oversight

2012 Annual Report: Opportunities to Reduce Duplication, Overlap and Fragmentation, Achieve Savings, and Enhance Revenue

Published by the Government Accountability Office on 2012-02-28.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                United States Government Accountability Office

GAO             Report to Congressional Addressees




February 2012
                2012 Annual Report:
                Opportunities to
                Reduce Duplication,
                Overlap and
                Fragmentation,
                Achieve Savings, and
                Enhance Revenue




GAO-12-342SP
United States Government Accountability Office
Washington, DC 20548




                                   February 28, 2012

                                   Congressional Addressees

                                   This is GAO’s second annual report to Congress in response to the
                                   statutory requirement that GAO identify and report annually on federal
                                   programs, agencies, offices, and initiatives, either within departments or
                                   governmentwide, which have duplicative goals or activities. 1 This body of
                                   work can help to inform government policymakers as they address the
                                   fiscal pressures facing our national government. The first report in this
                                   series, issued in March 2011, 2 presented 81 opportunities to reduce
                                   potential government duplication, achieve cost savings, or enhance
                                   revenue.

                                   This report for 2012 presents 51 areas where programs may be able to
                                   achieve greater efficiencies or become more effective in providing
                                   government services. Like our March 2011 publication, this report
                                   identifies government duplication, overlap, and fragmentation as well as
                                   other cost savings and revenue enhancement opportunities. Its findings
                                   involve a wide range of government missions and touch virtually all major
                                   federal departments and agencies.

                                   Federal agencies and Congress have taken or planned a number of
                                   actions that respond to issues we raised in our March 2011 report.
                                   Consistent with the commitment expressed in that report, we have
                                   continued to monitor developments in the 81 areas we identified. In a
                                   companion publication, Follow-up on 2011 Report: Status of Actions
                                   Taken to Reduce Duplication, Overlap, and Fragmentation, Save Tax
                                   Dollars, and Enhance Revenue, 3 which we are releasing concurrently
                                   with this report, we describe the extent to which progress has been made
                                   to address the actions we identified a year ago. In summary, GAO’s
                                   specific assessment of progress as of February 10, 2012, showed that 4


                                   1
                                    Pub. L. No. 111-139, § 21, 124 Stat. 29 (2010), 31 U.S.C. § 712 Note.
                                   2
                                    GAO, Opportunities to Reduce Potential Duplication in Government Programs, Save Tax
                                   Dollars, and Enhance Revenue, GAO-11-318SP (Washington, D.C.: Mar. 1, 2011).
                                   3
                                    GAO, Follow-up on 2011 Report: Status of Actions Taken to Reduce Duplication,
                                   Overlap, and Fragmentation, Save Tax Dollars, and Enhance Revenue, GAO-12-453SP
                                   (Washington, D.C.: Feb. 28, 2012).




                                   Page 1                                                 GAO-12-342SP 2012 Annual Report
                 (or 5 percent) of the 81 areas GAO identified were addressed; 60 (or 74
                 percent) were partially addressed; and 17 (or 21 percent) were not
                 addressed. 4 In addition, the Office of Management and Budget (OMB)
                 instructed agencies to consider areas of duplication or overlap identified
                 by GAO and others in their fiscal year 2013 budget submissions and
                 management plans.



What GAO Found   This report is divided into two sections. Section I presents 32 areas in
                 which we found evidence of duplication, overlap, or fragmentation among
                 federal government programs. Section II of this report summarizes 19
                 additional opportunities for agencies or Congress to consider taking
                 action that could either reduce the cost of government operations or
                 enhance revenue collections for the Treasury.

                 To find areas where duplication might exist, GAO’s work begins, in many
                 cases, by identifying fragmentation—that is, those circumstances in which
                 more than one federal agency (or more than one organization within an
                 agency) is involved in the same broad area of national interest. In some
                 instances of fragmentation, we find overlap—that is, programs that have
                 similar goals, devise similar strategies and activities to achieve those
                 goals, or target similar users. Duplication occurs when two or more
                 agencies or programs are engaged in the same activities or provide the
                 same services to the same beneficiaries. In many cases, the existence of
                 unnecessary duplication, overlap, or fragmentation can be difficult to
                 estimate with precision due to a lack of data on programs and activities.

                 Where information has not been available that would provide conclusive
                 evidence of duplication, overlap, or fragmentation, we often refer to
                 “potential duplication,” and where appropriate we suggest actions that
                 agencies or Congress could take to either reduce that potential or to
                 improve the accuracy and accessibility of information about program
                 operations, performance, and results. In some instances of duplication,
                 overlap, or fragmentation, it may be appropriate for multiple agencies or
                 entities to be involved in the same programmatic or policy area due to the
                 nature or magnitude of the federal effort. However, the areas discussed in


                 4
                   An issue area was considered “addressed” if all actions needed in that area were
                 addressed; “partially addressed” if at least one action needed in that area showed some
                 progress toward implementation, but not all actions were addressed; and “not addressed”
                 if none of the actions needed in that area were addressed.




                 Page 2                                                GAO-12-342SP 2012 Annual Report
the first section of this report identify instances where multiple
government programs or activities have led to inefficiencies, and we
determined that greater efficiencies or effectiveness might be achievable.
Further, we have expanded the scope of our work this year to look for
areas where a mix of federal approaches is used, such as tax
expenditures, direct spending, and federal grant or loan programs.

Among the 32 areas where we found evidence of duplication, overlap, or
fragmentation, this report describes a range of conditions. As the “Actions
Needed” presented in this report show, addressing our varied findings will
require careful deliberation and tailored, well-crafted solutions.

We have found that agencies can often realize a range of benefits, such
as improved customer service, decreased administrative burdens, and
cost savings from addressing the issues we raise in this report. Cost
savings related to reducing or eliminating duplication, overlap, and
fragmentation can be difficult to estimate in some cases because the
portion of agency budgets devoted to certain programs or activities is
often not clear. In addition, the implementation costs that might be
associated with consolidating programs, establishing collaboration
mechanisms, or reducing activities, facilities, or personnel, among other
variables, are difficult to estimate, or needed information on program
performance or costs is not readily available.

Section II of this report summarizes 19 additional opportunities for
agencies or Congress to consider taking action that could either reduce
the cost of government operations or enhance revenue collections for the
Treasury. Collectively, this report shows that, if actions are taken to
address the issues raised herein, as well as those from our 2011 report,
the government could potentially save tens of billions of dollars annually,
depending on the extent of actions taken.




Page 3                                         GAO-12-342SP 2012 Annual Report
GPRA Modernization     Many federal efforts, including those related to protecting food and
                       agriculture, providing homeland security, and ensuring a well trained and
Act Provides           educated workforce, transcend more than one agency, yet agencies face
Opportunities to       a range of challenges and barriers when they attempt to work
                       collaboratively. Both Congress and the Executive Branch have
Address Duplication,   recognized this, and in January 2011, the GPRA Modernization Act of
Overlap, and           2010 (the Act) was enacted, updating the almost two-decades-old
                       Government Performance and Results Act.5 The Act establishes a new
Fragmentation          framework aimed at taking a more crosscutting and integrated approach
                       to focusing on results and improving government performance. Effective
                       implementation of the Act could play an important role in clarifying desired
                       outcomes, addressing program performance spanning multiple
                       organizations, and facilitating future actions to reduce unnecessary
                       duplication, overlap, and fragmentation.

                       The Act requires OMB to coordinate with agencies to establish outcome-
                       oriented goals covering a limited number of crosscutting policy areas as
                       well as goals to improve management across the federal government, and
                       to develop a governmentwide performance plan for making progress
                       toward achieving those goals. The performance plan is to, among other
                       things, identify the agencies and federal activities—including spending
                       programs, tax expenditures, and regulations—that contribute to each goal,
                       and establish performance indicators to measure overall progress toward
                       these goals as well as the individual contribution of the underlying agencies
                       and federal activities. The President’s budget for fiscal year 2013 includes
                       14 such crosscutting goals. Aspects of several of these goals—including
                       Science, Technology, Engineering, and Math (STEM) Education,
                       Entrepreneurship and Small Businesses, Job Training, Cybersecurity,
                       Information Technology Management, Procurement and Acquisition
                       Management, and Real Property Management—are discussed in this
                       report or in our March 2011 report. The Act also requires similar information
                       at the agency level. Each agency is to identify the various federal
                       organizations and activities—both within and external to the agency—that
                       contribute to its goals, and describe how the agency is working with other
                       agencies to achieve its goals as well as any relevant crosscutting goals.
                       OMB officials stated that their approach to responding to this requirement
                       will address fragmentation among federal programs.




                       5
                       Pub. L. No. 111-352, 124 Stat. 3866 (2011); Pub. L. No. 103-62, 107 Stat. 285 (1993).




                       Page 4                                                GAO-12-342SP 2012 Annual Report
                       These requirements provide a much needed basis for more fully integrating
                       a wide array of potentially duplicative, overlapping, or fragmented federal
                       activities as well as a cohesive perspective on the long-term goals of the
                       federal government focused on priority policy areas. It could also be a
                       valuable tool for decision makers when reexamining existing programs and
                       considering proposals for new programs.



GAO’s Systematic       This annual report is based upon work conducted for completed GAO
                       products and certain ongoing audits, which were conducted in
Examination of         accordance with generally accepted government auditing standards or
Federal Programs and   with our Quality Assurance Framework as appropriate. For issues based
                       on GAO work that has not yet been published or those that update prior
Activities             GAO work, we provide additional information on the methodologies used
                       in that ongoing work or update in the section of each issue area titled
                       “How GAO Conducted Its Work.” For additional information on our
                       approach to preparing the overall report, see appendix II.

                       Appendix III includes lists of federal programs or other activities related to
                       issues in this report, and their fiscal year 2010 obligations data, where
                       such information was available. 6 Where information is being reported on
                       for the first time in this report, GAO sought comments from the agencies
                       involved and incorporated those comments as appropriate. In most
                       cases, agencies provided technical comments. Written comments are
                       reproduced in appendix IV.

                       While the areas identified in our annual reports are not intended to
                       represent the full universe of duplication, overlap, or fragmentation within
                       the federal government, we will have conducted a systematic examination
                       across the federal government to identify major instances of potential
                       duplication, overlap, and fragmentation governmentwide by the time we
                       issue our third annual report in fiscal year 2013. 7 This examination
                       involves a multiphased approach. First, to identify potential areas of


                       6
                        For some issue areas, agencies were not able to readily provide programmatic
                       information. Similarly, in some cases, we did not report budgetary information because
                       such information was either not available or not sufficiently reliable.
                       7
                        The statutory requirement calling for this report also asked GAO to identify specific areas
                       where Congress may wish to cancel budget authority it has previously provided—a
                       process known as rescission. To date, GAO’s work has not identified a basis for proposing
                       specific funding rescissions.




                       Page 5                                                   GAO-12-342SP 2012 Annual Report
overlap, we examined the major budget functions and subfunctions of the
federal government as identified by OMB. This was particularly helpful in
identifying issue areas involving multiple government agencies. Second,
GAO subject matter experts examined key missions and functions of
federal agencies—or organizations within large agencies—using key
agency documents, such as strategic plans, agency organizational charts,
and mission and function documents. This further enabled us to identify
areas where multiple agencies have similar goals, or where multiple
organizations within federal agencies are involved in similar activities.
Next, we canvassed a wide range of published sources—such as
congressional hearings and reports by the Congressional Budget Office,
OMB, various government audit agencies, and private think tanks—that
addressed potential issues of duplication, overlap, and fragmentation.
Lastly, we have work under way or planned in the coming year to
evaluate major instances of duplication, overlap, or fragmentation that we
have not yet covered in our first two annual reports.

This report was prepared under the coordination of Janet St. Laurent,
Managing Director, Defense Capabilities and Management, who may be
reached at (202) 512-4300, or stlaurentj@gao.gov; and Zina Merritt,
Director, Defense Capabilities and Management, who may be reached at
(202) 512-4300 or merrittz@gao.gov. Specific questions about individual
issues may be directed to the area contact listed at the end of each
summary.




Gene L. Dodaro
Comptroller General
  of the United States




Page 6                                        GAO-12-342SP 2012 Annual Report
Report at a Glance
                                            This report presents 51 areas where programs may be able to achieve
                                            greater efficiencies or become more effective in providing government
                                            services. The findings in this report involve a wide range of government
                                            missions and touch on virtually all major federal departments and
                                            agencies.

                                            Section I of this report presents 32 areas in which we found evidence of
                                            duplication, overlap, or fragmentation among federal government
                                            programs.

Table 1: Duplication, Overlap, and Fragmentation Areas Identified in This Report

Mission             Areas Identified                                                                                             Page
Agriculture         1.   Protection of Food and Agriculture: Centrally coordinated oversight is needed to ensure nine
                         federal agencies effectively and efficiently implement the nation’s fragmented policy to defend the       14
                         food and agriculture systems against potential terrorist attacks and major disasters.
Defense             2.   Electronic Warfare: Identifying opportunities to consolidate Department of Defense airborne
                         electronic attack programs could reduce overlap in the department’s multiple efforts to develop
                                                                                                                                   21
                         new capabilities and improve the department’s return on its multibillion-dollar acquisition
                         investments.
                    3.   Unmanned Aircraft Systems: Ineffective acquisition practices and collaboration efforts in the
                         Department of Defense unmanned aircraft systems portfolio creates overlap and the potential for           26
                         duplication among a number of current programs and systems.
                    4.   Counter-Improvised Explosive Device Efforts: The Department of Defense continues to risk
                         duplication in its multibillion-dollar counter Improvised Explosive Device efforts because it does        33
                         not have a comprehensive database of its projects and initiatives.
                    5.   Defense Language and Culture Training: The Department of Defense needs a more integrated
                         approach to reduce fragmentation in training approaches and overlap in the content of training            39
                         products acquired by the military services and other organizations.
                    6.   Stabilization, Reconstruction, and Humanitarian Assistance Efforts: Improving the
                         Department of Defense’s evaluations of stabilization, reconstruction, and humanitarian assistance
                         efforts, and addressing coordination challenges with the Department of State and the U.S.                 45
                         Agency for International Development, could reduce overlapping efforts and result in the more
                         efficient use of taxpayer dollars.
Economic            7.   Support for Entrepreneurs: Overlap and fragmentation among the economic development
development              programs that support entrepreneurial efforts require OMB and other agencies to better evaluate
                                                                                                                                   52
                         the programs and explore opportunities for program restructuring, which may include
                         consolidation, within and across agencies.
                    8.   Surface Freight Transportation: Fragmented federal programs and funding structures are not
                                                                                                                                   62
                         maximizing the efficient movement of freight.
Energy              9.   Department of Energy Contractor Support Costs: The Department of Energy should assess
                         whether further opportunities could be taken to streamline support functions, estimated to cost
                                                                                                                                   69
                         over $5 billion, at its contractor-managed laboratory and nuclear production and testing sites, in
                         light of contractors’ historically fragmented approach to providing these functions.
                    10. Nuclear Nonproliferation: Comprehensive review needed to address strategic planning
                        limitations and potential fragmentation and overlap concerns among programs combating nuclear              73
                        smuggling overseas.
General             11. Personnel Background Investigations: The Office of Management and Budget should take
government              action to prevent agencies from making potentially duplicative investments in electronic case              79
                        management and adjudication systems.




                                            Page 7                                                      GAO-12-342SP Report at a Glance
Mission           Areas Identified                                                                                            Page
                  12. Cybersecurity Human Capital: Governmentwide initiatives to enhance cybersecurity workforce
                      in the federal government need better structure, planning, guidance, and coordination to reduce           84
                      duplication.
                  13. Spectrum Management: Enhanced coordination of federal agencies’ efforts to manage radio
                      frequency spectrum and an examination of incentive mechanisms to foster more efficient
                      spectrum use may aid regulators’ attempts to jointly respond to competing demands for spectrum            89
                      while identifying valuable spectrum that could be auctioned for commercial use, thereby
                      generating revenues for the U.S. Treasury.
Health            14. Health Research Funding: The National Institutes of Health, Department of Defense, and
                      Department of Veterans Affairs can improve sharing of information to help avoid the potential for         96
                      unnecessary duplication.
                  15. Military and Veterans Health Care: The Departments of Defense and Veterans Affairs need to
                      improve integration across care coordination and case management programs to reduce                      102
                      duplication and better assist servicemembers, veterans, and their families.
Homeland          16. Department of Justice Grants: The Department of Justice could improve how it targets nearly
security/Law          $3.9 billion to reduce the risk of potential unnecessary duplication across the more than 11,000         110
enforcement           grant awards it makes annually.
                  17. Homeland Security Grants: The Department of Homeland Security needs better project
                                                                                                                               120
                      information and coordination among four overlapping grant programs.
                  18. Federal Facility Risk Assessments: Agencies are making duplicate payments for facility risk
                      assessments by completing their own assessments, while also paying the Department of                     128
                      Homeland Security for assessments that the department is not performing.
Information       19. Information Technology Investment Management: The Office of Management and Budget, and
technology            the Departments of Defense and Energy need to address potentially duplicative information                132
                      technology investments to avoid investing in unnecessary systems.
International     20. Overseas Administrative Services: U.S. government agencies could lower the administrative
affairs               cost of their operations overseas by increasing participation in the International Cooperative
                                                                                                                               139
                      Administrative Support Services system and by reducing reliance on American officials overseas
                      to provide these services.
                  21. Training to Identify Fraudulent Travel Documents: Establishing a formal coordination
                      mechanism could help reduce duplicative activities among seven different entities that are               146
                      involved in training foreign officials to identify fraudulent travel documents.
Science and the   22. Coordination of Space System Organizations: Fragmented leadership has led to program
                                                                                                                               150
environment           challenges and potential duplication in developing multibillion-dollar space systems.
                  23. Space Launch Contract Costs: Increased collaboration between the Department of Defense
                      and the National Aeronautics and Space Administration could reduce launch contracting                    157
                      duplication.
                  24. Diesel Emissions: Fourteen grant and loan programs at the Department of Energy, Department
                      of Transportation, and the Environmental Protection Agency, and three tax expenditures fund
                                                                                                                               162
                      activities that have the effect of reducing mobile source diesel emissions; enhanced collaboration
                      and performance measurement could improve these fragmented and overlapping programs.
                  25. Environmental Laboratories: The Environmental Protection Agency needs to revise its overall
                      approach to managing its 37 laboratories to address potential overlap and fragmentation and              169
                      more fully leverage its limited resources.
                  26. Green Building: To evaluate the potential for overlap or fragmentation among federal green
                      building initiatives, the Department of Housing and Urban Development, the Department of
                      Energy, and the Environmental Protection Agency should lead other federal agencies in                    175
                      collaborating on assessing their investments in more than 90 initiatives to foster green building in
                      the nonfederal sector.
Social services   27. Social Security Benefit Coordination: Benefit offsets for related programs help reduce the
                                                                                                                               180
                      potential for overlapping payments but pose administrative challenges.
                  28. Housing Assistance: Examining the benefits and costs of housing programs and tax
                      expenditures that address the same or similar populations or areas, and potentially consolidating        185
                      them, could help mitigate overlap and fragmentation and decrease costs.




                                          Page 8                                                     GAO-12-342SP Report at a Glance
Mission            Areas Identified                                                                                           Page
Training,          29. Early Learning and Child Care: The Departments of Education and Health and Human Services
employment, and        should extend their coordination efforts to other federal agencies with early learning and child
education              care programs to mitigate the effects of program fragmentation, simplify children’s access to these     193
                       services, collect the data necessary to coordinate operation of these programs, and identify and
                       minimize any unwarranted overlap and potential duplication.
                   30. Employment for People with Disabilities: Better coordination among 50 programs in nine
                       federal agencies that support employment for people with disabilities could help mitigate program       203
                       fragmentation and overlap, and reduce the potential for duplication or other inefficiencies.
                   31. Science, Technology, Engineering, and Mathematics Education: Strategic planning is needed
                                                                                                                               214
                       to better manage overlapping programs across multiple agencies.
                   32. Financial Literacy: Overlap among financial literacy activities makes coordination and
                       clarification of roles and responsibilities essential, and suggests potential benefits of               221
                       consolidation.



                                          Section II of this report summarizes 19 additional opportunities for
                                          agencies or Congress to consider taking action that could either reduce
                                          the cost of government operations or enhance revenue collections for the
                                          Treasury.

Table 2: Other Cost Savings or Revenue Enhancement Opportunities Identified in This Report

Mission            Areas Identified                                                                                           Page
Defense            33. Air Force Food Service: The Air Force has opportunities to achieve millions of dollars in cost          229
                       savings annually by reviewing and renegotiating food service contracts, where appropriate, to
                       better align with the needs of installations.
                   34. Defense Headquarters: The Department of Defense should review and identify further                      233
                       opportunities for consolidating or reducing the size of headquarters organizations.
                   35. Defense Real Property: Ensuring the receipt of fair market value for leasing underused real             239
                       property and monitoring administrative costs could help the military services’ enhanced use lease
                       programs realize intended financial benefits.
                   36. Military Health Care Costs: To help achieve significant projected cost savings and other                243
                       performance goals, DOD needs to complete, implement, and monitor detailed plans for each of its
                       approved health care initiatives.
                   37. Overseas Defense Posture: The Department of Defense could reduce costs of its Pacific region            250
                       presence by developing comprehensive cost information and re-examining alternatives to planned
                       initiatives.
                   38. Navy’s Information Technology Enterprise Network: Better informed decisions are needed to               255
                       ensure a more cost-effective acquisition approach for the Navy’s Next Generation Enterprise
                       Network.
Economic           39. Auto Recovery Office: Unless the Secretary of Labor can demonstrate how the Auto Recovery               259
development            Office has uniquely assisted auto communities, Congress may wish to consider prohibiting the
                       Department of Labor from spending any of its appropriations on the Auto Recovery Office and
                       instead require that the department direct the funds to other federal programs that provide funding
                       directly to affected communities.
Energy             40. Excess Uranium Inventories: Marketing the Department of Energy’s excess uranium could                   264
                       provide billions in revenue for the government.
General            41. General Services Administration Schedules Contracts Fee Rates: Re-evaluating fee rates on               269
government             the General Services Administration’s Multiple Award Schedules contracts could result in
                       significant cost savings governmentwide.
                   42. U.S. Currency: Legislation replacing the $1 note with a $1 coin would provide a significant             273
                       financial benefit to the government over time.
                   43. Federal User Fees: Regularly reviewing federal user fees and charges can help the Congress              278
                       and federal agencies identify opportunities to address inconsistent federal funding approaches
                       and enhance user financing, thereby reducing reliance on general fund appropriations.




                                          Page 9                                                     GAO-12-342SP Report at a Glance
Mission              Areas Identified                                                                                          Page
                     44. Internal Revenue Service Enforcement Efforts: Enhancing the Internal Revenue Service’s                 285
                         enforcement and service capabilities can help reduce the gap between taxes owed and paid by
                         collecting billions in tax revenue and facilitating voluntary compliance.
Health               45. Medicare Advantage Payment: The Centers for Medicare & Medicaid Services could achieve                 291
                         billions of dollars in additional savings by better adjusting for differences between Medicare
                         Advantage plans and traditional Medicare providers in the reporting of beneficiary diagnoses.
                     46. Medicare and Medicaid Fraud Detection Systems: The Centers for Medicare & Medicaid                     294
                         Services needs to ensure widespread use of technology to help detect and recover billions of
                         dollars of improper payments of claims and better position itself to determine and measure
                         financial and other benefits of its systems.
Homeland             47. Border Security: Delaying proposed investments for future acquisitions of border surveillance          298
security/Law             technology until the Department of Homeland Security better defines and measures benefits and
enforcement              estimates life-cycle costs could help ensure the most effective use of future program funding.
                     48. Passenger Aviation Security Fees: Options for adjusting the passenger aviation security fee            304
                         could further offset billions of dollars in civil aviation security costs.
                     49. Immigration Inspection Fee: The air passenger immigration inspection user fee should be                312
                         reviewed and adjusted to fully recover the cost of the air passenger immigration inspection
                         activities conducted by the Department of Homeland Security’s U.S. Immigration and Customs
                         Enforcement and U.S. Customs and Border Protection rather than using general fund
                         appropriations.
International        50. Iraq Security Funding: When considering new funding requests to train and equip Iraqi security         316
affairs                  forces, Congress should consider the government of Iraq’s financial resources, which afford it the
                         ability to contribute more toward the cost of Iraq’s security.
Social services      51. Domestic Disaster Assistance: The Federal Emergency Management Agency could reduce the                 321
                         costs to the federal government related to major disasters declared by the President by updating
                         the principal indicator on which disaster funding decisions are based and better measuring a
                         state’s capacity to respond without federal assistance.




Table 3: Appendixes

Appedixes                                                                                                                      Page
Appendix I: List of Congressional Addressees                                                                                    329
Appendix II: Objectives, Scope, and Methodology                                                                                 331
Appendix III: Lists of Programs Identified                                                                                      335
Appendix IV: Agency Comments                                                                                                    388




                                             Page 10                                                  GAO-12-342SP Report at a Glance
Abbreviations
     Auto Recovery Office    Office of Recovery for Auto Communities and Workers
     ATA                     Anti-Terrorism Assistance
     ATAT                    abusive tax avoidance transaction
     BEDI                    Brownfields Economic Development Initiative
     CBO                     Congressional Budget Office
     CBP                     U.S. Customs and Border Protection
     CCDF                    Child Care and Development Fund
     CDBG                    Community Development Block Grant
     CERP                    Commander’s Emergency Response Program
     CIO                     Chief Information Officer
     CMS                     Centers for Medicare & Medicaid Services
     Commerce                Department of Commerce
     COPS                    Community Oriented Policing Services
     DHS                     Department of Homeland Security
     DI                      Disability Insurance
     DOD                     Department of Defense
     Dodd-Frank Act          Dodd-Frank Wall Street Reform and Consumer Protection Act
     DOT                     Department of Transportation
     Education               Department of Education
     Energy                  Department of Energy
     EPA                     Environmental Protection Agency
     EUL                     enhanced use lease
     FCC                     Federal Communications Commission
     FECA                    Federal Employees Compensation Act
     Federal Reserve         Board of Governors of the Federal Reserve System
     FEMA                    Federal Emergency Management Agency
     FHA                     Federal Housing Administration
     FMS                     U.S. Foreign Military Sales
     FPS                     Federal Protective Service
     FRCP                    Federal Recovery Coordination Program
     GM                      General Motors
     GPRA                    Government Performance and Results Act
     GPRAMA                  GPRA Modernization Act of 2010
     GPS                     Global Positioning System
     GSA                     General Services Administration
     HHS                     Department of Health and Human Services
     HSPD-9                  Homeland Security Presidential Directive-9
     HUD                     Department of Housing and Urban Development
     ICASS                   International Cooperative Administrative Support Services
     ICE                     Immigration and Customs Enforcement
     IDR                     Integrated Data Repository
     IED                     improvised explosive device
     IPC                     Interagency Policy Committee
     IRAC                    Interdepartment Radio Advisory Committee
     IRS                     Internal Revenue Service
     ISC                     Interagency Security Committee
     IT                      information technology
     IWG                     interagency working group
     JAG                     Edward Byrne Memorial Justice Assistance Grant
     JIEDDO                  Joint IED Defeat Organization



                            Page 11                                       GAO-12-342SP Abbreviations
Justice     Department of Justice
MALD-J      Miniature Air Launched Decoy-Jammer
MAS         Multiple Award Schedules
MOU         memorandum of understanding
NASA        National Aeronautics and Space Administration
Navy        Department of the Navy
NGEN        Next Generation Enterprise Network
NIH         National Institutes of Health
NIST        National Institute of Standards and Technology
NNSA        National Nuclear Security Administration
NOAA        National Oceanic and Atmospheric Administration
NPOESS      National Polar-orbiting Operational Environmental Satellite System
NRO         National Reconnaissance Office
NSC         National Security Council
NSTC        National Science and Technology Council
NTIA        National Telecommunications and Information Administration
OJP         Office of Justice Programs
OMB         Office of Management and Budget
One PI      One Program Integrity
OPM         Office of Personnel Management
ORD         Office of Research and Development
OSTP        Office of Science and Technology Policy
OVW         Office on Violence Against Women
PTSD        post-traumatic stress disorder
RAMP        Risk Assessment and Management Program
RCP         Recovery Coordination Program
RHS         Rural Housing Service
SBA         Small Business Administration
SSA         Social Security Administration
SSI         Supplemental Security Income
State       Department of State
STEM        Science, Technology, Engineering, and Mathematics
Treasury    Department of the Treasury
TSA         Transportation Security Administration
UAS         unmanned aircraft system
ULA         United Launch Alliance
USAID       U.S. Agency for International Development
USDA        U.S. Department of Agriculture
VA          Department of Veterans Affairs
Wi-Fi       wireless fidelity




           Page 12                                          GAO-12-342SP Abbreviations
Section I: Areas in Which GAO Has Identified
Duplication, Overlap, or Fragmentation
              This section presents 32 areas in which we found evidence of duplication,
              overlap, or fragmentation among federal government programs.




              Page 13                      GAO-12-342SP Duplication, Overlap, and Fragmentation
1. Protection of Food and Agriculture
Centrally coordinated oversight is needed to ensure nine federal agencies effectively and efficiently implement
the nation’s fragmented policy to defend the food and agriculture systems against potential terrorist attacks and
major disasters.



Why This Area Is                     Agriculture is critical to public health and the nation’s economy. It annually
                                     produces $300 billion worth of food and other farm products, provides a
Important                            major foundation for prosperity in rural areas, and is estimated to be
                                     responsible for 1 out of every 12 U.S. jobs. As a result, any natural or
                                     deliberate disruption of the agriculture or food production systems can
                                     present a serious threat to the national economy and human health.
                                     Recognizing the vulnerability of the U.S. food and agriculture systems,
                                     the President issued Homeland Security Presidential Directive-9 (HSPD-
                                     9) in January 2004 to establish a national policy to defend the food and
                                     agriculture systems against terrorist attacks, major disasters, and other
                                     emergencies. HSPD-9 assigns more than nine federal agencies various
                                     responsibilities to enhance the nation’s preparedness for food and
                                     agriculture emergencies.



What GAO Found                       For many years, GAO has reported that federal oversight of food safety is
                                     fragmented and results in inconsistent oversight, ineffective coordination,
                                     and inefficient use of resources. In 2007, GAO added food safety to its list
                                     of high-risk areas that warrant attention by Congress and the executive
                                     branch. More recently GAO found that this fragmentation extends to the
                                     responsibilities across multiple agencies to defend food and agricultural
                                     systems against terrorist attacks and natural disasters. (See the table
                                     below for information on agencies’ roles and responsibilities under HSPD-
                                     9.) Many of these activities are everyday functions or part of the broader
                                     food and agriculture defense initiative and would be difficult for the
                                     agencies to separately quantify.




                                     Page 14                        GAO-12-342SP Duplication, Overlap, and Fragmentation
Federal Agency Roles and Responsibilities for Food and Agriculture Defense as Defined by HSPD-9




                                       Page 15                          GAO-12-342SP Duplication, Overlap, and Fragmentation
a
The National Response Plan was replaced by the National Response Framework in 2008.


As GAO reported in August 2011, there is no centralized coordination to
oversee the federal government’s overall progress in implementing the
nation’s food and agriculture defense policy. Because the responsibilities
outlined in this policy (HSPD-9) are fragmented and cut across at least
nine different agencies, centralized oversight is important to ensure that
efforts are coordinated to overcome this fragmentation, efficiently use
scarce funds, and promote the overall effectiveness of the federal
government.



Page 16                              GAO-12-342SP Duplication, Overlap, and Fragmentation
Previously, the White House Homeland Security Council conducted some
coordinated activities to oversee federal agencies’ HSPD-9
implementation by gathering information from agencies about their
progress. In 2008, it tasked the Department of Homeland Security (DHS)
with creating an online forum intended to enable agencies to share
information that coordinated their HSPD-9 efforts, allowing the Council to
efficiently view agencies’ implementation progress in a consistent
manner. However, these efforts are no longer ongoing. Officials from the
U.S. Departments of Agriculture (USDA), Homeland Security, Health and
Human Services (HHS) and the Environmental Protection Agency (EPA)
told us that the Homeland Security Council’s efforts were valuable. For
example, officials from EPA told us it was valuable to interact with other
agencies regarding HSPD-9 efforts, HHS officials found the Homeland
Security Council’s consolidation of information across multiple agencies
to be useful. Officials from EPA noted that although the Homeland
Security Council’s and DHS’s oversight roles have not been consistent for
the past few years, EPA and other agencies have used multi-agency
working groups to coordinate food and agriculture emergency activities. 1
It is unclear why the Homeland Security Council no longer gathers such
information, but officials from DHS noted that interest from agencies and
the Homeland Security Council has decreased, and as of late 2008 or
early 2009, they no longer coordinate agencies’ reporting of their HSPD-9
implementation progress. Top-level review can help ensure that
management’s directives are carried out and determine if agencies are
effectively and efficiently using resources.

Moreover, without centrally coordinated oversight, agencies may not have
sufficient direction for prioritizing responsibilities, and they may not have
sufficient incentive to monitor progress internally. For example, GAO
found that USDA does not have a departmentwide strategy for prioritizing
and allocating resources to its numerous HSPD-9 responsibilities.
According to USDA officials, because food and agriculture defense has
not been a primary focus in recent years for the National Security Staff—
which supports the White House Homeland Security Council under the
current administration—USDA has been less focused on HSPD-9
oversight and has prioritized other, more recently directed activities.
Instead, USDA assigned its responsibilities to its component agencies
based on their statutory authority and expertise and allowed individual
agencies to set their implementation and budget priorities.

However, USDA agencies are facing various challenges carrying out
these responsibilities. For example, from 2005 through 2010, USDA’s



1
 In 2005, GAO reported that, since the terrorist attacks of 2001, agencies had formed
numerous working groups to protect agriculture. For example, DHS created a Food and
Agriculture Sector Coordinating Council to help the federal government and industry share
ideas about how to mitigate the risk of an attack on agriculture. See GAO, Homeland
Security: Much Is Being Done to Protect Agriculture from a Terrorist Attack, but Important
Challenges Remain, GAO-05-214 (Washington, D.C.: Mar. 8, 2005).




Page 17                             GAO-12-342SP Duplication, Overlap, and Fragmentation
Agricultural Research Service allocated approximately $10.6 million to
develop a system—the National Plant Disease Recovery System—to help
the nation recover from plant disease outbreaks that could devastate the
nation’s production of economically important crops. A major part of this
effort involved developing recovery plans that identified critical research
gaps; however, the Agricultural Research Service does not have a
documented, systematic process to monitor the extent to which research
gaps are filled, calling into question the efficient use of these funds. In
addition, from 2006 through 2010, USDA’s Animal and Plant Health
Inspection Service allocated approximately $33 million (including about
$18 million in supplemental funding) to develop the National Veterinary
Stockpile—a stockpile containing resources to respond to the 17 most
damaging animal diseases affecting human health and the economy.
HSPD-9 calls for the National Veterinary Stockpile to leverage where
appropriate the mechanisms and infrastructure that have been developed
for HHS’s Strategic National Stockpile—which contains medical supplies
to address public health emergencies. Although there has been some
collaboration, there appears to be confusion about the mission and
capabilities of the stockpiles that could hinder USDA’s and HHS’s efforts
to identify leveraging opportunities. Unless resolved, the agencies may be
missing opportunities to more efficiently use federal resources.

Because there is currently no centralized coordination to oversee
agencies’ HSPD-9 implementation progress, it is unclear how effectively
or efficiently agencies are using resources in implementing the nation’s
food and agriculture defense policy. As a result, the nation may not be
assured that agency efforts to protect agriculture and the food supply are
well designed and effectively implemented. USDA officials told us that the
department would benefit from strategic direction from the National
Security Staff to help prioritize specific activities and funding decisions in
this time of limited resources. GAO has previously reported that effective
strategies help set priorities and allocate resources to inform decision
making and help ensure accountability. 2 Such priority setting and
resource allocation is especially important in a fiscally constrained
environment.




2
 See, for example, GAO, Combating Terrorism: Evaluation of Selected Characteristics in
National Strategies Related to Terrorism, GAO-04-408T (Washington, D.C.: Feb. 3, 2004).




Page 18                            GAO-12-342SP Duplication, Overlap, and Fragmentation
Actions Needed and       GAO recommended in August 2011 that to help ensure that the federal
                         government is effectively implementing the nation’s food and agriculture
Potential Financial or   defense policy, the Secretary of Homeland Security should
Other Benefits           •   resume DHS’s efforts to coordinate agencies’ overall HSPD-9
                             implementation efforts.

                         In addition, the Homeland Security Council should direct the National
                         Security Staff to

                         •   establish an interagency process that would provide oversight of
                             agencies’ implementation of HSPD-9; and

                         •   encourage agencies to participate in and contribute information to
                             DHS’s efforts to coordinate agencies’ implementation of HSPD-9.

                         Furthermore, to ensure that USDA is fulfilling its responsibilities to protect
                         the nation’s food and agriculture systems, the Secretary of Agriculture
                         should

                         •   develop a departmentwide strategy for implementing its HSPD-9
                             responsibilities. Such a strategy would include an overarching
                             framework for setting priorities, as well as allocating resources.

                         Also, to help ensure that the nation is adequately prepared to recover
                         from high-consequence plant diseases, the Secretary of Agriculture
                         should direct the Administrator of the Agricultural Research Service, in
                         coordination with relevant USDA agencies, to

                         •   develop and implement a documented, systematic process to track
                             research gaps identified in the National Plant Disease Recovery
                             System recovery plans and monitor progress in filling these gaps.

                         Moreover, to ensure the most effective use of resources and to resolve
                         any confusion, the Secretaries of Agriculture and Health and Human
                         Services should

                         •   jointly determine on a periodic basis if there are appropriate
                             opportunities for the National Veterinary Stockpile to leverage
                             Strategic National Stockpile mechanisms or infrastructure as directed
                             by HSPD-9. If such opportunities exist, the two agencies should
                             formally agree upon a process for the National Veterinary Stockpile to
                             use the identified mechanisms and infrastructure.

                         By taking these actions, federal decision makers will acquire critical
                         information they need to help assess how well the nation is prepared for
                         major emergencies and how efficiently agencies are using federal
                         resources to prepare.




                         Page 19                        GAO-12-342SP Duplication, Overlap, and Fragmentation
Agency Comments        GAO provided a draft of its August 2011 report to DHS, HHS, USDA,
                       EPA, and the National Security Staff for review and comment. DHS, HHS,
and GAO’s Evaluation   and USDA generally agreed with GAO’s recommendations. In addition, in
                       an e-mail received July 22, 2011, the National Security Staff’s Deputy
                       Legal Advisor stated that the National Security Staff agrees that a review
                       of HSPD-9 is appropriate and that they will look for an opportunity to do
                       so. DHS, HHS, USDA, EPA, and the National Security Staff also provided
                       technical comments, which were incorporated as appropriate. As part of
                       GAO’s routine audit work, GAO will track agency actions to address these
                       recommendations and report to Congress.



How GAO Conducted      This information contained in this analysis is based on findings from the
                       products in the related GAO products section. GAO reviewed key
Its Work               documents and interviewed officials from USDA, DHS, HHS, and EPA
                       because these agencies have the most responsibilities under HSPD-9.
                       GAO also met with an official from the National Security Staff to discuss
                       any current efforts they are coordinating to oversee agencies’ HSPD-9
                       implementation progress.



Related GAO            Homeland Security: Challenges for the Food and Agriculture Sector in
                       Responding to Potential Terrorist Attacks and Natural Disasters.
Products               GAO-11-946T. Washington, D.C.: September 13, 2011.

                       Homeland Security: Actions Needed to Improve Response to Potential
                       Terrorist Attacks and Natural Disasters Affecting Food and Agriculture.
                       GAO-11-652. Washington, D.C.: August 19, 2011.




Contact Information    For additional information about this area, contact Lisa Shames at (202)
                       512-3841 or shamesl@gao.gov.




                       Page 20                       GAO-12-342SP Duplication, Overlap, and Fragmentation
2. Electronic Warfare
Identifying opportunities to consolidate Department of Defense airborne electronic attack programs could
reduce overlap in the department’s multiple efforts to develop new capabilities and improve the department’s
return on its multibillion-dollar acquisition investments.



Why This Area Is                    Airborne electronic attack—an electronic warfare capability—involves use
                                    of aircraft to neutralize, destroy, or temporarily suppress enemy air
Important                           defense and communications systems, either through destructive or
                                    disruptive means. These capabilities are increasingly important and
                                    complex as networked systems, distributed controls, and sophisticated
                                    sensors become ubiquitous in military equipment, civilian infrastructure,
                                    and commercial networks. These technological developments complicate
                                    the Department of Defense’s ability to exercise control over the
                                    electromagnetic spectrum, when necessary, to support U.S. military
                                    objectives. Aircraft executing airborne electronic attack missions employ a
                                    variety of mission systems, such as electronic jamming pods, and
                                    weapons, such as antiradiation missiles and air-launched expendable
                                    decoys. These aircraft also rely on aircraft self-protection systems and
                                    defensive countermeasures for additional protection.

                                    All four military services within the Department of Defense are separately
                                    acquiring new airborne electronic attack systems. Department of Defense
                                    investments to develop and procure new and updated airborne electronic
                                    attack systems are projected to total more than $17.6 billion from fiscal
                                    years 2007 through 2016. With the prospect of slowly growing or flat
                                    defense budgets for years to come, the department must get better
                                    returns on its weapon system investments and find ways to deliver more
                                    capability to the warfighter for less than it has in the past.



What GAO Found                      GAO’s ongoing review of planned airborne electronic attack systems
                                    found that the department is developing multiple systems to provide
                                    similar capabilities. Opportunities may exist for consolidating some
                                    current service-specific acquisition efforts. As GAO reported in March
                                    2011, service-driven requirements and funding processes continue to
                                    hinder integration and efficiency and contribute to unnecessary
                                    duplication in addressing warfighter needs. In the airborne electronic
                                    attack mission area, systems in development may overlap—at least to
                                    some extent—in terms of planned mission tasks. Yet, they are being
                                    developed as individual programs by the different services. The table
                                    below highlights overlap among four systems being developed to counter
                                    irregular warfare 1 threats—one subset of airborne electronic attack. While


                                    1
                                     Irregular warfare is defined as a violent struggle among state and nonstate actors for
                                    legitimacy and influence over the relevant population(s). Irregular warfare favors indirect
                                    and asymmetric approaches, though it may employ the full range of military and other
                                    capacities, in order to erode an adversary’s power, influence, and will.




                                    Page 21                              GAO-12-342SP Duplication, Overlap, and Fragmentation
                                        the host platforms for each system are different, the missions each
                                        system performs are similar.

Potential Overlap among Communication Jamming Systems Supporting Ground Forces

                   Collaborative On-line                                              Communications
                   Reconnaissance                                                     Electronic Attack with
                   Provider Operationally                                             Surveillance and
                   Responsive Attack Link                                             Reconnaissance                   MQ-9 Reaper Electronic
System name        (CORPORAL)                   Intrepid Tiger II                     (CEASAR)                         Attack Pod
Service sponsor    Marine Corps                 Marine Corps                          Army                             Air Force
Host platform      RQ-7B Shadow unmanned AV-8B fixed wing aircrafta                   C-12 fixed wing aircraft         MQ-9 Reaper unmanned
                   aerial vehicle                                                                                      aerial vehicle
Mission            Communications jamming       Communications jamming Denial and disruption of                        Communications and
description        in support of ground         and surveillance capability enemy communications                       improvised explosive
                   forcesb                      in support of ground forces systems and improvised                     device jamming in support
                                                                            explosive devices in                       of combatant commander
                                                                            support of unit-level ground               mission needs
                                                                            commanders
Estimated          $54.5 million                $76.8 million                         $13.8 millionc                   $233.7 million
acquisition cost
                                        Source: GAO analysis of Department of Defense data.
                                        a
                                            After the AV-8B, the Intrepid Tiger II pod will be integrated onto additional aircraft.
                                        b
                                            CORPORAL also consists of other technologies that serve broader purposes.
                                        c
                                         Total excludes $26.3 million in funding from the Operations and Maintenance, Army budget account
                                        through fiscal year 2013. The Army uses these funds to (1) lease two C-12 aircraft to fly the CEASAR
                                        pod and (2) fund aircraft and pod sustainment costs.


                                        According to Department of Defense officials, airborne electronic attack
                                        limitations in recent operations, urgent needs of combatant commanders,
                                        and the desire to provide ground units with their own locally controlled
                                        assets have all contributed to the services’ decisions to develop their own
                                        systems to address irregular warfare threats.

                                        Requirements for most of these irregular warfare systems were derived
                                        from Department of Defense urgent needs processes—activities aimed at
                                        rapidly developing, equipping, and fielding solutions and critical
                                        capabilities to the warfighter in a way that is more responsive to urgent
                                        warfighter requests than the department’s traditional acquisition
                                        procedures. As GAO reported in March 2011, the department’s urgent
                                        needs processes often lead to multiple entities responding to requests for
                                        similar capabilities, resulting in potential duplication of efforts. As military
                                        operations in Iraq and Afghanistan wind down—and the services evaluate
                                        whether to transition their current urgent needs program over to the
                                        formal weapon system acquisition process—opportunities may exist to
                                        better consolidate current program activities, such as the CORPORAL
                                        and CEASAR pod systems that are still demonstration programs whose
                                        transitions to formal acquisition programs have not yet been determined.
                                        The potential for unnecessary duplication of efforts within the airborne
                                        electronic attack area is not limited to irregular warfare systems. Similar




                                        Page 22                                               GAO-12-342SP Duplication, Overlap, and Fragmentation
issues exist with airborne electronic attack systems designed to counter
potential near-peer adversaries. 2 Most notably, both the Air Force and
Navy are separately evaluating options for acquiring advanced jamming
decoys—the Air Force through an upgrade (referred to as Increment II) to
its Miniature Air Launched Decoy-Jammer (MALD-J) program, and the
Navy through its planned Airborne Electronic Attack Expendable initiative.

The two services have held discussions with one another about
combining efforts toward a joint solution—including a meeting between
Navy and Air Force requirements offices and acquisition officials in
December 2010—but they have not reached resolution on a common
path forward. According to Navy officials, relatively minor design and
software modifications to the Air Force’s planned MALD-J Increment II
system could produce a system that satisfies both services’ mission
requirements. However, Air Force officials stated that accommodating the
Navy’s mission requirements within the system would increase program
costs and delay planned fielding of the Increment II system, essentially
rendering the current program unexecutable. Subsequently, Air Force
officials stated that unless MALD-J Increment II, as currently configured,
sufficiently meets Navy requirements, they do not expect the Navy to
have any formal role in the program. In July 2011, the Air Force
suspended MALD-J Increment II because of future funding shortfalls. This
pause in the program affords an opportunity for continued dialogue
between the two services as to potential benefits and drawbacks to the
pursuit of a common acquisition solution.

On the other hand, the services have shown in some instances that they
can share information across the different efforts. For example, Marine
Corps decisions to reuse jammer technologies from CORPORAL for
Intrepid Tiger II have driven significant commonality in hardware and
software for these systems, which program officials state has reduced
technical challenges and produced cost savings.

Pursuing multiple separate acquisition efforts to develop similar
capabilities within the airborne electronic attack mission area can lead to
insufficient use of resources and may contribute to other warfighting
needs going unfilled. Leveraging resources and acquisition efforts across
services can simplify developmental efforts, improve interoperability
among systems, and decrease operations and support costs—outcomes
that position the department to maximize the returns it gets on its airborne
electronic attack investments.




2
 Potential near-peer adversaries include countries capable of waging large scale
conventional war on the United States. These nation-states are characterized as having
nearly comparable diplomatic, informational, military, and economic capacity to the United
States.




Page 23                             GAO-12-342SP Duplication, Overlap, and Fragmentation
Actions Needed and       To ensure investments in airborne electronic attack systems are cost-
                         effective and to prevent unnecessary overlap, GAO expects to
Potential Financial or   recommend that the Secretary of Defense
Other Benefits           •   review the capabilities provided by the Marine Corps’s Intrepid Tiger II
                             pod and CORPORAL, Army’s CEASAR, and Air Force MQ-9 Reaper
                             Electronic Attack Pod systems and identify opportunities for
                             consolidating these different efforts, as appropriate; and

                         •   assess Air Force and Navy plans for developing and acquiring new
                             expendable jamming decoys, specifically those services’ MALD-J
                             Increment II and Airborne Electronic Attack Expendable initiatives, to
                             determine if these activities should be merged.

                         Department of Defense analysis of airborne electronic attack programs—
                         both current and planned—could reduce duplication of similar acquisition
                         initiatives and improve efficiencies. More analysis is needed by the
                         department to determine the potential for cost savings.

Agency Comments          GAO provided a draft of this report section to the Department of Defense
                         for review and comment. The department provided technical comments,
and GAO’s Evaluation     which were incorporated as appropriate. In its comments, the department
                         noted that the Army and Marine Corps have held high-level discussions to
                         collaborate on the CEASAR, Intrepid Tiger II, and CORPORAL programs.
                         According to the department, discussions to share hardware and software
                         technology are ongoing—an arrangement that, if implemented, could
                         result in significant cost avoidance—but talks have not yet yielded a
                         design or set of requirements agreeable to both services. As part of
                         GAO’s routine audit work, GAO will track agency actions to address these
                         expected recommendations and report to Congress.



How GAO Conducted        The information contained in this analysis is based on findings from the
                         products listed in the related GAO products section and additional work
Its Work                 GAO conducted to be published as a separate product in 2012.
                         GAO reviewed program documentation to identify planned capabilities,
                         technical challenges, and anticipated costs for key systems. GAO also
                         analyzed Department of Defense documents outlining airborne electronic
                         attack-related mission requirements and acquisition needs and reviewed
                         platform-specific capabilities documents, service roadmaps, and budget
                         documents, which together provided insight on the department’s overall
                         strategy for acquiring airborne electronic attack capabilities. GAO
                         conducted interviews with relevant Department of Defense officials
                         responsible for managing airborne electronic attack requirements and
                         programs.

                         Appendix III lists the programs GAO identified that may have similar or
                         overlapping objectives, provide similar services or be fragmented across
                         government missions. Overlap and fragmentation may not necessarily
                         lead to actual duplication, and some degree of overlap and duplication
                         may be justified.


                         Page 24                       GAO-12-342SP Duplication, Overlap, and Fragmentation
Related GAO           Warfighter Support: DOD’s Urgent Needs Processes Need a More
                      Comprehensive Approach and Evaluation for Potential Consolidation.
Products              GAO-11-273. Washington, D.C.: March 1, 2011.

                      Opportunities to Reduce Potential Duplication in Government Programs,
                      Save Tax Dollars, and Enhance Revenue. GAO-11-318SP. Washington,
                      D.C.: March 1, 2011.



Contact Information   For additional information about this area, contact Michael J. Sullivan at
                      (202) 512-4841 or sullivanm@gao.gov.




                      Page 25                       GAO-12-342SP Duplication, Overlap, and Fragmentation
3. Unmanned Aircraft Systems
Ineffective acquisition practices and collaboration efforts in the Department of Defense unmanned aircraft
systems portfolio creates overlap and the potential for duplication among a number of current programs and
systems.



Why This Area Is                    The Department of Defense (DOD) estimates that the cost of current
                                    unmanned aircraft systems (UAS) acquisition programs and related
Important                           systems will exceed $37.5 billion in fiscal years 2012 through 2016. 1
                                    These programs and systems can be found across DOD and the military
                                    services (Air Force, Army, Navy, and Marine Corps). The continued
                                    success of UAS on the battlefield has led to greatly increased demand
                                    from warfighters and the development of many new systems. Further, in
                                    announcing the department’s new budget priorities, the Secretary of
                                    Defense highlighted various current and planned unmanned systems that
                                    are considered to be high-priority in terms of meeting the requirements of
                                    the new strategic guidance.

                                    In 2009, GAO’s work highlighted the need to consider commonality in
                                    UAS—using the same or interchangeable subsystems and components in
                                    more than one subsystem to improve interoperability of systems—and
                                    indicated that DOD lacked an analytical approach to prioritize capability
                                    needs which would reduce the likelihood of redundancies in UAS
                                    capabilities. As GAO reported in June 2011, although the Joint
                                    Requirements Oversight Council is directed to ensure that trade-offs
                                    among cost, schedule, and performance objectives are considered as
                                    part of its requirements review process, it currently does not prioritize
                                    requirements, consider redundancies across proposed programs, or
                                    prioritize and analyze capability gaps in a consistent manner. Congress
                                    has enacted legislation requiring DOD to establish a policy and
                                    acquisition strategy for more common ground stations and payloads for
                                    manned and unmanned aircraft systems. 2

                                    The elements of DOD’s planned UAS portfolio include unmanned aircraft,
                                    payloads, and ground control stations. Unmanned aircraft are fixed or
                                    rotary winged aircraft capable of flight without an onboard crew. Payloads
                                    are subsystems and equipment carried on a UAS configured to
                                    accomplish specific missions, including intelligence, surveillance, and
                                    reconnaissance and attack. Ground control stations handle multiple
                                    mission aspects such as system command and control, mission planning,
                                    payload control, and communications.


                                    1
                                     The $37.5 billion amount includes funding for the development, procurement,
                                    sustainment, military construction and personnel, and war funding to support UAS
                                    activities in then year dollars identified in the President’s 2012 budget submission.
                                    2
                                     Duncan Hunter National Defense Authorization Act for Fiscal Year 2009, Pub. L. No. 110-
                                    417, §144 (2008).




                                    Page 26                              GAO-12-342SP Duplication, Overlap, and Fragmentation
What GAO Found   Military service-driven requirements—rather than an effective
                 departmentwide strategy—have led to overlap in DOD’s UAS capabilities,
                 resulting in many programs and systems being pursued that have similar
                 flight characteristics and mission requirements. DOD currently has 15
                 unmanned aircraft programs which it categorizes into five groups
                 according to weight, altitude, and speed. Groups 4 and 5 contain the
                 largest and most expensive aircraft, with weights exceeding 1,320
                 pounds. Group 5 aircraft fly higher—above 18,000 feet—than Group 4
                 aircraft. DOD has spent almost $19 billion through fiscal year 2011 to
                 develop and procure three aircraft in Group 5 and five aircraft in Group 4,
                 where GAO found potential overlap, and expects to spend an additional
                 $32.4 billion to complete these programs.

                 Illustrative of the overlap, in Group 5, the Navy plans to spend more than
                 $3 billion to develop its own variant of the Air Force Global Hawk—the
                 Broad Area Maritime Surveillance UAS—rather than using the already
                 fielded Global Hawk. According to the Navy, its unique requirements
                 necessitate modifications to the Global Hawk airframe, payload
                 interfaces, and ground control station. However, the Navy program office
                 was not able to provide quantitative analysis to justify the variant.
                 According to program officials, no analysis was conducted to determine
                 the cost-effectiveness of developing a new aircraft to meet the Navy’s
                 requirements versus buying more Global Hawks.

                 If the preference for service-unique solutions persists in the absence of a
                 departmentwide strategy, so will the potential for overlap in the future.
                 DOD plans to significantly expand the UAS portfolio through 2040,
                 including five new systems in the planning stages that are expected to
                 become formal programs in the near future.

                 In addition to unmanned aircraft, DOD expects to spend about $9 billion
                 to buy 42 UAS payloads through fiscal year 2016. Each payload provides
                 a sensor using one of three different technologies: electro-optical/infra-
                 red, radar, and signals intelligence. For Group 4 and 5 aircraft, GAO
                 identified overlap among numerous sensors being developed within each
                 of the three technologies (see table below).




                 Page 27                       GAO-12-342SP Duplication, Overlap, and Fragmentation
Overlapping Development of Sensors for UAS Payloads in Group 4 and 5 Aircraft

 Sensor type                        Number of programs
 Electro-optical/infra-red          Four Air Force programs
                                    Four Army programs
                                    One Navy program
                                    Five multiservice programs
 Radar                              Three Air Force programs
                                    Two Army programs
                                    One Navy program
                                    One multiservice program
 Signals intelligence               Four Air Force programs
                                    Two Navy programs
                                    Two Army programs
Source: GAO analysis of DOD data.



While the fact that some multiservice payloads are being developed shows
the potential for collaboration, the service-centric requirements process still
creates the potential for overlap. For example, the Army and Air Force are
developing two separate signals intelligence sensors (the TSP and ASIP 2-
C, respectively) that have similar capabilities to track ground
communication and activity. According to a DOD-sponsored study in March
2010, the department could have saved almost $1.2 billion had the Air
Force acquired the same sensor as the Army. However, since such an
approach was not considered earlier in the program, DOD concluded there
was not a business case for combining the programs. Instead, the study
noted, the ideal time for such a decision would have been when
requirements were being determined. More recently, the Navy has begun
development of its own signals intelligence payload (the MCS-21) for the
Broad Area Maritime Surveillance aircraft, even though the sensor’s
capabilities are similar to those of the Air Force and Army payloads.

Through fiscal year 2016, DOD plans to spend about $3 billion to acquire
13 ground control stations and GAO identified overlap and potential
duplication among 10 of these systems. Because aircraft, payloads and
control stations are usually developed together, a unique ground control
station therefore exists for almost every UAS that DOD has acquired.
According to a cognizant DOD official, the associated software is about
90 percent duplicative because similar software is developed for each
ground control station. Even though the functionality of the software is
similar, a considerable amount of additional time and money is invested in
capabilities that have already been paid for and can also make it difficult
and costly to modify or upgrade.

DOD has acknowledged that an open architecture framework could
provide opportunities for increased competition and collaboration to
satisfy requirements through common software solutions, among other
areas. DOD has created a UAS control segment working group, which is
chartered to increase interoperability and enable software re-use and



Page 28                             GAO-12-342SP Duplication, Overlap, and Fragmentation
open systems. This could allow for greater efficiency, less redundancy,
and lower costs, while potentially reducing levels of contractor proprietary
data that cannot be shared across UAS programs. However, existing
ground control stations already have their own architecture and migration
to a new service-oriented architecture will not happen until at least 2015,
almost 6 years after it began. 3

DOD has acknowledged that it has bought many UAS systems
inefficiently and has begun to take steps to improve outcomes as it
expands these capabilities over the next several years. DOD continues to
face challenges in its ability to improve efficiency and reduce the potential
for overlap and duplication as it buys UAS capabilities:

•   GAO recommended in November 2008, among other things, that
    DOD designate a single entity to integrate all crosscutting efforts
    related to improving the management and operation of UAS, including
    to ensure that all UAS systems were designed to meet joint service
    requirements and interoperability standards. DOD did not agree,
    stating that rather than an executive agent, the combination of the
    UAS Task Force (created in 2007 to encourage initiatives for
    collaboration among the military services) and other initiatives would
    serve to address UAS challenges. Currently, the Task Force has no
    decision-making authority and cannot direct the military services’
    efforts to acquire UAS capabilities. As such, while the military services
    participate at all levels of the Task Force, they do not always fully
    support related initiatives and, therefore, do not achieve the potential
    benefits from collaboration.

•   GAO recommended in July 2009 that DOD not begin new programs
    until evaluating systems from a multiservice perspective and take an
    open systems approach to product development. While DOD
    concurred with this recommendation, it believes current practices do
    not encourage duplicative systems development. However, among
    future UAS aircraft, the Army and Navy are planning to spend
    approximately $1.6 billion to acquire separate systems that are likely
    to have similar capabilities to meet upcoming cargo and surveillance
    requirements. DOD officials state that current requirements do not
    preclude a joint program to meet these needs, but the Army and Navy
    have not yet determined whether such an approach will be used.

•   Despite DOD direction, although the Air Force and the Army used the
    same contractor to procure the Predator and Gray Eagle UAS, the
    programs achieved only limited success with efforts to combine



3
 In 2009, the Office of the Secretary of Defense directed the military services to develop a
common control station service-oriented architecture for implementation into the military
services’ control stations to help acquire, integrate, and extend the capabilities of current
control stations across the UAS portfolio. The Air Force has decided to implement a
“complementary” architecture.




Page 29                              GAO-12-342SP Duplication, Overlap, and Fragmentation
                             programs and missed an opportunity to potentially save hundreds of
                             millions of dollars. The Air Force now plans to procure Reaper UAS
                             rather than the Predator.



Actions Needed and       To reduce the likelihood of overlap and potential duplication in its UAS
                         portfolio, GAO has made several prior recommendations to DOD which
Potential Financial or   have not been fully implemented. While DOD generally agreed with the
Other Benefits           intent of those recommendations, the department has not always agreed
                         with the proposed method of implementation. The overlap in current UAS
                         programs, as well as the continued potential in future programs, shows
                         that DOD must still do more to implement GAO’s prior recommendations.
                         GAO believes the potential for savings is significant and with DOD’s
                         renewed commitment to UAS for meeting new strategic requirements, all
                         the more imperative. Specifically, DOD should

                         •   re-evaluate whether a single entity would be better positioned to
                             integrate all crosscutting efforts to improve the management and
                             operation of UAS;

                         •   consider an objective, independent examination of current UAS
                             portfolio requirements and the methods for acquiring future unmanned
                             aircraft, including strategies for making these systems more common,
                             to ensure the best return on every dollar it invests; and

                         •   prior to initiating future unmanned aircraft programs, direct the military
                             services to identify and document in their acquisition plans and
                             strategies specific areas where commonality can be achieved, take an
                             open systems approach to product development, conduct a
                             quantitative analysis that examines the costs and benefits of various
                             levels of commonality, and establish a collaborative approach and
                             management framework to periodically assess and effectively
                             manage commonality.



Agency Comments          GAO provided a draft of this report section to DOD. DOD provided
                         clarifications on individual program decisions and other technical
and GAO’s Evaluation     comments which were incorporated as appropriate. As part of its routine
                         audit work, GAO will track agency actions to address these
                         recommendations and report to Congress.



How GAO Conducted        The information contained in this analysis is based on findings from
                         products listed in the related GAO products section and additional work
Its Work                 GAO conducted. GAO comprehensively identified, to the extent possible,
                         using a data collection instrument, DOD’s UAS portfolio to analyze how
                         DOD and the military services acquired this portfolio. GAO assessed the
                         Office of the Under Secretary of Defense for Acquisition, Technology, and
                         Logistics and military service UAS roadmaps, requirements, and concepts
                         of operation. GAO conducted interviews with officials from the Joint
                         Chiefs of Staff, the Office of the Under Secretary of Defense for


                         Page 30                        GAO-12-342SP Duplication, Overlap, and Fragmentation
              Acquisition, Technology, and Logistics, military service laboratories and
              program offices, as well as UAS contractors. Using these data, GAO
              evaluated to what extent collaboration and coordination efforts by DOD
              and the military services resulted in—or reduced the potential for—
              duplication, fragmentation, and overlap. Appendix III lists the programs
              GAO identified that may have similar or overlapping objectives, provide
              similar services or be fragmented across government missions. Overlap
              and fragmentation may not necessarily lead to actual duplication, and
              some degree of overlap and duplication may be justified.



Related GAO   DOD Weapon Systems: Missed Trade-off Opportunities During
              Requirements Reviews. GAO-11-502. Washington, D.C.: June 16, 2011.
Products
              Intelligence, Surveillance, and Reconnaissance: Actions Are Needed to
              Increase Integration and Efficiencies of DOD’s ISR Enterprise.
              GAO-11-465. Washington, D.C.: June 3, 2011.

              Defense Acquisitions: Opportunities Exist to Achieve Greater
              Commonality and Efficiencies among Unmanned Aircraft Systems.
              GAO-09-520. Washington, D.C.: July 30, 2009.

              Unmanned Aircraft Systems: Additional Actions Needed to Improve
              Management and Integration of DOD Efforts to Support Warfighter
              Needs. GAO-09-175. Washington, D.C.: November 14, 2008.

              Unmanned Aircraft Systems: Advance Coordination and Increased
              Visibility Needed to Optimize Capabilities. GAO-07-836. Washington,
              D.C.: July 11, 2007.

              Defense Acquisition: Better Acquisition Strategy Needed for Successful
              Development of the Army’s Warrior Unmanned Aircraft System.
              GAO-06-593. Washington, D.C.: May 19, 2006.

              Unmanned Aircraft Systems: New DOD Programs Can Learn from Past
              Efforts to Craft Better and Less Risky Acquisition Strategies.
              GAO-06-447. Washington, D.C.: March 15, 2006.

              Unmanned Aircraft Systems: DOD Needs to More Effectively Promote
              Interoperability and Improve Performance Assessments. GAO-06-49.
              Washington, D.C.: December 13, 2005.

              Unmanned Aerial Vehicles: Changes in Global Hawk’s Acquisition
              Strategy Are Needed to Reduce Program Risks. GAO-05-6. Washington,
              D.C.: November 5, 2004.

              Force Structure: Improved Strategic Planning Can Enhance DOD’s
              Unmanned Aerial Vehicles Efforts. GAO-04-342. Washington, D.C.:
              March 17, 2004.




              Page 31                       GAO-12-342SP Duplication, Overlap, and Fragmentation
                      Defense Acquisitions: Matching Resources with Requirements Is Key to
                      the Unmanned Combat Air Vehicle Program’s Success. GAO-03-598.
                      Washington, D.C.: June 30, 2003.

                      Ballistic Missile Defense: More Common Systems and Components
                      Could Result in Cost Savings. GAO/NSIAD-99-101. Washington, D.C.:
                      May 21, 1999.

                      Unmanned Vehicles: Assessment of DOD’s Unmanned Aerial Vehicle
                      Master Plan. NSIAD-89-41BR. Washington, D.C.: December 9, 1988.



Contact Information   For additional information about this area, contact Michael J. Sullivan at
                      (202) 512-4841 or sullivanm@gao.gov.




                      Page 32                       GAO-12-342SP Duplication, Overlap, and Fragmentation
4. Counter-Improvised Explosive Device
Efforts
The Department of Defense continues to risk duplication in its multibillion-dollar counter Improvised Explosive
Device efforts because it does not have a comprehensive database of its projects and initiatives.



Why This Area Is                     The threat of improvised explosive devices (IED) continues to be a major
                                     concern in Afghanistan, as well as to other areas throughout the world
Important                            with over 500 reported IED events per month worldwide outside of
                                     Southwest Asia according to Department of Defense (DOD) officials.
                                     Further, there is widespread consensus in DOD that this threat will not go
                                     away and that IEDs will continue to be a weapon of strategic influence in
                                     future conflicts. In support of the fight against IEDs, Congress has
                                     appropriated over $18 billion to the Joint IED Defeat Organization
                                     (JIEDDO) 1 from fiscal year 2006 through fiscal year 2011 to address the
                                     IED threat. In addition, other DOD components, including the military
                                     services, also have spent billions of dollars from their own funds
                                     developing counter-IED capabilities. For example, the Mine Resistant
                                     Ambush Protected Task Force, which leads DOD’s efforts to produce and
                                     field Mine Resistant Ambush Protected vehicles to protect troops against
                                     IEDs and other threats, received over $40 billion from fiscal years 2005
                                     through 2010. With the current fiscal challenges facing the nation, it will
                                     be important for DOD to coordinate its counter-IED efforts in order to use
                                     funds efficiently.

                                     As GAO reported in March 2011, there are several examples of
                                     duplication in DOD’s counter-IED efforts and neither JIEDDO nor any
                                     other DOD organization had full visibility over all of DOD’s counter-IED
                                     efforts. 2 GAO also reported in February 2012 on additional examples of
                                     potential duplication in DOD’s counter-IED efforts.



What GAO Found                       DOD does not have full visibility over all of its counter-IED efforts. DOD
                                     relies on various sources and systems for managing its counter-IED
                                     efforts, but has not developed a process that provides DOD with a
                                     comprehensive listing of its counter-IED initiatives and activities. For
                                     example, JIEDDO has developed the JIEDDO Enterprise Management
                                     System to manage its own operations by collecting and reporting cost and


                                     1
                                      This total represents appropriations and rescissions made to the Joint Improvised
                                     Explosive Device Defeat Fund for JIEDDO. Prior to the establishment of JIEDDO in 2006,
                                     no single entity was responsible for coordinating DOD’s counter-IED efforts. A primary role
                                     for JIEDDO is to provide funding and assistance to rapidly develop, acquire, and field
                                     counter-IED solutions.
                                     2
                                      GAO, Opportunities to Reduce Potential Duplication in Government Programs, Save Tax
                                     Dollars, and Enhance Revenue, GAO-11-318SP (Washington, D.C.: March 1, 2011).




                                     Page 33                             GAO-12-342SP Duplication, Overlap, and Fragmentation
other information related to JIEDDO’s organizational and funds
management, its coordination of JIEDDO-funded projects and projects
funded by other DOD activities, its administrative activities, and its own
counter-IED projects. However, while this system contains information
that could be used to identify individual initiatives, it does not
automatically separate costs directly expended on counter-IED initiatives
from JIEDDO’s overhead and infrastructure costs such as facilities,
contractor support, pay and benefits, and travel. Consequently, this
system does not provide an automated means to comprehensively and
rapidly identify and list all of JIEDDO’s counter-IED initiatives. Further,
even if it did collect this information, the system is limited to JIEDDO, and
therefore would not include a comprehensive listing of other DOD efforts
outside of JIEDDO. However, JIEDDO is currently developing a new
information technology architecture and plans to develop a database for
counter-IED efforts across DOD as part of this new architecture. This
effort is in the conceptualization stage, and JIEDDO officials do not
anticipate completion before the end of fiscal year 2012. Further, JIEDDO
does not have an implementation plan that includes a detailed timeline
with milestones to help track its progress in achieving this goal.

Without a comprehensive listing of counter-IED initiatives, DOD
components may be unaware of the total spectrum of counter-IED efforts
within the department, and thereby continue to independently pursue
counter-IED efforts that focus on similar technologies and may be
duplicative. GAO identified three examples of potential duplication within
DOD counter-IED efforts focusing on relatively high-cost areas.

•   Counter-IED directed energy technology: The military services have
    developed six systems that emit energy directed at IEDs to neutralize
    them. 3 DOD has spent about $104 million collectively on these efforts
    to date. However, given the lack of a DOD-wide counter-IED
    database, there could be more directed energy efforts that GAO has
    not identified. Concerns regarding duplication in DOD’s directed
    energy efforts vis-à-vis counter-IEDs have risen to the highest levels
    within DOD’s warfighter community. Specifically, the commander of
    U.S. Central Command, in August 2011, conveyed concern regarding
    issues including apparent “duplicity of (development) effort” in directed
    energy technology with organizations (in DOD) working different
    solutions. The correspondence called for coordination and
    cooperation by DOD on its directed energy efforts to develop a
    directed energy system that works in theater as quickly as possible
    given that the development has been under way since 2008. In
    response in August 2011, JIEDDO, as DOD’s coordinating agency for
    these efforts, developed a plan and, in September 2011, brought
    various service program offices together to develop a solution as soon
    as possible. According to JIEDDO officials, the six systems will


3
 The specific capability gap addressed by this technology is classified and therefore not
discussed in this report.




Page 34                              GAO-12-342SP Duplication, Overlap, and Fragmentation
    continue in development through fiscal year 2012, at which point,
    JIEDDO will determine which of the systems best satisfies U.S.
    Central Command’s requirement. While this new approach may
    eliminate future unnecessary duplication of effort, earlier coordination
    and better visibility could have prevented duplication that may have
    occurred up to this point.

•   Radio-frequency jamming systems: The Army and Navy continue to
    pursue separate development of counter-IED jamming systems, which
    provide a limited radius of protection to prevent IEDs from being
    triggered by an enemy’s radio signals. In 2007, DOD established the
    Navy as the single manager and executive agent for ground-based
    jamming. 4 Under DOD Directive 5101.14, military services may
    conduct ground-based jammer research and development to satisfy
    military service-unique requirements if the requirements are
    coordinated before initiation with the DOD’s single manager for
    jammers and, for any system or system modifications resulting from
    such efforts, operational technical characteristics and logistics plans are
    approved by the single manager. The Navy has developed a standard
    technology and system for ground-based jamming called JCREW I1B1,
    which DOD has designated as the ground-based jamming program for
    the entire department. However, the Army has continued to develop its
    own ground-based jamming system called Duke.

    In 2010, according to Navy officials, the Army continued to develop
    new technology for insertion into its Duke system—expected to cost
    about $1.062 billion when completed and installed—without notifying
    and coordinating with the Navy. According to Army officials, the Army
    is pursuing development of its own system because it intends to
    expand the use of this technology for purposes other than countering
    IEDs, such as jamming enemy command, control, and communication
    systems. However, according to Navy officials, the CREW system’s
    technology has the flexibility and capacity to expand and provide the
    same additional functions as the Army plans for its Duke system.
    Moreover, according to Navy officials, the Navy’s system is further
    along in its development. Because the Navy and Army are pursuing
    separate jamming systems, it is not clear if DOD is taking the most
    cost-effective approach. While, according to JIEDDO officials, the
    Office of the Secretary of Defense was considering how to resolve this
    issue, a decision had not been made before GAO’s report was
    completed. Regardless of the final outcome, however, a more
    coordinated approach early in the process when initiating programs of
    this magnitude could prevent unnecessary duplication in costs and
    effort.



4
 See Department of Defense Directive 5101.14, DoD Executive Agent and Single
Manager for Military Ground-Based Counter Radio-Controlled Improvised Explosive
Device Electronic Warfare (CREW) Technology, ¶ 5.3.1 (June 11, 2007) (requiring the
Secretary of the Navy to designate a single manager).




Page 35                            GAO-12-342SP Duplication, Overlap, and Fragmentation
•   Electronic data collection systems: According to JIEDDO officials,
    JIEDDO has funded the development and support of approximately
    70 electronic data collection and analysis tools that overlap to some
    degree because they include capabilities to collect, analyze, and store
    data to help the warfighter combat the IED threat. Although JIEDDO
    recently reported that it could not verify total funding for its information
    technology investments, 5 GAO determined through a review of DOD
    financial records that the department has expended at least $184
    million collectively on information technology development for its data
    collection and analysis tools.

    According to JIEDDO officials, JIEDDO is aware of the redundancy
    within these electronic tools. In April 2011, the JIEDDO Deputy
    Director for Information Management raised the issue of redundancy
    in JIEDDO’s information technology systems, including its counter-
    IED data collection and analysis systems and tools. Consequently,
    since April 2011, JIEDDO has worked to eliminate overlapping
    information technology capabilities where feasible, including among
    the approximately 70 analytical tools JIEDDO has funded and
    developed for use in countering IED networks. For example, on July
    1, 2011, JIEDDO discontinued funding for one of these initiatives—
    Tripwire Analytical Capability—citing as reasons the initiative’s limited
    purpose, high cost, and duplicative capabilities.

    However, in making its decision to discontinue the Tripwire Analytical
    Capability, yet continue operating the other data collection and
    analysis tools, JIEDDO had not compared and quantified all of the
    potential options to streamline or consolidate these tools to create a
    single, collective system that includes extracting data on counter-IED
    efforts across DOD. As a result, JIEDDO cannot be certain it is
    pursuing the most advantageous approach for collecting, analyzing,
    storing, and using available data for combating the IED threat.
    Further, although JIEDDO has discontinued funding the Tripwire
    Analytical Capability, the Defense Intelligence Agency is continuing to
    develop the tool for its own use, resulting in the potential for DOD-
    wide duplication between the Tripwire Analytical Capability and
    JIEDDO’s other data collection and analysis tools.

These above three examples of potential duplication are based on GAO’s
examination of selected efforts identified during its review of DOD’s
progress in developing a comprehensive DOD-wide counter-IED
database. However, given the continued absence of a database and a
process to identify and reduce duplication in DOD’s counter-IED efforts,
the potential exists for additional cases of duplication.




5
 Joint Improvised Explosive Device Defeat Organization Office of Internal Review, Joint
Improvised Explosive Device Defeat Organization: Information Technology Investment
Management, Report of Audit 2011-07-002 (September 6, 2011).




Page 36                             GAO-12-342SP Duplication, Overlap, and Fragmentation
                         To improve visibility of its collective counter-IED expenditures and
Actions Needed and       investments, GAO has in prior years recommended that DOD develop a
Potential Financial or   database of all department-wide counter-IED efforts. However, after
                         expending billions of dollars on developing counter-IED capabilities, DOD
Other Benefits           has not made progress in establishing such a database. Consequently,
                         GAO recommended in February 2012 that DOD should

                            develop an implementation plan, including a detailed timeline with
                             milestones to help achieve this goal; and

                            develop a process to use this database once it is established to
                             identify and reduce duplication, overlap, and fragmentation among its
                             counter-IED initiatives.

                         It is essential that DOD follow-through in implementing GAO’s
                         recommendations to address the risk of duplication in its multibillion-dollar
                         counter-IED expenditures and investments. Given that JIEDDO and other
                         DOD organizations have spent billions of dollars on counter-IED efforts,
                         cost savings could be significant should DOD focus on reducing
                         duplication across its counter-IED efforts.


                         GAO provided a draft of its February 2012 report to DOD for review and
Agency Comments          comment. DOD agreed with GAO’s recommendation to develop an
and GAO’s Evaluation     implementation plan for the establishment of DOD’s counter- IED
                         database. The department did not agree with the recommendation to
                         develop a means to identify and reduce any duplication, overlap, and
                         fragmentation among counter-IED initiatives, stating that it had existing
                         processes to facilitate coordination and collaboration with the military
                         services and across DOD, which would address this recommendation.
                         GAO agrees that existing DOD processes such as JIEDDO’s Capabilities
                         Development Process and DOD’s Senior Integration Group prioritization
                         process can be helpful in coordinating DOD’s counter-IED efforts.
                         However, the effectiveness of these processes has been limited given
                         that they did not prevent the instances of potential duplication GAO
                         identified. For example, in the case of DOD’s directed energy counter-IED
                         efforts where DOD has collectively expended $104 million, the processes
                         cited by DOD in its response did not identify and resolve the potential
                         duplication present in these efforts. As a result the commander of U.S.
                         Central Command, as mentioned previously, protested in writing to DOD
                         officials about potential duplication of efforts. Without a process to use
                         DOD’s counter-IED database, once it is developed, DOD will continue to
                         lack assurance that it is identifying and addressing instances of potential
                         duplication before making significant investments. In finalizing its
                         February 2012 report, GAO modified the wording of the recommendation
                         to clarify the intent that DOD establish a process to use its counter-IED
                         data base once it is established.




                         Page 37                        GAO-12-342SP Duplication, Overlap, and Fragmentation
How GAO Conducted     The information contained in this analysis is based on findings from the
                      products in the related GAO products section. GAO reviewed JIEDDO
Its Work              databases on counter-IED efforts and interviewed DOD, military service,
                      and JIEDDO officials to determine the degree of comprehensive visibility
                      regarding DOD’s counter-IED efforts. GAO identified and evaluated
                      examples of potential duplication using information from interviews with
                      DOD officials and data and documentation collected that evidenced
                      similar capabilities and objectives among two or more counter-IED efforts.



Related GAO           Warfighter Support: DOD Needs Strategic Outcome-Related Goals and
                      Visibility Over Its Counter-IED Efforts. GAO-12-280. Washington, D.C.:
Products              February 22, 2012.

                      Warfighter Support: DOD’s Urgent Needs Processes Need a More
                      Comprehensive Approach and Evaluation for Potential Consolidation.
                      GAO-11-273. Washington, D.C.: March 1, 2011.

                      Warfighter Support: Actions Needed to Improve Visibility and
                      Coordination of DOD’s Counter-Improvised Explosive Device Efforts.
                      GAO-10-95. Washington, D.C.: October 29, 2009.

                      Warfighter Support: Challenges Confronting DOD’s Ability to Coordinate
                      and Oversee Its Counter-Improvised Explosive Devices Efforts.
                      GAO-10-186T. Washington, D.C.: October 29, 2009.

                      Defense Management: More Transparency Needed over the Financial
                      and Human Capital Operations of the Joint Improvised Explosive Device
                      Defeat Organization. GAO-08-342. Washington, D.C.: March 6, 2008.



Contact Information   For additional information about this area, contact Cary B. Russell at
                      (404) 679-1808 or russellc@gao.gov.




                      Page 38                       GAO-12-342SP Duplication, Overlap, and Fragmentation
5. Defense Language and Culture Training
The Department of Defense needs a more integrated approach to reduce fragmentation in training approaches
and overlap in the content of training products acquired by the military services and other organizations.



Why This Area Is                   Due to changes in the global security environment and operational
                                   experiences such as those in Afghanistan and Iraq, the Department of
Important                          Defense (DOD) has emphasized the importance of developing language
                                   skills and knowledge of foreign cultures within its forces to meet the
                                   needs of current and future military operations. Traditionally, DOD has
                                   focused on its professional communities of linguists and regional experts
                                   to ensure that it has the language and culture capabilities it needs. In
                                   recent years, the department has identified the need to build these
                                   capabilities within the general purpose forces and has spent considerable
                                   time and resources to establish language- and culture-related plans,
                                   organizations, and activities. 1

                                   Specifically, DOD has invested millions of dollars to provide language and
                                   culture training to thousands of servicemembers, including those
                                   deploying to ongoing operations. For example, GAO estimated that DOD
                                   invested about $266 million for fiscal years 2005 through 2011 to provide
                                   general purpose forces with training support, such as classroom
                                   instruction, computer-based training, and training aids. Since 2009, GAO
                                   has reported on management challenges that DOD faces in developing
                                   language and culture capabilities, indicating that opportunities exist for
                                   DOD to approach its language and culture training efforts more efficiently.



What GAO Found                     As GAO reported in May 2011, language and culture training within DOD
                                   is not provided through a single department- or servicewide program, but
                                   rather multiple DOD organizations oversee the development and
                                   acquisition of language and culture training and related products and
                                   deliver training. However, GAO has found that the department lacks an
                                   approach for integrating these efforts, which has contributed to some
                                   fragmentation of service training efforts and overlap and potential
                                   duplication in some of the language and culture training products
                                   acquired by the services.

                                   To establish organizational responsibility for language- and culture-
                                   related efforts, DOD has established the Defense Language Office and
                                   designated Senior Language Authorities within the Office of the Secretary




                                   1
                                    General purpose forces are the regular armed forces of a country, other than nuclear
                                   forces and special operations forces, that are organized, trained, and equipped to perform
                                   a broad range of missions across the range of military operations.




                                   Page 39                             GAO-12-342SP Duplication, Overlap, and Fragmentation
of Defense, the Joint Staff, and the military services. 2 Each military
service has a dedicated organization that provides culture and, in some
cases, language training to its respective forces, while the Defense
Language Institute Foreign Language Center also provides language
training to each of the services’ forces. GAO also reported that the Office
of the Secretary of Defense had not yet established internal mechanisms
to assist the department in reaching consensus with the military services
and other DOD entities on training priorities, synchronize the
development of service- and departmentwide plans with the budget
process, and guide efforts to monitor progress.

In the absence of an integrated approach, GAO found that DOD has not
approached its language and culture training efforts in an efficient
manner. In particular, DOD and the military services have not yet reached
agreement on the common language and cultural skills that general
purpose forces need to acquire. Without such an agreement, each
military service has developed an individualized approach for language
and culture training that varies in the amount, depth, and breadth of
training. Moreover, DOD did not have a process to coordinate training
requirements for ongoing operations, and therefore multiple organizations
independently established varying language and culture training
requirements. As a result, the services have expended considerable time
and resources adjusting their language and culture training plans.

In addition, the military services have not fully coordinated efforts to
develop and acquire language and culture training products. As a result,
the services have acquired overlapping and potentially duplicative
products, such as reference materials containing country- or region-
specific cultural information and computer software or web-based training
programs that can be used within a distributed learning training
environment. 3 GAO previously reported that when assessing delivery
options for training, agencies may achieve economies of scale and avoid
duplication of effort by taking advantage of existing training content, such
as sharable online courseware. 4 However, GAO found that
departmentwide working groups existed but had not been formally
designated with the responsibility to develop training products that can be



2
 The Defense Language Office, within the Office of the Under Secretary of Defense for
Personnel and Readiness, provides strategic direction and programmatic oversight to the
DOD components, including the services and combatant commands, on present and
future requirements related to language, as well as on regional and cultural proficiency.
The office’s director reports to the Deputy Assistance Secretary of Defense for Readiness,
who has been designated as the DOD Senior Language Authority.
3
 DOD defines distributed learning as structured learning mediated with technology that
does not require the physical presence of the instructor. Distributed learning models can
be used in combination with other forms of instruction or it can be used to create wholly
virtual classrooms.
4
 GAO, Human Capital: A Guide for Assessing Strategic Training and Development Efforts
in the Federal Government, GAO-04-546G (Washington, D.C.: March 2004).




Page 40                             GAO-12-342SP Duplication, Overlap, and Fragmentation
    used by more than one service. In practice, while GAO found some
    individual examples where the services had coordinated efforts to
    develop or contract for similar language and culture training products, in
    most cases they did not take steps to coordinate these types of efforts.

    To illustrate, GAO analyzed 18 DOD language and culture training
    products and found that the content overlapped to some extent with at
    least one other training product. While all of the products are intended for
    use by the services’ general purpose forces, there is some variance in the
    amount of language and cultural information contained within each
    product type. The following describes instances in which DOD might have
    increased training costs by developing or acquiring overlapping and
    potentially duplicative training products:

•   Cultural reference materials. Three of four services (the Air Force, Army,
    and Marine Corps) have used contractors to develop reference materials,
    such as “field guides” and “smart books” at a cost of about $1.6 million
    that contained similar general and country-specific cultural content. In
    addition, the Defense Language Institute Foreign Language Center has
    invested about $15 million to develop two products—”Countries in
    Perspective” and “Cultural Orientations”—that also offer country-specific
    cultural information, including some of the same countries addressed by
    the services’ products.

•   Distributed learning products for culture training. According to service
    officials, DOD obligated about $15 million on contracts within the period
    of fiscal year 2008 through fiscal year 2010 for three computer software
    or web-based distributed learning culture training products (for the Air
    Force, the Army, and the U.S. Joint Forces Command) that provided
    overlapping cultural content and similar learning objectives. For example,
    each of the products contained training modules for Afghanistan with
    learning objectives focused on behaviors to show respect and steps to
    avoid gender taboos. The same subcontractor developed the Air Force’s
    and the Army’s products, and the products generally did not contain
    information that was unique to the services’ primary roles and missions.
    At the same time, the Joint Staff was also developing another product
    that provides similar content as the Air Force and Army products.

•   Distributed learning products for foreign language training. The military
    services (the Air Force, Army, Marine Corps, and Navy) and the Defense
    Language Institute Foreign Language Center estimated costs totaling
    about $63 million within the period of fiscal year 2005 through fiscal year
    2011 to develop and acquire multiple computer software or web-based
    distributed learning foreign language products that offered some
    overlapping foreign languages. For Afghan languages, DOD invested in
    at least five products that were intended to build basic foreign language
    skills or specific language skills needed to perform military tasks.




    Page 41                       GAO-12-342SP Duplication, Overlap, and Fragmentation
Actions Needed and           DOD has taken positive steps, but has not fully addressed the
                             recommendations that GAO has made since 2009 regarding
Potential Financial or       management challenges that can cause inefficiencies in DOD efforts to
Other Benefits               develop language and culture capabilities. For example, in February
                             2011, DOD published the Department of Defense Strategic Plan for
                             Language Skills, Regional Expertise, and Cultural Capabilities
                             (2011-2016), but it still needs to take additional action. GAO
                             recommended in May 2011 that the Office of the Under Secretary of
                             Defense for Personnel and Readiness

                         •   establish a clearly defined planning process with mechanisms, such as
                             procedures and milestones, for reaching consensus with the military
                             departments; coordinating and reviewing approval of updates to plans;
                             synchronizing the development of plans with the budget process;
                             monitoring the implementation of initiatives, and reporting progress, on a
                             periodic basis, toward the achievement of established goals.

                             Further, DOD published a September 2010 training strategy that called
                             for eliminating unnecessary redundancy and duplication and leveraging
                             the investments of stakeholders with similar interests to include identifying
                             opportunities for shared use across DOD entities. 5 In one case, GAO
                             identified actions that the Army and Marine Corps took to achieve
                             efficiencies and save costs by reducing the number of contracts for
                             language training products. DOD could also take steps to achieve greater
                             efficiencies and maximize the use of resources by identifying and
                             reducing any unnecessary overlap and duplication in language and
                             culture training products. Specifically, the Office of the Under Secretary of
                             Defense for Personnel and Readiness and the military services should

                         •   designate organizational responsibility and a supporting process to
                             inventory and evaluate existing language and culture products and plans
                             for additional investments, eliminate any unnecessary overlap and
                             duplication, and adjust resources accordingly.

                         •   take steps to coordinate efforts to contract for future language and culture
                              training products where possible and collaborate on the development of
                              new products that support co-use by more than one military service.

                             Because multiple DOD organizations have responsibilities for planning
                             and developing language- and culture-related training, and budget and
                             cost information is not captured in a centralized manner, determining
                             definitive costs in this area is challenging. GAO was able to determine
                             that DOD is spending millions of dollars to develop and acquire language
                             and culture training products and deliver related training, but cannot
                             quantify the actual cost of the overlap within the language and culture
                             training products GAO identified due to these data limitations. However,


                             5
                              Department of Defense, Strategic Plan for the Next Generation of Training for the
                             Department of Defense (Sept. 23, 2010).




                             Page 42                             GAO-12-342SP Duplication, Overlap, and Fragmentation
                       based on the level of investments that GAO could determine that DOD is
                       making, it appears that DOD has opportunities to achieve significant cost
                       savings if it implements the actions outlined above.



Agency Comments        GAO provided a draft of this report section to DOD for review and
                       comment. DOD provided technical comments, which were incorporated
and GAO’s Evaluation   as appropriate. DOD officials generally agreed with the facts and findings
                       of the analysis. Specifically, officials recognized that coordination is
                       important and noted that DOD entities have, in some specific cases,
                       collaborated on the development of language and culture training
                       products. The officials agreed that departmentwide coordination efforts
                       could be improved and noted that GAO’s analysis would be useful in
                       targeting specific areas for improvement. DOD officials also noted that a
                       certain degree of overlap among training products can serve to prevent
                       gaps and accommodate the differing missions and training needs of the
                       military services. However, DOD officials recognized that, to avoid
                       duplication and maximize available resources, the department needs to
                       evaluate its existing language and culture training products and plans for
                       future investments to ensure that limited resources are being utilized on
                       quality products. GAO recognizes that some overlap in training products
                       may be warranted to meet the unique mission needs of the military
                       services, but by establishing an integrated approach, the department
                       would be better positioned to reach consensus with the military services
                       on the language and culture skills needed by general purpose forces as
                       well as the content of related training products. Such an approach would
                       also assist the department in evaluating the overlap in existing language
                       and culture training products and eliminating any unnecessary
                       duplication. As part of its routine audit work, GAO will track the extent to
                       which progress has been made to address the identified actions and
                       report to Congress.



How GAO Conducted      The information contained in this analysis is based on findings from the
                       products listed in the related GAO products section as well as additional
Its Work               work GAO conducted. GAO examined language and culture training
                       investments for general purpose forces; missions, roles, and
                       responsibilities among key DOD organizations involved in language and
                       culture training; and the content of language and culture training products.
                       GAO reviewed key documents, such as directives and training programs
                       of instruction; analyzed language and culture products used to train
                       general purpose forces; and interviewed relevant DOD and service
                       officials. GAO obtained and analyzed budgetary and contracting
                       information, where available, for language and culture training support
                       provided to DOD’s general purpose forces. For example, GAO estimated
                       the costs for this training for fiscal years 2005 through 2011.




                       Page 43                       GAO-12-342SP Duplication, Overlap, and Fragmentation
Related GAO           Language and Culture Training: Opportunities Exist to Improve Visibility
                      and Sustainment of Knowledge and Skills in Army and Marine Corps
Products              General Purpose Forces. GAO-12-50. Washington. D.C.: October 31,
                      2011.

                      Military Training: Actions Needed to Improve Planning and Coordination
                      of Army and Marine Corps Language and Culture Training. GAO-11-456.
                      Washington, D.C.: May 26, 2011.

                      Military Training: Continued Actions Needed to Guide DOD’s Efforts to
                      Improve Language Skills and Regional Proficiency. GAO-10-879T.
                      Washington, D.C.: June 29, 2010.

                      Military Training: DOD Needs a Strategic Plan and Better Inventory and
                      Requirements Data to Guide Development of Language Skills and
                      Regional Proficiency. GAO-09-568. Washington, D.C.: June 19, 2009.



Contact Information   For additional information about this area, contact Sharon Pickup at (202)
                      512-9619 or pickups@gao.gov.




                      Page 44                       GAO-12-342SP Duplication, Overlap, and Fragmentation
6. Stabilization, Reconstruction, and
Humanitarian Assistance Efforts
Improving the Department of Defense’s evaluations of stabilization, reconstruction, and humanitarian
assistance efforts, and addressing coordination challenges with the Department of State and the U.S. Agency
for International Development, could reduce overlapping efforts and result in the more efficient use of
taxpayer dollars.



Why This Area Is                    The Department of Defense (DOD), Department of State (State), and the
                                    U.S. Agency for International Development (USAID) have been heavily
Important                           involved in stabilization and reconstruction efforts in both wartime and
                                    peacetime environments to re-establish security, strengthen governance,
                                    rebuild infrastructure, and improve social and economic well-being in
                                    foreign countries. These efforts have cost the U.S. government a
                                    substantial amount of money—about $72 billion since 2002 for programs
                                    to secure, stabilize, and develop Afghanistan, and about $62 billion since
                                    2003 for relief and reconstruction in Iraq. DOD’s role in stabilization and
                                    reconstruction efforts has increased, with several new programs
                                    emerging in recent years, including the Commander’s Emergency
                                    Response Program (CERP), DOD’s Task Force for Business and Stability
                                    Operations, and the Afghanistan Infrastructure Fund. DOD’s efforts are
                                    often similar in nature to State and USAID efforts, and thus interagency
                                    coordination is critical for avoiding unnecessary overlap, wasted
                                    resources, or fragmentation.



What GAO Found                      DOD has been conducting stabilization and reconstruction efforts that are
                                    similar to those of USAID and State; and the three agencies face
                                    challenges in project evaluation and information sharing which, if not
                                    addressed, could result in the potential for unnecessary overlap, wasted
                                    resources, and a fragmented approach to U.S. assistance efforts.

                                    As the table below illustrates, DOD has expanded its programs over the
                                    past several years. In fiscal year 2011, Congress made available a total
                                    of $950 million for CERP, DOD’s Task Force for Business and Stability
                                    Operations, and the Afghanistan Infrastructure Fund. State and USAID
                                    have also pursued a variety of efforts to help rebuild Afghanistan,
                                    including projects to construct roads, develop water and electrical
                                    infrastructure, and build the capacity of its government. In Iraq, State and
                                    USAID projects have involved education, health, water and sanitation
                                    facilities, and building the capacity of the Iraqi ministries. Outside of Iraq
                                    and Afghanistan, funding for DOD’s peacetime humanitarian assistance
                                    efforts has also increased.




                                    Page 45                        GAO-12-342SP Duplication, Overlap, and Fragmentation
Key DOD Stability, Reconstruction, and Humanitarian Assistance Efforts

                                                                                                                                          Estimated program
Program (Key agencies involved)         Description                                                                                       funding
Commander’s Emergency Response          This program began in 2003 and has enabled commanders to                                          At least $7.9 billion made
Program (CERP)                          respond to urgent humanitarian relief and reconstruction needs in                                 available for FYs 2004-
(DOD)                                   Iraq, Afghanistan, and the Philippines. It has evolved in terms of                                2011
                                        project cost and complexity. Projects include new construction or
                                        rehabilitation of existing infrastructure, ranging from small scale
                                        projects like water wells to dormitories and roads. DOD uses
                                        some CERP funds to increase agricultural production with
                                        projects focused on irrigation systems, wells, and ditches; canal
                                        cleanup; and water sanitation.
Security and Stabilization Assistance   Created in 2006, this program authorized DOD to transfer funds to                                 Over $350 million
Program (also known as the Section      State for nonmilitary assistance related to stabilization,                                        provided by DOD to
1207 Program)                           reconstruction, and security. Activities could include removing                                   State for FYs 2006-2009;
(DOD, State)                            unexploded ordnance or reforming extremist educational                                            at least $250 million
                                        programs. The authority for the program expired in 2010, but                                      made available in FY
                                        Congress authorized a similar program for DOD and State in                                        2012 for the new fund
                                        fiscal year 2012, called the Global Security Contingency Fund.
Task Force for Business and Stability   Established in June 2006, the Task Force supports economic                                        $828 million made
Operations                              stabilization efforts, first in Iraq and now in Afghanistan. Activities                           available to the Task
(DOD)                                   include developing businesses, creating jobs, and attracting                                      Force for FYs 2007-2012
                                        foreign investment in sectors such as agriculture, energy, banking
                                        and finance, and communications and technology.
Afghanistan Infrastructure Fund         Established in 2011, the fund supports a joint DOD/State program                                  $800 million for FYs
(DOD, State)                            for high-priority, large-scale infrastructure projects that support the                           2011-2013
                                        U.S. military-civilian effort in Afghanistan.
Peacetime Humanitarian Assistance       DOD’s two key programs are the Overseas Humanitarian,                                             $383 million obligated for
Programs                                Disaster, and Civic Aid-funded humanitarian assistance program                                    FYs 2005-2010 outside
(DOD)                                   and the Humanitarian and Civic Assistance program. Activities,                                    of Iraq and Afghanistan
                                        which are typically performed outside of war or disaster
                                        environments, include renovating schools and hospitals, drilling
                                        wells, providing basic health care, and providing training to
                                        prepare for natural disasters. From fiscal years 2005 through
                                        2010 DOD obligated about $328.4 million to support the Overseas
                                        Humanitarian, Disaster, and Civic Aid-funded humanitarian
                                        assistance program, which represented an increase in obligations
                                        of about 60 percent over the time period (figures in constant FY
                                        2011 dollars).
                                            Source: GAO analysis of data from DOD, the Special Inspector General for Afghanistan, relevant legislation, and GAO’s prior work.

                                            Note: While direct comparison among dollar figures cannot be made, the table is intended to highlight
                                            examples of various programs and estimated funding associated with them.


                                            In some cases, especially during the early stages of a wartime
                                            environment, it may be advantageous for DOD to conduct stabilization
                                            and reconstruction efforts because it can provide its own security.
                                            However, questions have been raised as to DOD’s role in performing
                                            some of these efforts given that DOD efforts can overlap with those of
                                            State and USAID. For example, officials in State, USAID, and DOD have
                                            questioned whether DOD’s Task Force for Business and Stability
                                            Operations, which has funded economic stabilization efforts in Iraq and
                                            Afghanistan, should continue to reside in DOD or be transitioned to
                                            another federal agency, such as USAID, whose role includes providing
                                            economic, development, and disaster response assistance around the
                                            world in support of U.S. foreign policy and development goals. In 2011,
                                            Congress directed that State, USAID, and DOD jointly develop a plan to



                                            Page 46                                              GAO-12-342SP Duplication, Overlap, and Fragmentation
transition the Task Force’s activities in Afghanistan to State, with a focus
on potentially transitioning activities to USAID. To that end, DOD has
requested that an outside organization conduct a study that would
develop, describe, and assess organizational options for a continued
Task Force for Business and Stability Operations for the U.S. government
in Afghanistan through 2014 and beyond. According to the Task Force
director, as of January 2012, the transition plan was still being developed
and will incorporate the results of the outside study, which is due to be
completed in February 2012.

As GAO reported in February 2012, some DOD humanitarian assistance
efforts outside of Iraq and Afghanistan potentially overlap with those of
State and USAID in areas such as health care, infrastructure, disaster
preparation, and education. For example, both DOD and USAID have
provided basic medical care in Yemen, built schools and education
facilities in Azerbaijan, and upgraded and rehabilitated water wells in
Pakistan. GAO found that it can be difficult to determine whether DOD’s
projects necessarily or unnecessarily overlap with those of the other
agencies and suggested that Congress consider the role of DOD in
providing humanitarian assistance and clarify the relevant legislation of
DOD’s largest humanitarian assistance program, taking into account the
roles and similar types of efforts performed by the civilian agencies. 1

In addition to potentially overlapping efforts, GAO also found that DOD,
State, and USAID face challenges in monitoring and evaluating
stabilization, reconstruction, and humanitarian assistance efforts—which
makes it difficult to determine whether projects are effective at meeting
their goals. According to Standards for Internal Control in the Federal
Government, 2 U.S. agencies should monitor and assess the quality of
performance over time, and GAO has reported that key practices for
enhancing interagency collaboration include developing mechanisms to
monitor, evaluate, and report on the results of collaborative programs. 3
However, several challenges exist with monitoring and evaluation,
including:

•   As GAO reported in July 2011, DOD’s Task Force for Business and
    Stability Operations had not developed written guidance, including
    monitoring and evaluation processes, to be used by its personnel in
    managing Task Force projects. According to the Task Force director,
    program management guidance was issued in January 2012 to
    address this issue. While this is a positive step, until the guidance is



1
 DOD’s largest humanitarian assistance program is the Overseas Humanitarian, Disaster,
and Civic Aid-funded humanitarian assistance program.
2
 GAO, Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1
(Washington, D.C.: November 1999).
3
 GAO, Results-Oriented Government: Practices That Can Help Enhance and Sustain
Collaboration among Federal Agencies, GAO-06-15 (Washington, D.C.: Oct. 21, 2005).




Page 47                           GAO-12-342SP Duplication, Overlap, and Fragmentation
    fully implemented, it is unknown whether improvements will be made
    to DOD’s project monitoring and evaluation.

•   As GAO reported in February 2012, DOD was not consistently
    evaluating its peacetime humanitarian assistance efforts to determine
    whether they were meeting their intended goals. Specifically, GAO
    estimated that DOD had not completed 90 percent of evaluations
    required 1 year after projects were completed, and had also not
    conducted about half of the evaluations required after 30 days for
    those programs. GAO also found that DOD had not assessed its
    evaluation process or requirements to determine whether changes
    were needed to employ a more risk-based evaluation approach in
    order to strategically allocate resources.

Another theme that has emerged from GAO’s work relates to challenges
the agencies face in sharing information with each other about their
respective efforts. Information sharing is a critical tool in national security,
but GAO’s work has shown several instances of fragmented information
sharing among DOD, State, and USAID that could lead to poor
coordination, wasted resources, and potentially duplicative efforts. For
example:

•   As GAO reported in November 2010, USAID had not fully
    implemented a centralized database to provide information on all U.S.
    government development projects in Afghanistan—a challenge that is
    still not fully resolved. Thus, U.S. agencies lacked access to project
    data from other agencies, including DOD, that could contribute to
    better project planning, eliminate potential overlap, and allow
    agencies to leverage each other’s resources more effectively.

•   As GAO reported in February 2012, DOD, State, and USAID had
    various initiatives under way to improve information sharing on
    humanitarian and development assistance efforts outside of Iraq and
    Afghanistan but that no framework, such as a common database,
    existed to enable agencies to readily access information on each
    other’s efforts to help them leverage these efforts and to avoid
    unnecessary overlap. The agencies agreed, stating that they are or
    will be engaging each other to determine how best to develop a
    common information-sharing mechanism.

Without enhancements to information sharing, agencies do not have full
visibility over each other’s efforts, which could lead to “stove-piped”
agency planning, potential for overlap, and an inefficient use of resources.
Moreover, improved information sharing could identify opportunities for
synergy and avoid potential duplication among agencies.




Page 48                         GAO-12-342SP Duplication, Overlap, and Fragmentation
Actions Needed and       Stabilization, reconstruction, and humanitarian assistance efforts have the
                         potential to provide tangible benefits to foreign populations and advance
Potential Financial or   U.S. interests. While the agencies have taken steps to address some of
Other Benefits           GAO’s recommendations, additional actions are still needed to improve
                         information sharing and project evaluations.

                         USAID, along with DOD and other relevant agencies still need information
                         on all U.S. government development projects in Afghanistan. Progress
                         has been made, but further effort is needed to ensure that information is
                         accessible and used by all U.S. government agencies involved in U.S.-
                         funded development projects in the country.

                         As GAO recommended in February 2012, the Secretaries of Defense and
                         State as well as the Administrator of USAID should

                         •   jointly develop a framework, such as a common database, to
                             formalize their information sharing on humanitarian or development
                             assistance efforts outside of wartime or disaster environments.

                         As GAO recommended in February 2012, the Secretary of DOD should
                         also

                         •   employ a risk-based approach to review and modify its humanitarian
                             assistance project evaluation requirements to measure the long-term
                             effects of the projects.

                         Congress may wish to consider DOD’s role in conducting peacetime
                         humanitarian assistance efforts. As GAO recommended in February
                         2012, Congress should

                         •   consider amending the legislation that supports the Overseas
                             Humanitarian, Disaster, and Civic Aid-funded humanitarian assistance
                             program—DOD’s largest humanitarian assistance program—to more
                             specifically define DOD’s role in humanitarian assistance, taking into
                             account the roles and similar types of efforts performed by the civilian
                             agencies.

                         Addressing these issues could lead to a more efficient use of the billions
                         of dollars devoted to U.S. stabilization and reconstruction efforts abroad.



Agency Comments          GAO provided a draft of its November 2010 report to DOD and USAID
                         and its February 2012 report to DOD, State, and USAID for review and
and GAO’s Evaluation     comment. DOD and USAID generally agreed with GAO’s November 2010
                         recommendations to improve planning and coordination of water sector
                         projects in Afghanistan, with DOD noting that a centralized U.S.
                         government database for U.S. development efforts in Afghanistan, if
                         designed to allow easy data access and sharing among partners, would
                         make a positive contribution. GAO notes that progress has been made in
                         designating a database since GAO’s report was issued but that the
                         agencies need to ensure that the database is accessible and used by all



                         Page 49                       GAO-12-342SP Duplication, Overlap, and Fragmentation
                    U.S. government agencies involved in U.S.-funded development projects
                    in Afghanistan.

                    DOD generally agreed with GAO’s February 2012 recommendations to
                    review and modification project evaluation requirements for its peacetime
                    humanitarian assistance efforts to measure long-term effects and ensure
                    compliance with the requirements. DOD noted that it is developing an
                    appropriate method to encourage compliance with the new project
                    evaluation requirements. However, as noted earlier, DOD acknowledged
                    that the absence of project evaluation data will require that it take at least
                    a year to collect data in order to formulate a significant and reliable risk-
                    based approach to project evaluations requirements.

                    DOD, State, and USAID agreed with GAO’s February 2012
                    recommendation that they should jointly develop a framework to
                    formalizing their information sharing on peacetime humanitarian and
                    development assistance efforts. DOD stated that it will engage State and
                    USAID to determine what mechanisms could be used to enhance
                    information sharing among the agencies. State noted that it is currently in
                    discussions with DOD and USAID about broadening one particular
                    information-sharing mechanism it uses to include DOD efforts, and
                    USAID said that it will continue to explore opportunities to share
                    information with the other agencies. As part of its routine audit work, GAO
                    will track agency actions to address the extent to which progress has
                    been made to address the identified actions and report to Congress.



How GAO Conducted   The information contained in this analysis is based on findings from the
                    products in the related GAO products section. GAO generally analyzed
Its Work            agency documentation and interviewed cognizant agency officials. For
                    example, GAO interviewed DOD and USAID officials, including Army
                    units that had returned from Afghanistan about the type of management
                    and oversight that exists for CERP. GAO analyzed documents and
                    interviewed officials in Washington, D.C., Afghanistan, and Iraq as
                    appropriate. GAO analyzed funding, project evaluations, and other
                    program data and documents, and interviewed officials at DOD, State,
                    USAID, nongovernmental organizations, and U.S. embassies.



Related GAO         Humanitarian and Development Assistance: Project Evaluations and
                    Better Information Sharing Needed to Manage the Military’s Efforts.
Products            GAO-12-359. Washington, D.C., February 8, 2012.

                    Afghanistan’s Donor Dependence. GAO-11-948R. Washington, D.C.,
                    September 20, 2011.

                    DOD Task Force for Business and Stability Operations: Actions Needed
                    to Establish Project Management Guidelines and Enhance Information
                    Sharing. GAO-11-715. Washington, D.C.: July 29, 2011.




                    Page 50                        GAO-12-342SP Duplication, Overlap, and Fragmentation
                      Afghanistan: Actions Needed to Improve Accountability of U.S.
                      Assistance to Afghanistan Government. GAO-11-710. Washington, D.C.:
                      July 20, 2011.

                      Afghanistan Development: U.S. Efforts to Support Afghan Water Sector
                      Increasing, but Improvements Needed in Planning and Coordination.
                      GAO-11-138. Washington, D.C.: November 15, 2010.

                      International Security: DOD and State Need to Improve Sustainment
                      Planning and Monitoring and Evaluation for Section 1206 and 1207
                      Assistance Programs. GAO-10-431. Washington, D.C.: April 15, 2010.

                      Military Operations: Actions Needed to Improve Oversight and
                      Interagency Coordination for the Commander’s Emergency Response
                      Program in Afghanistan. GAO-09-615. Washington, D.C.: May 18, 2009.

                      Interagency Collaboration: Key Issues for Congressional Oversight of
                      National Security Strategies, Organizations, Workforce, and Information
                      Sharing. GAO-09-904SP. Washington, D.C. September 25, 2009.

                      Military Operations: Actions Needed to Better Guide Project Selection for
                      Commander’s Emergency Response Program and Improve Oversight in
                      Iraq. GAO-08-736R. Washington, D.C.: June 23, 2008.



Contact Information   For additional information about this area, contact John H. Pendleton at
                      (202) 512-3489 or pendletonj@gao.gov




                      Page 51                       GAO-12-342SP Duplication, Overlap, and Fragmentation
7. Support for Entrepreneurs
Overlap and fragmentation among the economic development programs that support entrepreneurial efforts
require OMB and other agencies to better evaluate the programs and explore opportunities for program
restructuring, which may include consolidation, within and across agencies.



Why This Area Is                   Economic development programs that effectively provide assistance to
                                   entrepreneurs may help businesses develop and expand, and thus
Important                          contribute to the nation’s economic growth. The Departments of
                                   Commerce (Commerce), Housing and Urban Development (HUD), and
                                   Agriculture (USDA), and the Small Business Administration (SBA)
                                   administer 53 such programs that focus on supporting entrepreneurs. 1
                                   These programs, which typically fund a variety of activities in addition to
                                   supporting entrepreneurs, spent an estimated $2.6 billion in enacted
                                   appropriations on economic development efforts in fiscal year 2010. 2

                                   As GAO reported in March and May 2011, the majority of the economic
                                   development programs had missions related to supporting entrepreneurs.
                                   Programs with overlapping missions can result in inefficiencies, such as
                                   requiring recipients to fill out applications to multiple agencies with varying
                                   program requirements, as well as compromising the government’s ability
                                   to effectively provide the desired service and meet the shared goals of the
                                   programs. While collaboration is one way to overcome overlap among
                                   agencies when providing similar services, opportunities for program
                                   restructuring, which include consolidation, may also exist. GAO has
                                   ongoing work that will be issued later this year to continue examining
                                   issues beyond those identified in the March and May 2011 reports. This
                                   document reports GAO’s findings to date.




                                   1
                                    The number of programs administered by Commerce, HUD, SBA, and USDA that were
                                   identified in GAO-11-477R as supporting entrepreneurial efforts decreased from 54 to 53
                                   because Commerce merged its Minority Business Opportunity Center program and
                                   Minority Business Enterprise Center program into one program that is now called Minority
                                   Business Center. In addition, two of the original Commerce programs identified in GAO’s
                                   March and May 2011 reports—Community Trade Adjustment Assistance and Research
                                   and Evaluation—have been replaced with two other Commerce programs—Trade
                                   Adjustment Assistance for Firms and the Economic Development-Support for Planning
                                   Organizations—because one of the original programs had temporary funding and the
                                   other original program was misclassified as an economic development program. The two
                                   new Commerce programs that have been added should have been included in the March
                                   and May 2011 reports, according to Commerce officials. See appendix III for a list of the
                                   53 programs GAO is currently reviewing that support entrepreneurs and their 2010
                                   enacted appropriations.
                                   2
                                    GAO excluded the portion of the Community Development Block Grant funding that HUD
                                   reported is not used to support economic development. The total enacted appropriations
                                   for these 53 programs was about $5.6 billion for fiscal year 2010.




                                   Page 52                             GAO-12-342SP Duplication, Overlap, and Fragmentation
What GAO Found   Based on a review of the missions and other related program information
                 for these 53 programs, GAO determined that these programs overlap
                 based not only on their shared purpose of serving entrepreneurs but also
                 on the type of assistance they offer. The programs generally can be
                 grouped according to at least one of three types of assistance that
                 address different entrepreneurial needs: help obtaining (1) technical
                 assistance, (2) financial assistance, and (3) government contracts. Many
                 of the programs can provide more than one type of assistance, and most
                 focus on technical and/or financial assistance: 3

                 •     Technical assistance: Thirty-six programs distributed across the four
                       agencies provide technical assistance, including business training and
                       counseling and research and development support.

                 •     Financial assistance: Thirty-three programs distributed across the four
                       agencies support entrepreneurs through financial assistance in the
                       form of grants and loans.

                 •     Government contracting assistance: Seven programs distributed
                       between two of the four agencies support entrepreneurs by helping
                       them qualify for federal procurement opportunities.

                 The table below illustrates overlap among programs that provide
                 entrepreneurial assistance in terms of the type of assistance they provide.
                 For example, 13 programs across 3 of the agencies provide financial
                 assistance only. SBA and USDA both have 5 programs that only provide
                 financial assistance, while HUD has 3.

                 53 Programs That Support Entrepreneurs, by Type of Assistance, as of
                 September 30, 2011a

                                                                                 HUD       SBA        USDA Commerce Totalb
                  Technical assistance only                                           2           6      5         4    17
                  Financial assistance only                                           3           5      5              13
                  Technical and financial assistance only                             7           3      4         2    16
                  Government contracting assistance only                                          2                      2
                  Technical and government contracting only                                       1                      1
                  Financial and government contracting only                                       2                      2
                  Technical, financial, and government                                                             2     2
                  contracting assistance
                  Total                                                             12           19     14         8    53
                 Source: GAO analysis of information provided by Commerce, HUD, USDA, and SBA.




                 3
                  SBA administers the two programs that solely provide entrepreneurs with assistance in
                 obtaining government contracts: the HUBZone program, which supports small businesses
                 located in economically distressed areas, and the Procurement Assistance to Small
                 Businesses program, which serves small businesses located in any area.




                 Page 53                                          GAO-12-342SP Duplication, Overlap, and Fragmentation
a
Some of the programs may not have received funding in fiscal year 2011.
b
 The 36 technical assistance programs include those in the following categories: technical assistance
only; technical and financial assistance only; technical, financial, and government contracting
assistance; and technical and government contracting assistance only. The 33 financial assistance
programs include those in the following categories: financial assistance only; technical and financial
assistance only; technical, financial, and government contracting assistance; and financial and
government contracting assistance only. The seven government contracting assistance programs
include those in the following categories: government contracting assistance only, technical and
government contracting assistance only, financial and government contracting assistance only, and
technical, financial, and government contracting assistance.


Much of the overlap and fragmentation among these 53 programs is
concentrated among programs that support economically distressed and
disadvantaged areas and programs that assist disadvantaged and small
businesses. As the figure below shows, of the 36 programs that provide
technical assistance (that is, programs that either provide only technical
assistance or those that provide technical assistance in addition to
financial and government contracting assistance),

•    Commerce’s Economic Development/Technical Assistance program
     and SBA’s 7(j) Technical Assistance program are among the 33
     programs that assist businesses located in economically distressed
     areas. 4

•    HUD’s Hispanic Serving Institutions Assisting Communities and
     USDA’s Rural Business Opportunity Grants programs are among the
     23 that can assist businesses operating in areas that are
     disadvantaged, 5

•    SBA’s Small Business Development Centers and Commerce’s
     Minority Business Centers are among the 27 programs that support
     disadvantaged businesses, 6 and

•    USDA’s Rural Business Enterprise Grant program and SBA’s 8(a)
     program are among the 32 programs that serve small businesses.

Overlap and fragmentation are also evident among programs that provide
more specific forms of assistance. For example, technical assistance
programs that provide business training and counseling include SBA’s
Small Business Development Centers, Women’s Business Centers,
SCORE (formerly, Senior Core of Retired Executives) programs;
Commerce’s Minority Business Centers program; and USDA’s Rural
Business Enterprise Grants program. In addition, many of these



4
 GAO characterizes economically distressed areas as those communities with high
concentrations of low- and moderate-income families and high rates of unemployment
and/or underemployment.
5
 GAO characterizes disadvantaged communities include as those with concentrations of
minority populations, among other factors.
6
 GAO characterizes disadvantaged businesses as those owned by women, minority
groups and veterans, among other factors.




Page 54                                  GAO-12-342SP Duplication, Overlap, and Fragmentation
economic development programs also operate in both urban and rural
areas. 7

Programs That Provide Technical and Financial Assistance, by Type of Business
and Community Served, as of September 30, 2011




Note: Some of the programs may not have received funding in fiscal year 2011.


The number of programs that support entrepreneurs—53—and the
overlap among these programs raise questions about whether a
fragmented system is the most effective way to support entrepreneurs. By
exploring alternatives, agencies may be able to determine whether there
are more efficient ways to continue to serve the unique needs of
entrepreneurs, including consolidating various programs. In ongoing
work, GAO plans to examine the extent of potential duplication among
these programs.

In addition, in order to effectively evaluate and oversee the services being
provided, Congress and the agencies need meaningful performance
information such as evaluation studies and performance measures. This
information is needed to help decision makers identify ways to make
more informed decisions about allocating increasingly scarce resources
among overlapping programs. Specifically, performance measures can
provide information on an agency’s progress toward meeting certain
program and agencywide strategic goals, expressed as measurable
performance standards. For example, while some of the financial
assistance programs track measures that include number of businesses
assisted and dollar value of loans obtained, they could begin to track
measures like defaults, prepayments, and number of loans in good
standing to better report how businesses fare after they participate in


7
 The definition of rural varies among these programs, but according to USDA—the agency
that administers many of the economic development programs that serve rural areas—the
term “rural” typically covers areas with population limits ranging from less than 2,500 to
50,000.




Page 55                                GAO-12-342SP Duplication, Overlap, and Fragmentation
these programs. In contrast, program evaluations are systematic ways to
assess a broader range of information on program performance. As a
result, evaluation studies can help identify which programs are effective
or not, explain why goals were not met and identify strategies for meeting
unmet goals, and estimate what would have occurred in the absence of
the program.

Based on preliminary results, GAO found that while most (45) of the 53
economic development programs that support entrepreneurs have
reasonable performance measures and tend to meet their annual
performance goals, few evaluation studies have been completed and little
evaluative information exists to assess programs’ effectiveness. For 39 of
the 53 programs, the four agencies have either never conducted a
performance evaluation or have conducted only one in the past decade.
For example, while SBA has conducted recent periodic reviews of 3 of its
10 programs that provide technical assistance, the agency has not
reviewed its other 9 financial assistance and government contracting
programs on any regular basis. 8 Moreover, Commerce, HUD, and USDA
have not routinely conducted program evaluations for the majority of their
economic development programs.

Without results from program evaluations and performance measurement
data, agencies lack the ability to measure the overall impact of these
programs, and decision makers lack information that could help them to
identify programs that could be better structured and improve the
efficiency with which the government provides these services. Moreover,
the federal government has recently required the Office of Management
and Budget (OMB) to coordinate with agencies to ensure that they better
track the results of their programs. Specifically, the GPRA Modernization
Act of 2010 (GPRAMA) requires OMB to work with agencies to, among
other things, develop outcome-oriented goals for certain crosscutting
policy areas and report annually on how these goals will be achieved. 9
Other GPRAMA requirements could lead to improved coordination and
collaboration among agencies. For instance, GPRAMA requires each
agency to identify the various organizations and program activities—both
within and external to the agency—that contribute to each agency’s goals.
In ongoing work, GAO plans to determine reasons why the agencies (1)
do not conduct more routine evaluations of these programs and (2) have
not established and do not track performance measures for 8 of the 53
programs. In addition, GAO plans to determine the ongoing and planned
efforts of OMB and the agencies to address the provisions contained in
GPRAMA.


8
 SBA administers a total of 19 programs that support entrepreneurs. Six of its programs
provide technical assistance only, 5 provide financial assistance only, 2 provide only
contracting assistance, 3 can provide both technical and financial assistance, 1 provides
technical and government contracting assistance, and 2 provide financial and government
contracting assistance.
9
Pub. L. No. 111-352 (2011).




Page 56                             GAO-12-342SP Duplication, Overlap, and Fragmentation
Actions Needed and       Based on ongoing work, GAO expects to recommend the following:

Potential Financial or   Congress may wish to consider
Other Benefits                     •   ways to tie funding more closely to a program’s demonstrated
                                       effectiveness. One way to increase accountability and elevate
                                       the importance of program evaluation activities is to tie these
                                       factors to funding decisions. Therefore, Congress may want to
                                       consider requiring agencies to provide greater support for
                                       funding requests and requiring information on demonstrated
                                       results of program effectiveness.

                         Agencies should

                                   •   improve program evaluation and performance metrics. In order
                                       to identify options to better structure these programs for the
                                       Congress to consider, SBA, Commerce, HUD, and USDA
                                       should conduct program evaluations and collect data on
                                       performance measures.

                         OMB and the agencies should

                                   •   explore opportunities to restructure programs through means
                                       such as consolidation, elimination, and collaborative
                                       mechanisms, both within and across agencies. As OMB works
                                       with the agencies to identify programmatic areas that should
                                       be better coordinated and tracked, the agencies should look
                                       for ways to consolidate programs or opportunities for greater
                                       collaboration. In addition, to better ensure the most efficient
                                       and effective delivery method for federal assistance to
                                       entrepreneurs, SBA, Commerce, HUD, and USDA should
                                       individually, and collectively, explore options for restructuring
                                       programs that target particular types of businesses or
                                       communities and report the results of their efforts to the
                                       Congress.



Agency Comments          GAO provided a draft of this report to OMB, Commerce, HUD, SBA, and
                         USDA for review and comment. Commerce and HUD provided written
and GAO’s Evaluation     comments. OMB, HUD, SBA, and USDA provided technical comments,
                         which were incorporated where appropriate. All written comments are
                         reprinted in appendix IV.

                         OMB stated that the Administration has taken a number of steps to
                         increase coordination among economic and entrepreneurial development
                         programs, provide better service to businesses seeking federal services,
                         and improve performance evaluation. For example, OMB stated that a
                         new website will be publicly launched for entrepreneurs and business
                         owners in February 2012 named BusinessUSA; the website is intended to
                         provide a virtual one-stop shop for small businesses and enable them to
                         access the wide array of federal programs and services available to them



                         Page 57                          GAO-12-342SP Duplication, Overlap, and Fragmentation
across the government regardless of where they are located. According
to OMB, BusinessUSA, while still in its early stages, will help remedy
many of the coordination and fragmentation issues identified in the GAO
report. OMB also stated that the President has proposed to consolidate
the federal government’s primary business and trade agencies and
programs into a new more efficient agency that will promote
competitiveness, exports and American business. OMB noted that more
than half of the programs identified in GAO’s recent report on duplication
in federal economic development programs would be consolidated into
the new department under the Administration’s proposal, and the new
department would more fundamentally address the issues raised in
GAO’s report. As GAO continues work in this area, it plans to further
monitor and assess OMB’s efforts to work with Commerce, HUD, USDA,
and SBA to increase coordination among economic development
programs, provide better service to businesses under the programs, and
improve program evaluation.

Commerce stated that prior GAO reports have focused on the types of
investments made without considering the goals of each program, and
GAO may be incorrectly identifying duplication where none exists as a
result. For this report, GAO examined the missions, goals, services
provided, and targeted beneficiaries and areas for 53 programs that fund
entrepreneurial assistance. GAO’s report states that these programs
overlap based not only on their shared purpose of serving entrepreneurs
but also on the type of assistance they offer; it does not state that
duplication exists among these programs. As GAO continues its work,
GAO plans to examine the extent of potential duplication among these
overlapping programs. Commerce also stated that GAO’s report presents
premature actions needed and that the report does not recognize the
significant advances that Commerce’s Economic Development Agency
has made to improve program evaluation with the development of a
performance management improvement logic model. GAO recognizes the
action that the Economic Development Agency has taken to develop its
new performance management model. However, because the Economic
Development Agency has not completely designed its new model or
provided sufficient information to explain how results of program
evaluations will be included in the model, this action does not change
GAO’s findings. In this report, GAO identified areas of concern related to
the extent that Commerce, HUD, SBA, and USDA conduct performance
evaluations for their economic development programs. Recent legislation
also requires OMB to work with agencies to ensure that they better track
the results of their programs. GAO believes that the actions needed
presented in this report are consistent with its findings and recent
legislation. As GAO continues work in this area, it also plans to further
monitor and assess the efforts the four agencies undertake to improve
program evaluation and performance metrics.

HUD’s Deputy Assistant Secretary for Grant Programs stated that GAO
should reduce the number of economic development programs identified
as being administered by HUD. First, she recommended that five of the
Community Development Block Grant (CDBG) programs be identified as


Page 58                       GAO-12-342SP Duplication, Overlap, and Fragmentation
one CDBG program. She noted that the five programs may have separate
Catalog of Federal Domestic Assistance numbers, but the programs are
funded from a single source within HUD’s annual appropriation, the
economic development activities CDBG grantees carry out under the five
programs are all subject to the same statutory and regulatory
requirements, and CDBG grantees generally cannot obtain assistance
under more than one of the five programs. Because GAO relies on the
executive branch’s definition of these programs, which separates them
into five distinct programs, we disagree that the five programs should be
identified as one CDBG program. The Catalog of Federal Domestic
Assistance defines federal programs based on legal authority,
administering office, funding, purpose, benefits, and beneficiaries; also,
the catalog may define a program separately regardless of whether it is
identified as a separate program by statute or regulation. While GAO
would be receptive to actions the executive branch may take to better
define programs, using the Catalog of Federal Domestic Assistance GAO
initially identified 80 federal programs administered by Commerce, SBA,
USDA, and HUD that can fund economic development activities. For this
report, GAO focused its analysis on 53 of these programs across the four
agencies that support entrepreneurial efforts, including the five programs
HUD noted. Second, the Deputy Assistant Secretary recommended that
GAO delete the Brownfields Economic Development Initiative (BEDI) as
one of HUD’s active programs that can fund economic development
activities. She noted that HUD did not request funding nor did Congress
appropriate funding for the BEDI program in fiscal years 2011 and 2012. 10
She further noted that HUD will continue to administer existing BEDI
grants, but the department is unlikely to request program funding for fiscal
year 2013. She added that the activities authorized under the BEDI
program can be funded under other CDBG programs. GAO disagrees
that the BEDI program should be removed from the list of HUD programs
because the department is actively administering grants under the
program.

USDA stated that GAO’s report does not emphasize the significant
difference in agencies and programs. For example, USDA stated its Rural
Business Service administers programs that are unique and not
duplicative because of the agency’s mission to provide assistance to
businesses in rural communities. USDA acknowledged that other
agencies’ programs may provide assistance to businesses in rural areas,
but the Rural Business Service’s programs are focused in these areas.
USDA also stated that the Rural Business Service delivers its programs
through an expansive field structure of state and local offices. According



10
  The BEDI program received $17.5 million in enacted appropriations for fiscal year 2010,
which is the fiscal year funding data that GAO is currently reporting for the 53 programs
that support entrepreneurs. In addition, while a number of programs that GAO is reviewing
received $0 during fiscal year 2010, they are still considered to be active programs by the
executive branch. In addition, these active programs could receive funding in the future
(see appendix III).




Page 59                             GAO-12-342SP Duplication, Overlap, and Fragmentation
                    to USDA, federal agencies such as SBA do not utilize a similar field
                    structure to deliver programs. As previously noted, GAO’s report does not
                    state that duplication exists among the 53 economic development
                    programs that support entrepreneurial efforts; it states that overlap and
                    fragmentation are evident based on GAO’s review of the missions and
                    other related program information for these programs. For example,
                    GAO’s report states that USDA administers many of the economic
                    development programs that serve rural areas. However, GAO also
                    determined that there was overlap because other agencies’ economic
                    development programs can provide assistance to entrepreneurs in rural
                    areas. GAO plans to examine the extent of potential duplication in GAO’s
                    ongoing work.



How GAO Conducted   The information contained in this analysis is based on findings from the
                    products listed in the related GAO products section and additional work
Its Work            GAO conducted that will be published as a separate product in 2012.
                    GAO focused its analysis on the 53 economic development programs at
                    Commerce, HUD, USDA, and SBA that fund entrepreneurial assistance
                    because these programs appeared to overlap the most. GAO examined
                    the extent to which the federal government’s efforts to support
                    entrepreneurs overlap among these numerous, fragmented programs by
                    examining their missions, goals, services provided, and targeted
                    beneficiaries and areas. GAO also collected information on performance
                    measures that the agencies collect to track the performance of each of
                    the 53 programs, and any evaluation studies conducted or commissioned
                    by the agencies evaluating the effectiveness of these programs. This
                    process included meeting with agency officials to corroborate the publicly
                    available information. GAO also determined the reasonableness of the
                    performance measures by assessing each measure against agency
                    strategic goals and specific program missions to determine the extent to
                    which they are aligned. GAO plans to issue a report evaluating (1) the
                    support that the programs provide to entrepreneurs, and the types of
                    information available on this support; (2) the extent to which federal
                    agencies collaborate on the provision of counseling, training, and related
                    services to entrepreneurs; and (3) the extent to which programs that
                    support entrepreneurs overlap or are fragmented, the extent to which
                    these programs have met their performance goals, and the information
                    that is available on their effectiveness.

                    Appendix III lists the programs GAO identified that may have similar or
                    overlapping objectives, provide similar services or be fragmented across
                    government missions. Overlap and fragmentation may not necessarily
                    lead to actual duplication, and some degree of overlap and duplication
                    may be justified.




                    Page 60                       GAO-12-342SP Duplication, Overlap, and Fragmentation
Related Products      Efficiency and Effectiveness of Fragmented Economic Development
                      Programs Are Unclear. GAO-11-477R. Washington, D.C.: May 19, 2011.

                      List of Selected Federal Programs That Have Similar or Overlapping
                      Objectives, Provide Similar Services, or Are Fragmented Across
                      Government Missions. GAO-11-474R. Washington, D.C.: March 18,
                      2011.

                      Opportunities to Reduce Potential Duplication in Government Programs,
                      Save Tax Dollars, and Enhance Revenue. GAO-11-318SP. Washington,
                      D.C.: March 1, 2011.

                      Small Business Administration: Additional Guidance on Documenting
                      Credit Elsewhere Decisions Could Improve 7(a) Program Oversight.
                      GAO-09-228. Washington, D.C.: February 12, 2009.

                      Small Business Administration: Additional Actions Are Needed to Certify
                      and Monitor HUBZone Businesses and Assess Program Results.
                      GAO-08-643. Washington, D.C.: June 17, 2008.

                      Small Business Administration: Additional Measures Needed to Assess
                      7(a) Loan Program’s Performance. GAO-07-769. Washington, D.C.: July
                      13, 2007.

                      Rural Economic Development: More Assurance Is Needed That Grant
                      Funding Information Is Accurately Reported. GAO-06-294. Washington,
                      D.C.: February 24, 2006.

                      Economic Development Administration: Remediation Activities Account
                      for a Small Percentage of Total Brownfield Grant Funding. GAO-06-7.
                      Washington, D.C.: October 27, 2005.



Contact Information   For additional information about this area, contact William B. Shear at
                      (202) 512-4325 or shearw@gao.gov.




                      Page 61                       GAO-12-342SP Duplication, Overlap, and Fragmentation
8. Surface Freight Transportation
Fragmented federal programs and funding structures are not maximizing the efficient movement of freight.



Why This Area Is                    The movement of freight is critical to the economy and the livelihood of
                                    Americans who rely on freight transportation for food, clothing, and other
Important                           essential commodities. Freight shipments move predominantly over vast
                                    networks of highways, railroads, and waterways and often are transported
                                    by more than one mode before reaching their final destination. System
                                    performance is essential for the timely transportation of freight from its
                                    sources and manufacturers to the customer. Congress authorized around
                                    $43 billion in fiscal year 2010 for Department of Transportation programs
                                    that can benefit surface freight transportation. 1 However, the Department
                                    of Transportation is just one of many stakeholders that are involved in
                                    freight movement—all with complex and varied roles, but none are
                                    responsible for the entire system. Federal funds in the form of grants,
                                    loans, and tax incentives are provided to state and local governments and
                                    the private sector, all of whom play major roles in ensuring freight
                                    mobility. Specifically, public sector transportation agencies at the federal,
                                    state, and local levels have a significant role in developing and managing
                                    some modes of the freight transportation system—such as highways and
                                    waterways—while private sector entities—such as railroads—finance and
                                    manage their own infrastructure. According to the Department of
                                    Transportation, in 2007, the surface freight transportation system, which
                                    crosses multiple surface modes, connected an estimated 8 million
                                    businesses and 116 million households moving $12 trillion in goods.
                                    Federal leadership can help assure that projects that facilitate movement
                                    of freight, which can be high-cost and cross jurisdictional lines, are
                                    undertaken.

                                    While freight transportation has some issues that are similar to the
                                    surface transportation issues that GAO identified in its first annual report
                                    to Congress on federal programs with duplicative goals or activities, 2
                                    inefficiencies affecting freight transportation such as poor roads and the
                                    lack of intermodal connections can impact the nation’s economy. Freight
                                    volumes are closely linked to the gross domestic product—increases in
                                    freight shipments closely coincide with economic growth. However, freight
                                    vehicles often compete with non-freight vehicles, such as on the U.S.
                                    highway system, which consists of mixed-use facilities where passenger
                                    and freight vehicles operate in the same stream of traffic on the same
                                    facilities. Systems that cannot adequately accommodate both freight and


                                    1
                                     An unknown amount of the funding went to projects that benefit freight. These programs
                                    have broad eligibility and may be used for a variety of types of projects that benefit freight
                                    to greater or lesser degrees.
                                    2
                                     GAO, Opportunities to Reduce Potential Duplication in Government Programs, Save Tax
                                    Dollars, and Enhance Revenue, GAO-11-318SP (Washington, D.C.: Mar. 1, 2011).




                                    Page 62                               GAO-12-342SP Duplication, Overlap, and Fragmentation
                 non-freight vehicles can become congested, leading to delays in freight
                 movements, lost revenues, and increased carbon emissions—all of which
                 can increase transportation costs and, consequently, the price of goods,
                 hurting businesses that rely on freight transportation infrastructure.



What GAO Found   As GAO previously reported, federal goals in surface transportation are
                 numerous and roles are unclear, and the federal government does not
                 maximize opportunities to promote the efficient movement of freight,
                 despite a clear federal interest, the billions of dollars provided, and the
                 importance of freight transportation to the national economy. There is
                 currently no separate federal freight transportation program, only a loose
                 collection of many freight-related programs that are embedded in a larger
                 surface transportation program aimed at supporting both passenger and
                 freight mobility. This fragmented structure makes it difficult to determine
                 the types of freight projects that are funded and their impact on overall
                 freight mobility. As GAO reported in January 2008, the need for the
                 federal government to reassess its role and strategy in funding, selecting,
                 and evaluating transportation investments, including those for freight
                 transportation.

                 Department of Transportation administrations that have a role in freight
                 transportation include the Federal Highway Administration, Federal
                 Railroad Administration, Federal Motor Carrier Safety Administration, and
                 the Maritime Administration (see table below). There also is an Office of
                 Freight Management and Operations within the Federal Highway
                 Administration that administers programs, develops policies, and
                 undertakes research that promotes freight movement across the nation
                 and its borders. However, the office does not coordinate federal actions
                 related to freight mobility, specifically. In addition, the U.S. Army Corps of
                 Engineers in the Department of Defense is responsible for planning,
                 constructing, operating, and maintaining the nation’s waterways.
                 Department of Transportation administrations also coordinate freight
                 issues with other federal agencies including the Department of
                 Commerce, Department of Homeland Security, and Environmental
                 Protection Agency. The various federal agencies and modal
                 administrations play key roles in planning, designing, constructing,
                 maintaining, and regulating freight transportation. GAO could not
                 determine the total amount spent on freight transportation projects
                 because it is not separately tracked from other transportation
                 investments. According to Federal Highway Administration officials,
                 isolating freight transportation expenditures is not possible at this time
                 because the vast majority of the nation’s highway system is used by both
                 passenger and freight vehicles, and most highway projects benefit both.




                 Page 63                        GAO-12-342SP Duplication, Overlap, and Fragmentation
Number of Department of Transportation Programs GAO Identified That Provide
Funding for Freight Surface Transportation Infrastructure

 Department of Transportation administration                           Number of programs identified
 Federal Highway Administration                                                                      48
 Federal Motor Carrier Safety Administration                                                          2
 Federal Railroad Administration                                                                      2
 Maritime Administration                                                                              2
 Office of the Secretary of Transportation                                                            1
Source: GAO analysis of Department of Transportation information.



These programs’ structures for funding freight transportation projects include

•     grants (such as the National Highway System program, which funds
      projects that benefit both freight and passenger travel and, since
      2009, the Transportation Investment Generating Economic
      Recovery—TIGER—programs, which use a criteria-based,
      competitive process to fund projects serving national and regional
      priorities);

•     loans (such as the Railroad Rehabilitation and Improvement
      Financing program, which directs federal loans and loan guarantees
      to finance the development of railroads); and

•     tax credits (such as the exemption from federal taxes on interest
      earned from state and local government bonds for general
      transportation purposes and tax credits for certain expenditures on
      railroad track maintenance, which can create incentives for the
      investment of private sector funds on transportation improvements).

These programs are administered by different agencies and modal
administrations with different missions, oversight, and funding
requirements; do not necessarily coordinate with each other; and at times
may overlap. As a result, funds have not always been allocated based on
need or condition of the infrastructure carrying freight. For instance,
highway funds are distributed to states through formulas that are not
linked to performance or need. Examples of programs that may overlap
include loan programs such as the Federal Railroad Administration’s
Railroad Rehabilitation and Improvement Financing Program and the
Federal Highway Administration’s Transportation Infrastructure Finance
and Innovation Act Program. Both may be used for freight rail facilities
and infrastructure. Additionally, certain state and local governments issue
tax-exempt bonds for financing infrastructure projects.

Although the current federal structure of loans, tax credits, and grants
(including formula grants and congressionally directed funds) is
beneficial, opportunities may exist to return greater national public and
private benefits. Furthermore, intermodal considerations may not be
evaluated in considering beneficial freight solutions for a given corridor,
which may result in funding projects across multiple modes without regard
for how each works toward meeting a common goal. Current law


Page 64                                             GAO-12-342SP Duplication, Overlap, and Fragmentation
generally ties transportation funding to a single mode, limiting the ability
of state and local transportation planning agencies to use federal funds
for intermodal projects. Further, Department of Transportation
administrations and state and local transportation agencies are organized
by mode—reflecting the structure of funding programs—resulting in an
organizational structure that the department’s own assessments
acknowledge can impede intermodal coordination. In addition,
collaboration between the public and private sectors can also be
challenging; for example, private-sector interests in airport, rail, and
freight (such as freight shippers and carriers) have historically not
participated in the regional planning process.
The federal government’s fragmented approach also has resulted in a
situation where the users of each freight mode are not equally bearing the
costs those modes impose on society. When looking at the three
categories of social costs borne by freight transportation services—private
costs (labor, equipment, and fuel), public costs (paid out of government
budgets and can be funded through taxes and fees), and “external” costs
(congestion, accidents, health, and environmental impacts), GAO reported
in January 2011 that freight trucking costs that were not passed on to
consumers of that service were at least 6 times greater than rail costs, and
at least 9 times greater than waterways costs. Therefore, public and private
investment choices may be distorted, and there may be misallocation of
scarce government resources to one mode over another.

Constrained freight mobility could have negative economic,
environmental, and health implications. Because of the growth in freight
and passenger demand, there has been an increase in truck and rail
congestion that is particularly pronounced in major urban areas that
contain important freight hubs such as ports, airports, border crossings,
and rail yards. Congestion results in increased delays, carbon emissions,
and fuel and labor costs, among other things.

Since the expiration of the last surface transportation authorization in
2009, Congress has funded transportation programs through a series of
temporary extensions; the most recent will expire on March 31, 2012.
Comprehensive legislative action has not been taken to fundamentally
reexamine the nation’s surface transportation policies; however, several
legislative committees have approved bills to reauthorize and reform
surface transportation programs. For example, the Senate Environment
and Public Works Committee approved a bill on November 9, 2011
reauthorizing the highway portion of the surface transportation program. 3
This bill contains measures to increase accountability for results by
entities receiving federal funds and consolidate federal programs. In
addition, the House Transportation and Infrastructure Committee
approved a bill on February 2, 2012 that includes consolidating or




3
S. 1813, 112th Cong. (2011).




Page 65                        GAO-12-342SP Duplication, Overlap, and Fragmentation
                         eliminating a number of programs. 4 When we completed our work for this
                         report, floor action was pending in the Senate. GAO is evaluating the
                         extent to which ongoing legislative actions better define federal roles and
                         goals, incorporate accountability for results, emphasize return on federal
                         investment, and ensure fiscal sustainability.



Actions Needed and       Although there is a clear federal interest in freight transportation, there is
                         no strategy or clearly defined federal role in freight transportation or
Potential Financial or   mechanism to implement the strategy, complete with defined national and
Other Benefits           regional transportation priorities, to achieve the highest return on federal
                         investments. As noted, federal funding for freight-related infrastructure is
                         based on discrete programs’ objectives, not on a national freight policy,
                         and it is currently not possible to identify program costs associated with
                         only freight. Further, the Department of Transportation does not have a
                         national freight strategy to guide its different operating administrations’
                         freight programs. In addition, oversight and funding requirements by the
                         different modal administrations can make it difficult for planners to
                         develop and implement intermodal freight projects which could result in
                         more efficient freight movement.

                         In recent years, GAO has recommended or proposed for congressional
                         consideration the following actions. The Department of Transportation
                         has agreed to consider the following recommendations, but they have yet
                         to be implemented, in large part because the authorization for surface
                         transportation programs expired in 2009, and existing programs
                         subsequently have been funded through temporary extensions.

                         GAO recommended in June 2007 that the Secretary of Transportation

                         •      direct one operating administration or office—such as the Federal
                                Highway Administration’s Office of Freight Management and
                                Operations—to take the lead in coordinating intermodal activities for
                                freight at the federal level by improving collaboration among operating
                                administrations and the availability of intermodal guidance and
                                resources.

                         GAO recommended in January 2008 that the Secretary of Transportation

                         •      develop with Congress and public and private stakeholders a
                                comprehensive national strategy to transform the federal
                                government’s involvement in freight transportation projects, including
                                defining federal and nonfederal stakeholder roles and using new or
                                existing federal funding sources and mechanisms to support a
                                targeted, efficient, and sustainable federal role.




                         4
                             H.R. 7, 112th Cong. (2012).




                         Page 66                           GAO-12-342SP Duplication, Overlap, and Fragmentation
                       GAO proposed in February 2009 that Congress, in considering the
                       reauthorization of federal surface transportation programs,

                       •   consider defining the federal role in surface transportation in
                           accordance with national and regional transportation priorities,
                           implementing a criteria-based, competitive project selection process,
                           and working with the Secretary of Transportation to develop
                           enhancements to ensure the highest return on federal investments.

                       Congressional reauthorization of transportation programs presents an
                       opportunity to address GAO recommendations and matters for
                       congressional consideration that have not been implemented. By
                       promoting and coordinating solutions across jurisdictional lines, the
                       federal government could increase the effectiveness of localities, states,
                       and regional governments and planning organizations in overcoming
                       freight-related challenges.



Agency Comments        GAO provided a draft of this report section to the Department of
                       Transportation for review and comment. The Department of
and GAO’s Evaluation   Transportation provided technical comments, which were incorporated as
                       appropriate. Department officials informed GAO that the department is
                       working with Congress to address prior GAO recommendations as part of
                       efforts to reauthorize the federal surface transportation programs.



How GAO Conducted      The information contained in this analysis is based on findings from the
                       products listed in the related GAO products section. Appendix III lists the
Its Work               programs GAO identified that may have similar or overlapping objectives,
                       provide similar services or be fragmented across government missions.
                       Overlap and fragmentation may not necessarily lead to actual duplication,
                       and some degree of overlap and duplication may be justified.



Related GAO            Surface Transportation: Competitive Grant Programs Could Benefit from
                       Increased Performance Focus and Better Documentation of Key
Products               Decisions. GAO-11-234. Washington, D.C.: March 30, 2011.

                       Surface Freight Transportation: A Comparison of the Costs of Road, Rail,
                       and Waterways Freight Shipments That Are Not Passed on to
                       Consumers. GAO-11-134. Washington, D.C.: January 26, 2011.

                       Surface Transportation: Clear Federal Role and Criteria-Based Selection
                       Process Could Improve Three National and Regional Infrastructure
                       Programs. GAO-09-219. Washington, D.C.: February 6, 2009.

                       Freight Transportation: National Policy and Strategies Can Help Improve
                       Freight Mobility. GAO-08-287. Washington, D.C.: January 7, 2008.

                       Intermodal Transportation: DOT Could Take Further Actions to Address
                       Intermodal Barriers. GAO-07-718. Washington, D.C.: June 20, 2007.


                       Page 67                       GAO-12-342SP Duplication, Overlap, and Fragmentation
                      Railroad Bridges and Tunnels: Federal Role in Providing Safety Oversight
                      and Freight Infrastructure Investment Could be Better Targeted.
                      GAO-07-770. Washington, D.C.: August 6, 2007.



Contact Information   For additional information about this area, contact Phillip Herr at (202)
                      512-2834 or herrp@gao.gov.




                      Page 68                        GAO-12-342SP Duplication, Overlap, and Fragmentation
9. Department of Energy Contractor
Support Costs
The Department of Energy should assess whether further opportunities could be taken to streamline support
functions, estimated to cost over $5 billion, at its contractor-managed laboratory and nuclear production and
testing sites, in light of contractors’ historically fragmented approach to providing these functions.



Why This Area Is                     The Department of Energy (Energy) spends 90 percent of its annual
                                     budget—which totaled $27 billion for fiscal year 2011—on the contractors
Important                            that carry out its diverse missions and operate its sites nationwide. These
                                     management and operating contractors—which include corporations,
                                     universities, and others—also provide sites’ support functions such as
                                     procuring needed goods and services; recruiting and hiring workers;
                                     managing health and retirement benefits; and maintaining facilities and
                                     infrastructure. GAO reviewed support functions at the 7 national laboratory
                                     and nuclear production and testing sites overseen by the National Nuclear
                                     Security Administration (NNSA) 1 and the 10 national laboratories overseen
                                     by the Office of Science. The total annual cost of support functions at
                                     NNSA and Office of Science sites increased from about $5.0 billion in fiscal
                                     year 2007 to about $5.5 billion (nominal) in fiscal year 2009. 2 Previously,
                                     GAO has recommended that Energy take actions to manage cost growth in
                                     certain support functions and related costs. Since that time, however, some
                                     of these costs have continued to grow.




What GAO Found                       Because each site has historically had its own unique contractor—as part
                                     of Energy’s longstanding model for research and nuclear weapons
                                     production—the sites have also differed in how support functions are
                                     organized and carried out. This decentralized, or fragmented, approach
                                     has sometimes led to inefficiencies in support functions. For example,
                                     sites have long procured goods and services independently of each other,
                                     sometimes buying from the same vendors in an uncoordinated manner
                                     and limiting Energy’s ability to leverage sites’ buying power. Similarly,
                                     Energy’s fragmented approach to prioritizing and funding upgrades to



                                     1
                                      Congress created NNSA as a semi-autonomous agency within the Department of Energy
                                     in 1999 (Title 32 of the National Defense Authorization Act for Fiscal Year 2000, Pub. L.
                                     No. 106-65, § 3201 et seq.).
                                     2
                                      Over the same period, the sites’ total annual support function costs increased from about
                                     $5.0 billion to about $5.3 billion in constant 2007 dollars. As discussed in GAO’s January
                                     2012 report, Energy sites’ support costs for more recent years are not fully known,
                                     because Energy changed its data collection approach in 2010 to improve the quality of its
                                     cost data. Also, Energy has not yet fully implemented a quality control process for these
                                     more recent data but intends to do so in fiscal year 2012.




                                     Page 69                             GAO-12-342SP Duplication, Overlap, and Fragmentation
sites’ aging facilities and infrastructures has made it difficult to leverage
the resources needed to modernize its facilities. For example, some
facilities cannot support vibration-free environments or other requirements
of modern research tools.

As GAO reported in January 2012, Energy and contractors at its 17
NNSA and Office of Science sites have been carrying out a variety of
efforts, since 2007, to streamline and reduce the costs of sites’ support
functions. For example:

•   In 2007, NNSA began operating a central Supply Chain Management
    Center to reduce fragmentation in procurement and better leverage
    purchasing power across its seven sites. This center applies “strategic
    sourcing” techniques, aggregating and analyzing NNSA sites’
    procurement spending data to identify opportunities to coordinate
    sites’ purchases and negotiate better prices for goods and services.
    One such analysis revealed that the sites were purchasing most of
    their laboratory supplies and equipment from the same set of 38
    vendors through individual contracts negotiated by each site. The
    center was able to negotiate a single contract for all the sites, saving
    an estimated $22 million, or 17 percent, over the contract’s 3-year
    term, according to a center official.

•   Also that year, the Office of Science adopted a less fragmented
    approach to upgrading facilities and infrastructure at its 10 national
    laboratories by using a centrally managed process to prioritize funding
    for modernizing the sites’ facilities. According to Office of Science
    officials, this approach has helped tie modernization efforts more
    closely to mission needs, while lowering the costs and shortening the
    lead times for upgrading facilities at sites.

In addition, GAO found that contractors at sites have undertaken their
own streamlining and cost-reduction efforts, ranging from automating
hiring, training, or other human resources activities to reducing employee
health care and pension costs. As GAO reported in September 2011,
while not all site-led efforts were aimed at reducing inefficiencies of
Energy’s fragmented approach, some of the efforts appeared to
incorporate key practices for streamlining and improving the efficiency of
federal programs and functions identified.

While these efforts have been made, there are additional opportunities to
streamline support functions. For example:

•   In an August 2010 memorandum, the Deputy Secretary of Energy
    called for expanding Energy’s use of strategic sourcing and cited
    NNSA’s Supply Chain Management Center, with its centralized
    approach to procuring goods and services for NNSA sites, as a
    possible model for leveraging Energy’s and sites’ buying power.

•   NNSA is considering whether to consolidate certain support services,
    such as payroll and finance, at all seven NNSA sites. In a March 2011



Page 70                        GAO-12-342SP Duplication, Overlap, and Fragmentation
                             white paper, NNSA concluded that a centralized approach was
                             technically feasible and could lead to cost savings.

                         •   In a July 2011 draft solicitation to industry, Energy and NNSA
                             proposed having a single contractor manage and operate two NNSA
                             sites. Energy and NNSA estimated that the new approach would save
                             around $895 million (nominal) over the next 10 years, largely through
                             efficiency gains and other improvements to the sites’ business
                             systems and support functions.

                         Energy and contractor officials noted that further assessment of the
                         appropriateness of these and other potential efforts is warranted, as each
                         can present challenges. For example, in response to the Deputy
                         Secretary’s August 2010 memo, the Office of Science expressed
                         reluctance to implement a more centralized approach to procurement,
                         citing the efficiencies of its current approach. Others in Energy noted,
                         however, that similar concerns were expressed during prior streamlining
                         efforts, including NNSA’s own implementation of a centralized approach,
                         and can be addressed through further assessment. In addition, a
                         centralized approach may not always be more efficient or effective, but
                         that determination can benefit from further assessment. For example, as
                         GAO reported in September 2011, the anticipated cost savings from
                         NNSA’s proposal to consolidate management and operating contracts for
                         two of its sites were uncertain, and NNSA’s own analysis suggested that
                         efficiencies could instead be achieved under its existing contracts through
                         improved management practices.



Actions Needed and       Energy and contractors at NNSA and Office of Science sites have taken
                         steps, and are identifying further opportunities, to streamline support
Potential Financial or   functions and reduce costs. As fiscal environments become more
Other Benefits           constrained, Energy needs to ensure that streamlining efforts will be
                         effective. This includes understanding when it is appropriate to use a
                         more centralized approach and addressing any challenges to further
                         streamlining. As a result, GAO recommended in January 2012 that the
                         Secretary of Energy should

                         •   assess whether all appropriate efforts are being taken to streamline
                             support functions at NNSA and Office of Science sites and to address
                             implementation challenges.


Agency Comments          GAO provided a draft of its January 2012 report to Energy for review and
                         comment. Energy generally agreed with the findings and
and GAO’s Evaluation     recommendations from the report. As part of its routine audit work, GAO
                         will track the extent to which progress has been made to address the
                         identified action and report to Congress.




                         Page 71                       GAO-12-342SP Duplication, Overlap, and Fragmentation
How GAO Conducted     The information in this analysis is based primarily on findings from the
                      products listed in the related GAO products section. GAO reviewed
Its Work              documents and data and spoke with Energy, NNSA, and Office of
                      Science officials and with contractors at eight sites—the four largest sites
                      by budget from NNSA and Office of Science.


Related GAO           Department of Energy: Additional Opportunities Exist to Streamline
                      Support Functions at NNSA and Office of Science Sites. GAO-12-255.
Products              Washington, D.C.: January 31, 2012.

                      Streamlining Government: Key Practices from Select Efficiency Initiatives
                      Should be Shared Governmentwide. GAO-11-908. Washington, D.C.:
                      September 30, 2011.

                      Modernizing the Nuclear Security Enterprise: The National Nuclear
                      Security Administration’s Proposed Acquisition Strategy Needs Further
                      Clarification and Assessment. GAO-11-848. Washington, D.C.:
                      September 20, 2011.


Contact Information   For additional information about this area, contact Gene Aloise at (202)
                      512-3841 or aloisee@gao.gov.




                      Page 72                       GAO-12-342SP Duplication, Overlap, and Fragmentation
10. Nuclear Nonproliferation
Comprehensive review needed to address strategic planning limitations and potential fragmentation and
overlap concerns among programs combating nuclear smuggling overseas.



Why This Area Is                    The proliferation of nuclear weapons represents one of the greatest
                                    threats to U.S. and international security. As little as 25 kilograms of
Important                           weapon-grade highly enriched uranium or 8 kilograms of plutonium could
                                    be used to build a nuclear weapon. If terrorists or other nations were to
                                    acquire and use a nuclear weapon, the results could have far-reaching
                                    and long-lasting social, financial, and health impacts. The United States
                                    has pursued a range of nuclear nonproliferation programs to address this
                                    threat through the Department of Energy’s (Energy) National Nuclear
                                    Security Administration (NNSA). In addition to NNSA, other U.S.
                                    government agencies—including the Departments of Defense (DOD),
                                    State (State), and Homeland Security (DHS)—support programs and
                                    activities to reduce proliferation concerns around the world. National
                                    Security Council (NSC) staff have the principal role in coordinating the
                                    implementation of NNSA, DOD, State, and other agency nonproliferation
                                    programs.



What GAO Found                      GAO reported in December 2011 on issues relating to the coordination of
                                    federal programs involved in preventing and detecting nuclear smuggling
                                    overseas. GAO identified and reviewed 21 U.S. government programs
                                    and offices under five federal agencies—NNSA, DOD, State, DHS, and
                                    the Department of Justice (Justice)—that play a role in preventing and
                                    detecting smuggling of nuclear materials and illicit trafficking of related
                                    technologies overseas. These include programs that (1) conduct research
                                    and development on radiation detection technologies; (2) deploy radiation
                                    detection equipment along foreign borders and points of transit; (3) train
                                    and equip foreign customs and border security officials to identify and
                                    interdict illicit nuclear materials or technology transfers; (4) assist foreign
                                    governments in the development of export control systems; (5) enhance
                                    and coordinate with foreign antismuggling law enforcement and
                                    prosecutorial capabilities; and (6) analyze potential foreign nuclear
                                    smuggling cases and incidents.

                                    Among other things, GAO found that none of the existing strategies and
                                    plans for coordinating federal efforts to prevent and detect nuclear
                                    smuggling and illicit nuclear transfers overseas incorporates all of the
                                    desirable characteristics of national strategies. GAO also identified
                                    potential fragmentation and overlap among some programs working in
                                    this area, especially those providing equipment and training in foreign
                                    countries to counter nuclear smuggling. Furthermore, there is no single
                                    recognized agency responsible for leading and directing federal efforts to
                                    combat nuclear smuggling. However, State is taking steps to enhance
                                    one of the principal interagency coordinating mechanisms.




                                    Page 73                        GAO-12-342SP Duplication, Overlap, and Fragmentation
Regarding strategic planning to combat nuclear smuggling overseas,
GAO found that existing interagency strategies to coordinate efforts
governmentwide lacked some of the desirable characteristics of a
national strategy, such as identifying financial resources needed and
monitoring mechanisms to be used to determine progress and make
improvements. For example, the 2010 Global Nuclear Detection
Architecture Strategic Plan—developed jointly by DHS, DOD, Energy,
State, Justice, the intelligence community, and the Nuclear Regulatory
Commission—did not identify the financial resources needed to achieve
the strategic plan’s objectives or the monitoring mechanisms that could
be used to determine programmatic progress and needed improvements.
Similarly, implementation guidelines for international nuclear and
radiological border security efforts issued by NSC in 2005 did not
establish priorities, identify measures to track progress, or define the
resources needed to effectively implement the strategy.

GAO also identified potential fragmentation and overlapping functions
among some of these programs implemented by these federal agencies.
Specifically, GAO identified six programs providing training to improve the
capabilities of foreign border security and customs officials to prevent
smuggling and illicit nuclear shipments: (1) NNSA’s Second Line of
Defense program, (2) International Nonproliferation Export Control
Program, and (3) Cooperative Border Security Program; 1 (4) State’s
Export Control and Related Border Security program; and (5) DOD’s
Weapons of Mass Destruction-Proliferation Prevention Program and (6)
International Counterproliferation Program. Similarly, GAO identified four
programs that are involved in providing equipment to foreign governments
to enhance the ability of their customs and border security organizations
to detect nuclear smuggling: (1) NNSA’s Second Line of Defense
program, (2) State’s Export Control and Related Border Security program,
(3) DOD’s Weapons of Mass Destruction-Proliferation Prevention
Program, and (4) DOD’s International Counterproliferation Program. In
prior reports on nuclear nonproliferation programs, GAO has found that
consolidating programs sharing common goals and implementing similar
projects can maximize limited resources and may achieve potential cost
savings or other programmatic and administrative efficiencies.

In raising the issue of potential fragmentation and overlap, agency
officials representing these programs told GAO that not all of them have
the same focus, that some concentrate on specialized niches, and that
many are complementary. For instance, in the area of training, NNSA
officials told GAO that the Second Line of Defense program is focused on
training in the use and long-term sustainment of the radiation detection



1
 The Cooperative Border Security Program was an independent program at the time of
GAO’s audit on the coordination of federal programs involved in combating nuclear
smuggling overseas. However, the program is no longer an independent program, and its
functions were merged into the International Nonproliferation Export Control Program in
June 2010.




Page 74                            GAO-12-342SP Duplication, Overlap, and Fragmentation
equipment provided by the program, whereas the International
Nonproliferation Export Control Program concentrates on training foreign
customs and border guard personnel at official points of entry to detect
illicit weapons of mass destruction-related commodity transfers and
assisting border security officials to detect illicit trafficking of weapons of
mass destruction-related items in “green border” areas between official
points of entry. Regarding the provision of equipment, NNSA, State, and
DOD officials noted that the Second Line of Defense program tends to
provide larger equipment, such as radiation portal monitors and cargo
scanning equipment, while the Export Control and Related Border
Security program and International Counterproliferation Program provide
smaller-scale equipment, such as handheld radiation detection pagers,
hazardous materials kits, and investigative suits to foreign customs and
border security organizations. While the agencies noted that these
programs are complementary to one another, in GAO’s view the
fragmented and overlapping nature of the programs nevertheless raises
questions as to whether greater efficiency could be obtained through
possible consolidation of such efforts.

Furthermore, GAO found that no single federal agency has lead
responsibility to direct federal efforts to prevent and detect nuclear
smuggling overseas. In the past, GAO has reported that interagency
undertakings can benefit from the leadership of a single entity with
sufficient time, responsibility, authority, and resources needed to ensure
that federal programs are based upon a coherent strategy, are well
coordinated, and that gaps and duplication in capabilities are avoided. For
efforts to detect nuclear material smuggling into or movement within the
United States, a 2005 presidential directive gave DHS’s Domestic Nuclear
Detection Office responsibility for developing the Global Nuclear Detection
Architecture and managing the domestic portion of the global architecture.
However, this directive divided responsibility for the international portion of
the global architecture among State, DOD, and Energy.

The 2010 Global Nuclear Detection Architecture Strategic Plan takes a
step toward clarifying lead agencies responsible for different elements of
the global architecture, including efforts overseas. Specifically, for the
exterior layer of the global architecture—the portion focused on
enhancing international capabilities for detecting nuclear and radiological
materials abroad—the strategic plan identifies four performance goals,
designating lead and supporting agency roles for each. However, it is
unclear whether these more defined roles give authority to these lead
agencies to provide direction and guidance across multiple agencies and
programs. For instance, State and DOD officials told GAO that neither
State nor any other federal agency has the authority to direct the activities
or coordinate implementation of programs administered by other agencies
involved in preventing or detecting nuclear smuggling overseas.

Regarding interagency coordinating mechanisms, the NSC has
established mechanisms to coordinate efforts in this area, including a
Countering Nuclear Threats Interagency Policy Committee (IPC) and a
sub-IPC for international nuclear and radiological border security efforts.


Page 75                         GAO-12-342SP Duplication, Overlap, and Fragmentation
NSC officials declined GAO’s request to discuss various aspects of the
IPC structure and how it coordinates U.S. efforts to combat nuclear
smuggling overseas. However, some officials from other agencies
expressed doubts about the value of the NSC’s coordinating role.
Notably, DOD officials told GAO that they believed NSC has played a
negligible role in coordination of programs to counter nuclear smuggling.

Coordinating groups have been established beneath the IPC structure to
facilitate greater interagency cooperation at a working level to address the
nuclear smuggling threat in foreign countries. One of the principal
coordinating mechanisms for U.S. export control and related border
security assistance activities overseas is an interagency working group
(IWG). This IWG meets on a regular basis and officials at DOD, NNSA,
and State told GAO the meetings are well attended and are useful for
exchanging information—such as sharing calendars and information on
planned program activities—and building relationships between program
managers. However, agency officials GAO interviewed identified some
limitations with this mechanism and its ability to facilitate a more cohesive
national response to this threat. For example, NNSA and DOD officials
told GAO that the coordination meetings are hampered by the
participation of many individuals and are oriented toward high-level
discussion, making in-depth discussion of specific issues affecting
program implementation difficult in these settings. In addition, NNSA and
DOD officials stated that while the IWG is useful for information
exchange, it is not a mechanism designed or suitable for conducting more
fundamental interagency strategic planning or for developing guidance
and priorities for individual agency programs.

State officials told GAO that they have addressed the first limitation by
chairing executive-level and regional sub-IWG meetings. For example,
the quarterly executive-level meetings involving senior-level participation
at the deputy assistant secretary level, allow for high-level discussion of
agency programmatic goals and funding priorities, while regional sub-
IWG meetings conducted at the action-officer level provide for more
focused attention on nonproliferation capacity building in specific
countries or regions. In addition, State officials told GAO that they have
proposed addressing the second limitation by using the IWG as a means
of developing common interagency strategies and approaches toward
other countries and to encourage individual programs to engage or
disengage in particular regions, countries, and functional areas.

GAO concluded that effective coordination of federal government efforts to
prevent and detect nuclear smuggling overseas is limited by shortcomings
in strategic plans, potential fragmentation and overlap among some
programs, and divided responsibilities among several agencies.
Furthermore, it is apparent that no single agency or program has the
authority to undertake and implement a strategic re-evaluation and
restructuring across the government to address these concerns.




Page 76                        GAO-12-342SP Duplication, Overlap, and Fragmentation
Actions Needed and       To address these concerns, GAO recommended in December 2011 that
                         the Assistant to the President for National Security Affairs (NSC) should
Potential Financial or
Other Benefits           •   undertake—or direct and delegate an appropriate agency or agencies
                             to undertake—a comprehensive review of the structure, scope, and
                             composition of agencies and programs across the federal government
                             involved in preventing and detecting smuggling of nuclear materials,
                             equipment, and technologies overseas. Such a review should assess
                             several issues, including: (1) the level of overlap and duplication
                             among agencies and programs, especially in the provision of training
                             and nuclear detection equipment; (2) potential for consolidation of
                             these functions to fewer programs and agencies; (3) the feasibility,
                             costs, and benefits of establishing a special coordinator to preside
                             over the allocation of U.S. counter-nuclear-smuggling assistance to
                             foreign nations and be responsible for directing the interagency
                             process of development, funding, and implementation of all U.S.
                             government programs related to combating nuclear smuggling
                             overseas; and (4) any U.S. laws that would need to be amended by
                             Congress in order to facilitate consolidation, elimination, or other
                             changes to existing programs; and

                         •   issue new guidance that incorporates the elements of effective
                             strategic plans, including clearly delineating the roles and missions of
                             relevant programs, specific priorities and objectives, performance
                             measures and targets, overall program cost estimates, and projected
                             time frames for program completion.


Agency Comments          GAO provided a draft of its December 2011 report to NSC for report and
                         comment. NSC did not comment on these recommendations.
and GAO’s Evaluation
                         GAO provided a draft of this report section to the Office of Management
                         and Budget for review and comment. The Office of Management and
                         Budget provided technical comments, which were considered and
                         incorporated as appropriate. The Office of Management and Budget
                         provided comments regarding the roles and responsibilities of other
                         agencies, noting the administration has taken several steps to enhance
                         and promote counter nuclear smuggling options within the national
                         security agencies. These observations were addressed in conjunction
                         with discussions GAO had with the other agencies during the course of its
                         work. As part of GAO’s routine audit work, GAO will track actions to
                         address these recommendations and report to Congress.



How GAO Conducted        The information in this analysis is based on findings from the product
                         listed in the related GAO products section. GAO reviewed uncosted
Its Work                 NNSA nuclear nonproliferation program funding, but did not specifically
                         discuss funding associated with the programs where GAO identified
                         potential fragmentation and overlap, and GAO did not quantify the
                         potential financial savings associated with those programs.




                         Page 77                        GAO-12-342SP Duplication, Overlap, and Fragmentation
Related GAO Product   Nuclear Nonproliferation: Action Needed to Address NNSA’s Program
                      Management and Coordination Challenges. GAO-12-71. Washington,
                      D.C.: December 14, 2011.



Contact Information   For additional information about this area, contact Gene Aloise at (202)
                      512-3841 or aloisee@gao.gov.




                      Page 78                       GAO-12-342SP Duplication, Overlap, and Fragmentation
11. Personnel Background Investigations
The Office of Management and Budget should take action to prevent agencies from making potentially
duplicative investments in electronic case management and adjudication systems.



Why This Area Is                   The federal government spent over $1 billion to conduct more than 2
                                   million personnel background investigations for government employees in
Important                          fiscal year 2011. The Office of Personnel Management (OPM) conducts
                                   the majority of these investigations for federal agencies including the
                                   Department of Defense (DOD). DOD requests more investigations from
                                   OPM than any other federal agency and received over 788,000
                                   background investigations that cost over $787 million in fiscal year 2011.
                                   Agencies use electronic case management systems to identify employees
                                   who need investigations and monitor the status of investigations. In
                                   addition, agencies use electronic adjudication systems to store records of
                                   the decisions that officials make based on investigations, such as whether
                                   an applicant is suitable for federal employment, and in some cases,
                                   whether the applicant is eligible for a security clearance, enabling him or
                                   her to access classified information.

                                   In light of long-standing delays in completing these processes and other
                                   concerns, Congress set objectives and established requirements for
                                   improving aspects of the personnel security clearance process in the
                                   Intelligence Reform and Terrorism Prevention Act of 2004. 1 Among other
                                   things, the act established requirements for reciprocity—an agency’s
                                   acceptance of a background investigation or clearance determination
                                   completed by any authorized investigative or adjudicative agency, subject
                                   to certain exceptions. When agencies do not reciprocally accept a
                                   background investigation or clearance determination completed by
                                   another agency, government resources may be used inefficiently to
                                   conduct duplicative investigations and adjudications. To meet the
                                   objectives laid out in the act and oversee reforms of the employment
                                   suitability and security clearance eligibility processes, DOD and the Office
                                   of the Director of National Intelligence established the Joint Security
                                   Clearance Process Reform Team (Joint Reform Team) in 2007. In 2008,
                                   the President issued an executive order 2 to ensure an efficient, practical,
                                   reciprocal, and aligned system for the suitability and security processes,
                                   among other things. The order (1) established a Suitability and Security
                                   Clearance Performance Accountability Council, which is accountable to
                                   the President to achieve the goals of reform (2) designated the Deputy
                                   Director for Management at the Office of Management and Budget (OMB)



                                   1
                                    Pub. L. No. 108-458 (2004) (codified at 50 U.S.C. § 435b).
                                   2
                                    Exec. Order No. 13467, Reforming Processes Related to Suitability for Government
                                   Employment, Fitness for Contractor Employees, and Eligibility for Access to Classified
                                   National Security Information (June 30, 2008).




                                   Page 79                             GAO-12-342SP Duplication, Overlap, and Fragmentation
                 as the chair of the Council; and (3) outlined the responsibilities of the
                 Council, which include establishing requirements for enterprise
                 information technology. Since 2008, the Joint Reform Team under the
                 guidance of the Performance Accountability Council has encouraged
                 agencies to automate their paper-based case management and
                 adjudication systems by using electronic systems. 3



What GAO Found   Multiple agencies have invested in or are beginning to invest in potentially
                 duplicative, electronic case management and adjudication systems
                 despite governmentwide reform effort goals that agencies leverage
                 existing technologies to reduce duplication and enhance reciprocity. The
                 governmentwide reform effort, led by the Performance Accountability
                 Council, has resulted in progress in reducing delays in the amounts of
                 time needed to conduct investigations and adjudicate clearances.
                 Additionally, the Joint Reform Team, under the Performance
                 Accountability Council’s leadership, set as a goal in its information
                 technology strategy that agencies will leverage existing systems to
                 reduce duplication and enhance reciprocity.

                 However, of the agencies that GAO reviewed, GAO found that since 2007
                 three agencies—DOD, the Department of Justice (Justice), and the
                 Department of Homeland Security (DHS) have each developed and
                 implemented their own electronic systems for case management and
                 adjudication. In addition, GAO identified three other agencies—the
                 National Reconnaissance Office, 4 the Department of Veterans Affairs,
                 and the Department of the Treasury—that are beginning to invest in new
                 systems that may duplicate the systems that DOD, Justice, and DHS
                 have already implemented. Moreover, OPM officials told GAO that OPM
                 plans to develop a new electronic case management and adjudication
                 system. See the table below for the agencies GAO identified that have
                 developed or are planning to develop their own electronic systems for
                 case management and adjudication and the amounts those agencies
                 have invested as of fiscal year 2011.




                 3
                  The Performance Accountability Council is currently comprised of representatives from
                 11 executive branch agencies, including DOD and the Office of the Director of National
                 Intelligence.
                 4
                  While the National Reconnaissance Office is an agency within DOD, it is beginning to
                 invest in an electronic system distinct from DOD’s system.




                 Page 80                            GAO-12-342SP Duplication, Overlap, and Fragmentation
Agency Investments in Electronic Systems That Have Potentially Duplicative
Capabilities for Case Management and Adjudication

    Agency                                        Status                  Investment as of FY11
    Department of Defense                         Completed                              $32 million
    Department of Justice                         Completed                               15 million
    Department of Homeland Security               Completed                               6.5 million
    National Reconnaissance Office                In development                          6.8 million
    Department of Veterans Affairs                In development                            900,000
    Department of the Treasury                    In development                           300,000a
    Office of Personnel Management                Planned                                  Unknown
Source: GAO.
a
 According to officials at the Department of the Treasury, the agency seeks $300,000 to fund its
system.


According to DOD officials, DOD has intended to share the technology for
its case management and adjudication system with other agencies since it
developed its system. According to Department of Energy officials, the
agency piloted a part of DOD’s system in 2010 and it is still considering
whether to implement it. In addition, DOD officials told GAO that the Social
Security Administration plans to use DOD’s system. DOD officials estimate
that to implement the DOD system, agencies would need to invest
approximately $300,000, in addition to any expenses agencies could incur
if they chose to customize DOD’s system to meet specific needs.
Furthermore, DOD officials estimate that agencies may need to spend
approximately $100,000 per year for long-term support and maintenance of
the system. Likewise, OPM officials told GAO that OPM plans to share the
technology for any case management and adjudication system that it
develops with the agencies that request investigations from OPM.

However, the Performance Accountability Council has not developed
specific governmentwide guidance regarding how agencies should
leverage existing technologies to prevent agencies from making
duplicative investments in electronic case management and adjudication
systems. As a result, individual agencies can decide to develop their own
new systems without evaluating whether utilizing an existing system
would be a more cost-effective approach. Since it was established, the
Performance Accountability Council and the Joint Reform Team have
issued several reports detailing reform-related plans, including a Strategic
Framework in February 2010. The Strategic Framework established
goals, performance measures, roles and responsibilities, and proposed
metrics for determining the quality of security clearance investigations
and adjudications. However, the Council did not include specific guidance
in the Strategic Framework about how agencies might leverage existing
technologies. Without specific guidance regarding how agencies should
leverage existing technologies, agencies may miss opportunities to avoid
duplicative investments in electronic systems for case management and
adjudication.




Page 81                                  GAO-12-342SP Duplication, Overlap, and Fragmentation
Actions Needed and       GAO recommended in February 2012 that OMB’s Deputy Director for
                         Management, in his capacity as Chair of the Performance Accountability
Potential Financial or   Council, should
Other Benefits           •   develop additional guidance to help ensure that reform stakeholders
                             identify opportunities for preventing duplication in the development of
                             electronic case management and adjudication technologies in the
                             suitability determination and personnel security clearance processes.

                         The federal government may realize multiple potential benefits from
                         taking the actions GAO describes, including improved reciprocity and cost
                         savings by preventing duplication of investments in electronic systems.
                         Agencies that operate the same electronic systems for case management
                         and adjudication may be able to share records of personnel background
                         investigations with one another more easily, which may improve
                         reciprocity and result in cost savings by using existing investigations
                         rather than paying for new ones to be conducted.



Agency Comments          GAO provided a draft of its February 2012 report to OMB for review and
                         comment. OMB agreed with GAO’s recommendation that OMB develop
and GAO’s Evaluation     additional guidance to help ensure that reform stakeholders identify
                         opportunities for preventing duplication in the development of electronic
                         case management and adjudication technologies in the suitability
                         determination and personnel security clearance processes. As part of its
                         routine audit work, GAO will track the extent to which progress has been
                         made to address the identified actions and report to Congress.



How GAO Conducted        The information contained in this analysis is based on findings from the
                         products listed in the related GAO products listed below. GAO selected
Its Work                 agencies to review that meet a combination of one or more of the
                         following criteria: (1) utilizes OPM to conduct most of its security
                         clearance investigations for civilians, military, and industrial (contractor)
                         personnel; (2) ranks among OPM’s top 10 largest investigation
                         customers, by volume and/or by total expenditures in fiscal year 2010;
                         and (3) is a member of the Performance Accountability Council. GAO also
                         reviewed selected additional agencies that are developing or planning to
                         develop an electronic system for case management and adjudication.
                         GAO then interviewed knowledgeable officials at each of these agencies
                         about the status of and their plans for investments in electronic systems
                         for case management and adjudication.




                         Page 82                        GAO-12-342SP Duplication, Overlap, and Fragmentation
Related GAO           Background Investigations: Office of Personnel Management Needs to
                      Improve Transparency of Its Pricing and Seek Cost Efficiencies.
Products              GAO-12-197. Washington, D.C.: February 28, 2012.

                      High-Risk Series: An Update. GAO-11-278. Washington, D.C.:
                      February 2011.

                      Personnel Security Clearances: Overall Progress Has Been Made to
                      Reform the Governmentwide Security Clearance Process. GAO-11-232T.
                      Washington, D.C.: December 1, 2010.

                      Personnel Security Clearances: Progress Has Been Made to Improve
                      Timeliness but Continued Oversight Is Needed to Sustain Momentum.
                      GAO-11-65. Washington, D.C.: November 19, 2010.

                      DOD Personnel Clearances: Preliminary Observations on DOD’s
                      Progress on Addressing Timeliness and Quality Issues. GAO-11-185T.
                      Washington, D.C.: November 16, 2010.

                      Personnel Security Clearances: An Outcome-Focused Strategy and
                      Comprehensive Reporting of Timeliness and Quality Would Provide
                      Greater Visibility over the Clearance Process. GAO-10-117T.
                      Washington, D.C.: October 1, 2009.

                      Personnel Security Clearances: Progress Has Been Made to Reduce
                      Delays but Further Actions Are Needed to Enhance Quality and Sustain
                      Reform Efforts. GAO-09-684T. Washington, D.C.: September 15, 2009.

                      Personnel Security Clearances: An Outcome-Focused Strategy Is
                      Needed to Guide Implementation of the Reformed Clearance Process.
                      GAO-09-488. Washington, D.C.: May 19, 2009.

                      DOD Personnel Clearances: Comprehensive Timeliness Reporting,
                      Complete Clearance Documentation, and Quality Measures Are Needed
                      to Further Improve the Clearance Process. GAO-09-400. Washington,
                      D.C.: May 19, 2009.

                      High-Risk Series: An Update.GAO-09-271. Washington, D.C.:
                      January 2009.



Contact Information   For additional information about this area, contact Brenda Farrell at (202)
                      512-3604 or farrellb@gao.gov.




                      Page 83                       GAO-12-342SP Duplication, Overlap, and Fragmentation
12. Cybersecurity Human Capital
Governmentwide initiatives to enhance cybersecurity workforce in the federal government need better
structure, planning, guidance, and coordination to reduce duplication.



Why This Area Is                    Threats to federal information technology (IT) infrastructure and systems
                                    continue to grow in number and sophistication, posing a risk to the
Important                           reliable functioning of government and highlighting the need to ensure
                                    that the federal and contractor workforce has the knowledge, skills, and
                                    abilities to maintain the security of federal IT infrastructure and systems.

                                    In discussing his 2009 Cyberspace Policy Review, 1 President Obama
                                    declared the cyber threat to be “one of the most serious economic and
                                    national security challenges we face as a nation.” Because of the
                                    importance of federal information systems to government operations, as
                                    well as continuing weaknesses in the information security controls over
                                    these systems, GAO has identified federal information security as a
                                    governmentwide high-risk area since 1997. 2

                                    Cybersecurity professionals help to prevent or mitigate vulnerabilities that
                                    could allow malicious individuals and groups access to federal IT
                                    systems. Specifically, the ability to secure federal systems is dependent
                                    on the knowledge, skills, and abilities of the federal and contractor
                                    workforce that uses, implements, secures, and maintains these systems.



What GAO Found                      GAO’s work and the work of other organizations suggest that there are
                                    leading practices that workforce planning for critical positions such as
                                    federal cybersecurity positions should address. These include defining
                                    roles, responsibilities, skills, and competencies for these positions and
                                    establishing a training and development program that supports the
                                    competencies an agency needs to accomplish its mission.

                                    The Department of Commerce’s National Institute of Standards and
                                    Technology (NIST), Chief Information Officers (CIO) Council, Office of
                                    Personnel Management (OPM), and the Department of Homeland
                                    Security (DHS) have separate efforts intended to help agencies define
                                    roles, responsibilities, skills, and competencies for their cybersecurity
                                    workforce. However, it is unclear how or whether the aforementioned
                                    entities will effectively align their efforts and, if so, the timeframe for
                                    accomplishing that. The four efforts are discussed briefly below:




                                    1
                                     President Barack Obama Cyberspace Policy Review: Assuring a Trusted and Resilient
                                    Information and Communications Infrastructure (Washington, D.C.: May 29, 2009).
                                    2
                                    See GAO, High Risk Series: An Update GAO-11-278 (Washington, D.C.: February 2011).




                                    Page 84                           GAO-12-342SP Duplication, Overlap, and Fragmentation
•   As part of its responsibilities under the Federal Information Security
    Management Act, NIST has defined cybersecurity roles and
    responsibilities in NIST Special Publications 800-16, 800-37, and 800-50.

•   In October 2010, the CIO Council released an updated version of 11
    standard cybersecurity roles that agencies could use as a guideline in
    developing detailed position descriptions and training. For each role,
    the CIO Council plans to develop a workforce development matrix that
    lists suggestions for qualifications for entry, intermediate, and
    advanced performance levels for the role; additional sources for skill
    and competency materials; educational and professional credentials;
    and learning and development sources. While several of the NIST-
    defined cybersecurity roles map to the roles defined by the CIO
    Council, others do not. As of August 2011, NIST had not indicated
    plans to modify the roles identified in NIST publications to align with
    the CIO Council roles. According to NIST, its standards and guidance
    which include its definition of cybersecurity roles and responsibilities
    were issued based on its responsibilities under the Federal Information
    Security Management Act, and as such, do not need to be revised to
    align with the CIO Council roles. However, providing multiple
    unaligned sources of guidance to federal agencies limits their value as
    a tool for agencies.

•   OPM developed a governmentwide cybersecurity competency model
    that identified the most common job series used by cybersecurity
    professionals across the federal government; however, the identified
    competencies are not unique to cybersecurity work, and there is no
    mechanism in place to determine if agencies will use this model.

•   In support of the National Initiative for Cybersecurity Education, 3 DHS
    is developing a framework consisting of 31 specialties across seven
    categories of cybersecurity work, which is intended to provide a
    common language for describing the cybersecurity workforce.
    According to DHS, once the framework has been finalized, other
    federal documents, including relevant NIST Special Publications, will
    be revised to conform to it. However, no time frame was provided on
    when this will occur and it is unclear whether or not NIST will revise its
    publications to conform to the framework.

Although NIST guidelines are currently widely used throughout the federal
government, it is unclear whether or how the results of the efforts of the
CIO Council, OPM, or DHS will be used governmentwide. A more



3
 The National Initiative for Cybersecurity Education began in March 2010 as an expansion
of Initiative 8 of the Comprehensive National Cybersecurity Initiative, which focused on
efforts to educate and improve the federal cybersecurity workforce. According to the
interagency committee recommendations establishing the National Initiative for
Cybersecurity Education, it is to provide program management support and promote
intergovernmental efforts to improve cybersecurity awareness, education, workforce
structure, and training.




Page 85                            GAO-12-342SP Duplication, Overlap, and Fragmentation
                         consolidated effort to develop one framework defining roles,
                         responsibilities, skills, and competencies for the federal cybersecurity
                         workforce rather than four separate efforts, would be a more efficient use
                         of resources.

                         In addition to efforts to define roles, responsibilities, skills and
                         competencies, there are multiple governmentwide cybersecurity training
                         efforts under way. In 2005, the Office of Management and Budget (OMB)
                         and DHS began to collaborate on an initiative, called the Information
                         Systems Security Line of Business, to address common information
                         systems security needs across the government, including cybersecurity
                         training. As part of this collaboration, DHS designated five agencies—the
                         Departments of Defense, State, and Veterans Affairs (VA), the National
                         Aeronautics and Space Administration (NASA), and OPM—to be security
                         training shared service centers available to all federal agencies so as to
                         reduce duplication and improve the quality of information security training.
                         The training courses that these agencies offer are organized into two
                         training tiers: general security awareness training and role-based security
                         training. While one of the goals of the shared program is to reduce
                         duplication, there are several areas in which the training roles overlap
                         among the agencies, and no process exists for coordinating or eliminating
                         duplication among the efforts. For example, NASA, VA, and State all have
                         training for employees in system administrator roles. Additionally, both
                         NASA and VA offer training for CIOs, and NASA and State both offer
                         training directed at the system owner role. However, neither the individual
                         agencies nor DHS evaluate the training for duplicative content,
                         effectiveness, or extent of use.



Actions Needed and       To ensure that governmentwide cybersecurity workforce initiatives are
                         better coordinated, GAO recommended in November 2011 that Directors
Potential Financial or   of OMB and OPM and the Secretaries of the Departments of Commerce
Other Benefits           and Homeland Security should

                         •   consolidate and align efforts to define roles, responsibilities, skills, and
                             competencies for the federal cybersecurity workforce.

                         Regarding the Information Systems Security Line of Business initiative,
                         GAO also recommended in November 2011 that the Secretary of DHS
                         should

                         •   implement a process for tracking agency use of training, gather
                             feedback from agencies on the training’s value and opportunities for
                             improvement, and develop a process to coordinate training offered to
                             minimize the production and distribution of duplicative products.

                         Implementation of these recommendations could help the government
                         more efficiently and effectively develop the federal cybersecurity
                         workforce in a constrained fiscal environment.




                         Page 86                         GAO-12-342SP Duplication, Overlap, and Fragmentation
Agency Comments        GAO provided a draft of its November 2011 report to OMB, OPM, the
                       Department of Commerce, and DHS, for review and comment. OPM, the
and GAO’s Evaluation   Department of Commerce, and DHS generally agreed with GAO’s
                       recommendation to consolidate and align efforts to define roles and
                       responsibilities, skills, and competencies for the federal cybersecurity
                       workforce. OMB provided technical comments, which were incorporated
                       as appropriate. In addition, DHS officials agreed with GAO’s
                       recommendations regarding improvements to the Information Systems
                       Security Line of Business and stated that the department is developing a
                       mechanism for gathering input to address GAO’s recommendation and
                       will work with other shared service centers to ensure that they align with
                       the National Initiative for Cybersecurity Education activities and findings.
                       As part of GAO’s routine audit work, GAO will track agency actions to
                       address these recommendations and report to Congress.

                       GAO provided a draft of this report section to OMB for review and
                       comment. OMB provided additional technical comments. However, GAO
                       did not revise its findings based on these comments. In one instance, OMB
                       indicated that GAO’s statement that the CIO Council released an updated
                       version of 11 standard cybersecurity roles in October 2010 was not
                       completely accurate and that the CIO Council document we referenced did
                       not update the 11 roles. GAO disagrees. The CIO document clearly shows
                       that the roles were updated on October 29, 2010. OMB also noted that the
                       October 2010 CIO Council document contained additional information
                       discussing efforts at NIST and the National Initiative for Cybersecurity
                       Education. GAO was not provided this additional information at the time of
                       its review, but to the extent this information supports better coordination of
                       federal cybersecurity workforce development efforts, this is a positive step.
                       Furthermore, OMB commented that it is intended that NIST will account for
                       the cybersecurity workforce framework developed by the National Initiative
                       for Cybersecurity Education in its follow on work. Any steps OMB and NIST
                       take to better coordinate federal cybersecurity efforts will be helpful.
                       Nevertheless, we continue to believe that consolidating and aligning efforts
                       to define roles, responsibilities, skills, and competencies for the federal
                       cybersecurity workforce will help the government more efficiently and
                       effectively develop the workforce in a fiscally constrained environment.



How GAO Conducted      The information contained in this analysis is based on findings from the
                       product in the related GAO product section. GAO identified
Its Work               governmentwide initiatives based on interviews with subject matter
                       experts at federal agencies and private organizations, and a review of
                       publicly released information on the initiatives. GAO reviewed plans,
                       performance measures, and status reports. GAO also interviewed officials
                       at agencies responsible for these initiatives, such as NIST, OPM, the
                       National Science Foundation, and OMB. GAO assessed the status and
                       plans of these efforts against GAO’s prior work on strategic planning,
                       training and development, and efficient government operations.




                       Page 87                        GAO-12-342SP Duplication, Overlap, and Fragmentation
Related GAO Product   Cybersecurity Human Capital: Initiatives Need Better Planning and
                      Coordination. GAO-12-8. Washington, D.C.: November 29, 2011.




Contact Information   For additional information about this area, contact Gregory C. Wilshusen
                      at (202) 512-6244 or wilshuseng@gao.gov or Valerie C. Melvin at
                      (202) 512-6304 or melvinv@gao.gov.




                      Page 88                      GAO-12-342SP Duplication, Overlap, and Fragmentation
13. Spectrum Management
Enhanced coordination of federal agencies’ efforts to manage radio frequency spectrum and an examination of
incentive mechanisms to foster more efficient spectrum use may aid regulators’ attempts to jointly respond to
competing demands for spectrum while identifying valuable spectrum that could be auctioned for commercial use,
thereby generating revenues for the U.S. Treasury.



Why This Area Is                     The radio frequency spectrum is a natural resource that is used to provide
                                     wireless communications services critical to the U.S. economy and a
Important                            variety of government functions, such as national defense, homeland
                                     security, and other vital public safety activities. The federal government
                                     controls the use of spectrum by authorizing federal agencies’ requests for
                                     spectrum and issuing licenses to nonfederal users. As the nation
                                     continues to experience significant growth in commercial wireless
                                     broadband services, the demand for spectrum has increased and
                                     additional capacity will be needed to accommodate future growth.

                                     Since most spectrum has already been allocated for federal, nonfederal,
                                     or shared uses, a number of initiatives are under way to identify
                                     previously assigned spectrum that can be repurposed for commercial
                                     wireless broadband. When spectrum is repurposed for commercial use,
                                     an auction may be held to distribute licenses through a bidding process.
                                     Since the first auction in 1994, auctions have generated nearly $52 billion
                                     for the U.S. Treasury and have provided additional spectrum for new
                                     commercial applications. In addition, some spectrum is available for
                                     unlicensed use, meaning an unlimited number of users can share the
                                     spectrum on a non-interference basis. Unlicensed spectrum supports a
                                     variety of technologies, including wireless fidelity (Wi-Fi) networks, and
                                     regulators are attempting to make more unlicensed spectrum available in
                                     the hopes of fueling innovation and economic growth. Spectrum
                                     management decisions require that regulators weigh the potential
                                     economic and technological benefits of increased spectrum availability
                                     against the need for federal agencies to use spectrum to achieve their
                                     missions.

                                     Over the past 10 years, GAO has identified weaknesses in spectrum
                                     management—which is fragmented between the Department of
                                     Commerce’s National Telecommunications and Information
                                     Administration (NTIA) and the Federal Communications Commission
                                     (FCC)—that could impact the nation’s ability to meet the growing demand
                                     for spectrum. In addition, GAO identified FCC’s spectrum management as
                                     a major governmental challenge, specifically citing the need to balance
                                     competing demands for limited spectrum.




                                     Page 89                       GAO-12-342SP Duplication, Overlap, and Fragmentation
What GAO Found   Spectrum management in the United States is fragmented between NTIA
                 and FCC. 1 NTIA is responsible for managing the federal government’s
                 use of spectrum, and FCC regulates spectrum use by nonfederal entities,
                 such as television broadcasters, wireless service providers, and state and
                 local public safety officials. A number of other entities also play a role in
                 spectrum management. For example, the Interdepartment Radio Advisory
                 Committee (IRAC), which consists of 19 agencies that hold over 90
                 percent of all federally assigned spectrum, coordinates federal use of
                 spectrum and provides NTIA policy advice on spectrum issues. In
                 addition, the Office of Management and Budget (OMB) is involved in
                 spectrum management through the federal budget process and has
                 issued a circular (OMB Circular A-11) that provides guidance for the use
                 of spectrum-dependent systems by federal agencies.

                 Given the fragmented federal approach, coordination is essential to
                 ensure that NTIA and FCC take a holistic approach to efficiently and
                 effectively manage spectrum use. As GAO reported in March 2006,
                 changes that affect existing users of spectrum can cause contentious
                 stakeholder conflicts that cross the jurisdictions of both agencies and can
                 lead to protracted negotiations.

                 As GAO reported in November 2011, coordination challenges between
                 NTIA and FCC were one of four factors contributing to delays in efforts to
                 repurpose spectrum for new commercial uses. Efforts to repurpose
                 spectrum require that NTIA and FCC coordinate to determine what
                 spectrum is suitable for new commercial uses, and the extent to which
                 federal agencies will be affected by efforts to relocate or modify their
                 current spectrum assignments. Repurposed spectrum that can be
                 auctioned for new commercial uses can generate significant revenues for
                 the U.S. Treasury, and GAO and the National Commission on Fiscal
                 Responsibility and Reform have supported the continued use of auctions
                 to assign spectrum licenses.

                 While NTIA and FCC have taken steps to improve coordination and are
                 collaborating on efforts to make spectrum available for wireless broadband,
                 the extent to which they are effectively coordinating and will be able to
                 quickly meet growing demands for spectrum is unclear due, in part, to a
                 lack of transparency in their joint planning efforts. In 2003, NTIA and FCC
                 signed a Memorandum of Understanding (MOU) that stated the Assistant
                 Secretary for Communications and Information at NTIA and the Chairman
                 of FCC would meet twice a year to conduct joint spectrum planning
                 activities, as required by the NTIA Act, to ensure spectrum is used for its




                 1
                   The responsibility for managing spectrum was divided between NTIA (an executive
                 agency) and FCC (a federal independent regulatory commission) to avoid concentrating
                 licensing power into one executive agency, while at the same time taking into account the
                 President’s responsibility for both national defense and fulfilling agency missions.




                 Page 90                             GAO-12-342SP Duplication, Overlap, and Fragmentation
“highest and best purpose.” 2 According to the MOU, the joint spectrum
planning is to include considerations of the future spectrum requirements of
public and private users, with the goal of promoting efficient use of
spectrum that reflects the economic and national security interests of the
nation.

However, according to NTIA and FCC officials, these meetings did not
occur regularly during one prior FCC Chairman’s term. FCC officials also
told us that the results of the meetings are not publicly available because
they contain pre-decisional information. In addition, NTIA and FCC have
not jointly developed a strategic spectrum plan encompassing federal and
nonfederal spectrum use, despite statutory requirements and a 2004
Presidential Memorandum to do so. In fact, when GAO asked which
documents comprise the national spectrum strategy, NTIA and FCC
officials identified different documents.

As GAO reported in November 2011, 62 of 71 experts and stakeholders we
surveyed strongly or somewhat agreed that there is a need to maintain an
ongoing strategic spectrum plan. GAO has also reported on the importance
of transparency and oversight in spectrum management decisions. Lacking
information on the extent to which NTIA and FCC are coordinating to
strategically manage spectrum, Congress and stakeholders have no
assurance that spectrum is being used for its highest and best purpose,
and it is difficult to assess whether NTIA and FCC are fulfilling the intent of
the NTIA Act and the MOU.

Furthermore, as GAO reported in April 2011, NTIA relies heavily on
federal agencies to self-evaluate and determine their current and future
spectrum needs, with limited oversight or emphasis on holistic spectrum
management to ensure that spectrum is being used efficiently across the
federal government. NTIA has explained that because federal agencies
use spectrum for a variety of applications and missions, it must rely on
the agencies’ expertise when reviewing spectrum assignments. However,
prior GAO reports found that such a fragmented, decentralized approach
proves problematic, since agency use of spectrum may not reflect the
economic value of spectrum for the following reasons:

•   Agencies focus on mission requirements—not an underlying,
    systematic consideration of spectrum efficiency—when making
    investments in spectrum technologies.

•   Agencies do not pay for the spectrum they receive (outside of an
    administrative fee to NTIA). While OMB’s Circular A-11 requires that
    agencies consider the economic value of spectrum when purchasing


2
 See National Telecommunications and Information Administration Act, title I, § § 103, 112
(1992) codified as amended at 47 U.S.C. §§ 902 (b)(2)(L)(i), 922, and Memorandum of
Understanding Between the Federal Communications Commission and the National
Telecommunications and Information Administration, signed January 31, 2003.




Page 91                             GAO-12-342SP Duplication, Overlap, and Fragmentation
    spectrum-dependent systems, the requirements only apply to new
    procurements.

•   Agencies receive no economic benefit from freeing up spectrum that
    can be auctioned for other uses and potentially generate revenue for
    the U.S. Treasury. In May 2004, GAO recommended that NTIA develop
    a pilot to implement incentives for agencies to use spectrum more
    efficiently, and NTIA undertook a review to identify potential incentives.
    However, according to NTIA, it did not carry out the studies
    recommended by the review due to limited resources and other
    strategic priorities. Some experts GAO spoke with noted the need to
    better incent agencies to use spectrum more efficiently, and a
    subcommittee of the Department of Commerce’s Spectrum Management
    Advisory Committee made recommendations on this issue in a January
    2011 report. NTIA officials told us that NTIA has also highlighted the
    need to amend the Commercial Spectrum Enhancement Act 3 to provide
    agencies with up-front funding to cover their planning costs associated
    with future spectrum reallocations, as well as covering the costs of
    sharing spectrum and enabling agencies to upgrade their technology.

•   Agencies might not have the up-front resources needed to invest in
    new technologies, which could result in the agencies using outdated,
    inefficient equipment. GAO has noted that OMB has experience
    managing a dedicated governmentwide fund that supports the up-
    front costs of improving efficiency in certain programs, such as
    improving the administrative efficiency of federal assistance
    programs. Although this fund is not spectrum-related, OMB officials
    noted that one of the benefits of having a centralized multiyear source
    of dedicated funding for efficiency projects is the ability to enhance
    agencies’ abilities to undertake efficiency issues that need to be
    reviewed over time or that are affected by multiple federal agencies. 4

With respect to using incentives to encourage more efficient spectrum
use among non-federal users, GAO found that FCC has taken steps to
rely more heavily on market mechanisms, such as auctions, to dictate the
allocation of spectrum, and recommended Congress consider extending
FCC’s auction authority. 5 FCC is also pursuing additional approaches to
expand economic incentives, such as incentive auctions—in which an
existing user could receive a portion of the proceeds from the auction—
however, some of these approaches require congressional approval and
face mixed support among stakeholders.




3
 Pub. L. No. 108-494, title II, 118 Stat. 3991 (2004).
4
 GAO-11-908 provides more information about OMB’s Partnership Fund for Program
Integrity Innovation, which funds efforts to improve the efficiency of federal assistance
programs.
5
 GAO-12-118.




Page 92                               GAO-12-342SP Duplication, Overlap, and Fragmentation
Actions Needed and       In its previously issued reports, GAO has consistently noted that
                         spectrum management is not guided by a long-range holistic vision
Potential Financial or   encompassing federal and nonfederal users. A Presidential Memorandum
Other Benefits           required NTIA and FCC to collaborate to make more spectrum available
                         for wireless broadband. NTIA and FCC are also working together to
                         accommodate more flexible and efficient models of spectrum use. These
                         efforts could lead to additional spectrum auctions, which could generate
                         increased revenues for the U.S. Treasury and provide spectrum for new
                         commercial applications. Enhanced transparency in NTIA and FCC’s joint
                         spectrum management efforts could aid Congress’ oversight and ensure
                         that the agencies are on the path to efficient and effective spectrum
                         management. In addition, GAO, the Department of Commerce, and an
                         FCC task force have noted the need to develop incentives that encourage
                         agencies to use spectrum more efficiently.

                         To improve transparency in national spectrum policy decisions, assure
                         coordination between managers of government and privately-owned
                         spectrum, and help ensure that spectrum is used for its highest and best
                         purpose, the Assistant Secretary for Communications and Information at
                         NTIA and the Chairman of the FCC should

                         •   report periodically to Congress on their joint spectrum planning
                             activities and their consultation with other relevant government
                             agencies. The report should include information on estimated future
                             spectrum requirements for public and private uses, the spectrum
                             allocation actions necessary to accommodate those uses, and any
                             actions taken to promote the efficient use of spectrum.

                         To improve spectrum efficiency among federal agencies, Congress may
                         wish to consider

                         •   evaluating what incentive mechanisms could be used to move
                             agencies toward more efficient use of spectrum, which could free up
                             some allocated for federal use spectrum to be made available for
                             other purposes. OMB’s experience managing governmentwide
                             efficiency programs could prove helpful in this evaluation.



Agency Comments          GAO provided a draft of this report section to the Department of
                         Commerce, FCC, and OMB for review and comment. The Department of
and GAO’s Evaluation     Commerce, FCC, and OMB provided technical comments, which were
                         incorporated as appropriate. The Department of Commerce stressed that
                         spectrum management is a difficult, complex undertaking with multiple
                         growing demands from commercial and governmental users, requiring
                         that regulators balance regulatory certainty for existing users against
                         flexibility to accommodate new users. The Department of Commerce
                         added that NTIA and FCC will need to continue to improve their
                         processes to meet competing demands for spectrum, specifically noting
                         the need to develop a regulatory basis for spectrum sharing. The
                         Department of Commerce stated that if so directed by Congress, NTIA
                         would work with FCC to report on planning activities, but cautioned



                         Page 93                      GAO-12-342SP Duplication, Overlap, and Fragmentation
against over-simplifying the complexity of spectrum management, noting
that it is impossible to simply calculate a number that represents how
much spectrum each user requires. GAO acknowledges the complexity of
such decisions, but believes that increased transparency in NTIA and
FCC’s statutorily-required joint planning efforts would prove useful for
Congress and stakeholders. With respect to applying market incentives to
encourage more efficient federal spectrum use, the Department of
Commerce noted potential difficulties with applying such incentives. For
example, the Department of Commerce stated that federal agencies
seldom have exclusive spectrum access and a band of spectrum may be
used to support a variety of technologies and operations. Thus, providing
incentives to one federal user to use less spectrum may not mean that
other federal users in the same spectrum will do the same. However, the
Department of Commerce stated that NTIA would do its best to ensure
the implementation of any efficiency requirements ultimately specified by
Congress, and would fully consider any proposals to fund efficiency gains
such as those carried out by OMB in other fields.

FCC noted that it has increased strategic planning for spectrum
designated for commercial use, and has worked to ensure greater
transparency in FCC’s planning efforts. FCC also provided some
information on its efforts to expand the use of market incentives to
encourage efficient spectrum use among commercial users, which were
incorporated as appropriate.
OMB disagreed with GAO’s recommendation that NTIA and FCC report
periodically to Congress on their joint spectrum planning activities and
their consultation with other relevant government agencies. OMB stated
that since NTIA and FCC have distinct missions and serve discrete
populations of spectrum users, additional public reporting would not likely
appreciably enhance spectrum management efforts. OMB also noted that
NTIA and FCC are collaborating with one another and with other federal
agencies to identify spectrum that can be made available for wireless
broadband, and that NTIA periodically reports on the progress of these
efforts. GAO recognizes that NTIA and FCC are collaborating to make
additional spectrum available for broadband. However, GAO has
previously noted that coordination challenges between NTIA and FCC
have delayed efforts to repurpose spectrum for new commercial uses,
and changes that affect existing users of spectrum can cause contentious
stakeholder conflicts that cross the jurisdictions of both agencies and can
lead to protracted negotiations. Given that NTIA and FCC have not jointly
developed a national strategic spectrum plan, despite being statutorily
required to do so, and did not, during one prior Chairman’s term, hold
statutorily-required spectrum-planning meetings, GAO believes that
increased transparency in NTIA and FCC’s coordination efforts would
prove useful in maintaining coordination between the agencies. In its
comments, OMB also stated that the Administration has put forth
proposals to encourage more efficient use of spectrum, such as providing
FCC with new authority to conduct incentive auctions, and modifying
existing law to provide federal agencies with up-front funding to plan for




Page 94                       GAO-12-342SP Duplication, Overlap, and Fragmentation
                      spectrum reallocations and allowing support for upgrading agency
                      communication capabilities.



How GAO Conducted     The information contained in this analysis is based on findings from the
                      products listed in the related GAO reports section as well as additional
Its Work              work GAO conducted. GAO interviewed NTIA and FCC officials, as well
                      as academic experts and think tank representatives.



Related GAO           •   Commercial Spectrum: Plans and Actions to Meet Future Needs,
                          Including Continued Use of Auctions. GAO-12-118. Washington, D.C.:
Products                  November 23, 2011.

                      •   Streamlining Government: Key Practices from Select Efficiency
                          Initiatives Should Be Shared Governmentwide. GAO-11-908.
                          Washington, D.C.: September 30, 2011.

                      •   Spectrum Management: NTIA Planning and Processes Need
                          Strengthening to Promote the Efficient Use of Spectrum by Federal
                          Agencies. GAO-11-352. Washington, D.C.: April 12, 2011.

                      •   Telecommunications: Options for and Barriers to Spectrum Reform.
                          GAO-06-526T. Washington, D.C.: March 14, 2006.

                      •   Telecommunications: Strong Support for Extending FCC’s Auction
                          Authority Exists, but Little Agreement on Other Options to Improve
                          Efficient Use of Spectrum. GAO-06-236. Washington, D.C.: December
                          20, 2005.

                      •   Spectrum Management: Better Knowledge Needed to Take
                          Advantage of Technologies That May Improve Spectrum Efficiency.
                          GAO-04-666. Washington, D.C.: May 28, 2004.



Contact Information   For additional information about this area, contact Mark Goldstein at (202)
                      512-2834 or goldsteinm@gao.gov.




                      Page 95                       GAO-12-342SP Duplication, Overlap, and Fragmentation
14. Health Research Funding
The National Institutes of Health, Department of Defense, and Department of Veterans Affairs can improve
sharing of information to help avoid the potential for unnecessary duplication.



Why This Area Is                    The majority of federal funding for health research and related activities is
                                    spent by the National Institutes of Health (NIH), within the Department of
Important                           Health and Human Services (HHS), the Department of Defense (DOD),
                                    and the Department of Veterans Affairs (VA). 1 In fiscal year 2010, NIH,
                                    DOD, and VA obligated about $40 billion, $1.3 billion, and $563 million,
                                    respectively, for activities related to health research. 2 Applications for
                                    federal funding of health research are typically submitted by principal
                                    investigators 3—the lead researchers for research projects—through their
                                    institution, and in some cases they may submit applications to multiple
                                    agencies at the same time for funding consideration. 4 It is common for
                                    agencies to fund health research on topics of common interest, such as
                                    breast cancer and post-traumatic stress disorder (PTSD). 5 In some
                                    cases, funding similar research on the same topics is appropriate and
                                    necessary, for example, for purposes of replicating or corroborating prior
                                    research results. However, without effective sharing of information among




                                    1
                                     Specifically, about 94 percent of federal funding for medical sciences research in fiscal
                                    year 2008 was obligated by these three federal agencies, according to data from the
                                    National Science Foundation.
                                    2
                                     With respect to DOD, we obtained data on obligations of funds made available for
                                    research, development, testing, and evaluation in the annual appropriation for the Defense
                                    Health Program. With respect to VA, we obtained data on obligations of its appropriation
                                    for Medical and Prosthetic Research.
                                    3
                                     Principal investigators are typically individuals designated by the applicant organization,
                                    such as a university receiving federal grants, to have the appropriate level of authority and
                                    responsibility to direct the project or program to be supported by the award.
                                    4
                                     Agency officials told us that multiple agencies cannot fund the same research application
                                    unless they work together to jointly fund it.
                                    5
                                     In some instances, research is initiated in response to congressional direction. For
                                    example, according to DOD, the Office of Congressionally Directed Medical Research
                                    Programs is funded through the annual Defense Appropriations Act and manages
                                    research in many areas, including breast cancer. According to DOD, funds identified
                                    during the appropriations process at the request of members of the House and Senate are
                                    used for congressionally directed research.
                                    http://cdmrp.army.mil/about/fundingprocess.shtml (last visited Dec. 2, 2011). Future GAO
                                    work is expected to examine the Office of Congressionally Directed Medical Research
                                    Programs.




                                    Page 96                              GAO-12-342SP Duplication, Overlap, and Fragmentation
                 federal agencies about their funding decisions, they may use available
                 funds inefficiently due to duplication of effort. 6



What GAO Found   NIH, DOD, and VA each lack comprehensive information on health
                 research funded by the other agencies, which limits their ability to identify
                 potential areas of duplication in the health research they fund. NIH, DOD,
                 and VA program managers—officials who typically manage agency
                 research portfolios and may provide input to senior agency officials
                 responsible for making funding decisions—told GAO that, when reviewing
                 health research applications, they typically search publicly available
                 databases for potentially duplicative research projects funded by other
                 federal agencies. 7 These databases are used by various federal
                 agencies, including NIH, DOD, and VA, to maintain information on funded
                 health research applications. For example:

                 •   To obtain information on NIH-funded research applications, DOD and
                     VA program managers told GAO that they search NIH’s Research
                     Portfolio Online Reporting Tools Expenditures and Results, known as
                     RePORTER, an electronic database that provides the public with
                     information on the expenditures and results of NIH-supported health
                     research. This database is also used by NIH and DOD officials to
                     obtain information on some, but not all, of the health research
                     applications funded by VA. 8

                 •   To obtain information on DOD-funded health research applications,
                     the NIH and VA program managers GAO interviewed said that they
                     use DOD’s Congressionally Directed Medical Research Programs
                     website, which includes a database that provides information on
                     health research applications funded through these programs, though




                 6
                  GAO recognizes that, in some instances, it is appropriate for multiple agencies or entities
                 to be involved in the same programmatic or policy area due to the nature or magnitude of
                 the federal effort. For purposes of this report, the term “unnecessary duplication” refers to
                 duplicative research funding that is not necessary to corroborate or replicate prior
                 research results for scientific purposes.
                 7
                  Officials at NIH, DOD, and VA also stated that they consider the opinions of peer
                 reviewers, who are typically scientists or professors who score proposals for scientific
                 merit, to determine whether applications may be duplicative of other research. NIH and VA
                 applications have a required section where principal investigators and other key personnel
                 must list all current funding they receive and all other applications they have submitted at
                 the time of their application. Peer reviewers generally have access to this information
                 when scoring the proposals.
                 8
                  According to VA officials, NIH’s database contains information on about one quarter of all
                 VA-funded health research applications. VA officials told us that they are working to add
                 information on most VA-funded applications to this database by August 2012. In addition,
                 NIH officials stated that they search NIH’s database for information on proposals funded
                 by NIH.




                 Page 97                              GAO-12-342SP Duplication, Overlap, and Fragmentation
     not those funded outside these programs, such as those funded by
     separately managed research centers. 9

According to NIH, DOD, and VA officials, the information provided in the
research databases they use to identify any potential duplication when
making funding decisions is generally not sufficient. For example, NIH’s
public database provides basic application information such as the title,
principal investigator name, abstract, and agency contact information for
each application. 10 However, program managers said they need more
details on the aims and methodologies of funded applications in order to
determine whether applications considered for funding are duplicative of
funded research. Officials noted that even applications with identical titles
may have different aims. In such cases, officials said they typically obtain
information not contained in the databases by contacting colleagues at
other federal agencies to obtain details on specific applications.

Officials at NIH, DOD, and VA added that they also communicate with
officials at other agencies through participation on joint committees that
have members from various federal agencies. For example, NIH officials
stated that the Interagency Breast Cancer and Environmental Research
Coordinating Committee, a committee established in 2010 by NIH,
facilitates exchanges of information about breast cancer environment and
research efforts across various agencies. While DOD’s database for
applications funded through its Congressionally Directed Medical
Research Programs provides information about applications’ aims and
methodologies, DOD’s database does not provide contact information for
the officials associated with specific applications. One program manager
at NIH and several VA officials said that they had difficulty knowing who
to contact at DOD to obtain further information on specific applications.

Another limitation of the databases is that they do not always allow for
efficient, comprehensive searches to identify unnecessary duplication of
research. As stated earlier, information on health research funded by NIH,
DOD, and VA is in different databases with varying types and amounts of
information. DOD and VA officials told GAO that, in general, when
searching multiple databases for potential duplication, the large number
of funded applications on related topics makes comprehensive checks
difficult and time-consuming. Because of this, officials at NIH, DOD, and
VA told GAO that they often limit searches to principal investigators’ other
federally funded research projects, which they are generally required to




9
 NIH, DOD, and VA officials told us that they also may search other databases, such as
clinicaltrials.gov, DeployMed ResearchLINK, and PubMed, which contain information on
federally funded health research.
10
 NIH officials said the system that provides information to NIH’s database may contain
additional information for VA applications, such as the actual application and supporting
documentation; however, this information is only available to NIH and VA officials.




Page 98                              GAO-12-342SP Duplication, Overlap, and Fragmentation
                         list on their applications. 11 To address this challenge, VA officials told
                         GAO that they are working to make comprehensive searching of the
                         various databases less time-consuming. VA awarded a contract for the
                         development of an electronic tool to search multiple databases and check
                         for potential duplication among health research applications funded by
                         various agencies and other sources. 12 According to VA officials, this tool,
                         when implemented, will allow these officials to identify in a timely manner
                         applications that are most likely to be duplicative.

                         Officials at NIH, DOD, and VA acknowledged that duplication may
                         sometimes go undetected. GAO performed searches on funded
                         applications for breast cancer and PTSD research in NIH’s database and
                         DOD’s Congressionally Directed Medical Research Programs’ website
                         using various key words frequently found in related research. 13 While
                         most of the applications identified did not appear to be duplicative, GAO
                         identified two applications, one funded by VA and the other by DOD, that
                         a VA program manager confirmed were duplicative as described in the
                         databases. However, the databases were not updated to reflect
                         modifications that had been made to the applications’ aims. The VA
                         official told GAO that these two applications were originally identical and
                         submitted by the same principal investigator. VA funded one of the
                         applications with the understanding that DOD would not fund the second,
                         duplicative application. Subsequently, according to DOD officials, DOD
                         funded the second application after the principal investigator made some
                         modifications to its aims in order to make it no longer duplicative.
                         However, VA officials did not have information on DOD’s funding of the
                         application or on how it had been modified. This example illustrates how
                         the databases used to check for duplication in health research do not
                         always provide comprehensive information needed to evaluate research
                         for potential duplication across federal agencies during the funding
                         decision process.



Actions Needed and       Because multiple federal agencies fund research on topics of common
                         interest, there is potential for unnecessary duplication. As long as
Potential Financial or   research on similar topics continues to be funded by separate agencies, it
Other Benefits           is incumbent on the agencies to coordinate effectively with each other.
                         While NIH, DOD, and VA take steps to check for duplication in the health
                         research they fund, the agencies have opportunities to improve sharing of



                         11
                           Officials told us that they check this information prior to funding to ensure that the
                         application is not duplicative of other federally funded research conducted by the principal
                         investigator.
                         12
                           This tool will be completed by June 28, 2012, according to VA’s contractor. After its
                         completion, VA plans to use it internally to analyze its research portfolio and to identify
                         potential duplication across research funded by various entities. VA also plans to make
                         some information resulting from its use of the tool available to the public.
                         13
                          The searches we performed were not comprehensive or generalizable.




                         Page 99                               GAO-12-342SP Duplication, Overlap, and Fragmentation
                       information needed to evaluate research for potential duplication when
                       making funding decisions. In order to do so, the Director of NIH as well as
                       the Secretaries of DOD and VA should

                       •   determine ways to improve access to comprehensive electronic
                           information on funded health research shared among agency officials
                           and improve the ability of agency officials to identify possible
                           duplication.

                       For example, NIH, DOD, and VA could collaborate to allow for more
                       efficient, comprehensive searches to identify duplication, by, for example,
                       increasing commonalities among their respective databases; providing
                       additional information in their respective databases, such as more details
                       on the aims and methodology of applications that may be useful to
                       program managers evaluating applications for duplication; and ensuring
                       contact information for agency officials associated with specific
                       applications is made available in their respective databases, if possible.
                       NIH, DOD, and VA could also provide program managers with information
                       to help them identify when they receive similar applications and to monitor
                       the funding status of these applications, such as which applications
                       receive funding, and which are modified during the funding process.
                       Determining ways to improve access to comprehensive information and
                       to improve officials’ ability to identify duplication could help agency
                       officials in their efforts to avoid duplication when determining which health
                       research applications to fund.



Agency Comments        GAO provided a draft of this report section to HHS, DOD, and VA for
                       review and comment. HHS and DOD provided written comments. DOD
and GAO’s Evaluation   generally agreed with GAO’s findings, and HHS did not state whether it
                       agreed or disagreed. In its comments, on behalf of NIH, HHS provided
                       more detail on NIH’s policies and procedures concerning monitoring and
                       managing potential overlap in funding, particularly within NIH. HHS also
                       described an internal NIH database that is also available to VA staff and
                       that provides more detailed information on grants than is included in
                       NIH’s public RePORTER database, but is not generally available to staff
                       at other agencies. For this work, GAO focused on RePORTER because it
                       is the NIH database that officials at other agencies told GAO they use
                       when checking for information on NIH- or VA-funded research and is
                       available to officials at all agencies. HHS and VA also provided technical
                       comments, which were incorporated as appropriate. All written comments
                       are reprinted in appendix IV. As part of its routine audit work, GAO will
                       track the extent to which progress has been made to address the
                       identified actions and report to Congress.



How GAO Conducted      The information contained in this analysis is based on findings from the
                       products listed in the related GAO reports section as well as additional
Its Work               work GAO conducted. GAO used breast cancer and PTSD research as
                       examples of areas of research that are funded by these three agencies.
                       Within NIH, GAO focused on the National Cancer Institute and the


                       Page 100                       GAO-12-342SP Duplication, Overlap, and Fragmentation
                      National Institute of Mental Health, because these entities fund the
                      majority of breast cancer and PTSD research within NIH, respectively,
                      according to NIH officials. Within DOD, GAO focused on the Defense
                      Health Program and, within VA, the Office of Research and Development,
                      because these entities fund the majority of health research within DOD
                      and VA, according to officials with whom GAO spoke. GAO focused its
                      work on coordination across federal agencies that impacts decisions to
                      fund health research. GAO collected and analyzed documents provided
                      by NIH, DOD, and VA officials. GAO did not focus its review on
                      coordination within federal agencies. In addition, GAO searched the
                      available databases containing information on applications funded by
                      NIH, DOD, and VA—RePORTER and DOD’s Congressionally Directed
                      Medical Research Programs website—to identify examples of potentially
                      duplicative research applications funded by these agencies. GAO
                      searched for the terms “breast cancer” and “PTSD” and then searched for
                      terms that were frequently cited in titles that appeared to indicate potential
                      duplication. GAO also interviewed 23 officials at NIH, DOD, and VA whom
                      it selected because of their involvement in coordination across federal
                      agencies when determining which research applications to fund in the
                      areas of breast cancer and PTSD.



Related GAO           Defense Health: Coordinating Authority Needed for Psychological Health
                      and Traumatic Brain Injury Activities. GAO-12-154. Washington, D.C.:
Products              January 25, 2012.

                      HHS Research Awards: Use of Recovery Act and Patient Protection and
                      Affordable Care Act Funds for Comparative Effectiveness Research.
                      GAO-11-712R. Washington, D.C.: June 14, 2011.

                      VA Health Care: VA Spends Millions on Post-Traumatic Stress Disorder
                      Research and Incorporates Research Outcomes into Guidelines and
                      Policy for Post-Traumatic Stress Disorder Services. GAO-11-32.
                      Washington, D.C.: January 24, 2011.

                      National Institutes of Health: Awarding Process, Awarding Criteria, and
                      Characteristics of Extramural Grants Made with Recovery Act Funding.
                      GAO-10-848. Washington, D.C.: August 6, 2010.

                      VA Health Care: Progress and Challenges in Conducting the National
                      Vietnam Veterans Longitudinal Study. GAO-10-658T. Washington, D.C.:
                      May 5, 2010.

                      VA Health Care: Status of VA’s Approach in Conducting the National
                      Vietnam Veterans Longitudinal Study. GAO-10-578R. Washington, D.C.:
                      May 5, 2010.



Contact Information   For additional information about this area, contact Linda T. Kohn at (202)
                      512-7114 or kohnl@gao.gov.



                      Page 101                       GAO-12-342SP Duplication, Overlap, and Fragmentation
15. Military and Veterans Health Care
The Departments of Defense and Veterans Affairs need to improve integration across care coordination and
case management programs to reduce duplication and better assist servicemembers, veterans, and their
families.



Why This Area Is                   In 2007, in reaction to media reports criticizing the deficiencies in the
                                   provision of outpatient services at Walter Reed Army Medical Center,
Important                          various review groups investigated the challenges that the Departments of
                                   Defense (DOD) and Veterans Affairs (VA) faced in providing care to
                                   wounded, ill, and injured servicemembers. The review groups cited
                                   common areas of concern, including case management, which helps
                                   ensure continuity of care by coordinating services from multiple providers
                                   and guiding servicemembers’ transitions between care providers, from
                                   active duty status to veteran status, or back to the civilian community. One
                                   of these review groups, the President’s Commission on Care for America’s
                                   Returning Wounded Warriors—commonly referred to as the Dole-Shalala
                                   Commission—issued a report noting that while the military services did
                                   provide case management, some servicemembers were being assigned
                                   multiple case managers, having no single person to monitor and coordinate
                                   their activities, which often resulted in confusion, redundancy, and delay in
                                   addressing servicemembers’ health care issues. 1

                                   To elevate the response needed to address the problems associated with
                                   the provision of care and services for returning servicemembers, DOD
                                   and VA established the Wounded, Ill, and Injured Senior Oversight
                                   Committee (Senior Oversight Committee) in May 2007. Co-chaired by the
                                   Deputy Secretaries of Defense and Veterans Affairs, the Senior Oversight
                                   Committee was designed to be the main decision-making body for the
                                   oversight, strategy, and integration of DOD’s and VA’s efforts to improve
                                   seamlessness across the recovery care continuum. 2 The committee
                                   included the most senior decision makers from both departments, who
                                   met on a routine basis to ensure timely decisions and actions, including
                                   ensuring that the recommendations of various review groups were
                                   properly evaluated, coordinated, implemented, and resourced.

                                   Under the purview of the Senior Oversight Committee, DOD and VA
                                   jointly developed the Federal Recovery Coordination Program (FRCP) in
                                   response to the Dole-Shalala Commission’s recommendation for an
                                   integrated approach to care management. Specifically, the FRCP was


                                   1
                                    President’s Commission on Care for America’s Returning Wounded Warriors, Serve,
                                   Support, Simplify (July 2007).
                                   2
                                    The 2007 Dole-Shalala Commission report outlined a vision for a recovery care
                                   continuum that provides continuous and integrated care management across both DOD
                                   and VA to create seamless transitions between the many providers and facilities
                                   recovering servicemembers and veterans must navigate.




                                   Page 102                          GAO-12-342SP Duplication, Overlap, and Fragmentation
designed to assist Operation Enduring Freedom and Operation Iraqi
Freedom servicemembers, 3 veterans, and their families with access to
care, services, and benefits provided through DOD, VA, other federal
agencies, states, and the private sector. The FRCP was envisioned to
serve “severely” wounded, ill, and injured servicemembers who are most
likely to be medically separated from the military, including those who
have suffered traumatic brain injuries, amputations, burns, spinal cord
injuries, visual impairment, and post-traumatic stress disorder. 4 The
program uses coordinators to monitor and coordinate both the clinical and
nonclinical services 5 needed by program enrollees, by serving as the
single point of contact among all of the case managers of DOD, VA, and
other governmental and private care coordination 6 and case
management 7 programs that provide services directly to servicemembers
and veterans.

Separately, the Recovery Coordination Program (RCP) was established
in response to the National Defense Authorization Act for Fiscal Year
2008 to improve the care, management, and transition of recovering
servicemembers. It is a DOD-specific program that was designed to use
coordinators to provide nonclinical care coordination to “seriously”
wounded, ill, and injured servicemembers, who may return to active duty
unlike those categorized as “severely” wounded, ill, or injured. The RCP
is centrally coordinated by DOD’s Office of Wounded Warrior Care and
Transition Policy, but is implemented separately by each of the military
services. Most of the military services have implemented the RCP within
their existing wounded warrior programs, including the Navy Safe Harbor



3
 Operation Enduring Freedom, which began in October 2001, supports combat operations
in Afghanistan and other locations, and Operation Iraqi Freedom, which began in March
2003, supported combat operations in Iraq and other locations. Beginning September 1,
2010, Operation Iraqi Freedom was referred to as Operation New Dawn.
4
 The Department of Defense established three injury categories—mild, serious, and
severe. Servicemembers with “mild” wounds, illnesses, or injuries are expected to return
to duty in less than 180 days; those with “serious” wounds, illnesses, or injuries are
unlikely to return to duty in less than 180 days and possibly may be medically separated
from the military; and those who are “severely” wounded, ill, or injured are highly unlikely
to return to duty and also likely to medically separate from the military.
5
 For the purposes of this report, clinical services include services such as scheduling
medical appointments and providing outreach education about medical conditions such as
post-traumatic stress disorder. Nonclinical services include services such as assisting
servicemembers with financial benefits and accessing accommodations for families.
6
 According to the National Coalition on Care Coordination, care coordination is a client-
centered, assessment-based interdisciplinary approach to integrating health care and
social support services in which an individual’s needs and preferences are assessed, a
comprehensive care plan is developed, and services are managed and monitored by an
identified care coordinator.
7
 According to the Case Management Society of America, case management is defined as
a collaborative process of assessment, planning, facilitation, and advocacy for options and
services to meet an individual’s health needs through communication and available
resources to promote quality, cost-effective outcomes.




Page 103                             GAO-12-342SP Duplication, Overlap, and Fragmentation
                 Program, the Air Force Warrior and Survivor Care Program, 8 and the
                 Marine Wounded Warrior Regiment. The Army Wounded Warrior
                 Program and the U.S. Special Operations Command’s Care Coalition
                 also provide care coordination services using coordinators referred to as
                 “advocates” that meet the requirements of the RCP, although they did not
                 specifically implement the RCP program. Depending on how a military
                 service’s wounded warrior program is structured, a servicemember may
                 receive either case management or care coordination services or both.
                 For example, the Navy Safe Harbor Program only provides care
                 coordination services and does not have a case management
                 component, whereas the Marine Wounded Warrior Regiment provides all
                 servicemembers with both case management and care coordination
                 services. 9



What GAO Found   Many recovering servicemembers and veterans are enrolled in more than
                 one care coordination or case management program, and as a result,
                 they may have multiple care coordinators and case managers, potentially
                 duplicating agencies’ efforts and reducing the effectiveness and efficiency
                 of the assistance they provide. (See table below.) For example, although
                 the FRCP and RCP were intended to serve different populations, a DOD
                 official told GAO that shortly after the military services implemented the
                 RCP, they began to provide assistance to servicemembers who were
                 “severely” wounded, ill, and injured—individuals who may also be
                 enrolled in the FRCP—because DOD officials believed these
                 servicemembers would also benefit from having RCP coordinators. 10 As a
                 result, servicemembers may have care coordinators from both programs.
                 In addition, recovering servicemembers and veterans who have a care
                 coordinator also may be enrolled in one or more of the multiple DOD or
                 VA programs that provide case management services to “seriously” and
                 “severely” wounded, ill, and injured servicemembers, veterans, and their
                 families. These programs include the military services’ wounded warrior
                 programs and VA’s Operation Enduring Freedom/Operation Iraqi
                 Freedom Care Management Program, among others. For one wounded
                 warrior program—the U.S. Special Operations Command’s Care
                 Coalition—enrollees may be dually enrolled in another wounded warrior
                 program because servicemembers that are part of the Special Operations




                 8
                  The Air Force Warrior Survivor Care Program is an overarching wounded warrior
                 program, which includes a care coordination component called the Air Force Recovery
                 Care Program and a case management component called the Air Force Wounded Warrior
                 Program.
                 9
                  The Marine Wounded Warrior Regiment provides nonclinical case management services
                 to its enrollees. Although it does not provide clinical case management services, the
                 program does facilitate access to medical programs and care needs that have been
                 identified for its servicemembers.
                 10
                   According to the Army, they have been providing care to severely wounded, ill, and
                 injured servicemembers since 2004.




                 Page 104                            GAO-12-342SP Duplication, Overlap, and Fragmentation
                                            Forces belong to a separate military service branch. 11 Servicemembers
                                            who have specialty needs also may have case managers affiliated with
                                            specialty programs or services, such as for polytrauma or spinal cord
                                            injury, during their recovery process, outside of, but in coordination with,
                                            wounded warrior programs.

Characteristics of Selected Department of Defense and Department of Veterans Affairs Care Coordination and Case
Management Programs for “Seriously” and “Severely” Wounded, Ill, and Injured Servicemembers, Veterans, and Their
Families

                                                                                                                 Type of services provided
                                                                                      Number of
                                                 Severity of                     active enrollees                                       Recovery
                                                                    a
Program                                          enrollees’ injuries                 (Sept. 2011)            Clinical   Nonclinical       plan
DOD and VA Care Coordination Program
Federal Recovery Coordination Program            Severeb                                              777       ●            ●               ●
DOD Recovery Coordination Programs by
                c
Military Service
Navy Safe Harbor Program                         Mild to severe                                       728                    ●               ●
                                                                                                                             ●               ●
                                                                                                         d
Air Force Recovery Care Program                  Mild to severe                                   946
                                                                                                         e
Marine Wounded Warrior Regiment’s                Serious to severe                              1,020
                                                                                                                             ●               ●
Recovery Coordination Program
Other DOD Care Coordination Programs
by Military Service
Army Warrior Care and Transition Program:        Severe                                         9,144g
                               f                                                                                             ●               ●
Army Wounded Warrior Program
U.S. Special Operations Command’s Care           Serious to severe                                    115i
                                                                                                                             ●               ●
Coalition Recovery Programh
DOD Case Management Programs by
Military Service
Army Warrior Care and Transition Program:        Serious to severe                              9,778g
Warrior Transition Units and Community                                                                          ●            ●               ●
                               f
Based Warrior Transition Units
Air Force Wounded Warrior Program                Serious to severe                               1270d                       ●
                                                                                                                             ●
                                  j                                                                      e
Marine Wounded Warrior Regiment                  Serious to severe                              1,020
U.S. Special Operations Command’s Care           Mild to severe                                 3,615i
                                                                                                                             ●
Coalition
VA Case Management Program
VA Operation Enduring Freedom/Operation          Mild to severe                                50,256
                                                                                                                ●            ●               ●
Iraqi Freedom Care Management Program
                                            Source: GAO analysis of DOD and VA program information.

                                            Notes: The characteristics listed in this table are general characteristics of each program; individual
                                            circumstances may affect the enrollees served and services provided by specific programs. For the
                                            purposes of this report, clinical services include services such as scheduling medical appointments
                                            and providing outreach education about medical conditions such as post-traumatic stress disorder.
                                            Nonclinical services include services such as assisting servicemembers with financial benefits and
                                            accessing accommodations for families.



                                            11
                                              According to a U.S. Special Operations Command’s Care Coalition Recovery Program
                                            official, when an enrollee is dually enrolled in another wounded warrior program, the U.S.
                                            Special Operations Command’s Care Coalition Recovery Program takes the lead for
                                            providing nonclinical case management.




                                            Page 105                                          GAO-12-342SP Duplication, Overlap, and Fragmentation
Because servicemembers and veterans may be enrolled in multiple programs, it is difficult to
determine the overall number of unique individuals served by these programs. Furthermore, the
number of “seriously” and “severely” wounded, ill, and injured servicemembers in the Operation
Enduring Freedom/Operation Iraqi Freedom conflicts is not known with certainty because the terms
“seriously” and “severely” are not categorical designations used by DOD or VA medical or benefits
programs, and determinations of the size of this population vary, depending on definitions and
methodology.
a
 For the purposes of this table, GAO has categorized the severity of enrollees’ injuries according to
the injury categories established by DOD. Servicemembers with mild wounds, illness, or injury are
expected to return to duty in less than 180 days; those with serious wounds, illness, or injury are
unlikely to return to duty in less than 180 days and possibly may be medically separated from the
military; and those who are severely wounded, ill, or injured are highly unlikely to return to duty and
also likely to medically separate from the military. These categories are not necessarily used by the
programs themselves.
b
 Although the Federal Recovery Coordination Program (FRCP) enrollment criteria state that the
program is for severely wounded, ill, and injured servicemembers and veterans, FRCP officials told
GAO that the program enrolls or assists seriously wounded, ill, and injured servicemembers and
veterans who need the program’s care coordination services.
c
 Most of the military services have implemented DOD’s Recovery Coordination Program (RCP) within
their existing wounded warrior programs, including the Navy Safe Harbor Program, the Air Force
Warrior and Survivor Care Program, and the Marine Wounded Warrior Regiment.
d
 About one-third (286) of the Air Force Recovery Care Program enrollees were also either tracked or
actively assisted by the Air Force Wounded Warrior Program.
e
 All servicemembers that are enrolled in the Marine Wounded Warrior Regiment receive care
coordination and case management services.
f
 The Army Warrior Care and Transition Program includes the Army Wounded Warrior Program as
well as the Warrior Transition Units and Community Based Warrior Transition Units. The Army did not
implement DOD’s RCP. However, according to officials, the Army Wounded Warrior Program
provides care coordination services that meet the requirements of the RCP.
g
 Over 1,100 Army Wounded Warrior Program enrollees were also enrolled in a Warrior Transition
Unit. Most Army Wounded Warrior Program enrollees are veterans because the program supports
enrollees throughout their recovery and transition, even into veteran status.
h
 The U.S. Special Operations Command did not implement DOD’s RCP. However, according to
officials, the U.S. Special Operations Command’s Care Coalition Recovery Program provides care
coordination services that meet the requirements of the RCP.
i
Enrollees of the U.S. Special Operations Command’s Care Coalition Recovery Program also receive
case management services. They may also be enrolled in a military service’s wounded warrior
program based on their branch of service, but the U.S. Special Operations Command’s Care
Coalition Recovery Program takes the lead for providing nonclinical case management.
j
 The Marine Wounded Warrior Regiment provides nonclinical case management services to its
enrollees. Although it does not provide clinical case management services, the program does
facilitate access to medical programs and care needs that have been identified for its
servicemembers.


GAO found that inadequate information exchange and poor coordination
between these programs have resulted in not only duplication of effort but
confusion and frustration for enrollees, particularly when case managers
and care coordinators duplicate or contradict one another’s efforts. 12 For
example, an FRCP coordinator told GAO that in one instance there were
five case managers working on the same life insurance issue for an
individual. In another example, an FRCP coordinator and an RCP
coordinator were not aware the other was involved in coordinating care
for the same servicemember and had unknowingly established conflicting


12
  While FRCP coordinators are generally not expected to provide services directly to
enrollees, they may do so in certain situations, such as when they cannot determine
whether a case manager has taken care of an issue for an individual or when asked to
make complicated arrangements, such as assisting enrollees with adaptive housing grants
or obtaining medical equipment or prosthetics.




Page 106                                  GAO-12-342SP Duplication, Overlap, and Fragmentation
recovery goals for this individual. In this case, a servicemember with
multiple amputations was advised by his FRCP coordinator to separate
from the military in order to receive needed services from VA, whereas
his RCP coordinator set a goal of remaining on active duty. These
conflicting goals caused considerable confusion for this servicemember
and his family.

DOD and VA have been unsuccessful in jointly developing options for
improved collaboration and potential integration of the two care
coordination programs—the FRCP and RCP—although they have made
a number of attempts to do so. Despite the identification of various
options, no final decisions to revamp, merge, or eliminate programs have
been agreed upon. As outlined in the following examples, the
departments’ lack of progress illustrates their continued difficulty in
collaborating to resolve program duplication.

•    Beginning in December 2010, the Senior Oversight Committee
     directed its care management work group 13 to conduct an inventory of
     DOD and VA case managers and perform a feasibility study of
     recommendations on the governance, roles, and mission of DOD and
     VA care coordination. According to DOD and VA officials, this
     information was requested for the purpose of formulating options for
     improving DOD and VA care coordination. However, DOD officials
     stated that following compilation of this information, no action was
     taken by the committee, and other issues, such as responding to
     budget reductions, were given higher priority.

•    In May 2011, the Senior Oversight Committee was asked by the
     House Committee on Veterans Affairs Subcommittee on Health to
     develop options for integrating the FRCP and RCP in order to reduce
     duplication and to provide a response to the subcommittee by June
     20, 2011. On September 12, 2011—almost 3 months after the
     subcommittee requested a response—the co-chairs of the Senior
     Oversight Committee issued a joint letter following notification by the
     subcommittee that it would hold a hearing on the FRCP and RCP care
     coordination issue. The letter stated that the departments are
     considering several options to maximize care coordination resources,
     but these options had not been finalized and were not specifically
     identified or outlined in the letter.

Nonetheless, as GAO has previously reported, the need for better
collaboration and integration extends beyond the FRCP and RCP to also
encompass other DOD and VA case management programs, such as
DOD’s wounded warrior programs that also serve seriously and severely



13
  The Senior Oversight Committee is supported by several internal work groups devoted
to specific issues, such as DOD and VA care coordination and case management.
Participants in the committee’s care management work group include officials from the
FRCP and the RCP.




Page 107                           GAO-12-342SP Duplication, Overlap, and Fragmentation
                         wounded, ill, and injured servicemembers and veterans. Without
                         interdepartmental coordination and action to better align and integrate
                         these programs, problems with duplication and overlap will persist, and
                         perhaps worsen as the number of enrollees served by these programs
                         continues to grow. Moreover, the confusion this creates for recovering
                         servicemembers, veterans, and their families may hamper their recovery.
                         Consequently, the intended purpose of these programs—to better
                         manage and facilitate care and services—may actually have the opposite
                         effect.



Actions Needed and       To improve the effectiveness, efficiency, and efficacy of services for
                         recovering servicemembers, veterans, and their families by reducing
Potential Financial or   duplication and overlap, GAO recommended in October 2011 that the
Other Benefits           Secretaries of Defense and Veterans Affairs should direct the co-chairs of
                         the Senior Oversight Committee to

                         •   expeditiously develop and implement a plan to strengthen functional
                             integration across all DOD and VA care coordination and case
                             management programs that serve this population, including—but not
                             limited to—the FRCP and RCP.



Agency Comments          GAO provided a draft of its October 2011 report as well as a draft of this
                         report section to DOD and VA for review and comment. Although DOD
and GAO’s Evaluation     and VA did not specifically comment on the recommendation, they
                         provided technical comments, which were incorporated as appropriate.
                         As part of its routine audit work, GAO will track the extent to which
                         progress has been made to address the identified actions and report to
                         Congress.



How GAO Conducted        The information contained in this analysis is based on findings from the
                         products listed in the related GAO products section as well as additional
Its Work                 work GAO conducted to be published as a separate product in 2012.
                         GAO interviewed officials from each of DOD’s wounded warrior programs
                         and the VA Operation Enduring Freedom/Operation Iraqi Freedom Care
                         Management Program to obtain information about the services that they
                         provide and their enrollees.



Related GAO              DOD and VA Health Care: Action Needed to Strengthen Integration
                         across Care Coordination and Case Management Programs.
Products                 GAO-12-129T. Washington, D.C.: October 6, 2011.

                         Federal Recovery Coordination Program: Enrollment, Staffing, and Care
                         Coordination Pose Significant Challenges. GAO-11-572T. Washington,
                         D.C.: May 13, 2011.




                         Page 108                      GAO-12-342SP Duplication, Overlap, and Fragmentation
                      DOD and VA Health Care: Federal Recovery Coordination Program
                      Continues to Expand but Faces Significant Challenges. GAO-11-250.
                      Washington, D.C.: March 23, 2011.



Contact Information   For additional information about this area, please contact Debra Draper at
                      (202) 512-7114 or draperd@gao.gov or Randall B. Williamson at (202)
                      512-7114 or williamsonr@gao.gov.




                      Page 109                     GAO-12-342SP Duplication, Overlap, and Fragmentation
16. Department of Justice Grants
The Department of Justice could improve how it targets nearly $3.9 billion to reduce the risk of potential
unnecessary duplication across the more than 11,000 grant awards it makes annually.



Why This Area Is                      Since fiscal year 2005, Congress has appropriated approximately $30
                                      billion for crime prevention, law enforcement, and crime victim services for
Important                             more than 200 federal financial assistance programs that the Department
                                      of Justice (Justice) manages. 1 These federal financial assistance programs
                                      provide funding through formula grants, discretionary grants, cooperative
                                      agreements, and other payment programs, but are all generally referred to
                                      as grants. 2 In 2010, Justice awarded nearly $3.9 billion in grants through its
                                      three granting agencies—the Office of Justice Programs (OJP), the Office
                                      on Violence Against Women (OVW), and the Community Oriented Policing
                                      Services (COPS) Office. As established in statute, some of the grant
                                      programs administered by OJP, OVW, and the COPS Office are similar in
                                      scope and grant applicants can apply for and receive grant awards from
                                      more than one program. Moreover, grant recipients may choose to award a
                                      portion of their grant to subgrantees. These subgrantees may also apply
                                      directly to Justice for funding through other grant programs for the same or
                                      similar purposes. The number of grant programs and recipients, and the
                                      billions of dollars in funds awarded annually, present administrative
                                      challenges for Justice.

                                      As the United States experiences budgetary constraints, there is an ever-
                                      increasing need to ensure that governmental resources—including those
                                      awarded through grants and subgrants—are appropriately targeted and
                                      unnecessary duplication is mitigated. Further, Justice’s Office of the
                                      Inspector General continues to include Justice’s grants management
                                      among its list of top challenges affecting the department, and in previous
                                      reports, has identified fragmentation and duplication between Justice’s
                                      granting agencies. The Inspector General noted that such fragmentation
                                      incurs additional cost to Justice, and recommended closer coordination to




                                      1
                                       The amount appropriated since fiscal year 2005 does not include amounts appropriated
                                      in fiscal year 2012. In addition to fiscal year funding from 2005 through 2011, this amount
                                      includes $4 billion appropriated in fiscal year 2009 through the American Recovery and
                                      Reinvestment Act of 2009 (Pub. L. No. 111-5, 123 Stat. 115, 129-30), which includes $10
                                      million for salaries and expenses to manage, administer, and oversee the grant programs.
                                      2
                                       Formula grant programs are noncompetitive awards based on a predetermined formula.
                                      Discretionary grants are awarded on the basis of a competitive process. A cooperative
                                      agreement is a type of federal financial assistance similar to a grant except the federal
                                      government is more substantially involved with the grant. Payment programs at Justice
                                      typically take the form of reimbursements to state and local law enforcement entities for
                                      purchases such as body armor or the cost to border states for prosecuting criminal cases.




                                      Page 110                            GAO-12-342SP Duplication, Overlap, and Fragmentation
                 ensure that awards are not made to the same grantee for similar
                 purposes. 3



What GAO Found   Based on audit work with associated findings to be published in a
                 forthcoming report, GAO found instances where Justice’s granting
                 agencies had awarded funds from different grant programs to the same
                 applicants whose applications described similar—and in some cases, the
                 same—purposes for using the grant funds. 4 According to Justice officials,
                 funding from multiple Justice grant programs may be necessary to fully
                 implement grantees’ initiatives. GAO acknowledges that there may be
                 times when Justice’s decision to fund grantees in this manner is
                 warranted. However, GAO found that Justice made grant award
                 decisions without visibility over whether the funds supported similar or the
                 same purposes, thus potentially resulting in unnecessary and unintended
                 duplication. Moreover, Justice has not assessed its grant programs to
                 determine the extent to which they overlap with one another and
                 determine if consolidation of grant programs may be appropriate. Further,
                 Justice’s granting agencies have not established consistent policies and
                 procedures for sharing grant application information that could help them
                 identify and mitigate any unnecessary duplication in how grantees intend
                 to use their grant awards. Additionally, the granting agencies do not
                 consider subgrant data, such as award amounts and project purposes, as
                 criteria in making grant award decisions. As a result, Justice is at risk of
                 unintentionally awarding funding from multiple grant programs to grant
                 recipients in the same communities for the same or similar purposes
                 because it does not consistently and routinely check for any unnecessary
                 duplication in grant applications. 5

                 GAO reviewed all 253 of Justice’s three granting agencies’ fiscal year
                 2010 grant program solicitations, which serve as announcements of new
                 grant funding available and explain areas for which funding can be used.
                 These solicitations and the respective grant awards are in addition to
                 grant programs that Justice continues to administer from prior fiscal years
                 or more recently began administering. 6 The review found evidence of
                 overlap in the justice areas that Justice’s grant programs aim to support.


                 3
                  U.S. Department of Justice Office of the Inspector General, Audit Report 03-27,
                 Streamlining of Administrative Activities and Federal Financial Assistance Functions in the
                 Office of Justice Programs and the Office of Community Oriented Policing Services
                 (Washington, D.C.: August 2003).
                 4
                  Reviewing and validating that grantees actually used the funds for the articulated
                 purposes was not within GAO’s scope. GAO’s review focused on what the grantees
                 proposed in their applications and Justice’s review and approval of those applications.
                 5
                  The three granting agencies support criminal justice interventions targeted at the
                 community level.
                 6
                  Because Justice grant programs can last from 1 to 5 years, the total number of active
                 Justice grant programs can be higher than what is presented in the table, which is a single
                 year of grant program solicitations.




                 Page 111                             GAO-12-342SP Duplication, Overlap, and Fragmentation
                                         For example, as the table below illustrates, 56 of Justice’s 253 grant
                                         solicitations—or more than 20 percent—were providing grant funds that
                                         could be used for victim assistance. Eighteen of these 56 programs were
                                         administered by offices other than OVW and OJP’s Office for Victims of
                                         Crime, whose primary functions are to serve individuals who have been
                                         victims of crime. In addition, more than 50 percent of all grant solicitations
                                         provided funding that could be used in support of the same three justice
                                         areas—victim assistance, technology and forensics, and juvenile justice—
                                         indicating concentrated and overlapping efforts. The justice area with the
                                         least overlap was juvenile justice with 30 of 33 grant programs
                                         administered by the Office of Juvenile Justice and Delinquency
                                         Prevention.

Breakdown of Fiscal Year 2010 Justice Grant Solicitations by Office and Justice Area

                                                                         Justice Area
                                                                                       Mental
                                                                      Community       illness,
Component            Technology                         Justice              crime substance Corrections,
/ program     Victim        and Juvenile Enhancing information         prevention      abuse, recidivism,   Multi-
                                                                                                                 a
office    assistance   forensics justice   policing    sharing Courts   strategies and crime and reentry purpose                             Total
COPS                0           1        0               2                 0       0           3           1               0           0          7
          b
Joint               0           0        1               0                 0       0           0           0               2           3          6
OVW                15           0        0               0                 0       1           0           0               0           1         17
      c
OJP
BJA                 2           2        0               7                 3       7           3           6               7           5         42
BJS                 5           2        2               3                 6       4           1           1               4           2         30
CCDO                0           0        0               0                 0       0           2           0               0           0          2
NIJ                 3          36        0               4                 0       1           4           0              5            8         61
OJJDP               8           0      30                7                 1       8           4           0               0           3         61
OVC                23           0        0               0                 0       0           0           0               0           0         23
SMART               0           0        0               0                 2       0           0           0               2           0          4
Total              56          41      33              23                 12      21          17           8             20           22       253
solicitations
                                                                                                                                                    e
Total award      $872        $325    $264           $386                $98      $77         $77        $53            $430        $810    $3,393
amount (in
         d
millions)
                                         Source: GAO analysis of Justice data.

                                         Notes: Solicitations in this table reflect those for direct assistance, such as funds Justice provides for
                                         the hiring of police officers, as well as those for research and data collection on the related justice
                                         areas.
                                         a
                                         Multipurpose solicitations were solicitations for grants that addressed more than one justice area
                                         within a single solicitation.
                                         b
                                          Joint refers to solicitations issued jointly by multiple program offices, components, or departments
                                         (e.g., Justice and the Department of Health and Human Services, or BJA and OJJDP).
                                         c
                                         OJP is comprised of a number of smaller bureaus and offices. BJA is the Bureau of Justice
                                         Assistance; BJS is the Bureau of Justice Statistics; CCDO is the Community Capacity Development
                                         Office; NIJ is the National Institute of Justice; OJJDP is the Office of Juvenile Justice and
                                         Delinquency Prevention; OVC is the Office for Victims of Crime; and SMART is the Sex Offender
                                         Sentencing, Monitoring, Apprehending, Registering, and Tracking Office.
                                         d
                                             Actual amount awarded to grantees in millions.
                                         e
                                          This amount excludes congressional earmarks and direct benefits paid to families of fallen officers
                                         from Justice’s Public Service Pension Benefit Program.




                                         Page 112                                       GAO-12-342SP Duplication, Overlap, and Fragmentation
According to Justice officials, the statutory creation of grant programs with
similar purposes requires grant design coordination within and among
Justice’s granting agencies to limit the risk of unnecessary duplication
from overlapping programs. Officials from all three granting agencies
stated that they regularly meet with one another to coordinate the goals
and objectives of their grant programs, especially joint grant programs
that they believe are complementary. For example, the Bureau of Justice
Assistance and the Office for Victims of Crime issued a joint solicitation
for anti-human trafficking programs where each office issued separate
awards based on coordinated proposals from collaborating police
departments and community-based victim service organizations. Further,
according to officials, Justice recently launched the Coordinated Tribal
Assistance Solicitation to provide a single application for most of Justice’s
tribal grant programs.

However, as the above table illustrates, there are a number of justice
areas in which Justice is offering dozens of grant solicitations, yet Justice
has not assessed the universe of grant solicitations across its granting
agencies to identify justice purpose areas that may be overlapping. As a
result, without this assessment, Justice lacks information on the extent to
which unnecessary duplication in the administration and grantee use of
funds in these areas may exist. Additionally, Justice’s granting agencies
have not established policies and procedures requiring consistent
coordination to mitigate the risks of unnecessary duplication before
finalizing their award decisions. While coordination about program goals
may be occurring on an ad hoc basis, GAO found that the granting
agencies do not systematically coordinate their application reviews to
mitigate the risk of unnecessary duplication.

According to Standards for Internal Control in the Federal Government,
one way to ensure that program managers are effectively managing and
efficiently using resources is to have access to all financial data—such as
grant awards, prime and subgrant recipient names, and planned or
implemented activities. In part because Justice’s granting agencies do not
routinely share grant applicant finalist lists with one another before
making their award decisions, GAO identified instances where Justice’s
granting agencies had awarded funds from different grant programs to the
same grantees whose applications described similar—and in some
cases, the same—purposes for using the grant funds without being aware
of the potential for unnecessary duplication or whether it was warranted.

Specifically, after reviewing a sample of 26 grant applications from
recipients who received funds from grant programs GAO identified as
having similar purpose areas, GAO found instances where applicants
were using the same or similar language to apply for multiple streams of
funding. For example, one grant recipient applied for funding from both
the COPS Office’s Child Sexual Predator Program and OJP’s Internet
Crimes Against Children program to reduce child endangerment through
cyber investigations. In both of these separate applications, the applicant
stated that it planned to use the grants to increase the number of
investigations in its state, provide training for cyber crime investigations,


Page 113                       GAO-12-342SP Duplication, Overlap, and Fragmentation
serve as a forensic resource for the state, and establish an internet safety
program. Further, included in this applicant’s proposed budgets for both
funding streams was a plan to purchase equipment, such as forensic
computers and the same specialized software to investigate internet
crimes against children. Another grant recipient applied for funding from
the aforementioned COPS Office and OJP programs to support the same
types of investigations. In a third instance, an applicant received fiscal
year 2010 grant funding for planned sexual assault victim services from
both the Office for Victims of Crime and OVW. The applicant used similar
language in both applications, noting that it intended to use the funding to
support child victim services through its child advocacy center. After
reviewing a draft of this report section, Justice followed-up with the grant
recipients in these instances and reported to GAO that the grantees were
not using awarded funds for duplicative purposes. However, such follow-
up for the purpose of assessing duplication is not a routine practice for
Justice. Absent routine coordination among its granting agencies before
awarding grants, Justice is not positioned to mitigate the risk of funding
unnecessarily duplicative grants.

In fiscal year 2010, Justice’s three granting agencies awarded more than
11,000 prime grant awards, but officials said that they do not generally
assess the flow of funds to subgrant recipients and in many instances do
not know the extent to which subgrants are made and for what purposes
and activities. Officials from Justice’s granting agencies told GAO that
they encourage applicants to apply for as many sources of Justice
funding as possible, yet the granting agencies are not assessing subgrant
data with the specific intent to identify any unnecessarily duplicative grant
awards. According to the OJP officials, state and local communities have
expansive criminal justice needs and therefore they encourage applicants
to seek out as much Justice grant funding as possible, including from
grant programs that may have similar objectives or allow for similar
activities to be carried out.

Justice officials reported that OVW assesses subgrant data for some of
its formula grant programs to better understand how funding is used;
however, officials did not provide specific examples of how such
assessments are used to identify unnecessary duplication in funding. In
addition, officials indicated that OVW required applicants for some of its
fiscal year 2010 grant programs to notify OVW of the other federal grant
programs it had either received money from or applied for in the same
fiscal year, but GAO found that this requirement was not in place across
all OVW programs. Further, OVW officials stated they intended to require
that applicants for all of OVW’s programs identify other federal funding
they are receiving beginning in fiscal year 2012. While this is a positive
step, there is no indication that this information would be shared with
other granting agencies or whether other granting agencies are
considering implementing a similar practice.

In part because this coordination is not routinely occurring before grant
awards are made, GAO found examples where federal funds were
awarded to the same local communities through multiple grants including


Page 114                       GAO-12-342SP Duplication, Overlap, and Fragmentation
subawards for the same or similar uses. In one of the states GAO visited,
a county received an Edward Byrne Memorial Justice Assistance Grant
(JAG) program subaward and used the funding for its officers to conduct
community policing. The county also received a COPS Office hiring grant
and used the funding for an officer to conduct community policing. 7
Additionally, the largest city in this county received a COPS Office Hiring
grant to conduct community policing. Because this city received the
COPS Office funding to conduct community policing in geographical
areas that overlapped with areas in the county already served by JAG-
funded police officers, three Justice grant awards were used to provide
community policing to overlapping areas in the county. Officials from two
additional counties in the state told GAO they received funding for drug
court-assisted substance abuse treatment and mental health counseling
through both a JAG program subaward and a grant directly from OJP’s
Adult Drug Court Discretionary Grant Program. Officials from one of these
counties informed GAO that they received so much Justice funding from
the two different grant programs that they planned to return a portion to
Justice because the funding exceeded their needs.

State Officials from 10 of the 11 states GAO interviewed stated that the
delivery of federal criminal justice assistance could be improved and the
risk of unnecessary duplication limited if Justice relied more on their
perspectives before making discretionary grant awards to localities in
their states. In particular, officials from two of these states told GAO that
they are better positioned than Justice to determine the demonstrated
needs of their communities. Moreover, state officials reported they would
prefer to receive assistance from Justice in the form of block grants citing
reasons such as flexibility and reducing unnecessary duplication and
fragmentation. With respect to state input related to discretionary grant
award decisions, Justice officials stated that since states can compete
with localities for the receipt of direct awards, the provision of pre-award
information to the states or the solicitation of states for input on funding
decisions could present a conflict of interest. With respect to block grants,
Justice officials added that they believe the department is in a unique
position to test, disseminate, evaluate, and foster best practices at a
national level.

OJP officials also stated that because programs are created by statute,
they have little discretion related to grant program design and may be
limited in the extent to which they can consolidate similar programs and
solicitations. 8 Justice officials stated that the timeline for reviewing


7
 The COPS Office hiring grant awarded to this county was for fiscal year 2009. COPS
Office hiring grants last up to 3 years and the county used the grant in fiscal years 2010
and 2011.
8
 The fiscal year 2012 Justice Congressional Budget Justification, however, recognized the
potential for consolidation by stating that “whenever possible, the President’s Budget
proposes to consolidate existing programs into larger, more flexible programs that offer
state, local, and tribal grantees greater flexibility in using grant funding and developing
innovative approaches to their criminal justice needs.”




Page 115                             GAO-12-342SP Duplication, Overlap, and Fragmentation
applications, making recommendations on their merit, and processing
awards each year is compressed and that it would be difficult to build in
the extra time and level of coordination required to complete an
intradepartmental review for potentially unnecessary duplication of
funding prior to making awards. The officials added that it would take
even more time if granting agencies were to attempt a pre-award
duplication review at the subgrantee level. However, because OJP
officials stated that previous and pending grant award information would
be very useful when they make grant award decisions, they are exploring
ways to make such a review more automated by leveraging their grant
systems.

GAO understands that the time necessary to complete annual grant
awards makes such a review process more difficult; however, OJP
actions to automate reviews using previous and pending grant award
information could help overcome this challenge. Moreover, although
statutory authorizations for grant programs may limit Justice’s discretion
over grant program design, developing agency procedures to avoid
unnecessary grant duplication is one of the promising practices that the
federal Domestic Working Group Grant Accountability Project suggested
in its Guide to Opportunities for Improving Grant Accountability. 9
Moreover, while assessing its programs might be time intensive on the
front end, such a review could yield positive dividends for the department
over the longer term. Specifically, Justice could improve grants
management by first understanding the areas in which individual granting
agencies may be awarding funds for the same or similar purposes,
whether these grant programs appropriately channel the department’s
priorities, and whether any existing duplication is desirable. By focusing
on how the grants align with priorities and understanding where
coordination can be improved or the risk of unnecessary duplication
reduced, Justice could then better target limited grant resources.

In addition, Justice could improve its decision making before finalizing
awards. By sharing information with one another about past and
prospective grantees, Justice’s granting agencies could better ensure that
applicants from certain communities already receiving funds from one
program are not then inadvertently awarded funds from another program
for the same or similar purposes. In some instances, Justice may deem it
appropriate for large numbers of distinct grant programs to serve one
goal, or for the same communities to benefit from multiple streams of
grant funding. However, unless Justice considers information it has
available, it cannot know with certainty where it’s funding is going, how it
is being used, and whether it is awarding grant dollars in the most
efficient way.



9
 The Domestic Working Group is comprised of 18 federal government inspectors general
and other state and local audit organizations, and is chaired by the Comptroller General of
the United States.




Page 116                            GAO-12-342SP Duplication, Overlap, and Fragmentation
                         Based on ongoing work, GAO anticipates recommending the following:
Actions Needed and
Potential Financial or   The Attorney General of the United States should
Other Benefits              conduct an assessment to better understand the extent to which
                             Justice grant programs overlap with one another and determine if
                             grant programs may be consolidated to mitigate the risk of
                             unnecessary duplication. To the extent that Justice identifies any
                             statutory obstacles to consolidating its grant programs, it should work
                             with Congress to address them, as needed; and

                            direct granting agencies to coordinate with one another on a
                             consistent basis to review potential or recent grant awards, including
                             subgrant awards reported by Justice prime grant awardees, to the
                             extent possible, before awarding grants. This could help ensure an
                             accurate understanding of Justice resources already provided to
                             applicants and the communities they serve, as well as knowledge of
                             those applicants proposing to carry out the same or similar activities
                             with funds from one or more of the granting agencies’ programs.
                             Justice should also take steps to establish written policies and
                             procedures to govern this coordination and help ensure that it occurs.


                         GAO provided a draft of this report section to Justice for review and
Agency Comments          comment. Justice provided technical comments, which were incorporated
and GAO’s Evaluation     as appropriate. In technical comments, Justice stated that using funding
                         from multiple grant programs may be necessary to fully implement law
                         enforcement projects in light of limited local and federal resources. GAO
                         acknowledges that there may be cases where funding in this manner is
                         warranted, but without an assessment of the extent of overlap across
                         Justice grant programs, combined with consistent and routine grant
                         award coordination, there is an increased risk of unnecessary duplication
                         in grant awards.


                         The information contained in this analysis is based on findings from the
How GAO Conducted        products listed in the related GAO products section as well as additional
Its Work                 work GAO conducted to be published as a separate product in 2012. To
                         identify the total number of Justice grant solicitations for fiscal year 2010,
                         GAO reviewed the lists posted on the OJP, COPS Office, and OVW
                         websites and confirmed the currency of the information with Justice
                         officials. To determine whether these solicitations were announcing grant
                         funding available for similar purposes, GAO first established 10
                         categories of criminal justice areas and then sorted the solicitations into
                         each. GAO developed these 10 categories after reviewing comparable
                         justice areas identified within OJP’s Crimesolutions.gov website, which
                         OJP officials asserted also covers COPS Office and OVW programs;
                         OJP’s Fiscal Year 2010 Program Plan; and other materials from the
                         COPS Office and OVW, such as justice program themes from their




                         Page 117                       GAO-12-342SP Duplication, Overlap, and Fragmentation
respective websites. 10 After identifying solicitations with similar scopes,
GAO reviewed a sample of successful grant applications that were
awarded under the similar solicitations to identify and assess specific
examples of how the recipients planned to use funds from multiple
programs in the same or similar manner. The sample GAO reviewed is
not generalizable to all Justice grant programs because GAO did not
review all grant applications, including subgrants, but it provides evidence
of the potential for unnecessary duplication. GAO also reviewed agency
policies, procedures, and guidance on grant program design and award,
such as the COPS Office Program Development Team charter and
template, and the OJP Grant Managers Manual. Further, GAO
interviewed Justice officials from the three granting agencies to obtain
additional information on grant program design and award processes, and
the extent to which the three agencies coordinate and share information.

GAO also visited or conducted phone interviews with officials from 11
states, including the five largest and five smallest state recipients of JAG
funding. 11 These officials represent the state administering agencies
responsible for distributing JAG and other Justice formula block grant
funds to subrecipients in California, Florida, New York, North Dakota,
Pennsylvania, South Dakota, Rhode Island, Tennessee, Texas, Vermont,
and Wyoming. These officials provided their views regarding the type and
timeliness of information on grant awards and subawards they provide to
and receive from Justice. GAO selected these 11 states based on the
amount of JAG funding they receive and the existence of other recipients
in their communities receiving Justice discretionary grants for potentially
similar purposes. The results of these contacts are not generalizable to all
states, but provide insight into how Justice grant funds are used locally
and into the communication between states and Justice. Finally, GAO
compared agency grant design and award practices against Standards
for Internal Control in the Federal Government and promising practices
identified in the Domestic Working Group Grant Accountability Project’s
Guide to Opportunities for Improving Grant Accountability. Appendix III
lists the programs GAO identified that may have similar or overlapping
objectives, provide similar services or be fragmented across government
missions. Overlap and fragmentation may not necessarily lead to actual
duplication, and some degree of overlap and duplication may be justified.




10
  OJP reports that its Crimesolutions.gov website uses rigorous research to inform
practitioners and policy makers about what works in criminal justice, juvenile justice, and
crime victim services. Though the categories on the website were not intended to
categorize federal funding programs or exhaustively categorize every aspect of the
criminal justice system, according to Justice officials, they do address the areas relevant
to practitioners’ and researchers’ work.
11
  Illinois was among the top five highest state recipients of JAG funding. However, state
officials did not respond to GAO inquiries. Therefore GAO substituted Pennsylvania, which
was the sixth largest recipient. In addition, Tennessee was not within these two categories
but provided additional insight.




Page 118                             GAO-12-342SP Duplication, Overlap, and Fragmentation
Related GAO           Information Technology: Continued Attention Needed to Accurately
                      Report Federal Spending and Improve Management. GAO-11-831T.
Products              Washington, D.C.: July 14, 2011.

                      Federal Grants: Improvements Needed in Oversight and Accountability
                      Processes. GAO-11-773T. Washington, D.C.: June 22, 2011.

                      Recovery Act: Department of Justice Could Better Assess Justice
                      Assistance Grant Program Impact. GAO-11-87. Washington, D.C.:
                      October 15, 2010.

                      Juvenile Justice: A Time Frame for Enhancing Grant Monitoring
                      Documentation and Verification of Data Quality Would Help Improve
                      Accountability and Resource Allocation Decisions. GAO-09-850R.
                      Washington, D.C.: September 22, 2009.

                      Grants Management: Additional Actions Needed to Streamline and
                      Simplify Processes. GAO-05-335. Washington, D.C.: April 18, 2005.



Contact Information   For additional information about this area, contact David C. Maurer at
                      (202) 512-9627, or maurerd@gao.gov.




                      Page 119                      GAO-12-342SP Duplication, Overlap, and Fragmentation
17. Homeland Security Grants
The Department of Homeland Security needs better project information and coordination among four
overlapping grant programs.



Why This Area Is                   From fiscal years 2002 through 2011, the federal government
                                   appropriated over $37 billion to a variety of Department of Homeland
Important                          Security (DHS) homeland security preparedness grant programs. 1 Of this
                                   amount, the DHS’s Federal Emergency Management Agency (FEMA)
                                   allocated about $20.3 billion to grant recipients through four programs:
                                   the State Homeland Security Program, the Urban Areas Security
                                   Initiative, the Port Security Grant Program, and the Transit Security Grant
                                   Program. Through these grant programs, DHS has sought to enhance the
                                   capacity of states, localities, and other entities—such as ports or transit
                                   agencies—to prevent, respond to, and recover from a terrorism incident.

                                   As GAO reported in March 2011, DHS could benefit from examining its 17
                                   preparedness grant programs and coordinating their application
                                   processes; developing measurable capability requirements and
                                   evaluation criteria; and eliminating redundant reporting requirements. 2
                                   GAO also reported in February 2012 on 4 of these 17 grant programs—
                                   the State Homeland Security Program, the Urban Areas Security
                                   Initiative, the Port Security Grant Program, and the Transit Security Grant
                                   Program—and found that multiple factors contributed to the risk of FEMA
                                   funding unnecessarily duplicative projects. These factors include overlap
                                   among grant recipients, goals, and geographic locations, combined with
                                   the limited project information that FEMA had available regarding grant
                                   funding levels, grant recipients, and grant purposes. 3



What GAO Found                     GAO has previously reported that overlap among government programs
                                   or activities can be harbingers of unnecessary duplication. 4 The four DHS
                                   grant programs that GAO reported on in February 2012 5––the State



                                   1
                                    This total is based on Congressional Research Service data and GAO analysis, and
                                   includes firefighter assistance grants and emergency management performance grants.
                                   See Congressional Research Service, Department of Homeland Security Assistance to
                                   States and Localities: A Summary of Issues for the 111th Congress, R40246 (Washington,
                                   D.C.: Apr. 30, 2010).
                                   2
                                    GAO, Opportunities to Reduce Potential Duplication in Government Programs, Save Tax
                                   Dollars, and Enhance Revenue, GAO-11-318SP (Washington, D.C.: March 1, 2011).
                                   3
                                    GAO, Homeland Security: DHS Needs Better Project Information and Coordination
                                   Among Four Overlapping Grant Programs, GAO-12-303 (Washington, D.C.: February 28,
                                   2012).
                                   4
                                    GAO-11-318SP.
                                   5
                                    GAO-12-303.




                                   Page 120                          GAO-12-342SP Duplication, Overlap, and Fragmentation
                                            Homeland Security Program, the Urban Areas Security Initiative, the Port
                                            Security Grant Program, and the Transit Security Grant Program—have
                                            multiple areas of overlap. The grant programs have similar goals and fund
                                            similar activities, such as equipment and training, in overlapping
                                            jurisdictions. For instance, each state and eligible territory receives a
                                            legislatively mandated minimum amount of State Homeland Security
                                            Program funding to help ensure that all geographic areas develop a basic
                                            level of preparedness, while the Urban Areas Security Initiative grants
                                            explicitly target urban areas most at risk of terrorist attack. 6 However,
                                            many jurisdictions within designated Urban Areas Security Initiative
                                            regions also apply for and receive State Homeland Security Program
                                            funding. Similarly, port stakeholders in urban areas could receive funding
                                            for equipment such as patrol boats through both the Port Security Grant
                                            Program and the Urban Areas Security Initiative, and a transit agency
                                            could purchase surveillance equipment with Transit Security Grant
                                            Program or Urban Areas Security Initiative funding.

                                            Further, depending on the program, other federal stakeholders in addition
                                            to FEMA are involved in the administration or coordination of some, but
                                            not all, of the four programs. The table below illustrates overlap in the
                                            purposes and types of projects funded by the four grant programs.

Federal Agencies, Purpose, and Project Type Involved in Select Homeland Security Grants

                       State Homeland                Urban Areas Security                  Port Security Grant          Transit Security Grant
                       Security Grant Program        Initiative                            Program                      Program
Primary federal        Federal Emergency             Federal Emergency                     Federal Emergency            Federal Emergency
agencies involved      Management Agency             Management Agency                     Management Agency/           Management Agency/
                                                                                           U.S. Coast Guard             Transportation Security
                                                                                                                        Administration
Purpose of the grant   The State Homeland            The Urban Areas Security              The Port Security Grant      The Transit Security
program                Security Program              Initiative provides funding           Program provides funding     Grant Program provides
                       provides funding to           to high-risk urban areas to           to port stakeholders to      funds to public transit
                       support state and local       build and sustain regional            mitigate against risks       agencies to protect critical
                       efforts to prevent, protect   capabilities to prevent,              associated with potential    surface transportation
                       against, respond to, and      protect, respond to, and              terrorist attacks by         infrastructure and the
                       recover from acts of          recover from acts of                  enhancing capabilities to    traveling public from acts
                       terrorism and other           terrorism.                            detect, prevent, respond     of terrorism and to
                       catastrophic events.                                                to and recover from          increase the resilience of
                                                                                           terrorist attacks.           transit infrastructure.
Types of projects      •   Planning                  •     Planning                        •      Maritime domain       •    Capital infrastructure
funded                 •   Organization              •     Organization                           awareness efforts          projects
                       •   Equipment                 •     Equipment                       •      Planning              •    Operational activities
                       •   Training                  •     Training                        •      Equipment             •    Planning
                       •   Exercises                 •     Exercises                       •      Training              •    Equipment
                                                                                           •      Exercises             •    Training
                                                                                           •      Supporting port       •    Exercises
                                                                                                  resiliency and
                                                                                                  recovery
                                            Source: Federal Emergency Management Agency grant guidance.




                                            6
                                             See 6 U.S.C. §§ 604, 605.




                                            Page 121                                           GAO-12-342SP Duplication, Overlap, and Fragmentation
As GAO reported in February 2012, FEMA made award decisions for all
four programs with differing levels of information which contributes to the
risk of funding unnecessarily duplicative projects. While GAO understands
that some overlap may be desirable to provide multiple sources of funding,
a lack of visibility over grant award details around these programs
increases the risk of unintended and unnecessary duplication. Some of the
factors that contributed to the differences in the information available
include different administrative processes and information requirements.
With respect to administrative differences, FEMA delegates some
administrative duties to stakeholders for the State Homeland Security
Program, the Urban Areas Security Initiative and the Port Security Grant
Program, thereby reducing its administrative burden according to FEMA
officials. However, this delegation also contributes to FEMA having less
visibility over some grant applications, and in particular those funded by the
State Homeland Security Program and the Urban Areas Security Initiative.
These two programs are administered by state administrative agencies; 7
however, some administrative functions are further delegated to
subrecipients such as local governments or other entities. In contrast,
Transit Security Grant Program awards are made directly to the final grant
recipients and this more direct award structure, among other factors, allows
FEMA to better track these grant awards. In delegating significant grants
administration duties to the state administrative agencies for the larger
State Homeland Security Program and Urban Areas Security Initiative
programs, FEMA officials recognize the trade-off between decreased
visibility over grant funding, subrecipients, and specific project-level data in
exchange for their reduced administrative burden.

Differences in information requirements also affect the level of information
that FEMA has available for making grant award decisions. For example,
for the State Homeland Security Program and Urban Areas Security
Initiative, states and eligible urban areas submit investment justifications
for each program with up to 15 distinct investment descriptions that
describe general proposals in wide-ranging areas such as “critical
infrastructure protection.” 8 Each investment justification encompasses
multiple specific projects to different jurisdictions or entities, but project-
level information, such as a detailed listing of subrecipients or equipment
costs, is not required by FEMA. In contrast, Port Security Grant Program


7
 A designated state administrative agency is responsible for managing the State
Homeland Security Program and Urban Areas Security Initiative programs at the state
level. This management includes processing project applications prior to submitting them
to FEMA, “passing though” federal funds to regional or local entities, and ensuring that
local grant recipients comply with various statutory and grant requirements.
8
 Investment justifications are one component of the State Homeland Security Program,
the Urban Areas Security Initiative, the Port Security Grant Program, and the Transit
Security Grant Program applications for grant funding. They provide narrative information
on proposed activities (investments) that will be accomplished with the grant funds and
are described in more detail later in this report. The investment justifications must
demonstrate how proposed investments address gaps and deficiencies in current
capabilities, and also demonstrate adherence to program guidance.




Page 122                            GAO-12-342SP Duplication, Overlap, and Fragmentation
and Transit Security Grant Program applications require specific
information on individual projects such as detailed budget summaries. As
a result, FEMA has a much clearer understanding of what is being
requested and what is being funded by these programs.

FEMA has studied the potential utilization of more specific project-level
data for making grant award decisions, especially for the State Homeland
Security Program and Urban Areas Security Initiative. 9 Specifically, a May
2011 FEMA report recommended that the agency modify the investment
justification format for the Urban Areas Security Initiative and the State
Homeland Security Program applications to include a detailed project
list. 10 This project list would contain information that is currently collected
later in the grant cycle in the post-award phase. However, while GAO's
analysis of selected grant projects determined that this additional
information was sufficient for identifying potentially unnecessary
duplication for nearly all of the projects it reviewed, the information did not
always provide the FEMA with sufficient detail to identify and prevent the
risk of unnecessary duplication.

Specifically, GAO reviewed the type of information that FEMA would have
available at the applications stage if it implemented the May 2011 report
recommendation. GAO’s analysis of 1,957 projects, 11 using post-award
information as recommended in the report, determined that over 1,800 of
the projects representing about 90 percent of the overall funding had the
detail needed to determine whether they were unnecessarily duplicative.
However, 140 projects, or 9.2 percent of the overall funding associated
with the 1,957 projects––about $183 million––lacked sufficient detail to
determine whether they were unnecessarily duplicative or had involved
coordination during the state’s planning or selection processes to prevent
any unnecessary duplication. For example, in one instance GAO
identified overlap in the descriptions of the project types and titles of State
Homeland Security Program, Urban Areas Security Initiative, and Port
Security Grant Program grants that funded critical infrastructure
improvements in a single port area. This overlap suggested that
duplication could be occurring among the grant programs, and warranted
further analysis.


9
 In August 2009, FEMA established the Reporting Requirements Working Group to
compile a list of select grant reporting activities, collect grant stakeholder feedback, and
make recommendations regarding future data collection policies. FEMA utilized the
working group’s analysis and recommendations in a May 2011 Report to Congress.
10
  See FEMA, Redundancy Elimination and Enhanced Performance for Preparedness
Grants Act: Initial Report to Congress (Washington, D.C.: May 23, 2011) for their findings
and recommendations.
11
   We reviewed investment justification and Biannual Strategy Implementation Report
information––The Biannual Strategy Implementation Report is a reporting requirement
submitted by states to FEMA regarding the progress of certain grants––for the 1,957 grant
projects awarded through the four grant programs to five urban areas: Houston, Jersey
City/Newark, New York City, San Francisco, and Seattle for fiscal years 2008 through
2010.




Page 123                              GAO-12-342SP Duplication, Overlap, and Fragmentation
After gathering additional information from state and local grant
recipients, however, GAO determined that none of the projects it
reviewed were duplicative. While implementing the May 2011 report
recommendation to better utilize more specific project-level data would be
a step in the right direction, the Director of FEMA’s Grants Preparedness
Division reported in September 2011 that FEMA had not yet determined
the specifics of future data requirements related to the report’s
recommendation. GAO was able to ascertain that over 90 percent of the
projects it reviewed had sufficient detail to determine that the projects
were not likely duplicative. However, GAO believes that more detailed
project information could be of value to FEMA in its grant review process
since the information that would be gathered and considered, if the
report’s recommendation were implemented, would not always allow for
the necessary differentiation between projects funded by the four grant
programs. Moreover, DHS’s Office of Inspector General has also
concluded in recent years that FEMA should utilize more specific project-
level data in making grant award decisions, especially for the State
Homeland Security Program and Urban Areas Security Initiative, in order
to identify and mitigate potential duplication. 12

Another effort that FEMA has initiated to improve its grant information is
the phase-in of a new consolidated grants management system—the
Non-Disaster Grants system. Agency officials stated that this system,
once completed, will help FEMA manage all of its preparedness grants,
and has an explicit goal of enhancing project-level data collection. In
addition, FEMA anticipates that the Non-Disaster Grants system will
consolidate data from multiple systems and facilitate greater utilization
and sharing of information. However, according to FEMA documentation,
the agency has not yet determined all of its specific data needs for the
system. As FEMA continues to develop the Non-Disaster Grants system,
it will be important to ensure that it collects the level of data needed, as
appropriate, to compare projects across grant programs to mitigate the
risk of funding unnecessarily duplicative projects. GAO recognizes that
collecting more detailed project information through the new system could
involve additional costs. However, collecting additional information with
this level of detail could help better position FEMA to ensure that it is
using its resources effectively.

GAO also reported in February 2012 that FEMA lacks a process to
coordinate application reviews across the four grant programs. FEMA’s
Grants Program Directorate has divided the administration of the grant
programs into two separate branches: The Urban Areas Security Initiative
and State Homeland Security Program are administered by a Homeland
Security Grant Program branch, while the Port Security Grant Program
and Transit Security Grant Program are administered by a Transportation



12
  Department of Homeland Security Office of Inspector General, Efficacy of DHS Grant
Programs, OIG-1069 (Washington, D.C.: Mar. 22, 2010).




Page 124                           GAO-12-342SP Duplication, Overlap, and Fragmentation
Infrastructure Security branch. The result of this structure is that grant
applications are reviewed separately by program and are not compared
across each other to determine where possible unnecessary duplication
may occur. Similar findings were also reported by the DHS Inspector
General in March 2010.

As noted earlier, each grant program GAO reviewed has similar goals,
allowable costs, and geographic proximity. As a result, these four
programs share applicants as state and local entities seek to maximize
grant dollars for their projects; however, FEMA does not compare
applications, including the investment justifications, for these overlapping
grant programs. As a result, neither FEMA nor an independent third party
is positioned to determine where unnecessary duplication may occur.

Because the applications for the four grant programs are being reviewed
by two separate divisions, yet have similar allowable costs, GAO and the
DHS Inspector General concluded that coordinating the review of grant
projects internally would give FEMA more complete information about
applications across the four grant programs. This additional information
could help FEMA identify and mitigate the risk of unnecessary duplication
across grant applications. A FEMA Grants Program Directorate Section
Chief noted that the primary reasons for the current lack of coordination
across programs are the sheer volume of grant applications that need to
be reviewed and FEMA’s lack of resources to coordinate the grant
application review process. GAO recognizes the challenges associated
with reviewing a large volume of grant applications, but to help reduce the
risk of funding unnecessarily duplicative projects, FEMA could benefit
from exploring opportunities to coordinate project reviews across grant
programs while also taking into account the large volume of grant
applications it must process.

In addition, from fiscal year 2010 to 2012, appropriations for DHS’s
preparedness grant programs declined from $3.02 billion to $1.35
billion—or about 55 percent. 13 Further, the consolidated appropriations
act for fiscal year 2012 combined funding for DHS’s preparedness grant
programs into a single appropriation and provided the Secretary of
Homeland Security with the discretion to distribute this funding amongst
the suite of preparedness grant programs. 14 Specifically, the
appropriations for these four programs declined by about $487 million—or
about 20 percent—from fiscal year 2010 to 2011. However, the fiscal year
2012 funding levels for these four programs are unclear at this time
because the Secretary of Homeland Security has not yet determined how
to distribute available funding amongst the grant programs. Given the



13
  This total is comprised of preparedness grant programs in FEMA’s state and local
programs account, which does not include firefighter assistance grants and emergency
management performance grants.
14
 See H.R. Rep. No. 112-331, at 175-77 (2011) (Conf. Rep.).




Page 125                           GAO-12-342SP Duplication, Overlap, and Fragmentation
                         significant overlap in these grant programs and the risk of unnecessary
                         duplication, requiring additional information on FEMA’s efforts to identify
                         and eliminate overlap may be helpful to the Congress as it makes future
                         decisions regarding preparedness grant funding.



Actions Needed and       The State Homeland Security Program, Urban Areas Security Initiative,
                         Port Security Grant Program, and Transit Security Grant Program have
Potential Financial or   similar goals and fund similar activities in overlapping jurisdictions. In a
Other Benefits           constrained budget environment, it is important for FEMA to have the
                         information it needs about projects funded through these programs and to
                         coordinate their administration to maximize their impacts on improving
                         homeland security and avoid the risk of any unnecessary duplication.
                         Although reviewing a large volume of grant applications is challenging,
                         these reviews are important to better ensure that FEMA is able to identify
                         and prevent any potential unnecessary duplication, and that limited grant
                         resources are used effectively.

                         GAO recommended in its February 2012 report that to help reduce the
                         risk of unnecessary duplication by strengthening the administration and
                         oversight of these programs, the FEMA Administrator should

                         •   take steps, when developing the Non-Disaster Grants system and
                             responding to the FEMA May 2011 report recommendations on data
                             requirements, to ensure that FEMA collects project information with
                             the level of detail needed to better position the agency to identify any
                             potential unnecessary duplication within and across the four grant
                             programs, weighing any additional costs of collecting this data; and

                         •   explore opportunities to enhance FEMA’s internal coordination and
                             administration of the programs in order to identify and mitigate the
                             potential for any unnecessary duplication.

                         In addition to these recommendations to DHS from GAO’s February 2012
                         report, Congress may also want to consider

                         •   requiring DHS to report on the results of its efforts to identify and
                             prevent unnecessary duplication within and across the State
                             Homeland Security Program, Urban Areas Security Initiative, Port
                             Security Grant Program, and Transit Security Grant Program, and
                             considering these results when making future funding decisions for
                             these programs.


Agency Comments          GAO provided a draft of this report section to DHS for review and
                         comment. DHS provided technical comments, which were incorporated
and GAO’s Evaluation     as appropriate.




                         Page 126                       GAO-12-342SP Duplication, Overlap, and Fragmentation
How GAO Conducted     The information contained in this analysis is based on findings from the
                      products listed in the related GAO products section. GAO took several
Its Work              actions to determine how FEMA awarded grant funds and how funds
                      were distributed. GAO interviewed officials at DHS and FEMA and visited
                      five urban areas that contained grant recipients for all four grant programs
                      and were among the highest annual grant recipients in fiscal year 2010
                      due to their risk profile. In each of these locations, GAO interviewed
                      officials responsible for administering the program (state and local
                      officials for the State Homeland Security Program/Urban Areas Security
                      Initiative; fiduciary agents for the Port Security Grant Program; and transit
                      agency officials for Transit Security Grant Program). GAO also met with
                      grant recipients and members of the local coordination or project
                      selection groups (e.g., Urban Area Working Group for the Urban Areas
                      Security Initiative). Additionally, GAO reviewed grant guidance, legislation
                      and prior GAO and Department of Homeland Security Inspector General
                      reports; analyzed grant awards; and reviewed state and national plans
                      related to homeland security grant programs. Appendix III lists the
                      programs GAO identified that may have similar or overlapping objectives,
                      provide similar services or be fragmented across government missions.
                      Overlap and fragmentation may not necessarily lead to actual duplication,
                      and some degree of overlap and duplication may be justified.

Related GAO           Homeland Security: DHS Needs Better Project Information and
                      Coordination among Four Overlapping Grant Programs. GAO-12-303.
Products              Washington, D.C.: February 28, 2012.

                      Port Security Grant Program: Risk Model, Grant Management, and
                      Effectiveness Measures Could Be Strengthened. GAO-12-47.
                      Washington, D.C.: November 17, 2011.

                      Urban Area Security Initiative: FEMA Lacks Measures to Assess How
                      Regional Collaboration Efforts Build Preparedness Capabilities.
                      GAO-09-651. Washington, D.C.: July 2, 2009.

                      Transit Security Grant Program: DHS Allocates Grants Based on Risk,
                      but Its Risk Methodology, Management Controls, and Grant Oversight
                      Can Be Strengthened. GAO-09-491. Washington, D.C.: June 8, 2009.

                      Homeland Security: DHS Improved its Risk-Based Grant Programs’
                      Allocation and Management Methods, But Measuring Programs’ Impact
                      on National Capabilities Remains a Challenge. GAO-08-488T.
                      Washington, D.C.: March 11, 2008.



Contact Information   For additional information about this area, contact David C. Maurer at
                      (202) 512-9627 or maurerd@gao.gov.




                      Page 127                       GAO-12-342SP Duplication, Overlap, and Fragmentation
18. Federal Facility Risk Assessments
Agencies are making duplicate payments for facility risk assessments by completing their own assessments,
while also paying the Department of Homeland Security for assessments that the department is not
performing.



Why This Area Is                   Since the 1995 bombing of the Alfred P. Murrah Federal Building in
                                   Oklahoma City, Oklahoma, and the September 11, 2001, terrorist attacks,
Important                          the federal government has made significant changes in its approach to
                                   protecting federal facilities and the more than 1 million employees and
                                   members of the public that work in and visit these facilities annually.
                                   However, federal facilities continue to be vulnerable to terrorist attacks
                                   and other acts of violence, as evidenced by the 2010 attacks on the
                                   Internal Revenue Service (IRS) building in Austin, Texas, and the federal
                                   courthouse in Las Vegas, Nevada, which resulted in loss of life. These
                                   attacks highlight the importance of protecting federal facilities by, among
                                   other things, conducting timely and comprehensive risk assessments,
                                   which can help decision makers identify and evaluate potential threats so
                                   that countermeasures can be implemented to help prevent or mitigate the
                                   facilities’ vulnerabilities to those threats.

                                   The Department of Homeland Security’s (DHS) Federal Protective
                                   Service (FPS) is the primary federal agency responsible for providing
                                   physical security and law enforcement services—including conducting
                                   risk assessments—for the approximately 9,000 federal facilities owned or
                                   leased by the General Services Administration (GSA). 1 Risk assessments
                                   for federal facilities, which FPS refers to as facility security assessments,
                                   are to be completed every 3 to 5 years according to DHS’s Interagency
                                   Security Committee (ISC) standards. 2 FPS’s assessments are to include
                                   a full examination of the facility, including a review of access points to the
                                   facility and the security of the facility’s perimeter, such as closed circuit
                                   television monitoring and lighting. Its risk assessment process entails
                                   gathering and reviewing facility information; conducting and recording
                                   interviews with tenant agencies; assessing the threats, vulnerabilities, and
                                   consequences associated with a facility; and recommending appropriate
                                   countermeasures in accordance with ISC standards to mitigate
                                   vulnerabilities to tenant agencies.




                                   1
                                    GAO is referring to facilities that are under GSA’s control and custody as GSA-owned or
                                   leased facilities.
                                   2
                                    The ISC, composed of representatives from 50 federal agencies and departments, was
                                   established under Executive Order 12977 to enhance the quality and effectiveness of
                                   security and protection of buildings and facilities in the United States occupied by federal
                                   employees for nonmilitary activities.




                                   Page 128                             GAO-12-342SP Duplication, Overlap, and Fragmentation
What GAO Found   GAO has found that there is duplication in the federal government’s
                 approach to assessing risks at some of the 9,000 federal facilities
                 managed by GSA. As GAO reported in June 2008 and as it has recently
                 found, multiple federal agencies are expending additional resources to
                 assess their own facilities; although, according to an FPS official, the
                 agency received $236 million from federal agencies for risk assessments
                 and other security services in fiscal year 2011. For example, an official
                 from IRS said that IRS completed risk assessments based on concerns
                 about risks unique to its mission for approximately 65 facilities that it also
                 paid FPS to assess. Additionally, an official from the Federal Emergency
                 Management Agency (FEMA) stated that FEMA has assessed its own
                 facilities for several years because of dissatisfaction with the security
                 levels FPS has assigned to its facilities, and Environmental Protection
                 Agency (EPA) officials said that EPA has conducted its own assessments
                 based on concerns with the quality and thoroughness of FPS’s
                 assessments. 3 EPA officials also said that the agency’s assessments are
                 conducted by teams of contractors and EPA employees, cost an
                 estimated $6,000, and can take a few days to a week to complete. An
                 official from the U.S. Army Corps of Engineers told GAO that it duplicates
                 FPS’s assessments at some of its regional facilities because the agency
                 follows U.S. Army force protection regulations, rather than the security
                 requirements followed by FPS.

                 According to an FPS official, FPS planned to use its Risk Assessment
                 and Management Program (RAMP) to complete assessments of about
                 700 federal facilities in fiscal year 2010 and 2,500 facilities in fiscal year
                 2011. However, since November 2009, according to an FPS official, the
                 agency has only completed four risk assessments using RAMP, which
                 does not provide adequate assurance that FPS is utilizing an effective
                 risk management approach to help protect federal facilities and may
                 contribute to more agencies completing their own assessments. RAMP
                 was intended to provide FPS with the capability to assess risks at federal
                 facilities based on threat, vulnerability, and consequence; and track
                 countermeasures to mitigate those risks. As GAO reported in July 2011,
                 FPS experienced cost overruns, schedule delays, and operational issues
                 with developing RAMP and as a result the agency could not use it to
                 complete risk assessments. Without risk assessments that identify threats
                 and vulnerabilities and the resources required to achieve security goals,
                 FPS has only limited assurance that programs will be prioritized and
                 resources will be allocated to address existing and potential security
                 threats in an efficient and effective manner. GAO recommended in July
                 2011 that FPS develop interim solutions for completing risk assessments
                 while addressing RAMP’s challenges. FPS agreed with this
                 recommendation and is in the process of developing an interim
                 assessment tool.



                 3
                  FPS is responsible for coordinating with tenant agencies to determine a facility’s security
                 level, which ranges from I (lowest risk level) to V (highest risk level).




                 Page 129                             GAO-12-342SP Duplication, Overlap, and Fragmentation
                         As noted above, FPS charged federal agencies $236 million in basic
                         security fees for risk assessments and security services in fiscal year
                         2011, although FPS has completed few risk assessments using RAMP. 4
                         As GAO reported in May 2011, FPS does not know how much of the
                         basic security fee is used for completing risk assessments of federal
                         facilities. Nonetheless, FPS increased the basic security fee from $.66 in
                         fiscal year 2011 to $.74 per square foot in fiscal year 2012. GAO
                         recommended in May 2011 that FPS make information on the estimated
                         costs of key activities, as well as the basis for these cost estimates,
                         readily available to affected parties to improve the transparency of the
                         process for setting and using the fees.



Actions Needed and       GAO has found that multiple federal agencies are incurring additional
                         costs by completing their own assessments while paying FPS to complete
Potential Financial or   risk assessments for the same facilities. However, DHS has not taken any
Other Benefits           actions to address the duplication and it is not clear whether FPS’s
                         planned risk assessment tool will help minimize duplication. Achieving the
                         financial and other benefits that may result from reducing duplication and
                         increased cost that occurs in assessing risks at federal facilities will
                         require additional effort on the part of DHS and other key stakeholders.

                         GAO recommended in July 2011 that the Secretary of DHS

                         •   direct the Director of FPS to develop interim solutions for completing
                             risk assessments while addressing RAMP’s challenges.

                         GAO recommended in May 2011 that the Director of FPS

                         •   make information about the estimated costs of key activities and the
                             basis for these estimates available to affected parties to improve
                             transparency.

                         In addition, DHS should

                         •   work with federal agencies to determine their reasons for duplicating
                             the activities included in FPS’s risk assessments and identify
                             measures to reduce this duplication.




                         4
                          In addition to risk assessments, the $236 million in basic security fees funds security
                         services including ongoing review of facility countermeasures to ensure they are
                         functioning as designed; assistance with emergency planning and exercises; response to
                         criminal incidents and reports of suspicious activity; patrol of facilities to deter and detect
                         criminal activity; and awareness training to inform tenants how to prevent and react to
                         events in the facility.




                         Page 130                              GAO-12-342SP Duplication, Overlap, and Fragmentation
Agency Comments        GAO provided a draft of this report section to DHS for review and
                       comment. DHS agreed with GAO’s previous two recommendations and
and GAO’s Evaluation   has begun action on both. DHS did not provide comments on GAO’s
                       newly identified action needed. DHS also provided technical comments,
                       which were incorporated as appropriate. In its response, DHS stated that
                       although FPS has only completed four risk assessments using RAMP, the
                       agency is collecting data, through site visits, interviews of facility
                       occupants, and evaluation of countermeasures, which will be used to
                       generate risk assessments when its interim assessment tool is
                       implemented in spring 2012. As part of its routine audit work, GAO will
                       track agency action to address these recommendations and report to
                       Congress.



How GAO Conducted      The information contained in this analysis is based on findings from the
                       products listed in the related GAO products section and additional work
Its Work               GAO conducted to be published as a separate product in 2012. To
                       update that information and identify continuing issues related to
                       duplication and overlap in risk assessments for federal facilities, GAO
                       interviewed officials from FPS, EPA, FEMA, GSA, Immigration and
                       Customs Enforcement, IRS, U.S. Army Corps of Engineers, and the
                       Department of Veterans Affairs.



Related GAO            Federal Protective Service: Actions Needed to Resolve Delays and
                       Inadequate Oversight Issues with FPS’s Risk Assessment and
Products               Management Program. GAO-11-705R. Washington, D.C.: July 15, 2011.

                       Budget Issues: Better Fee Design Would Improve Federal Protective
                       Service’s and Federal Agencies’ Planning and Budgeting for Security.
                       GAO-11-492. Washington, D.C.: May 20, 2011.

                       Homeland Security: The Federal Protective Service Faces Several
                       Challenges That Raise Concerns About Protection of Federal Facilities.
                       GAO-08-914T. Washington, D.C.: June 18, 2008.

                       Homeland Security: The Federal Protective Service Faces Several
                       Challenges That Hamper Its Ability to Protect Federal
                       Facilities.GAO-08-683. Washington, D.C.: June 11, 2008.



Contact Information    For additional information about this area, contact Mark Goldstein at (202)
                       512-2834 or goldsteinm@gao.gov and Susan J. Irving at (202) 512-6806
                       or irvings@gao.gov.




                       Page 131                      GAO-12-342SP Duplication, Overlap, and Fragmentation
19. Information Technology Investment
Management
The Office of Management and Budget, and the Departments of Defense and Energy need to address
potentially duplicative information technology investments to avoid investing in unnecessary systems.



Why This Area Is                    The Office of Management and Budget (OMB) has reported that the
                                    federal government spends billions of dollars on information technology
Important                           (IT) investments each year. In fiscal year 2011, there were approximately
                                    7,200 investments totaling at least $79 billion. The Department of
                                    Defense (DOD) reported the largest number of information technology
                                    (IT) investments (2,383 investments at $37 billion), followed by the
                                    Department of Energy (Energy) (876 investments and $2 billion).

                                    According to OMB’s annual budget guidance (beginning with fiscal year
                                    2004), agencies are required to map each IT investment to a functional
                                    category and sub-category within the Federal Enterprise Architecture. 1
                                    These categorizations, known as a primary function and subfunction are
                                    intended to enable OMB and others to analyze investments with similar
                                    functions, as well as identify and analyze potentially duplicative
                                    investments across agencies.



What GAO Found                      As GAO reported in September 2011, in their fiscal year 2011 budget
                                    submissions to OMB on IT spending, agencies reported the greatest
                                    number of IT investments in the information and technology management
                                    category (1,536 investments), followed by supply chain management (777
                                    investments), and human resources management (622 investments). 2
                                    Similarly, planned expenditures on investments were greatest in the
                                    information and technology management category, at about $35.5 billion.
                                    The figure below depicts the total number of investments governmentwide
                                    per function.




                                    1
                                     The Federal Enterprise Architecture is intended to provide federal agencies and other
                                    decision makers with a common frame of reference or taxonomy for informing agencies’
                                    individual enterprise architecture efforts and their planned and ongoing investment
                                    activities, and to do so in a way that identifies opportunities for avoiding duplication of
                                    effort and launching initiatives to establish and implement common, reusable, and
                                    interoperable solutions across agency boundaries.
                                    2
                                     GAO, Information Technology: OMB Needs to Improve Its Guidance on IT Investments,
                                    GAO-11-826 (Washington, D.C.: Sept. 29, 2011).




                                    Page 132                             GAO-12-342SP Duplication, Overlap, and Fragmentation
Number of IT Investments Governmentwide by Primary Function, as of July 2011 (fiscal year 2011 planned expenditures, in
billions)




                                        GAO reported that OMB provides guidance to agencies on how to report
                                        on their IT investments, but this guidance does not ensure complete
                                        reporting or facilitate the identification of duplicative investments.
                                        Specifically, agencies differ on what investments they include as an IT
                                        investment; for example, 5 of the 10 agencies GAO reviewed consistently
                                        consider investments in research and development systems as IT, and 5
                                        do not. As a result, federal agencies’ annual IT investments are likely
                                        greater than the $79 billion reported in fiscal year 2011. In addition,
                                        OMB’s guidance to federal agencies requires each investment to be
                                        mapped to a single functional category. This limits OMB’s ability to
                                        identify duplicative investments both within and across agencies because
                                        similar investments may be organized into different categories. For
                                        example, GAO reported on a DOD financial management system that
                                        was identified in a different functional category—supply chain
                                        management. 3

                                        GAO also reported that OMB and federal agencies have undertaken
                                        several initiatives to address potentially duplicative IT investments. For
                                        example, OMB has efforts under way to consolidate similar functions
                                        through its Federal Enterprise Architecture initiative, which was developed
                                        in 1999. This initiative was intended to provide federal agencies with a
                                        common construct for their architectures and thereby facilitate the



                                        3
                                         GAO, Financial Management Systems: OMB's Financial Management Line of Business
                                        Initiative Continues but Future Success Remains Uncertain, GAO-09-328 (Washington,
                                        D.C.: May 7, 2009).




                                        Page 133                         GAO-12-342SP Duplication, Overlap, and Fragmentation
coordination of common business processes, and system investments
among federal agencies. In 2004, we reported that the Federal Enterprise
Architecture was a work in progress and was still evolving. 4 To this point,
OMB’s Chief Architect reported that comprehensive changes to the Federal
Enterprise Architecture are underway and planned for fiscal year 2012. In
addition, most of the agencies GAO reviewed established guidance for
ensuring new investments are not duplicative with existing systems.
However, agencies do not routinely assess operational systems to
determine if they are duplicative. Therefore, GAO reported that until
agencies routinely assess their IT investment portfolios to identify and
reduce duplicative systems, the government’s current situation of having
hundreds of similar IT investments will continue to exist.

More recently, GAO conducted a review to examine the three largest
categories of IT investments within DOD, Energy, and the Department of
Homeland Security (DHS). Specifically, as GAO reported in February
2012, although DOD, Energy, and DHS use various investment review
processes to identify duplicative investments, GAO found that 37 of
GAO’s sample of 810 investments were potentially duplicative at DOD
and Energy (see table below). 5 These investments account for about $1.2
billion in IT spending for fiscal years 2007 through 2012, for these two
agencies. To identify these potentially duplicative investments, GAO
reviewed the description of each investment’s purpose within specific
functional categories and subcategories to identify similarities among
related investments within each agency. This formed the basis of
establishing groupings of similar investments. GAO discussed the
groupings with each of the selected agencies, and GAO obtained further
information from agency officials and reviewed and assessed agencies’
rationales for having multiple systems that perform similar functions. For
example, GAO identified four DOD Navy personnel assignment
investments—one system for officers, one for enlisted personnel, one for
reservists, and a general assignment system—each of which is
responsible for managing similar functions. The Department of the Navy
is implementing an executive oversight board and a centralized review
process of IT investments that officials reported will examine these
investments to determine if actual duplication exists. The table below
summarizes 12 groups of potentially duplicative investments by purpose
and agency, which GAO identified.




4
 GAO, Information Technology: The Federal Enterprise Architecture and Agencies’
Enterprise Architectures Are Still Maturing, GAO-04-798T (Washington, D.C.: May 19,
2004).
5
 GAO, Information Technology: Departments of Defense and Energy Need to Address
Potentially Duplicative Investments, GAO-12-241. Washington, D.C.: February 17, 2012.




Page 134                           GAO-12-342SP Duplication, Overlap, and Fragmentation
Potentially Duplicative Investments for DOD and Energy, as of January 2012

Dollars in millions
                                                                                                                       Planned or actual
                                                                                                        Number of        spending fiscal
Department            Branch/bureau                         Purpose                                   investments       years 2007-2012
DOD                   Air Force                             Contract Management                                   5                  $41
                      Army                                  Personnel Assignment Management                       2                   12
                      Navy                                  Acquisition Management                                4                  407
                                                            Aviation Maintenance and Logistics                    2                   85
                                                            Contract Management                                   5                   17
                                                            Housing Management                                    2                     5
                                                            Personnel Assignment Management                       4                   28
                                                            Promotion Rating                                      2                     3
                                                            Workforce Management                                  3                  109
                      DOD-enterprisewide                    Civilian Personnel Management                         2                  504
Energy                Energy Programs                       Back-end Infrastructure                               3                     1
                      Energy Programs & Environmental       Electronic Records and Document                       3                     7
                      and Other Defense Activities          Management
Total                                                                                                            37               $1,219
                                             Source: GAO analysis of agency data.



                                             While GAO did not identify any potentially duplicative investments at DHS
                                             within GAO’s sample, DHS officials have independently identified several
                                             duplicative investments and systems. Specifically, DHS officials have
                                             identified and, more importantly, reduced duplicative functionality in four
                                             investments, including a personnel security investment, time and
                                             attendance investment, human resources investment, and an information
                                             network investment. DHS also has plans to further consolidate systems
                                             within these investments by 2014, which is expected to produce
                                             approximately $41 million in cost savings. DHS officials have also
                                             identified 38 additional systems that they have determined to be
                                             duplicative. For example, officials identified multiple personnel action
                                             processing systems that could be consolidated.

                                             Officials from the three agencies offered a variety of reasons for the
                                             potential duplication, such as decentralized governance within the
                                             department and a lack of control over certain facilities. Further
                                             complicating agencies’ ability to identify and eliminate duplicative
                                             investments is that investments are, in certain cases, misclassified by
                                             function. For example, DHS’s Federal Emergency Management
                                             Agency—Minor Personnel/Training Systems investment was initially
                                             categorized within the Employee Performance Management subfunction,
                                             but DHS agreed that this investment should be assigned to the Human
                                             Resources Development subfunction. Proper categorization is necessary
                                             in order to analyze and identify duplicative investments, both within and
                                             across agencies. GAO reported that until DOD, Energy, and DHS,
                                             correctly categorize their investments, they are limiting their ability to
                                             identify opportunities to consolidate or eliminate duplicative investments.



                                             Page 135                                 GAO-12-342SP Duplication, Overlap, and Fragmentation
                         GAO also reported that DHS had taken action to improve its processes
                         for identifying and eliminating duplicative investments. For example,
                         through reviewing portfolios of IT investments, DHS had identified much,
                         and eliminated some, duplicative functionality in certain investments—as
                         previously discussed. Additionally, DOD and Energy had recently initiated
                         specific plans to address potential duplication in many of the investments
                         GAO identified—such as plans to consolidate or eliminate systems. While
                         these efforts could eventually yield results, DOD’s and Energy’s initiatives
                         had not yet led to the consolidation or elimination of duplicative
                         investments or functionality. For example, while DOD and Energy had
                         documented milestones for improving their IT investment review
                         processes, officials did not provide examples of duplicative investments
                         that they had consolidated or eliminated. Therefore, GAO reported that
                         until DOD and Energy demonstrate, through existing transparency
                         mechanisms, that they are making progress in identifying and eliminating
                         duplicative investments, it will remain unclear whether they are avoiding
                         investment in unnecessary systems.



Actions Needed and       To better ensure the agencies avoid investing in duplicative investments,
                         GAO recommended in September 2011 that the Director of OMB
Potential Financial or
Other Benefits           •   clarify guidance to federal agencies in reporting on their IT
                             investments by specifying whether certain types of systems should be
                             included;

                         •   require federal agencies to report the steps they take to ensure that
                             their IT investments are not duplicative as part of their annual budget
                             and IT investment submissions; and

                         •   revise guidance to federal agencies on categorizing IT investments to
                             ensure that the categorizations are clear and allow agencies to
                             choose secondary categories.

                         Additionally, GAO recommended in February 2012 that the Secretaries of
                         DOD and Energy should direct their Chief Information Officers to

                         •   utilize existing transparency mechanisms to report on the results of
                             their efforts to identify and eliminate, where appropriate, each
                             potentially duplicative investment GAO identified, as well as any other
                             duplicative investments.

                         GAO also recommended in February 2012 that the Secretaries of DOD,
                         Energy, and DHS should direct their Chief Information Officers to

                         •   correct the miscategorizations for the investments GAO identified and
                             ensure that investments are correctly categorized in agency
                             submissions.




                         Page 136                      GAO-12-342SP Duplication, Overlap, and Fragmentation
Agency Comments        GAO provided a draft of its September 2011 report to OMB for review and
                       comment. OMB disagreed with the first recommendation and agreed with
and GAO’s Evaluation   the second and third recommendations. Specifically, OMB officials do not
                       plan to implement the first recommendation, because they believe
                       guidance already exists on categorizing and identifying IT investments.
                       However, GAO believes that the recommendation is appropriate because
                       the existing guidance does not address key categories of IT investments
                       where GAO found inconsistencies among agencies. OMB officials stated
                       that the agency plans to address the second and third recommendations
                       through updated guidance and the annual budget process.

                       GAO provided a draft of its February 2012 report to OMB, DOD, Energy,
                       and DHS for review and comment. OMB provided technical comments
                       that GAO incorporated, where appropriate. DOD and DHS generally
                       agreed with the recommendations, while Energy agreed with the first
                       recommendation, but not the second. Specifically, Energy disagreed that
                       two of the four investments GAO identified were miscategorized,
                       explaining that their categorizations reflect funding considerations.
                       However, OMB guidance indicates that investments should be classified
                       according to their intended purpose. Consequently, GAO believes the
                       recommendation is warranted.

                       GAO provided a draft of this report section to OMB for review and
                       comment. OMB provided technical comments, which were incorporated
                       as appropriate.



How GAO Conducted      The information contained in this analysis is based on findings from the
                       products listed in the related GAO products section. GAO analyzed IT
Its Work               investment data and OMB’s guidance to federal agencies on IT
                       investments, interviewed officials at the 10 federal agencies with the largest
                       IT spending in fiscal year 2010 6 to understand how they implement OMB
                       guidance, and analyzed reports and interviewed officials on efforts to
                       address duplicative investments. GAO also selected three of the largest
                       agencies with respect to number of investments—DOD, Energy, and DHS
                       to identify potentially duplicative investments. GAO analyzed a subset of
                       investment data from OMB’s IT budget data to identify investments with
                       similar functionality. Specifically, GAO reviewed 810, or 11 percent, of the
                       approximately 7,200 IT investments federal agencies report to OMB.
                       GAO’s review represents approximately 24 percent of DOD’s IT portfolio in
                       terms of the number of investments that they report to OMB, 19 percent of
                       Energy’s, and 16 percent of DHS’s. GAO then reviewed the name and
                       narrative description of each investment’s purpose to identify similarities
                       among related investments within each agency (GAO did not review



                       6
                        The 10 federal agencies are the Departments of Agriculture, Commerce, Defense, Health
                       and Human Services, Homeland Security, Justice, Transportation, the Treasury, and
                       Veterans Affairs, and the National Aeronautics and Space Administration.




                       Page 137                          GAO-12-342SP Duplication, Overlap, and Fragmentation
                      investments across agencies). This formed the basis of establishing
                      groupings of similar investments. GAO discussed the groupings with each
                      of the selected agencies, and GAO obtained further information from
                      agency officials and reviewed and assessed agencies’ rationales for having
                      multiple systems that perform similar functions. Appendix III lists the
                      programs GAO identified that may have similar or overlapping objectives,
                      provide similar services or be fragmented across government missions.
                      Overlap and fragmentation may not necessarily lead to actual duplication,
                      and some degree of overlap and duplication may be justified.



Related GAO           Information Technology: Departments of Defense and Energy Need to
                      Address Potentially Duplicative Investments, GAO-12-241. Washington,
Products              D.C.: February 17, 2012.

                      Information Technology: OMB Needs to Improve Its Guidance on IT
                      Investments. GAO-11-826. Washington, D.C.: September 29, 2011.

                      Information Technology: OMB’s Dashboard Has Increased Transparency
                      and Oversight, but Improvements Needed. GAO-10-701. Washington,
                      D.C.: July 16, 2010.

                      Information Technology: Management and Oversight of Projects Totaling
                      Billions of Dollars Need Attention. GAO-09-624T. Washington, D.C.: April
                      28, 2009.

                      Information Technology: OMB and Agencies Need to Improve Planning,
                      Management, and Oversight of Projects Totaling Billions of Dollars.
                      GAO-08-1051T. Washington, D.C.: July 31, 2008.

                      Information Technology: Further Improvements Needed to Identify and
                      Oversee Poorly Planned and Performing Projects. GAO-07-1211T.
                      Washington, D.C.: September 20, 2007.

                      Information Technology: Improvements Needed to More Accurately
                      Identify and Better Oversee Risky Projects Totaling Billions of Dollars.
                      GAO-06-1099T. Washington, D.C.: September 7, 2006.

                      Information Technology: Agencies and OMB Should Strengthen
                      Processes for Identifying and Overseeing High Risk Projects.
                      GAO-06-647. Washington, D.C.: June 15, 2006.

                      Information Technology: OMB Can Make More Effective Use of Its
                      Investment Reviews. GAO-05-276. Washington, D.C.: April 15, 2005.



Contact Information   For additional information about this area, contact David A. Powner at
                      (202) 512-9286 or pownerd@gao.gov.




                      Page 138                      GAO-12-342SP Duplication, Overlap, and Fragmentation
20. Overseas Administrative Services
U.S. government agencies could lower the administrative cost of their operations overseas by increasing
participation in the International Cooperative Administrative Support Services system and by reducing reliance
on American officials overseas to provide these services.



Why This Area Is                     As of fiscal year 2011, the U.S. government employed over 23,500
                                     Americans overseas, including nearly 15,000 with the Department of
Important                            State (State), at more than 250 diplomatic and consular posts. The
                                     operation of these posts requires a wide variety of administrative support
                                     services for overseas personnel, such as building maintenance, vehicle
                                     operations, and travel services, among others. U.S. government agencies
                                     may obtain these services through the International Cooperative
                                     Administrative Support Services (ICASS) system, the principal means by
                                     which the U.S. government provides and shares the cost of common
                                     services. ICASS is an interagency system established in 1997 for
                                     distributing the cost of administrative services at overseas posts and is
                                     intended to ensure that each agency bears the cost of its overseas
                                     presence. The ICASS Executive Board, chaired by State and comprised
                                     of senior representatives from participating agencies, sets the strategic
                                     vision and policy for ICASS.

                                     State is the principal—and most often the only—administrative service
                                     provider at most posts worldwide, and its personnel provide virtually all
                                     ICASS services. The cost of ICASS, which totaled over $2 billion in fiscal
                                     year 2011, is shared with over 40 participating federal agencies, of which
                                     State, the U.S. Agency for International Development (USAID), and the
                                     Departments of Agriculture, Commerce, Defense, Health and Human
                                     Services, Homeland Security, and Justice are the largest, accounting for
                                     nearly 95 percent of all ICASS costs. Participation is mostly voluntary, as
                                     agencies may obtain any or all of 31 different services at each overseas
                                     post or opt out of ICASS by providing services for themselves or obtaining
                                     them from another source.

                                     As GAO reported in September 2004, since the establishment of ICASS,
                                     many agencies had not signed up for ICASS services and decided
                                     instead to provide similar services for their own staff independently. GAO
                                     found that this resulted in duplicative administrative systems that limited
                                     ICASS’s ability to achieve economies of scale and deliver administrative
                                     services efficiently.



What GAO Found                       Since 2004, State and other agencies operating overseas have made
                                     limited progress in reducing the cost of administrative support services
                                     overseas. Agencies continue to provide many services independently,
                                     despite economies of scale available through greater participation in
                                     ICASS. Furthermore, State, the primary provider of ICASS services, has
                                     not implemented other cost containment measures that would significantly
                                     reduce the need to employ American administrative staff overseas.


                                     Page 139                      GAO-12-342SP Duplication, Overlap, and Fragmentation
Opting out of ICASS results in potential duplication of administrative
services and increased costs to the U.S. government. GAO’s analysis of
ICASS data from 2011 shows that agencies continue to obtain
administrative support services outside of ICASS at overseas posts,
duplicating services provided through the ICASS system. GAO found that
when customer agencies had a choice to obtain services outside of
ICASS, they did so about one-third of the time, on average. ICASS
participation rates vary widely by agency, but individual agency rates
have remained relatively constant since 2005, with the exception of
USAID. USAID has experienced a marked increase in participation since
it began consolidating its administrative operations with State in 2005.

GAO directly observed duplication of administrative services during site
visits to four overseas missions. For example, at each post visited, GAO
found that instead of participating in the ICASS-managed motor pool,
several agencies operated or maintained their vehicles independently. In
addition, several agencies procured their own appliances or shipped their
own furniture, declining to participate in ICASS furniture and appliance
pools, where this would be done collectively by ICASS staff. According to
the financial management officer in Manila, this not only reduces the
opportunity to realize lower procurement costs through larger bulk
purchases, it entails other hidden costs, including increased labor and
wear and tear on the property, as furniture and appliances are removed
and reinstalled when agency staff move in and out of embassy-managed
residences. He noted that over a 6-month period in 2010, ICASS service
providers had to remove and reinstall furniture and appliances at
embassy-managed residences 67 times as a result of agency officials
being replaced in a home by officials from a different agency. Such
additional work would not have been necessary if all agencies subscribed
to one furniture and appliance pool, as this property would have remained
in the home where it was originally installed, regardless of the occupant.

GAO’s analysis of ICASS cost and workload data confirms that State and
other agencies participating in ICASS have realized savings through
economies of scale. For all 28 ICASS services GAO analyzed, GAO
found that as ICASS workloads increased—for example, through
increased participation in ICASS services or growth in staff posted
overseas—service provision became more efficient and costs per unit of
output decreased (see table below). However, GAO was unable to
estimate the specific cost implications for new ICASS customers, as other
agencies that had opted out of ICASS could not provide GAO with
comparable cost data to those which ICASS collects.




Page 140                     GAO-12-342SP Duplication, Overlap, and Fragmentation
ICASS Participation Rates for 2011 and Potential Savings through Economies of
Scale for Selected Administrative Services

                                                     Percentage of         Estimated change in
                                                          agencies             unit cost with 10
                                                  obtaining service            percent increase
    Administrative service                          through ICASS                   in workload
    Property managementa                                        70.6%                        -9.1%
    Furniture, furnishings, and appliance                         57.5                           -8.4
    pools
    Pouch services                                                50.2                           -7.0
    Travel services                                               70.7                           -6.2
    Photocopying services                                         28.0                           -6.2
    Shipment and customs                                          66.2                           -6.1
    Administrative supply                                         56.5                           -5.6
    Procurement services                                          75.4                           -5.6
    Motor pool services                                           45.1                           -4.8
Source: GAO analysis of ICASS data.
a
 Includes inventory management, warehousing, and issuance of office and residential furniture,
furnishings, and appliances; does not include real property.


According to the results of GAO’s survey of agency representatives,
decisions to opt out of ICASS services are based on various factors, the
most frequently cited of which were concerns about cost. GAO’s survey
results indicated that some agency representatives who obtained a specific
service outside of ICASS believed that doing so was less expensive than
obtaining this service through ICASS. However, several respondents
indicated that their decisions to opt out of ICASS were not based on any
formal cost analyses. Agencies also chose not to participate in ICASS for a
variety of other reasons. In some cases, agency representatives said that
they could obtain some services from their headquarters more efficiently
than through ICASS. In other cases, officials indicated that they would be
unable to fulfill their agency’s mission if they relied on ICASS services. For
example, some Department of Homeland Security officials said they
needed to maintain their own vehicles to have immediate, 24 hours-a-day
access for them to conduct investigations. Also, several USAID and
Department of Agriculture officials noted that their missions require them to
take extended trips to the field that the ICASS motor pool is sometimes not
able to accommodate.

Another frequently cited reason for opting out of ICASS was concern
about the quality of ICASS services. While results from the annual ICASS
survey and GAO’s survey of U.S. government agency representatives
show overall satisfaction with the quality of ICASS services generally,
some dissatisfaction with ICASS performance still exists, particularly
among USAID staff. Officials from USAID and other agencies have
indicated that performance problems could affect their ability to achieve
their respective mission efficiently and effectively in some cases. In
particular, USAID officials have cited the unavailability of ICASS motor
pool vehicles for travel to distant project sites as a major impediment to its
ability to monitor development programs. While agencies may have valid


Page 141                                GAO-12-342SP Duplication, Overlap, and Fragmentation
justifications for not participating in ICASS services, they generally do not
document their rationales or formally share them with ICASS service
providers or other customer agencies. Nor do State or ICASS
systematically request such analyses or document the reasons why
agencies choose not to subscribe to an ICASS service.

The voluntary nature of ICASS has permitted the continuation of
duplicative services, as agencies often make decisions about participating
in ICASS based on their own costs and not the costs to the U.S.
government as a whole. GAO recommended in September 2004 that the
ICASS Executive Board encourage greater ICASS participation. The
board agreed and has taken some steps to reduce duplication of
administrative services, particularly between State and USAID. However,
according to ICASS officials, experience has shown that board members
do not necessarily have the incentive to require their agencies to
participate in ICASS. In this context, congressional action may be
necessary to increase participation in ICASS.

One of ICASS’s primary goals is to contain or reduce administrative
costs. Yet State, as the primary ICASS service provider, has made limited
progress in containing costs by reducing the need for American
administrative staff overseas. GAO recommended in September 2004
that, in addition to pursuing the elimination of duplicative administrative
support structures, the ICASS Executive Board seek to contain ICASS
cost by reengineering administrative processes and employing innovative
managerial approaches through competitive sourcing, regionalization of
services, improved technology, and adoption of other best practices
developed by agencies and other posts. GAO further noted that State had
undertaken several initiatives to increase the efficiency of ICASS
services, primarily by reducing the need for administrative staff overseas.

However, according to ICASS management officials, State has
discontinued these efforts without demonstrating significant progress in
containing costs. For example, State did not fully implement a pilot effort
to streamline services by requiring ICASS service providers and ICASS
Councils to rationalize administrative staffing levels. Moreover, State did
not execute its plans to relocate some administrative support activities
from overseas to the Florida Regional Center in Fort Lauderdale, which
State estimated in 2004 would save ICASS customers up to $140 million
over 5 years. According to State and ICASS management officials, State
discontinued these efforts because it determined that the potential cost
savings did not outweigh the administrative burden of fully implementing
them. Furthermore, they indicated that State has not undertaken any
other comparable streamlining efforts that would lower costs significantly.

State has implemented a wide variety of smaller scale innovations that
have increased the efficiency of ICASS service delivery and reduced
costs. For example, State established a “post support unit” to provide
vouchering services to more than 90 posts worldwide from three central
locations. State also implemented a global network energy management
program, which has reportedly reduced energy costs by almost $900,000


Page 142                       GAO-12-342SP Duplication, Overlap, and Fragmentation
in its first 10 months. Other than this initiative, State has not identified the
specific cost impacts of these innovations. State anticipates future cost
savings from innovative approaches to procuring air freight pouch and
mail services and information technology.

The ICASS Executive Board has had limited power to effectuate
reengineering and innovation in administrative processes, as State
maintains control over virtually all of these processes as both the primary
provider and customer of ICASS services. Officials from nearly every
agency GAO met with expressed concern about State’s failure to contain
the cost of the ICASS services it provides. In particular, agency officials in
Washington and at the overseas posts GAO visited commonly
complained that State employed too many American staff overseas to
provide administrative services instead of relying on much less expensive
locally employed staff or outsourcing to local firms. 1

Furthermore, State has not sought to maximize the cost-effectiveness of
ICASS services by ensuring that the most appropriate agency deliver
these services at all posts. In some instances of duplication GAO
observed, GAO noted that USAID appeared to have more expertise in
providing a particular service than the existing State ICASS provider,
potentially making USAID a reasonable alternate ICASS service provider.
For example, in Nairobi, USAID operates a copy center for its own staff
inside the embassy compound, offering more specialized services,
including digitization, than the ICASS copy center provides.

State’s Foreign Affairs Handbook recognizes that an agency other than
State may be better positioned to be the principal provider of specific
services for themselves and other agencies at a given post. It allows for
the use of these alternate service providers in cases where an agency
has a sufficiently large administrative support capability at a location and
agrees to provide services to other agencies at that post. However, in
2006, State and USAID, in the interest of simplifying and expediting the
consolidation of their administrative operations overseas, adopted a
policy effectively restricting the establishment of new alternate ICASS
service providers.

As a result, in 2012, only seven posts had such a provider for one or
more ICASS service, potentially limiting opportunities for ICASS to
achieve greater efficiency and effectiveness. In 2010, Task Force 11, a
joint State-USAID group supporting the development of the Quadrennial
Diplomacy and Development Review, 2 recommended that posts consider



1
 In 2004, we found that the per capita labor cost of an American direct hire staff was
almost eight times higher than that of a local hire.
2
 Department of State and the U.S. Agency for International Development, Leading
Through Civilian Power: The First Quadrennial Diplomacy and Development Review
(Washington, D.C.: Dec. 15, 2010).




Page 143                             GAO-12-342SP Duplication, Overlap, and Fragmentation
                         the use of alternate service providers in order to reduce costs. Task Force
                         11 also proposed that State and USAID establish a Joint Management
                         Board and formulate a consolidation policy that considers the use of
                         alternate providers. However, the Joint Management Board, created in
                         August 2011, has not yet established such a policy.



Actions Needed and       To contain costs and reduce duplication of administrative support
                         services overseas, GAO recommended in January 2012 that Congress
Potential Financial or   may wish to consider
Other Benefits           •   requiring agencies to participate in ICASS services unless they
                             provide a business case to show that they can obtain these services
                             outside of ICASS without increasing overall costs to the U.S.
                             government or that their mission cannot be achieved within ICASS.

                         GAO also recommended in January 2012 that the Secretary of State
                         should

                         •   increase the cost-effectiveness of ICASS services by continuing to
                             reengineer administrative processes and seek innovative managerial
                             approaches, including those that would reduce the reliance on
                             American officials overseas to provide these services.

                         Furthermore, where agencies are able to demonstrate, through a
                         compelling business case, that they can provide a service more efficiently
                         than the existing State ICASS provider without adverse effects on the
                         overall government budget, GAO recommended in January 2012 that the
                         Secretary of State and the Administrator of USAID should

                         •   allow the creation of new ICASS service providers, in lieu of State,
                             that could provide administrative services to the other agencies at
                             individual posts.


Agency Comments          GAO provided a draft of its January 2012 report to State, USAID, and the
                         Departments of Agriculture, Commerce, Defense, Health and Human
and GAO’s Evaluation     Services, Homeland Security, and Justice for review and comment. State,
                         USAID, and the Departments of Agriculture, Commerce, and Homeland
                         Security provided written comments. The Departments of Defense, Health
                         and Human Services, and Justice provided technical comments, which
                         were incorporated as appropriate. State and USAID generally agreed with
                         GAO’s recommendations. However, while State agreed that continued
                         efforts are needed to increase the cost-effectiveness of ICASS services, it
                         did not agree that such actions have not been undertaken or that such
                         efforts would substantially reduce the need for the American management
                         staff abroad. GAO added information about State’s other cost-reduction
                         efforts to the draft, noting that they were of a smaller scale than those State
                         had indicated in 2004 that it would undertake. Given the relatively high cost
                         of posting American staff overseas compared to engaging staff locally,
                         GAO believes that even minor modifications in staffing could have




                         Page 144                       GAO-12-342SP Duplication, Overlap, and Fragmentation
                      significant cost implications and should be thoroughly explored, in close
                      coordination with ICASS-participating agencies.

                      The Departments of Agriculture, Commerce, and Homeland Security took
                      issue with GAO’s finding that nonparticipation in ICASS services reflects
                      potential duplication of administrative services overseas, and with GAO’s
                      suggestion that Congress consider requiring agencies to participate in
                      ICASS services unless they provide a business case to justify opting out. In
                      particular, these agencies noted that ICASS customers have a variety of
                      valid reasons for not participating in ICASS services and expressed
                      concern that developing business cases to justify nonparticipation would be
                      overly burdensome. GAO believes that, while agencies may have valid
                      reasons for not participating in some ICASS services, the voluntary nature
                      of ICASS has permitted agencies to opt out of the system without
                      conducting rigorous cost analyses. Without such analyses, agencies are
                      making decisions about participating in ICASS based on their own costs—
                      or perceptions of cost—and not necessarily the overall cost to the U.S.
                      government. GAO believes that if conducted in close coordination with the
                      ICASS Service Center and other participating agencies, preparing business
                      cases need not be overly burdensome and could lead to significant, long-
                      term savings for the U.S. government that would justify the additional effort.
                      As part of its routine audit work, GAO will track the extent to which progress
                      has been made to address the identified actions and report to Congress.


How GAO Conducted     The information contained in this analysis is based on findings from the
                      products listed in the related GAO products section. GAO analyzed data
Its Work              and documentation on ICASS participation and costs from 2000 through
                      2011; interviewed cognizant staff at the 8 agencies with the largest
                      overseas presence; and surveyed representatives from these agencies at
                      posts around the world. GAO staff conducted fieldwork in Japan, Kenya,
                      the Philippines, and Rwanda, where they observed administrative
                      services, met with embassy management officials, and conducted focus
                      groups of ICASS customers. GAO performed its work from August 2010
                      to January 2012.


Related GAO           Embassy Management: State Department and Other Agencies Should
                      Further Explore Opportunities to Save Administrative Costs Overseas.
Products              GAO-12-317. Washington, D.C.: January 31, 2012.

                      New Embassy Compounds: State Faces Challenges in Sizing Facilities
                      and Providing for Operations and Maintenance Requirements.
                      GAO-10-689. Washington, D.C.: July 20, 2010.

                      Embassy Management: Actions Are Needed to Increase Efficiency and
                      Improve Delivery of Administrative Services. GAO-04-511. Washington,
                      D.C.: September 7, 2004.


Contact Information   For additional information about this area, contact Michael Courts at (202)
                      512-8980 or courtsm@gao.gov.


                      Page 145                       GAO-12-342SP Duplication, Overlap, and Fragmentation
21. Training to Identify Fraudulent Travel
Documents
Establishing a formal coordination mechanism could help reduce duplicative activities among seven different
entities that are involved in training foreign officials to identify fraudulent travel documents.



Why This Area Is                    Eliminating the threat of terrorist attacks continues to be a primary U.S.
                                    national security focus. According to the 9/11 Commission, constraining
Important                           the mobility of terrorists is one of the most effective weapons in fighting
                                    terrorism. The U.S. government has identified four key gaps in foreign
                                    countries’ capacity to prevent terrorist travel overseas, including a key
                                    gap in our foreign partners’ ability to address the use of fraudulent travel
                                    documents. As a result, U.S. agencies have undertaken a variety of
                                    efforts to enhance our foreign partners’ capacity to identify and interdict
                                    fraudulent travel documents (i.e., passports and visas).



What GAO Found                      As GAO reported in June 2011, seven different U.S. government entities
                                    across three federal agencies are involved in providing training to foreign
                                    government officials to detect fraudulent travel documents. 1 In delivering
                                    the training, agencies have similar objectives and often train the same
                                    populations (e.g., immigration officials and law enforcement officials) to
                                    develop their skills in recognizing the characteristics of altered,
                                    counterfeit, or other fraudulent travel documents, sometimes in the same
                                    country.




                                    1
                                     We were unable to determine the total amount of money spent on training foreign
                                    government officials to detect fraudulent travel documents because the agencies involved
                                    did not consistently track the cost of individual training sessions.




                                    Page 146                           GAO-12-342SP Duplication, Overlap, and Fragmentation
U.S. Agencies and Bureaus Involved in Providing Fraudulent Travel Document
Recognition Training to Foreign Immigration and Law Enforcement Officials




As GAO reported in June 2011, the federal entities in the above figure
provided the following training to foreign officials in fraudulent travel
document recognition:

•   The Bureau of Diplomatic Security within the Department of State
    (State) provided 458 instructor-led courses on fraudulent travel
    documents through their staff posted overseas and, in collaboration
    with State’s Bureau of Counterterrorism, provided an additional 12
    courses in fraudulent travel document recognition through their Anti-
    Terrorism Assistance (ATA) program.

•   Immigration and Customs Enforcement (ICE) within the Department of
    Homeland Security (DHS) provided 360 training courses, briefings,
    and outreach sessions through their attachés stationed overseas, and
    through their Office of International Affairs provided 4 additional
    courses instructed by officials traveling from Washington, D.C.

•   State’s Bureau of International Narcotics and Law Enforcement
    Affairs, through the International Law Enforcement Academies,
    provided two courses specifically on fraudulent travel document
    recognition and five courses that covered this topic as part of longer,
    general law enforcement training. In addition, this State bureau
    provided funding to the U.S. Customs and Border Protection (CBP)
    within DHS for one training course and to arrange six trips of foreign
    officials to the United States through the International Visitors
    Program for this purpose and to the Organization of American States



Page 147                        GAO-12-342SP Duplication, Overlap, and Fragmentation
    to deliver training in fraudulent document recognition throughout the
    Western Hemisphere.

•   The Transportation Security Administration within DHS funded one
    fraudulent travel document training course, as part of its Aviation
    Security Sustainable International Standards Teams.

•   CBP within DHS, through its Office of International Affairs, funded one
    course in fraudulent document recognition for law enforcement
    officials.

•   The Federal Bureau of Investigation within the Department of Justice
    did not fund or implement any such training in fiscal year 2010;
    however, in March 2011, it organized one such training session.

Officials from State’s Bureau of Counterterrorism—which coordinates and
supports the development and implementation of all U.S. government
policies and programs aimed at countering terrorism overseas—told GAO
they had been unaware of how many agencies and subagencies are
involved in providing fraudulent travel document training to foreign
officials. They added that no mechanism existed to encourage
coordination among all the parties involved. At the country level, during
site visits in March 2011, GAO found that agency officials at two of the
four posts it visited did not always collaborate on the delivery of fraudulent
travel document recognition training. As a result, some planned training
was duplicative and did not make an effective use of limited resources.

•   In Pakistan, GAO identified two agencies, State and DHS, planning to
    provide fraudulent travel document recognition training courses in April
    2011 to Pakistani officials from the same agency without coordinating
    with one another. An attaché from DHS/ICE planned one course, while
    State’s ATA program was simultaneously planning to hold two other
    fraudulent travel document courses in the same month. Meanwhile, the
    ICE attaché had been certified to be an instructor for fraudulent travel
    document recognition courses through a train-the-trainer course
    provided by ICE’s Forensic Document Laboratory. Since ATA program
    officials were unaware of the existence of this local resource, the ATA
    program was still attempting to find two instructors from ICE to travel to
    Pakistan to teach their planned courses.

•   In Kenya, GAO found that representatives from two U.S. agencies,
    State and DHS, deliver fraudulent travel document training but do not
    collaborate. State provides such training through its ATA program and
    through an in-country representative of their Bureau of Diplomatic
    Security, while an in-country representative of DHS’s CBP also
    provided many such training courses. Despite these three
    representatives providing this similar training, a representative from
    one of the agencies stated that although he coordinated with other
    countries providing similar training in Kenya, he did not do so with
    other U.S. agencies.




Page 148                       GAO-12-342SP Duplication, Overlap, and Fragmentation
Actions Needed and       GAO recommended in June 2011 that the Secretary of State should

Potential Financial or   •   develop a mechanism to enhance coordination among the agencies
Other Benefits               involved in funding and implementing fraudulent travel document
                             training overseas.



Agency Comments          GAO provided a draft of its June 2011 report to State for review and
                         comment. State agreed with GAO’s previous recommendation and
and GAO’s Evaluation     reported that efforts to enhance such coordination have begun at the
                         country level. As part of its routine audit work, GAO will track the extent to
                         which progress has been made to address the identified actions and
                         report to Congress.



How GAO Conducted        The information contained in this analysis is based on findings from the
                         products listed in the related GAO products section. GAO reviewed the
Its Work                 strategies and documentation of U.S. agencies funding and/or
                         implementing foreign capacity-building efforts to prevent terrorist travel
                         overseas, including those of State, DOD, DHS, the Department of Justice,
                         and the U.S. Agency for International Development. GAO met with these
                         agencies and conducted field work in Kenya, Pakistan, the Philippines,
                         and Thailand.



Related GAO Product      Combating Terrorism: Additional Steps Needed to Enhance Foreign
                         Partners’ Capacity to Prevent Terrorist Travel. GAO-11-637. Washington,
                         D.C.: June 30, 2011.



Contact Information      For additional information about this area, contact Charles Michael
                         Johnson, Jr. at (202) 512-7331 or johnsoncm@gao.gov.




                         Page 149                       GAO-12-342SP Duplication, Overlap, and Fragmentation
22. Coordination of Space System
Organizations
Fragmented leadership has led to program challenges and potential duplication in developing multibillion-dollar
space systems.



Why This Area Is                     U.S. government space systems provide a wide range of capabilities such
                                     as Global Positioning System, weather, climatology, meteorology, missile
Important                            warning, and secure communications to a large number of users, including
                                     the Department of Defense (DOD), the intelligence community, civil
                                     agencies, U.S. businesses and citizens, and/or other countries. More than
                                     $25 billion a year is appropriated to agencies for developing space
                                     systems. These systems typically take a long time to develop, and often
                                     consist of multiple components—including satellites, ground control
                                     stations, terminals, and user equipment—with different program offices that
                                     oftentimes separately plan, acquire, and deploy individual system
                                     components. Moreover, the nation’s satellites are put into orbit by rockets
                                     that can cost more than of $100 million per launch. Given these
                                     components, often costing billions of dollars to acquire, recent GAO studies
                                     have shown that costs of space programs tend to increase significantly
                                     from initial cost estimates. A May 2011 GAO testimony showed that
                                     estimated costs for the major Defense space acquisition programs have
                                     increased by about $13.9 billion from initial estimates for fiscal years 2010
                                     through 2015, almost a 286 percent increase. NASA space programs have
                                     also wrestled with excessive cost growth. While many of the programs
                                     have provided users with important and useful capabilities, GAO and
                                     others have reported for a number of years that, in some cases, problems
                                     with these systems have been so severe that acquisitions were either
                                     canceled or the needed capabilities were severely delayed, and that
                                     fragmented leadership has been a factor in some of these problems.



What GAO Found                       Fragmented leadership and lack of a single authority in overseeing the
                                     acquisition of space programs have created challenges for optimally
                                     acquiring, developing, and deploying new space systems. This
                                     fragmentation is problematic not only because of a lack of coordination
                                     that has led to delays in fielding systems, but also because no one person
                                     or organization is held accountable for balancing governmentwide needs
                                     against wants, resolving conflicts and ensuring coordination among the
                                     many organizations involved with space acquisitions, and ensuring that
                                     resources are directed where they are most needed. Past studies and
                                     reviews examining the leadership, organization, and management of
                                     national security space have found that there is no single authority
                                     responsible below the President for integrating space programs, and
                                     responsibilities for acquiring space systems are diffused across various
                                     DOD organizations—including the military services and the Missile
                                     Defense Agency—as well as the intelligence community and the National
                                     Aeronautics and Space Administration (NASA). A variety of other


                                     Page 150                       GAO-12-342SP Duplication, Overlap, and Fragmentation
                                            agencies, such as the Federal Aviation Administration, the National
                                            Oceanic and Atmospheric Administration (NOAA), and the Department of
                                            Homeland Security rely on government space systems to execute their
                                            missions. As indicated in these studies and reviews, each military service
                                            or agency that acquires space systems has its own lines of acquisition
                                            authority, even though many of the larger programs, such as the Global
                                            Positioning System and those to acquire imagery and environmental
                                            satellites, are integral to the execution of multiple agencies’ missions.
                                            With multiagency space programs, success is often only possible with
                                            cooperation and coordination; however, successful and productive
                                            coordination appears to be the exception and not the rule.

                                            GAO previously reported on how this fragmented leadership and lack of
                                            coordination has contributed to problems for the development,
                                            acquisition, and fielding of space programs. Examples of programs
                                            affected and their challenges are presented in the table below.

Selected Space Programs GAO Reviewed Where Fragmentation and Lack of Coordination Affected Development and Acquisition

Program name              Problems resulting from a lack of coordination
Global Positioning        The GPS program is currently being modernized to replace and update the aging satellite constellation
System (GPS)              with new GPS satellites, which will provide warfighters with a stronger and more secure military signal.
                          Moreover, there is an interagency structure in place to help coordinate requirements and resolve issues
                          related to GPS. However, modernized military user equipment that DOD is concurrently developing with
                          the new satellites has suffered schedule delays and is not expected to be fully fielded to all of the military
                          services until 2025—10 years after the new military signal from the satellites is expected to reach full
                          operational capability. GAO previously reported in April 2009 that the coordination of the satellite and user
                          equipment segments is not adequately synchronized due to funding shifts and diffuse leadership in the
                          program, likely leading to numerous years of missed opportunities to utilize new capabilities. DOD has
                          taken some steps to better coordinate the GPS segments. DOD created the Space and Intelligence Office
                          within the Office of the Under Secretary of Defense for Acquisition, Technology, and Logistics to ensure
                          that all three segments of GPS stay synchronized in the development and acquisition processes. However,
                          that office does not have authority over all user equipment. DOD also conducted enterprise reviews of the
                          program; however, it has not gone as far as GAO recommended to establish a single authority responsible
                          for ensuring that all GPS segments, including user equipment, are synchronized to the maximum extent
                          practicable.
The National Polar-       NPOESS was an attempt to converge defense and civil environmental monitoring requirements and avoid
orbiting Operational      duplication through a tri-agency program office, with each participating agency (DOD, NOAA, and NASA)
Environmental Satellite   having the lead on certain activities but no single authority to adjudicate conflicts or set priorities. Along with
System (NPOESS)           technical and design challenges that arose from decisions related to requirements, the lack of an effective
                          leadership structure to prioritize requirements and resolve interagency conflicts contributed to restructuring of
                          NPOESS. GAO previously reported in June 2009 that the interagency program structure did not effectively
                          fulfill its responsibilities and did not have the ability to effectively or efficiently oversee and direct the NPOESS
                          program. No authority at a level higher than the involved agencies was charged with coordinating the program
                          to ensure resources were used for the greatest need, and this led to significant program delays. By the end of
                          fiscal year 2010, the U.S. government had spent 16 years and over $5 billion to develop NPOESS, but had
                          not launched a single satellite, resulting in a potential capability gap for weather and environmental
                          monitoring. Consequently, in February 2010, citing the program’s cost overruns, schedule delays, and
                          management problems, the White House Office of Science and Technology Policy announced that the
                          NPOESS tri-agency structure would be eliminated and the program would be restructured by splitting
                          procurements and responsibilities.a Given this restructuring, GAO recommended in May 2010 that NOAA and
                          DOD establish plans to mitigate key risks in transitioning from NPOESS to the successor satellite programs,
                          including ensuring effective oversight of program management, and addressing cost and schedule
                          implications from contract and program changes. GAO reported that both agencies have acknowledged these
                          risks, but have not yet established plans to mitigate these risks. For example, NOAA could not provide firm
                          time frames for completing its management control plan and DOD never formally started its follow-on space
                          weather satellite program, though it was attempting to pull together key acquisition documents. Moving
                          forward, it will be important for the agencies to continue efforts to mitigate these risks in order to ensure the
                          success of their respective environmental monitoring programs.




                                            Page 151                                GAO-12-342SP Duplication, Overlap, and Fragmentation
Program name        Problems resulting from a lack of coordination


Space Radar         The Space Radar program faced significant affordability issues, along with leadership and management
                    challenges that eventually contributed to the program’s cancellation. Started in 2003, Space Radar was a
                    collaborative effort between DOD and the intelligence community to provide global, all-weather, day and
                    night intelligence, surveillance, and reconnaissance capabilities, particularly in denied areas. Space Radar
                    was to consist of a constellation of satellites, a ground system, and a communications network that
                    included ground-, air-, ship-, and space-based platforms. The initial cost estimate for Space Radar was
                    between $20 and $25 billion, but the program did not have long-term funding agreements in place or an
                    adjudication process for prioritizing and resolving the tasking from various users. GAO previously reported
                    in August 2007 that cooperation between DOD and the intelligence community on the program could face
                    challenges and an independent review found that the program lacked an effective way to resolve
                    disagreements between the partners. Further, the program faced challenges including a potentially
                    accelerated schedule, questions about system affordability, and difficulty defining key requirements. By
                    2008, DOD and the intelligence community decided to stop developing the Space Radar program, citing
                    affordability issues, even though millions of dollars had already been spent and no immediate follow-on
                    effort was continued to leverage this investment.
Space Situational   GAO previously reported in May 2011 that Space Situational Awareness acquisition efforts experienced
Awareness           challenges due to a lack of governmentwide authority. Space Situational Awareness efforts are designed
                    to mitigate threats to U.S. space systems via a variety of space- and ground-based sensors and systems
                    that detect, track, and characterize space objects and space-related events, and forecast which assets
                    may be at risk. DOD has responsibility, with support from the Director of National Intelligence, for the
                    development, acquisition, operation, maintenance, and modernization of Space Situational Awareness
                    capabilities governmentwide. The Space Situational Awareness community consists of a diverse and large
                    array of stakeholders, and while the National Space Policy assigns Space Situational Awareness
                    responsibility to the Secretary of Defense, the Secretary cannot direct resources to the highest priority
                    systems if they belong to an agency outside DOD, or ensure that agencies are setting aside funding
                    needed for Space Situational Awareness over the long term. This complicates program oversight and
                    operations and presents significant challenges to executing and overseeing the Space Situational
                    Awareness mission. GAO has reported that development efforts have been hampered by cost, schedule,
                    and performance challenges, and that in the past 5 fiscal years DOD has not delivered significant new
                    Space Situational Awareness capabilities as originally expected. GAO also reported that the new National
                    Space Policy increases the number of stakeholders that must participate in the development of planning
                    documents that, among other things, identify the roles to manage national security space capabilities and
                    develop specific measures for improving Space Situational Awareness capabilities. While identifying roles
                    and having input from more Space Situational Awareness stakeholders are positive first steps and may
                    result in more inclusive and robust planning efforts, it is too early to assess the effect of these provisions
                    on managing and overseeing governmentwide Space Situational Awareness efforts.
                                     Source: GAO analysis of Department of Defense and GAO information.
                                      a
                                       The announcement accompanied the release of the President’s fiscal year 2011 budget request.


                                     In addition, based on preliminary ongoing work, GAO has found the
                                     potential for duplication among satellite operations infrastructure within
                                     the federal government. This preliminary work indicates that there are
                                     multiple stove piped ground systems and duplication of facilities and
                                     hardware. This preliminary work also indicates the potential for
                                     duplication with satellites across the government in certain mission areas,
                                     such as for remote sensing. GAO plans to further examine these efforts in
                                     more detail in the near future.

                                     Since late 2009, DOD has taken a number of initiatives to improve
                                     leadership over defense space acquisitions, but these actions have not
                                     been in place long enough to determine whether acquisition outcomes will
                                     improve. To improve leadership over space acquisitions, DOD has (1)
                                     established the Defense Space Council to serve as the principal advisory
                                     forum to inform, coordinate, and resolve all DOD space issues, to include
                                     implementation of the National Security Space Strategy; (2) designated
                                     the Under Secretary of Defense for Acquisition, Technology and Logistics



                                     Page 152                                          GAO-12-342SP Duplication, Overlap, and Fragmentation
(USD AT&L) to serve as the Office of the Secretary of Defense focal point
for space programs; (3) reaffirmed the Secretary of the Air Force as the
DOD Executive Agent for Space, to integrate and assess DOD’s overall
space program, provide recommended adjustments to the space budget
and facilitate increased cooperation with the Intelligence Community and
(4) eliminated organizations believed to be redundant and/or ineffective.
DOD officials also cite various changes at the Air Force level that better
align and unify space acquisition. Further, the new National Space Policy
that was issued in 2010 also takes some steps to clarifying
responsibilities for space programs among government entities. These
changes hold promise to strengthen unity of efforts across DOD’s space
portfolio as they seek to streamline authority for acquisitions, establish a
process for prioritizing investments, and develop tools to ensure greater
coordination. However, it is too early to determine if they resolve
fragmentation that exists within DOD and between DOD and the
intelligence community. Moreover, they do not extend to the space
activities across the government.

In addition, according to OMB, the administration has taken several steps
to enhance the coordination of space activities among and between civil
and national security agencies including (1) conducting Interagency
Policy Committee meetings on government-wide space-related issues; (2)
creating and supporting agency-led coordination mechanisms for specific
space topics or programs where appropriate; and (3) tasking agencies to
develop joint plans and responses for addressing cross-sector space
challenges, such as improving U.S. launch infrastructure or enhancing
space situational awareness. While these steps may help increase
coordination among agencies, they do not appear to set funding priorities
and it is unclear whether they will help to resolve the conflicts between
agencies that have lead to management and acquisition problems.

GAO has not made recommendations with regard to broader
governmentwide leadership for space, but in previous reports GAO has
recommended a number of changes to the leadership of specific sectors
of the space community, including (1) assigning a single authority to
oversee the development of the overall GPS capability, with authority to
ensure DOD space, ground control, and user equipment are
synchronized to the maximum extent practicable and (2) increasing
coordination of launch vehicle acquisitions across federal agencies in
order to increase efficiencies and cost savings. Several congressional
commissions and other studies have also made recommendations for
strengthening national security space authorities, including establishing a
new Under Secretary of Defense for Space who would have authority
over the planning and execution of the national security space program
and a senior interagency group to focus on policy formulation and
coordination of space activities. But these commissions did not look at the
need for an authority that would also cover civilian agencies with space
responsibilities.




Page 153                      GAO-12-342SP Duplication, Overlap, and Fragmentation
Actions Needed and       GAO and others have recommended a number of changes to the
                         leadership of the space community and have consistently reported that a
Potential Financial or   lack of strong, centralized leadership has led to inefficiencies and other
Other Benefits           problems. But the question still looms as to what office or leadership
                         structure above the department level would be effective and appropriate
                         for coordinating all U.S. government space programs and setting
                         priorities. Working with the National Security Council, the Director of
                         Office of Management and Budget should

                         xassess whether a construct analogous to the Defense Space Council
                              could be applied government wide or if a separate organization
                              should be established that would have greater authority for setting
                              priorities than individual departments and agencies as well as
                              responsibility for strategic planning. Given the complexity, diversity,
                              and sensitivity of the many organizations involved in space and long-
                              standing resistance to centralized leadership structures or even
                              partnerships among agencies, we realize such an action could not be
                              implemented quickly and would require a phased implementation
                              approach.

                         Having a single authority responsible for ensuring coordination and
                         setting priorities between U.S. space entities could have numerous
                         benefits. It could reduce the fragmentation of authority and leadership in
                         the space community and thereby help ensure coordination between
                         multiple players, and improve synchronization of space program
                         acquisitions to help avoid the past problems of interdependent capabilities
                         coming online at different times. In addition, this authority would be in a
                         better position than any one department or agency to determine the best
                         use of limited funds and resources by more effectively prioritizing the
                         most highly needed space programs, and would have the authority to
                         reduce duplication across programs. While the Defense Space Council
                         could fill the role as a single high level authority within DOD, this same
                         construct could be used, such as a National Space Council, to coordinate
                         and set priorities across the government.



Agency Comments          DOD has expressed mixed views on the need for clearer lines of authority
                         for space. For example, DOD agreed with GAO’s recommendation in
and GAO’s Evaluation     April 2009 to appoint a single authority to oversee the development of the
                         GPS system, including space, ground control, and user equipment
                         assets, to ensure that the program is well executed, resourced, and that
                         potential disruptions are minimized. But it asserted that GPS’s current
                         leadership structure was sufficient. Before GAO issued its May 2011
                         report on space situational awareness, the administration issued the new
                         National Space Policy, which has the potential to resolve concerns GAO
                         identified with leadership. In responding to this assessment, DOD
                         acknowledged the need for a cleaner space and acquisition leadership
                         structure. DOD officials believe that space acquisition programs have
                         turned a corner and are successfully deploying far more capable systems
                         in almost all major space mission areas. NASA and the National
                         Reconnaissance Office did not have comments on this assessment.



                         Page 154                       GAO-12-342SP Duplication, Overlap, and Fragmentation
                    The Office of Management and Budget agreed that coordinating space
                    activities across the U.S. government has been and continues to be a
                    major challenge, but is concerned that the GAO recommendation would
                    add an extra layer of space bureaucracy on top of ongoing coordination
                    efforts.OMB acknowledges the potential for improved coordination, but is
                    concerned about additional costs and possible confusion regarding roles
                    and authorities among the existing mechanisms. GAO believes that the
                    recommendation is sufficiently flexible to allow for an implementation
                    approach that would address these concerns. As part of GAO’s routine
                    audit work, GAO will continue to track agency actions to address these
                    recommendations and report to Congress.



How GAO Conducted   The information contained in this analysis is based on findings from the
                    products listed in the related GAO products section. In previous work to
Its Work            assess DOD’s Space Situational Awareness efforts to determine the
                    extent to which an integrated approach was being used to manage and
                    oversee efforts to develop Space Situational Awareness capabilities,
                    GAO analyzed documents and interviewed officials from 30 organizations
                    within the Space Situational Awareness stakeholder community—users
                    and providers of Space Situational Awareness information represented by
                    DOD, the intelligence community, civil government agencies, and
                    commercial industry—to examine (1) management and oversight efforts
                    to develop, acquire, and manage Space Situational Awareness
                    capabilities; and (2) planning activities for Space Situational Awareness
                    architectures, investments, and requirements. GAO also analyzed
                    documentation and interviewed officials from DOD and commercial
                    industry to assess the benefits and challenges relating to DOD’s
                    implementation of its Space Situational Awareness-sharing program
                    (formerly the Commercial and Foreign Entities program) under which
                    Space Situational Awareness information is to be shared among DOD,
                    industry, and foreign entities for collision avoidance purposes. In previous
                    work to assess GPS coordination efforts, GAO reviewed recent
                    documentation regarding the delivery of capabilities and equipment and
                    assessed the level of synchronization among satellites, ground systems,
                    and user equipment.



Related GAO         Space Acquisitions: Development and Oversight Challenges in Delivering
                    Improved Space Situational Awareness Capabilities. GAO-11-545.
Products            Washington, D.C.: May 27, 2011.

                    Space Acquisitions: DOD Delivering New Generations of Satellites, but
                    Space System Acquisition Challenges Remain. GAO-11-590T.
                    Washington, D.C.: May 11, 2011.

                    Defense Acquisitions: Assessments of Selected Weapon Programs.
                    GAO-11-233SP. Washington, D.C.: March 29, 2011.




                    Page 155                      GAO-12-342SP Duplication, Overlap, and Fragmentation
                      Space Acquisitions: DOD Poised to Enhance Space Capabilities, but
                      Persistent Challenges Remain in Developing Space Systems.
                      GAO-10-447T. Washington, D.C.: March 10, 2010.

                      Global Positioning System: Challenges in Sustaining and Upgrading
                      Capabilities Persist. GAO-10-636. Washington, D.C.: September 15,
                      2010.

                      Defense Acquisitions: Challenges in Aligning Space System
                      Components. GAO-10-55. Washington, D.C.: October 29, 2009.

                      Polar-Orbiting Satellites: With Costs Increasing and Data Continuity at
                      Risk, Improvements Needed in Tri-agency Decision Making.
                      GAO-09-772T. Washington, D.C.: June 17, 2009.

                      Global Positioning System: Significant Challenges in Sustaining and
                      Upgrading Widely Used Capabilities. GAO-09-325. Washington, D.C.:
                      April 30, 2009.

                      DOD is Making progress in Adopting Best Practices for the
                      Transformational Satellite Communications System and Space Radar but
                      Still Faces Challenges. GAO-07-1029R. Washington, D.C.: August 2,
                      2007.



Contact Information   For additional information about this area, contact Cristina Chaplain at
                      (202) 512-4841 or chaplainc@gao.gov.




                      Page 156                      GAO-12-342SP Duplication, Overlap, and Fragmentation
23. Space Launch Contract Costs
Increased collaboration between the Department of Defense and National Aeronautics and Space
Administration could reduce launch contracting duplication.



Why This Area Is                  The Department of Defense (DOD), the intelligence community, the
                                  National Aeronautics and Space Administration (NASA), and other
Important                         government agencies rely on commercial domestic launch service
                                  providers to place their satellites into orbit. National policy generally
                                  requires that U.S. government payloads, including satellites, be launched
                                  on U.S. manufactured launch vehicles. National security space payloads,
                                  comprised of DOD, including National Reconnaissance Office (NRO) 1
                                  payloads, are primarily launched by the main U.S. launch provider, the
                                  United Launch Alliance (ULA), on its Delta IV and Atlas V vehicles. NASA
                                  payloads are launched on a variety of launch vehicles from multiple
                                  launch providers, including ULA. In fiscal year 2012, DOD plans to
                                  complete nine launches on Delta IV and Atlas V launch vehicles, at a cost
                                  of roughly about $1.8 billion. Similarly, in fiscal year 2012, NASA plans to
                                  complete two launches on ULA’s Atlas V launch vehicle, at a cost of
                                  about $370 million. The government plans to spend about $15 billion on
                                  ULA’s launch services from fiscal year 2013 through 2017. In the past few
                                  years, ULA’s launch costs have risen, but there are currently no
                                  alternative launch vehicles in the commercial sector that have been
                                  certified to launch the larger national security satellites. Meanwhile,
                                  NASA, which has more options for launch providers due to the greater
                                  diversity of its space programs, tolerance for launch risk, and cooperation
                                  with international partners, typically uses ULA to launch a few satellites
                                  each year—averaging about two annually in the past few years.

                                  DOD is considering a new space launch acquisition strategy beginning in
                                  2013 which will likely allow DOD to procure a set number of launch
                                  vehicles from ULA each year in an effort to control cost increases and
                                  stabilize the launch industrial base. However, awards of launch services
                                  from ULA by NASA—which are negotiated in a separate acquisition
                                  process with a different acquisition office—were not directly included in
                                  DOD’s planned procurements.



What GAO Found                    Space launch acquisition processes for NASA and DOD are not formally
                                  coordinated, duplicate one another, and may not fully leverage the
                                  government’s investment because the government is not acting as a
                                  single buyer. As GAO reported in September 2008 and September 2011,


                                  1
                                   The NRO is responsible for research and development, acquisition, launch, deployment,
                                  and operation of overhead reconnaissance systems, and related data-processing facilities
                                  to collect intelligence and information to support national and DOD mission and other
                                  United States Government needs.




                                  Page 157                           GAO-12-342SP Duplication, Overlap, and Fragmentation
opportunities exist to reduce duplication in government contracting for
launch services by jointly negotiating launch acquisitions, which could
reduce the number of contracts and potentially save time and money. The
U.S. National Space Policy 2 directs agencies to work jointly to acquire
space launch services, and a recently signed memorandum of
understanding may help facilitate communication on launch acquisitions.
However, the National Space Policy does not specifically direct agencies
to jointly negotiate for launch services, and the changes to coordination
resulting from the memorandum of understanding do not appear to be
significant enough to decrease the duplication in how DOD and NASA
procure their launch services and to leverage the combined buying power
of DOD and NASA.

Currently, the Air Force’s Launch and Range Systems Directorate
ensures DOD’s access to space. The directorate develops and acquires
expendable launch systems by awarding contracts to commercial firms;
manages the launch integration, mission assurance, and launch
campaigns; and provides range systems for space launch operations. In
the past, launch services had been procured one at a time as needed.
However, DOD is considering a new acquisition strategy, slated to begin
in 2013, to provide ULA with a minimum order quantity for each year from
DOD without the need to negotiate a new launch vehicle contract for each
launch. This new strategy will cover DOD launches, but will not include
NASA launches, which are negotiated separately by NASA under a
different contract.

NASA’s Launch Services II contract is an indefinite delivery, indefinite
quantity 3 contract with four launch service providers—Lockheed Martin,
Orbital Sciences, Space Exploration Technologies, and ULA. When a
NASA mission needs to acquire launch services, the NASA Launch
Service Program issues orders for launch services and generally provides
the companies a fair opportunity to compete for each order under NASA’s
Launch Services II contract. According to launch service program
officials, competition between the launch service providers is intended to
generate lower prices, but ULA is currently the only provider of
intermediate class launch vehicles.

Since DOD and NASA negotiate for launch services separately, the
current space launch acquisition environment may not leverage the
government’s overall negotiating power to get the best prices for launch
services from ULA. There is also no current way to ensure that the
government is not paying twice for launch overhead costs through the



2
 National Space Policy of the United States of America, 28 June 2010.
3
 An indefinite delivery, indefinite quantity contract is a type of contract that provides for an
indefinite quantity, within stated limits, of supplies or services during a fixed period of time
under which the government places orders for individual requirements. Federal Acquisition
Regulation (FAR), § 16.504(a).




Page 158                              GAO-12-342SP Duplication, Overlap, and Fragmentation
separate acquisition processes. Recently, DOD, the NRO, and NASA
signed a memorandum of understanding outlining future cooperation in
space launch acquisitions. In this agreement, DOD agreed to acquire five
launch vehicle common booster cores 4 per year for the next 5 years, and
the NRO agreed to procure a minimum of three each year for the next 5
years. This large acquisition was intended to help control launch vehicle
costs and stabilize production of launch vehicles. However, the
agreement did not include a commitment from NASA to procure a
minimum amount of boosters or services per year, though NASA will
continue using its Launch Services II contract to procure launch services
on the Atlas V launch vehicle from ULA separately from DOD’s negotiated
acquisition. NASA officials believe that they have been successful at
awarding contracts for launch services through their separate acquisition
process. Since NASA has a “most favored customer” contractual clause
on its contracts with ULA to ensure that it does not pay a higher price for
standard launch services than the lowest price charged to other ULA
commercial or government customers, they do not have a strong
incentive to cooperate in these procurements. Though this approach
minimizes NASA’s launch vehicle costs, it may not necessarily ensure the
best price for the overall government nor does it eliminate the potential for
redundant or unnecessary overhead costs.

Reducing duplication in awarding contracts for space launch services is
further hindered, in part, due to the lack of a governmentwide policy for
space launch services acquisitions. Currently, in addition to launch
services procurements, numerous federal agencies have responsibility for
space activities, including the Federal Aviation Administration’s oversight
of commercial space launches; NASA’s scientific and exploration space
activities; the DOD’s national security space launches; the State
Department’s involvement in international trade issues; and the
Department of Commerce’s advocacy and promotion of the industry.
Current National Space Policy broadly states a goal to energize the
competitive domestic space industries, to include space launch, and to
enhance capabilities for assured access to space. A governmentwide
launch policy could more specifically clarify the overall government’s
priorities in developing and introducing new launch providers and could
establish guidance for cooperation on launch services procurements
between agencies. It could also identify and fill gaps in federal policy
concerning the commercial space launch industry, according to senior
Federal Aviation Administration and Department of Commerce officials.

According to the National Academy of Sciences, aligning the strategies of
the various civil and national security space agencies will address many
current issues arising from or exacerbated by the current uncoordinated,
overlapping, and unilateral strategies. According to the academy, a


4
 The booster core is the main body of a launch vehicle. ULA uses common booster cores
to build all of the Atlas V and Delta IV launch vehicles. Medium and intermediate launch
vehicles use one core each, while the Delta IV Heavy launch vehicle requires three.




Page 159                           GAO-12-342SP Duplication, Overlap, and Fragmentation
                         process of alignment offers the opportunity to leverage resources from
                         various agencies to address such shared challenges as the diminished
                         space industrial base, the dwindling technical workforce, and reduced
                         funding levels. According to senior Federal Aviation Administration and
                         Department of Commerce officials, the need for an overall U.S. space
                         launch policy, which includes commercial space launches, was being
                         discussed within the Department of Transportation and across other
                         departments as part of the administration’s review of national space
                         activities, but the development of a national policy had not yet begun.
                         Guidance on launch acquisitions will, however, be included in the updated
                         National Space Transportation Policy which is currently under
                         development.



Actions Needed and       DOD, NRO, and NASA are taking steps to outline responsibilities on
                         space launch services acquisitions through their recently signed
Potential Financial or   memorandum of understanding. However, there are opportunities for the
Other Benefits           government to act as a single buyer to further reduce duplication in
                         acquiring launch services. Specifically, the Office of Management and
                         Budget should

                         •   assess and adopt mechanisms to ensure formal coordination of the
                             DOD and NASA acquisition processes for awarding launch services
                             contracts with an eye toward leveraging the government's buying
                             power and ensuring that launch prices are competitive for all U.S.
                             government customers; and

                         •   determine whether the government is paying twice for any overhead
                             costs, and if duplication is found, develop a way to ensure that the
                             government does not pay more than once for overhead costs through
                             separate acquisition processes.



Agency Comments          In September 2011, GAO recommended that DOD examine how broader
                         launch issues, such as greater coordination across federal agencies, can
and GAO’s Evaluation     be factored into future launch acquisitions to increase efficiencies and
                         cost savings. DOD concurred with this recommendation. In responding to
                         this paper on duplication in launch contracting, NASA agreed that the
                         goal of improving efficiency and maximizing the government’s buying
                         power for intermediate launch vehicles is worthy, but believes that it is
                         currently working with DOD in such a way as to achieve this goal while
                         still allowing each agency to perform its assigned space-related
                         responsibilities. GAO would encourage NASA to continue its coordination
                         with DOD. Technical comments from NASA have been incorporated as
                         appropriate.

                         The Office of Management and Budget agrees that clear benefits can be
                         gained from avoiding unnecessary contracting duplication, and points out
                         that this and prior administrations have taken steps to consolidate launch
                         services. OMB also cites this administration’s current effort to develop an
                         updated National Space Transportation Policy, which will include



                         Page 160                      GAO-12-342SP Duplication, Overlap, and Fragmentation
                      guidance on launch acquisition. OMB believes that the flexibility of
                      separate acquisition approaches can be beneficial and that the unique
                      mission requirements of DOD and NASA may not be met most efficiently
                      by a “one size fits all” contracting approach. In addressing OMB, DOD,
                      and NASA comments, GAO modified its original suggestion that DOD and
                      NASA consolidate their acquisition processes, to a suggestion where
                      these agencies enhance their coordination of launch services. GAO
                      continues to believe that greater coordination efforts could help to
                      leverage the government’s buying power, in addition to the specific
                      actions outlined above. For example, by acting as a single buyer, the
                      government can better leverage its requirements for multi-year purchases
                      of launch vehicles, and jointly negotiate launch acquisitions to reduce the
                      number of awarded launch service contracts.

                      As part of its routine audit work, GAO will track the extent to which
                      progress has been made to address the identified actions and report to
                      Congress. All written comments are reprinted in appendix IV.



How GAO Conducted     The information contained in this analysis is based on findings from the
                      products listed in the related GAO products section. In addition, GAO
Its Work              reviewed the March 2011 launch vehicle agreement by the Secretary of
                      the Air Force, Director of the National Reconnaissance Office, and the
                      Administrator of NASA. To identify important launch issues with potential
                      bearing on current and future government launch acquisitions, GAO
                      reviewed DOD launch studies and interviewed study leaders or
                      participants in three of the five studies; GAO analyzed historical launch
                      data and expected launch vehicle demand; reviewed other relevant
                      government and industry reports; interviewed DOD, NASA, and
                      contractor officials; and reviewed information from NRO.



Related GAO           Evolved Expendable Launch Vehicle: DOD Needs to Ensure New
                      Acquisition Strategy is Based on Sufficient Information. GAO-11-641.
Products              Washington, D.C.: September 15, 2011.

                      Commercial Launch Vehicles: NASA Taking Measures to Manage Delays
                      and Risks. GAO-11-692T. Washington, D.C.: May 26, 2011.

                      Commercial Space Transportation: Industry Trends and Key Issues
                      Affecting Federal Oversight and International Competitiveness.
                      GAO-11-629T. Washington, D.C.: May 5, 2011.

                      Space Acquisitions: Uncertainties in the Evolved Expendable Launch
                      Vehicle Program Pose Management and Oversight Challenges.
                      GAO-08-1039. Washington, D.C.: September 26, 2008.



Contact Information   For additional information about this area, contact Cristina Chaplain at
                      (202) 512-4841 or chaplainc@gao.gov, or Gerald Dillingham, Ph.D. at
                      (202) 512-2834 or dillinghamg@gao.gov.


                      Page 161                      GAO-12-342SP Duplication, Overlap, and Fragmentation
24. Diesel Emissions
Fourteen grant and loan programs at the Department of Energy, Department of Transportation, and the
Environmental Protection Agency and three tax expenditures fund activities that have the effect of reducing
mobile source diesel emissions; enhanced collaboration and performance measurement could improve these
fragmented and overlapping programs.

Why This Area Is                     Diesel engines play a vital role in public transportation, construction,
                                     agriculture, and shipping, largely because they are more durable and
Important                            reliable than gasoline-powered engines, as well as 25 to 35 percent more
                                     energy efficient. However, exhaust from diesel engines is a pervasive and
                                     harmful form of air pollution. Diesel exhaust contains air pollutants such as
                                     nitrogen oxides and particulate matter, as well as other harmful substances
                                     that affect public health and the environment. 1 Since 1984, the
                                     Environmental Protection Agency (EPA) has implemented standards that
                                     have progressively lowered the maximum allowable amount of certain
                                     pollutants, including nitrogen oxides and particulate matter, from new diesel
                                     engines by more than 98 percent. However, the most stringent standards
                                     generally apply to diesel engines and vehicles built after 2007, and EPA
                                     estimates that over 20 million older mobile sources of diesel emissions—13
                                     million on-highway vehicles, 7 million non-road engines, and 47,000
                                     locomotive and marine engines—continue to emit higher amounts of
                                     harmful pollutants than newer engines. 2 Programs at the Department of
                                     Energy (Energy), the Department of Transportation (DOT), and EPA
                                     address mobile source diesel emissions from these older sources by
                                     providing grants and loans for projects that, among other things, retrofit,
                                     rebuild, or replace existing diesel engines or vehicles; install devices that
                                     reduce idling of diesel engines; and convert diesel engines and vehicles to
                                     use cleaner fuels, such as natural gas or propane. From fiscal years 2007
                                     through 2011, these programs obligated at least $1.4 billion for such
                                     projects. 3 In addition, three tax expenditures, which resulted in at least
                                     $510 million in forgone federal tax revenue in fiscal year 2010, provide
                                     incentives to reduce mobile source diesel emissions.



What GAO Found                       As GAO reported in February 2012, federal grant and loan funding for
                                     activities that reduce mobile source diesel emissions is fragmented across
                                     14 programs at Energy, DOT, and EPA. Thirteen of these programs
                                     provide grants, and 1 program—DOT’s State Infrastructure Banks



                                     1
                                      Nitrogen oxides are regulated pollutants commonly known as NOx that, among other
                                     things, contribute to the formation of ozone. Particulate matter is an ubiquitous form of air
                                     pollution commonly referred to as soot.
                                     2
                                      Non-road engines are those used in machines, such as construction equipment,
                                     agricultural equipment, and airport service vehicles.
                                     3
                                      The American Recovery and Reinvestment Act of 2009 provided about $870 million of
                                     this funding. All dollar amounts reported in this analysis are in nominal dollars.




                                     Page 162                              GAO-12-342SP Duplication, Overlap, and Fragmentation
                                                         program—provides loans. 4 Of the 14 programs, 1—EPA’s Diesel
                                                         Emissions Reduction Act program—has a specific purpose of reducing
                                                         mobile source diesel emissions. The remaining 13 programs focus on other
                                                         goals or purposes, such as supporting energy efficiency projects or
                                                         reducing petroleum use. In addition to fragmentation across three
                                                         agencies, each of the 14 programs overlaps with at least 1 other program
                                                         in the specific activities they fund, the program goals, or the eligible
                                                         recipients of funding (see fig. below).

Overlapping Mobile Source Diesel Emissions Reduction Activities, Goals, and Eligible Recipients, by Agency and Program

                                                                             Activities                                                                                             Goals                                                                            Eligible recipients




                                                                                                           Reduce vehicle idling




                                                                                                                                                                         areas not meeting air




                                                                                                                                                                                                                                                                                                                  Federally recognized


                                                                                                                                                                                                                                                                                                                                         Private or non-profit
                                                                                                                                                                         Reduce pollution in




                                                                                                                                                                                                                                                         Local governments
                                                                                                                                                                                                                                     State governments




                                                                                                                                                                                                                                                                             Land management
                                                                                      Replace vehicle or




                                                                                                                                                      Reduce emissions
                                                                 Rebuild vehicle or
                                           Retrofit vehicle or




                                                                                                                                                                         quality standards




                                                                                                                                                                                                                                                                                               Transit agencies
                                                                                                                                   Use cleaner fuel




                                                                                                                                                                                                                   Reduce fuel use
                                                                                                                                                                                                 Increase energy




                                                                                                                                                                                                                                                                                                                                         organizations
                                                                                                                                                                                                 efficiency




                                                                                                                                                                                                                                                                             agencies
                                           engine


                                                                 engine


                                                                                      engine




                                                                                                                                                                                                                                                                                                                  tribes
Agency/Program
Energy
Clean Cities                                    ●                                          ●                ●                       ●                                                                ●              ●                 ●                   ●                      ●              ●                       ●                      ●
Energy Efficiency and Conservation Block
                                                ●                     ●                    ●                ●                       ●                  ●                                             ●                                ●                   ●                                                             ●
Grant
State Energy Program                            ●                     ●                    ●                ●                       ●                                                                ●              ●                 ●
      a
DOT
Federal Aviation Administration
Voluntary Airport Low Emissions                 ●                                          ●                                        ●                  ●                        ●                                                     ●                   ●
Federal Highway Administration
Congestion Mitigation and Air Quality
                                                ●                     ●                    ●                ●                       ●                                           ●                                                     ●                   ●                                     ●
Improvement
Ferry Boat Discretionary                        ●                     ●                    ●                                        ●                                                                                                 ●                   ●                                                                                    ●
State Infrastructure Banks                      ●                     ●                    ●                ●                       ●                                                                                                 ●
Federal Transit Administration
Bus and Bus Facilities                          ●                     ●                    ●                                        ●                                                                               ●                 ●                   ●                                     ●                       ●
Clean Fuels Grant                               ●                     ●                    ●                ●                       ●                  ●                        ●                    ●              ●                 ●                   ●                                     ●
National Fuel Cell Bus Technology
                                                                                           ●                ●                       ●                  ●                                             ●              ●                                                                                                                          ●
Development
Transit in Parks                                ●                     ●                    ●                ●                       ●                  ●                                                                              ●                   ●                      ●              ●                       ●                      ●
Transit Investments in Greenhouse Gas
                                                ●                     ●                    ●                ●                       ●                  ●                                             ●              ●                 ●                                                         ●                       ●
and Energy Reductionb
Urbanized Area Formula Grants                   ●                     ●                    ●                ●                       ●                                                                               ●                 ●                   ●                                     ●
EPA
Diesel Emissions Reduction Act Program          ●                     ●                    ●                ●                       ●                  ●                                                                              ●                   ●                                     ●                       ●                      ●
                                                         Source: GAO analysis of Energy, DOT, and EPA documents and interviews.
                                                         a
                                                             In 2011, GAO reported that fragmentation of surface transportation programs led to inefficiencies.
                                                         b
                                                          The American Recovery and Reinvestment Act of 2009 authorized this program, and the program
                                                         received funding through fiscal year 2011. The program did not receive funding for fiscal year 2012 in
                                                         the relevant appropriations act.



                                                         4
                                                          Under DOT’s State Infrastructure Banks program, states may use allocated federal
                                                         transportation funds to capitalize state infrastructure banks, which in turn provide loans
                                                         and other nongrant financial assistance to eligible projects.




                                                         Page 163                                                                                                               GAO-12-342SP Duplication, Overlap, and Fragmentation
In addition, GAO identified three tax expenditures—biodiesel producer tax
credits, a diesel fuel emulsion excise tax credit, and an excise tax
exemption for idling reduction devices—that provide incentives for owners
and operators of diesel engines and vehicles to reduce emissions. 5 GAO
found overlap among the qualifying activities for the excise tax exemption
for certain vehicle idling reduction devices and programs that fund idling
reduction activities because the excise tax exemption and these
programs all provide incentives to use idle reduction devices to reduce
diesel emissions. According to Department of the Treasury estimates, in
fiscal year 2010, the biodiesel tax credits resulted in $510 million in
forgone federal tax revenue. 6 The Department of the Treasury estimates
did not include forgone revenue from the diesel fuel emulsion excise tax
credit or the excise tax exemption for idling reduction devices because
the department does not report estimates for tax provisions that result in
forgone excise tax only.

GAO also identified several instances of duplication where more than one
program provided grant or loan funding to the same recipient for the same
type of activities. 7 In one case, a state transportation agency received
$5.4 million from DOT’s Transit Investments in Greenhouse Gas
Emissions Reduction program to, among other things, upgrade 37 diesel
buses to hybrid diesel-electric buses, $3.5 million from DOT’s Congestion
Mitigation and Air Quality Improvement program to replace diesel buses
with four hybrid diesel-electric buses, and $2.3 million from DOT’s Clean
Fuels Grants program to replace four diesel buses with hybrid electric
buses. In another case, a nonprofit organization received $1.1 million
from EPA’s Diesel Emissions Reduction Act program to install emission
reduction and idle reduction technologies on 1,700 trucks, as well as $5.6
million from a state infrastructure bank established under DOT’s program
to equip trucks and truck fleets with emission control and idle reduction
devices.

Even with duplication among the programs, several factors make it
difficult to precisely determine whether unnecessary duplication exists.
First, when different programs fund the same diesel emissions reduction
activities, it is not necessarily wasteful. For example, a transit agency
could use funds from two different programs to replace two separate
fleets of aging diesel buses. Second, grant recipients may leverage
funding from more than one program to support the full cost of diesel



5
 Biodiesel fuel is an alternative to petroleum-based transportation fuel. U.S. biodiesel is
made from soybeans and other plant oils, such as cottonseed and canola; animal fats,
such as beef tallow, pork lard, and poultry fat; and recycled cooking oils. A diesel fuel
emulsion is a mixture of diesel, water, and additives.
6
 The biodiesel tax credits include an income tax credit, as well as an excise tax credit for
the production and use of biodiesel.
7
 GAO did not determine whether the federal agencies that provided this funding were
aware of each other’s actions.




Page 164                             GAO-12-342SP Duplication, Overlap, and Fragmentation
emissions reduction projects. In some cases, grant recipients have used
funding from multiple agencies, in addition to local matching funds, to
support the cost of large projects that include multiple diesel emissions
reduction activities. GAO previously reported that leveraging is generally
recognized favorably by public and private sector officials, but leveraging
funds from multiple agencies can be inefficient because agencies may
incur costs for duplicative administrative activities. 8 Third, agencies were
often unable to provide information necessary to determine whether and
to what extent unnecessary duplication exists among the programs. For
example, several agencies reported that they do not track costs for
administrative functions at the program level.

The overall effectiveness of federal funding for activities that reduce
mobile source diesel emissions may be limited because agencies
generally do not collaborate. According to Energy, DOT, and EPA
officials, the three agencies consult one another on broad issues such as
available emissions reduction technology or emissions standards, but
these efforts do not involve collaboration on diesel-related issues. This is
partially due to the differing purposes and goals of each program, which
often do not directly relate to reducing diesel emissions. However, GAO
previously reported that, although federal programs have been designed
for different purposes or targeted for different population groups,
coordination among programs with related responsibilities is essential to
efficiently and effectively meet national concerns. 9

GAO also previously reported that uncoordinated program efforts can
waste scarce funds, confuse and frustrate program customers, and limit
the overall effectiveness of the federal effort. A focus on results as
envisioned by the Government Performance and Results Act implies that
federal programs contributing to the same or similar results should closely
coordinate to ensure that goals are consistent, and, as appropriate,
program efforts are mutually reinforcing. 10 Also, the GPRA Modernization
Act of 2010 established a new, cross-cutting, and integrated framework
for achieving results and improving government performance. 11

In addition, few agencies collect performance information on their diesel
emissions reduction activities. Specifically, EPA collects performance
information on the amount and type of diesel emissions reductions each
project achieves, Energy’s three programs and three of DOT’s programs
collect some performance information related to diesel emissions


8
 GAO, Leveraging Federal Funds for Housing, Community, and Economic Development,
GAO-07-768R (Washington, D.C.: May 25, 2007).
9
 GAO, The Government Performance and Results Act: 1997 Governmentwide
Implementation Will Be Uneven, GAO/GGD-97-109 (Washington, D.C.: June 1997).
10
  The Government Performance and Results Act (GPRA) of 1993, Pub. L. No. 103-62
(1993).
11
    Pub. L. No. 111-352 (2011).




Page 165                          GAO-12-342SP Duplication, Overlap, and Fragmentation
                         reductions, and the remaining seven DOT programs do not collect
                         performance information related to diesel emissions. This is partially
                         because 13 of the 14 programs that fund these activities have purposes
                         other than reducing diesel emissions. However, the information that
                         would result from enhanced collaboration and outcome measurement is
                         needed to determine if fragmentation, overlap, and duplication have
                         resulted in ineffective or inefficient programs.



Actions Needed and       To help ensure the effectiveness and accountability of federal funding that
                         reduces diesel emissions, the Secretaries of Energy and DOT as well as
Potential Financial or   the Administrator of EPA should
Other Benefits           ‡consistent with existing law, establish a strategy for collaboration in
                              reducing mobile source diesel emissions.

                         This strategy should help agencies (1) determine the performance
                         measures needed, as appropriate, to assess the collective results of
                         federal funding for activities that reduce diesel emissions and (2) identify
                         and address any unnecessary duplication, including the effects of the
                         relevant tax expenditures, among other things. In undertaking this effort,
                         agencies could also assess opportunities for administrative cost savings.
                         GAO will monitor the agencies’ efforts on these issues.



Agency Comments          GAO provided a draft of this report section to Energy, DOT, and EPA.

and GAO’s Evaluation     Energy provided technical comments, which were incorporated as
                         appropriate. In its comments, Energy questioned several of the findings
                         but agreed with the action needed that GAO identified. Specifically,
                         Energy stated that the findings mischaracterize the agency as having a
                         statutory responsibility for diesel emissions reductions. The findings do
                         not contain such a statement. Rather, they identify 14 programs, including
                         3 Energy programs, that fund activities with the effect of reducing diesel
                         emissions and state that programs with related responsibilities should
                         coordinate their efforts. Energy also stated that the findings
                         mischaracterize Energy as not collaborating with other government
                         agencies. The findings state that Energy collaborates with other agencies
                         on broad issues but does not collaborate on diesel-related issues. In
                         addition, Energy stated that the findings mischaracterize the agency as
                         sharing redundant national goals with DOT and EPA. The findings do not
                         discuss Energy's national goals, their relationship to those of other
                         agencies, or whether they are redundant. Rather, the findings (1) focus
                         on Energy programs that fund activities that result in diesel emissions
                         reductions and (2) demonstrate that these programs share similar goals
                         with DOT and EPA programs that fund the same activities. Specifically,
                         each of these programs shares some goals, such as reducing emissions,
                         increasing energy efficiency, and reducing fuel use.

                         DOT did not provide comments on the draft findings. In its comments on a
                         draft of the February 2012 report, DOT questioned several of the report's


                         Page 166                        GAO-12-342SP Duplication, Overlap, and Fragmentation
                    key findings and the report's recommendation that Energy, DOT, and
                    EPA establish a strategy for collaboration among their programs that
                    reduce mobile source diesel emissions. Specifically, DOT stated that
                    GAO inaccurately described the Federal Transit Administration’s
                    programs as funding diesel emissions reduction activities. The report
                    identifies Federal Transit Administration activities that reduce diesel
                    emissions, including replacing existing diesel vehicles and installing
                    devices that reduce idling of diesel engines, and identifies six Federal
                    Transit Administration programs that fund these same activities. In
                    addition, DOT questioned the evidence underlying our finding of
                    fragmentation among the federal programs within our review. DOT stated
                    that GAO identified independent programs with varying objectives that, in
                    some cases, include similar activities. As GAO reported, fragmentation
                    occurs when more than one federal agency, or more than one
                    organization within an agency, is involved in the same broad area of
                    national need. The report clearly identifies fragmentation, overlap, and
                    duplication among the 14 federal programs that fund diesel emissions
                    reduction activities. Consistent with our established definition of
                    fragmentation and our evidence, GAO stands by its finding that federal
                    grant and loan funding for activities that reduce diesel emissions is
                    fragmented across 14 programs.

                    Regarding GAO’s recommendation that Energy, DOT, and EPA establish
                    a strategy for collaboration among their programs that reduce mobile
                    source diesel emissions, DOT agreed that collaboration can be useful but
                    questioned its usefulness in this context. As GAO reported, while the
                    programs GAO reviewed have been designed for different purposes,
                    coordination among programs with related responsibilities and that fund
                    the same activities is essential to the efficient and effective use of
                    resources. Further, uncoordinated programs can waste scarce funds and
                    limit the overall effectiveness of federal spending. GAO therefore
                    continues to believe that the recommendation is warranted. DOT also
                    stated that the report does not effectively demonstrate that the
                    recommended action will produce cost-effective investments appropriate
                    for DOT that do not potentially duplicate efforts elsewhere in the
                    government. GAO continues to believe that establishing a strategy for
                    collaboration is an appropriate investment that would help ensure the
                    effectiveness and accountability of federal funding for activities that
                    reduce diesel emissions. As the report notes, such a strategy should help
                    agencies identify and address any unnecessary duplication.

                    EPA did not provide specific comments on the draft findings. However, in
                    commenting on a draft of our February 2012 report, EPA stated that it
                    agreed with GAO’s findings and relevant recommendation.



How GAO Conducted   The information contained in this analysis is based on findings from the
                    report listed in the related GAO products section. To determine the total
Its Work            amount of federal funding for mobile source diesel emissions reduction
                    activities in fiscal year 2010, GAO obtained and analyzed funding data
                    from Energy, DOT, and EPA. Appendix III lists the programs GAO


                    Page 167                      GAO-12-342SP Duplication, Overlap, and Fragmentation
                      identified that may have similar or overlapping objectives, provide similar
                      services or be fragmented across government missions. Overlap and
                      fragmentation may not necessarily lead to actual duplication, and some
                      degree of overlap and duplication may be justified.



Related GAO Product   Diesel Pollution: Fragmented Federal Programs that Reduce Mobile
                      Source Emissions Could Be Improved. GAO-12-261. Washington, D.C.:
                      February 7, 2012.



Contact Information   For additional information about this area, contact David C. Trimble at
                      (202) 512-3841 or trimbled@gao.gov.




                      Page 168                      GAO-12-342SP Duplication, Overlap, and Fragmentation
25. Environmental Laboratories
The Environmental Protection Agency needs to revise its overall approach to managing its 37 laboratories to
address potential overlap and fragmentation and more fully leverage its limited resources.



Why This Area Is                    From monitoring air quality and testing drinking water to responding to
                                    environmental disasters, the Environmental Protection Agency’s (EPA)
Important                           laboratory enterprise produces scientific research, technical support, and
                                    analytical services that underpin many of the policies and regulations the
                                    agency implements to protect human health and our nations’
                                    environment. In the present atmosphere of constrained budgets, EPA,
                                    along with its state partners, will need to more effectively use its scientific
                                    and laboratory resources and effectively integrate these activities to
                                    ensure the agency is best positioned to fulfill its core mission, including
                                    responsibilities for responding to a large-scale environmental incident.
                                    EPA’s laboratory enterprise includes 37 laboratories that are housed in
                                    about 170 buildings and facilities located in 30 cities across the nation.



What GAO Found                      As GAO reported in July 2011, EPA has an uncoordinated approach to
                                    managing its laboratory enterprise—including the scientific work,
                                    workforce, and facilities—and identified the potential for missed cost-
                                    savings opportunities, due in part to fragmentation and overlap of
                                    activities. However, GAO was not able to calculate the cost associated
                                    with this potential fragmentation and overlap—or the corresponding
                                    savings from reducing fragmentation and overlap—because EPA did not
                                    have sufficiently complete and reliable operating cost data for its
                                    laboratories. EPA also lacked information on the number of federal and
                                    contract employees working in its 37 laboratories and the related costs
                                    associated with its laboratory workforce. GAO’s report found that EPA’s
                                    uncoordinated approach is due in part to the lack of a top science official
                                    with the responsibility or authority to coordinate, oversee, and make
                                    management decisions regarding major scientific activities throughout the
                                    agency—including the work of all 37 laboratories.

                                    EPA’s laboratories operate under the direction of 15 different senior
                                    officials using 15 different organizational and management structures.
                                    EPA has also not fully addressed recommendations from a 1994
                                    independent evaluation by the MITRE Corporation to consolidate and
                                    realign its laboratory facilities and workforce 1—even though this
                                    evaluation found that the geographic separation of laboratories hampered
                                    their efficiency and technical operations and that consolidation and
                                    realignment could improve planning and coordination issues that have


                                    1
                                     MITRE Corporation, Center for Environment, Resources, and Space, Assessment of the
                                    Scientific and Technical Laboratories and Facilities of the U.S. Environmental Protection
                                    Agency (McLean, Va.: May 1994).




                                    Page 169                            GAO-12-342SP Duplication, Overlap, and Fragmentation
hampered its science and technical community for decades. We found
that these problems are evident today and MITRE’s past
recommendations may still be relevant.

Scientific work. EPA does not have a planning process that integrates and
coordinates scientific work throughout the agency, including potentially
overlapping functions performed by its 37 laboratories. Consequently, EPA
has a limited ability to know if scientific activities are being unintentionally
duplicated among the laboratories or if opportunities exist to collaborate
and share scientific expertise, equipment, and facilities across EPA’s
fragmented laboratory enterprise. For example, many of EPA’s 10 regional
laboratories provide the same or similar types of analytical and technical
support functions, such as routine and specialized testing of air samples. In
addition, the agency’s nine program laboratories provide their respective
program offices 2 with research and analytical services that may overlap
with research and development performed by the Office of Research and
Development’s (ORD) 18 laboratories. For example, an Office of Air and
Radiation program laboratory located in Michigan does emissions testing,
while a separate ORD laboratory located in North Carolina does emissions
testing research.

In addition to potential overlap in the work performed by these two
laboratories, the fragmentation across the laboratory enterprise may fail
to provide the agency with opportunities for laboratories to share subject
matter expertise and scientific equipment. For example, both the Office of
Air and Radiation and ORD laboratories utilize the same kind of
specialized equipment, called truck dynamometers, yet each separately
requested funding in fiscal years 2010 and 2011 that totaled over $4
million to expand or modify their facilities for emissions testing. While the
agency funded only one of the two potentially duplicative requests, the
net result is that the second laboratory’s facility and equipment needs
were not met. In addition to potential lost opportunities to share facilities
and equipment, the agency may also be missing opportunities to share
expertise, such as technical knowledge pertaining to the use of
specialized equipment.

In addition, to support the implementation of both state and federal
environmental statutes, various state agencies and public universities
operate over 70 separate environmental laboratories (see fig. below) that
may perform functions similar to those performed by EPA laboratories.
Similar to the work of some EPA regional laboratories, state
environmental laboratories conduct regular testing of air, water, soil, food,
and other media for signs of contamination. State laboratories also
perform analytical and method development functions that may be similar
to those performed by ORD laboratories. EPA has partnered with some


2
 The four national program offices that operate laboratories are the Office of Air and
Radiation, the Office of Enforcement and Compliance Assurance, the Office of Chemical
Safety and Pollution Prevention, and the Office of Solid Waste and Emergency Response.




Page 170                          GAO-12-342SP Duplication, Overlap, and Fragmentation
                                       state laboratories for specific programs, but to fully leverage these state
                                       scientific resources EPA will first need to integrate and coordinate the
                                       activities of its own laboratories agencywide.

Potential Overlap among Federal and State Environmental Laboratories




                                       Workforce. EPA does not use a comprehensive planning process for
                                       managing its laboratories’ workforce and may be missing opportunities to
                                       work across organizational boundaries to integrate, share, or coordinate
                                       laboratory workforces that perform potentially overlapping functions. For
                                       example, many of the 10 regional laboratories provide the same or similar
                                       core analytical capabilities—including a full range of routine and
                                       specialized chemical and biological testing of air, water, soil, sediment,



                                       Page 171                        GAO-12-342SP Duplication, Overlap, and Fragmentation
                         tissue, and hazardous waste—but each region independently determines
                         and attempts to address its individual workforce needs. EPA also lacks
                         basic demographic information needed to know how many scientific and
                         technical employees it has working in its laboratories, where they are
                         located, what functions they perform, or what specialized skills they may
                         have. In addition, the agency does not have a workload analysis for the
                         laboratories to help determine the optimal numbers and distribution of
                         staff throughout the enterprise. GAO believes that such information is
                         essential for EPA to prepare a comprehensive laboratory workforce plan
                         to achieve the agency’s mission with limited resources.

                         Facilities. EPA manages its laboratory facilities in a way that may fail to
                         achieve operating efficiencies that could be gained by colocating
                         laboratories with overlapping activities and facility needs. EPA manages
                         laboratories on a site-by-site basis and does not make capital
                         improvement or other decisions for each site in the context of all the
                         agency’s laboratory properties. Because decisions regarding laboratory
                         facilities are made independently of one another, opportunities to improve
                         operating efficiencies can be lost. For example, GAO found cases where
                         laboratories that were previously colocated moved into separate space
                         without considering the potential benefits of remaining colocated. In one
                         case, GAO found that the relocation increased some operating costs
                         because the laboratories then had two facility managers and two security
                         contracts and associated personnel because of different requirements for
                         the leased facility.

                         Moreover, EPA lacks sufficiently complete and reliable data to make
                         informed decisions for managing its laboratory facilities. Among other
                         things, EPA lacks reliable information on laboratory usage, which is
                         needed to inform both capital investment and property disposal decisions.
                         For example, EPA does not have reliable data on space utilization
                         because its data are either out of date or not based on objective criteria
                         such as public and commercial space usage benchmarks. Instead, EPA
                         measures laboratory usage on the basis of subjective interviews with
                         local laboratory officials.



Actions Needed and       To improve cohesion and efficiency in the management and operation of
                         EPA’s laboratories, GAO recommended in July 2011 that the
Potential Financial or   Administrator of EPA
Other Benefits           •   ensure that the agency includes alternative approaches for organizing
                             the laboratories’ workforce and infrastructure, including options for
                             sharing and consolidation as part of any future studies of EPA
                             laboratory enterprise, such as the long-term study requested in the
                             President’s fiscal year 2012 budget.

                         To address potentially overlapping laboratory activities and achieve
                         efficiencies by sharing workforce expertise, GAO recommended in July
                         2011 that the Administrator of EPA




                         Page 172                      GAO-12-342SP Duplication, Overlap, and Fragmentation
                       •   establish a top-level science official with the authority and
                           responsibility to coordinate, oversee, and make management
                           decisions regarding major scientific activities throughout the agency,
                           including the work of all program, regional, and Office of Research
                           and Development laboratories;

                       •   develop an overarching issue-based planning process that reflects the
                           collective goals, objectives, and priorities of the laboratories’ scientific
                           activities; and

                       •   develop a comprehensive workforce planning process for all
                           laboratories that is based on reliable workforce data and reflects
                           current and future agency needs in overall number of federal and
                           contract employees, skills, and deployment across all laboratory
                           facilities.

                       To identify opportunities to reduce costs associated with maintaining a
                       footprint of 170 laboratory buildings and facilities that support
                       organizations with potentially overlapping functions, facility, and
                       equipment needs, GAO recommended in July 2011 that the Administrator
                       of EPA

                       •   improve physical infrastructure and real property planning and
                           investment decisions by

                           •      managing individual laboratory facilities as part of an interrelated
                                  portfolio of facilities;

                           •      ensuring that master plans and other facility information are up-to-
                                  date and that analysis of the use of space is based on objective
                                  benchmarks; and

                           •      improving the completeness and reliability of operating cost and
                                  other data needed to manage EPA’s real property and report to
                                  external parties.



Agency Comments        GAO provided a draft of its July 2011 report to EPA for review and
                       comment. EPA generally agreed with GAO’s recommendations. In
and GAO’s Evaluation   November 2011, EPA noted that current efforts to reduce the federal
                       budget deficit require EPA to more effectively use its laboratory enterprise
                       to help ensure that its scientific activities respond to the agency’s highest-
                       priority needs. The agency also acknowledged the demand for sharing
                       facilities and equipment, as well as expertise and human resources. EPA
                       agreed that it should (1) include alternate approaches for organizing the
                       laboratory workforce and infrastructure in any future studies of its
                       laboratories, such as the long-term study for which the agency requested
                       $2 million in the President’s fiscal year 2012 budget; (2) develop an
                       overarching planning process that better reflects the collective goals,
                       objectives, and priorities of its laboratories; (3) develop a comprehensive
                       workforce-planning process for its laboratories; (4) improve physical



                       Page 173                          GAO-12-342SP Duplication, Overlap, and Fragmentation
                      infrastructure and real property planning and investment decisions by
                      managing laboratory facilities as part of an interrelated portfolio of
                      facilities; (5) maintain up-to-date master plans that include objective
                      benchmarks; and (6) improve the completeness and reliability of
                      operating cost and other data needed to manage its real property.

                      In response to our recommendation to establish a top-level science
                      official with the authority and responsibility to coordinate, oversee, and
                      make management decisions regarding major scientific activities
                      throughout the agency, EPA proposed to increase the responsibilities of
                      its science advisor. However, it is not clear that this will fully address the
                      issue and it may ultimately introduce additional challenges for EPA. We
                      note that in 2000, the National Research Council reported “no single
                      individual could reasonably be expected to direct a world-class research
                      program in ORD while also trying to improve scientific practices and
                      performance throughout the rest of the agency,” stating that “these jobs
                      are inherently different.” The Council cautioned that “assigning agency-
                      wide scientific authority to the assistant administrator for ORD might
                      produce a conflict of responsibilities, because many decisions about
                      science in the regulatory programs could affect ORD’s budget or favor
                      ORD’s research over research done elsewhere.” EPA managers need to
                      ensure that there is sustained attention on these issues in order to assure
                      its efforts are carried out and achieve the intended results.

                      GAO also provided a draft of new information included in this report
                      section that was not previously reported in the July 2011 report, such as
                      information pertaining to state environmental laboratories, to EPA for
                      review and comment. EPA provided technical comments, which were
                      incorporated as appropriate.

                      As part of its routine audit work, GAO will track the extent to which progress
                      has been made to address the identified actions and report to Congress.



How GAO Conducted     The information contained in this analysis is based on findings from the
                      products listed in the related GAO products section. Information regarding
Its Work              state environmental laboratories is based on analysis of a May 2011
                      Environmental Council of States Green Report, a 2007 report on the
                      capability and capacity of state environmental laboratories conducted by
                      the Association of Public Health Laboratories, and information obtained
                      from state environmental laboratory websites and EPA’s Environmental
                      Response Laboratory Network website.



Related GAO Product   Environmental Protection Agency: To Better Fulfill Its Mission, EPA
                      Needs a More Coordinated Approach to Managing Its Laboratories.
                      GAO-11-347. Washington, D.C.: July 25, 2011.



Contact Information   For additional information about this area, contact David C. Trimble at
                      (202) 512-3841 or trimbled@gao.gov.


                      Page 174                       GAO-12-342SP Duplication, Overlap, and Fragmentation
26. Green Building
To evaluate the potential for overlap or fragmentation among federal green building initiatives, the Department
of Housing and Urban Development, the Department of Energy, and the Environmental Protection Agency
should lead other federal agencies in collaborating on assessing their investments in more than 90 initiatives to
foster green building in the nonfederal sector.



Why This Area Is                     Economic, environmental, and health concerns have spurred interest in
                                     “green building”—construction and maintenance practices designed to
Important                            make efficient use of resources, reduce environmental problems, and
                                     provide long-term financial and health benefits through lower operating
                                     costs and better indoor air quality. These practices are intended to help
                                     address issues posed by traditional construction and maintenance
                                     practices for buildings. According to the Department of Energy (Energy),
                                     in 2008, buildings in the United States consumed almost 40 percent of the
                                     nation’s energy and emitted about 39 percent of its carbon dioxide, a
                                     greenhouse gas recognized as a major contributor to climate change.
                                     Also, Energy reports that the approximately 30 million to 35 million tons of
                                     construction, renovation, and demolition waste produced annually in the
                                     nation account for about 24 percent of municipal solid waste, although
                                     most of this waste could be recycled. Furthermore, according to the
                                     Environmental Protection Agency (EPA), exposure to indoor air
                                     pollutants, such as radon and formaldehyde, can lead to harmful health
                                     effects, from headaches to respiratory diseases.

                                     In response to concerns about energy consumption, among other things,
                                     federal laws and executive orders have directed agencies to reduce
                                     energy consumption and meet other green building requirements in
                                     federally owned or leased buildings. For buildings not subject to these
                                     requirements because they are owned or leased by private, state, local,
                                     or tribal entities, laws have also directed federal agencies to foster green
                                     building. GAO refers to these entities and their buildings as the
                                     “nonfederal sector,” which accounts for most of the nation’s buildings.



What GAO Found                       As GAO reported in November 2011, there are 94 federal initiatives GAO
                                     identified to foster green building in the nonfederal sector. In conducting
                                     its work, GAO sent questionnaires to the 11 agencies implementing the
                                     initiatives identified. As the table below indicates, 3 of the 11 agencies—
                                     the Department of Housing and Urban Development (HUD), EPA, and
                                     Energy—implement about two-thirds of these initiatives.




                                     Page 175                       GAO-12-342SP Duplication, Overlap, and Fragmentation
Number of Initiatives That Foster Green Building in the Nonfederal Sector, by
Federal Agency

 Agency                                                                         Number of initiatives
 HUD                                                                                                29
 EPA                                                                                                18
 Energy                                                                                             17
 U.S. Department of Agriculture                                                                      8
 Department of the Treasury                                                                          8
 Department of Transportation                                                                        5
 National Institute of Standards and Technology                                                      3
 Department of Education                                                                             2
 Small Business Administration                                                                       2
 Department of Defense                                                                               1
 Department of Health and Human Services                                                             1
 Total                                                                                              94
Source: GAO analysis of agency information and questionnaire responses.



According to GAO’s analysis of agency questionnaire responses, the 94
initiatives GAO identified share the broad goal of fostering green building.
Specifically:

•     All of the initiatives foster at least one of six green building elements
      GAO identified (see table below). Three-quarters of the initiatives
      foster more than one element, and 21 initiatives across seven
      agencies foster all six elements.

Federal Initiatives Fostering Green Building Elements in the Nonfederal Sector

                                                                                Number of initiatives
 Green building element                                                       fostering each element
 Energy conservation or efficiency                                                                  83
 Indoor environmental quality                                                                       60
 Water conservation or efficiency                                                                   51
 Integrated design (collaborative planning at all stages of                                         48
 a building’s life)
 Sustainable siting or location                                                                     43
 Environmental impact of materials                                                                  39
Source: GAO analysis of questionnaire responses.

Note: Numbers total more than 94 because many initiatives foster more than one element.


In addition, GAO identified similarities among these federal initiatives that
indicate potential overlap:

•     Many initiatives provide similar types of assistance, mostly through
      grants (47 initiatives) and technical assistance (45 initiatives) but also
      through other types of assistance, such as loans (9 initiatives), tax
      credits (5 initiatives), and tax deductions (3 initiatives).




Page 176                                           GAO-12-342SP Duplication, Overlap, and Fragmentation
•   Agencies reported that they expect the initiatives to directly benefit
    many of the same types of recipients, such as individual property
    owners or renters (55 initiatives), local governments (49 initiatives),
    businesses (47 initiatives), nonprofit organizations (45 initiatives), and
    state governments (42 initiatives).

The 94 initiatives may vary greatly in the scale of their funding. GAO
requested funding information for all initiatives, but the information
agencies provided was incomplete and unreliable for the purposes of
describing the size of green building initiatives. Agency officials stated
that many of the initiatives are part of broader programs and, as such, the
agencies do not track green building funds separately from other program
activities, even for initiatives that have as a component the direct fostering
of green building. As a result, GAO did not report funding information for
the initiatives in its November 2011 report.

About one-third of the 94 initiatives GAO identified have goals and
performance measures specific to green building and about two-thirds do
not; therefore, the results of most initiatives and their related investments in
green building are unknown. Agency officials reported various reasons for
not having goals and measures, such as challenges in gathering reliable
performance data. As GAO previously reported, leading organizations
commonly define clear goals and related outcomes, measure performance
to gauge progress, and use performance information to assess the results
of their efforts and the related investment. 1 Achieving results for the nation
increasingly requires that federal agencies work together to identify ways to
deliver results more efficiently and in a way that is consistent with their
multiple demands and limited resources. 2 Agencies and programs working
collaboratively can often achieve more public value than when they work in
isolation.

GAO identified some instances in which agencies have begun to
collaborate to assess results. For example, under the Partnership for
Sustainable Communities, the Department of Transportation, EPA, and
HUD plan to adopt a common set of performance measures for HUD’s
Community Challenge Planning Grants Program, which makes funds
available to state and local governments and other entities to promote
affordable communities through green building, among other activities.
Furthermore, Energy chairs the Interagency Energy Management Task
Force, which includes 10 of the 11 agencies implementing the 94 initiatives
GAO identified. Since 1988, this task force has served as the interagency
group for collaborating on green building in the federal sector, measuring
progress, and acting as a forum for addressing challenges to green building



1
 GAO, Executive Guide: Effectively Implementing the Government Performance and
Results Act, GAO/GGD-96-118 (Washington, D.C.: June 1996).
2
 GAO, Results-Oriented Government: Practices That Can Help Enhance and Sustain
Collaboration among Federal Agencies, GAO-06-15 (Washington, D.C.: Oct. 21, 2005).




Page 177                          GAO-12-342SP Duplication, Overlap, and Fragmentation
                         and developing common solutions for the federal sector. However, GAO
                         did not identify a governmentwide effort to collaborate on green building
                         issues, including shared goals and common performance measures, for the
                         nonfederal sector that is comparable to the task force’s efforts for the
                         federal sector. Without such an effort, agencies with green building
                         initiatives for the nonfederal sector may be missing opportunities to, among
                         other things, identify the potential for inefficient or costly duplication,
                         overlap, or fragmentation across these initiatives, and to reach agreement
                         on governmentwide goals and measures for assessing the overall progress
                         of their efforts to foster green building in the nonfederal sector.



Actions Needed and       Without comprehensive information about each individual initiative’s
                         progress toward fostering green building, and without collaboration across
Potential Financial or   federal agencies to establish green building goals and ways to measure
Other Benefits           progress, Congress, agency heads, and the public have incomplete
                         information about the results of individual and overall federal efforts to
                         foster green building in the nonfederal sector and the efficiency of these
                         efforts. Governmentwide collaboration to identify performance information
                         could, among other things, help inform efforts to evaluate the potential for
                         inefficient or costly duplication and overlap across the more than 90
                         federal initiatives—implemented by 11 agencies—to foster green building
                         in the nonfederal sector. To help assess the results of investments in
                         individual federal initiatives to foster green building in the nonfederal
                         sector, as well as their combined results, GAO recommended in
                         November 2011 that the Secretaries of Energy and HUD as well as the
                         Administrator of EPA

                         •   lead an effort with other agencies that are implementing green
                             building initiatives to collaborate on identifying performance
                             information, such as shared goals and common performance
                             measures, for green building initiatives for the nonfederal sector.

                         Such an effort could help identify opportunities for enhancing efficiency
                         and reducing costs to administer these initiatives.



Agency Comments          GAO provided a draft of its November 2011 report for review and
                         comment to the U.S. Department of Agriculture, the Department of
and GAO’s Evaluation     Defense, the Department of Education, Energy, the Department of Health
                         and Human Services, HUD, the Department of Transportation as well as
                         EPA, the Department of the Treasury’s Internal Revenue Service, the
                         National Institute of Standards and Technology, and the Small Business
                         Administration. Energy, HUD, and EPA agreed with the
                         recommendation. HUD, the U.S. Department of Agriculture, the
                         Department of Defense, the Department of Education, the Department of
                         Transportation, the Internal Revenue Service, and the Small Business
                         Administration provided concurrence or technical comments which were
                         incorporated as appropriate. The Department of Health and Human
                         Services and the National Institute of Standards and Technology did not
                         provide comments on this issue. As part of its routine audit work, GAO


                         Page 178                       GAO-12-342SP Duplication, Overlap, and Fragmentation
                      will track the extent to which progress has been made to address the
                      identified actions and report to Congress.



How GAO Conducted     The information contained in this analysis is based on the report listed in
                      the related GAO product section. Appendix III lists the initiatives GAO
Its Work              identified that may have similar or overlapping objectives, provide similar
                      services or be fragmented across government missions. Overlap and
                      fragmentation may not lead to actual duplication, and some degree of
                      overlap and duplication may be justified.



Related GAO Product   Green Building: Federal Initiatives for the Nonfederal Sector Could
                      Benefit from More Interagency Collaboration. GAO-12-79. Washington,
                      D.C.: November 2, 2011.



Contact Information   For additional information about this area, contact Frank Rusco at (202)
                      512-3841 or ruscof@gao.gov or David J. Wise at (202) 512-2834 or
                      wised@gao.gov.




                      Page 179                      GAO-12-342SP Duplication, Overlap, and Fragmentation
27. Social Security Benefit Coordination
Benefit offsets for related programs help reduce the potential for overlapping payments but pose administrative
challenges.



Why This Area Is                     Social Security provides old age benefits to millions of Americans,
                                     forming the foundation of retirement income. However, Social Security is
Important                            more than a retirement program: it also provides benefits to survivors and
                                     other dependents, as well as to disabled workers. In 2011, over 60 million
                                     Americans received $770 billion in Social Security benefits. While Social
                                     Security provides benefits to many different groups, and beneficiaries
                                     may receive benefits from more than one social safety net program,
                                     Social Security’s design helps reduce overlap with other programs. The
                                     Social Security programs are subject to several provisions that offset
                                     benefits for individuals who receive both Social Security benefits and
                                     similar benefits under another program. 1 However, ensuring that these
                                     provisions offset benefits appropriately and accurately can pose
                                     administrative challenges.

                                     As GAO reported in March 2011, the Social Security Administration (SSA)
                                     needed accurate information from state and local governments on
                                     retirees who receive pensions from employment not covered under Social
                                     Security to fairly and accurately apply two public pension offsets—the
                                     Government Pension Offset, which generally applies to spouse and
                                     survivor benefits, and the Windfall Elimination Provision, which applies to
                                     retired and disabled worker benefits. GAO continues to believe that it is
                                     important to apply the Government Pension Offset and Windfall
                                     Elimination Provision consistently and equitably and reiterates its earlier
                                     recommendation that Congress consider giving the Internal Revenue
                                     Service the authority to collect the information that SSA needs on
                                     government pension income to administer the Government Pension
                                     Offset and Windfall Elimination Provision accurately and fairly. In this
                                     report, we focus on other offsets—workers’ compensation offsets.



                                     1
                                      For some of these programs, the calculation of the offset is not a significant issue.
                                     Supplemental Security Income (SSI) provides financial assistance to eligible individuals
                                     who are age 65 or older, blind or disabled, and who have limited income and resources.
                                     While SSI provides benefits to individuals with disabilities, the Disability Insurance (DI)
                                     program, also administered by SSA, uses the same definition of disability as SSI. SSI is a
                                     means-tested program, and the amount of the DI benefit is considered as income when
                                     determining whether an individual with a disability also qualifies for SSI. While individuals
                                     who receive SSI and DI have their SSI benefit offset based on the amount of their DI
                                     benefit, the appropriate offset calculation is not an issue since SSA administers both
                                     programs. Social Security also allows a person to receive both SSI and Temporary
                                     Assistance for Needy Families payments, but Temporary Assistance for Needy Families
                                     benefits are also considered income for SSI purposes, and will reduce the SSI payment.
                                     Other assistance received, such as from the Supplemental Nutrition Assistance Program
                                     and home energy assistance, is not considered income for SSI and thus does not offset
                                     the amount of the benefit received.




                                     Page 180                             GAO-12-342SP Duplication, Overlap, and Fragmentation
What GAO Found   The Social Security program’s workers’ compensation offsets reduce the
                 potential for overlapping payments to beneficiaries who also receive
                 workers’ compensation benefits. However, the lack of reliable information
                 on receipt of workers’ compensation can result in these offset provisions
                 not being administered fairly or equitably. Adequately addressing this
                 issue offers the potential for cost savings by reducing overpayments.

                 Workers’ compensation consists of a complex array of programs that
                 provide benefits to persons injured while working or who suffer
                 occupational diseases. Employers provide workers’ compensation
                 insurance for their employees and report work-related injuries to the state
                 workers’ compensation agency. Although workers’ compensation
                 programs exist in all states, the programs are not federally mandated,
                 administered, or regulated. 2 Workers’ compensation beneficiaries may
                 also be eligible for federal program benefits, such as Social Security
                 Disability Insurance (DI) and Supplemental Security Income (SSI). For
                 these other programs, the law often limits access or reduces benefits for
                 those receiving workers’ compensation. For example, if a person receives
                 both DI and workers’ compensation benefits, and together these benefits
                 exceed 80 percent of the injured worker’s average current earnings, SSA
                 generally reduces the DI benefit. 3

                 In a prior report, GAO found that SSA’s administration of the workers’
                 compensation offset provision continued to be undermined by the lack of
                 reliable information identifying the receipt of workers’ compensation
                 benefits by DI beneficiaries, causing payment errors. 4 No national
                 reporting system identifies workers’ compensation beneficiaries. Instead,
                 SSA largely relies on applicants and beneficiaries to report their receipt of
                 workers’ compensation benefits and any changes that occur in the benefit
                 amounts—an approach that makes it very difficult for SSA to make
                 accurate benefit payments. GAO recommended that the Commissioner of
                 Social Security and the Administrator of the Centers for Medicare &
                 Medicaid Services test the extent to which sharing information that
                 identifies persons who are or may be receiving workers’ compensation



                 2
                  See GAO-01-367 for more information. Also, workers’ compensation benefits are
                 generally exempt from federal income taxes, so the IRS does not have any data on receipt
                 of workers’ compensation benefits.
                 3
                  This offset was enacted in response to concern about individuals receiving excessive
                 benefits as a result of receiving DI and workers’ compensation benefits concurrently. An
                 exception to the offset was made, however, for such individuals if they resided in states
                 whose laws already reduce their workers’ compensation benefits (making a reduction in DI
                 benefits unnecessary). Such state provisions are referred to as reverse offsets, and in
                 these cases, SSA does not offset the DI benefit if it recognizes the state provision. The
                 reverse offset exception only applies to state provisions that were in effect on February
                 18, 1981.
                 4
                  In February 2011, the SSA Office of Inspector General found payment errors and
                 estimated there were about $4 million in payments with errors resulting in underpayments
                 and about $3.8 million in payments with errors resulting in overpayments related to the
                 workers’ compensation offset.




                 Page 181                           GAO-12-342SP Duplication, Overlap, and Fragmentation
benefits improves the accuracy of their benefit payment. 5 GAO also
recommended that SSA officials meet with representatives from the
workers’ compensation insurance industry to determine whether a viable
voluntary reporting process could be established that would provide the
government with information that periodically identifies workers’
compensation beneficiaries. In response, SSA met with the Centers for
Medicare & Medicaid Services and representatives of the workers’
compensation insurance industry. Since these meetings, SSA has been
able to do some data sharing with states, but on a very limited basis due
to systems limitations. Additionally, the workers’ compensation insurance
data held by privately-owned organizations is not available. Therefore,
GAO continues to believe that this problem should be addressed.

For federal workers, the Federal Employees’ Compensation Act (FECA)
program provides wage loss compensation and payments for medical
treatment to those federal employees who are injured in the performance
of their federal duties. 6 A claimant can receive both FECA and SSA
retirement benefits, although the claimant’s FECA wage-loss-
compensation payment is to be reduced by the amount of SSA retirement
benefits attributable to federal service. Similarly, a claimant can receive
both FECA and SSA disability benefits, although in such cases SSA is
required to reduce the level of disability benefits it pays if the combined
benefits exceed a certain amount.

As GAO reported in February 2008, the FECA program is vulnerable to
improper payments. Some overpayments occur because Labor’s Office of
Workers’ Compensation Programs (OWCP), which administers the
program, does not regularly verify whether claimants are receiving SSA
retirement benefits, for which FECA benefits are to be reduced. GAO
recommended that OWCP take steps to ensure that wage-loss-
compensation payments for claimants covered by the federal retirement
system are appropriately reduced by the amount of their SSA benefits
that are attributable to their federal service. In response to our
recommendation, OWCP reported that it has implemented an automated
request to be sent to SSA when a claimant reaches retirement eligibility
age to identify cases in which FECA payments should be reduced due to
the receipt of Social Security retirement benefits. If this system functions
as planned, it has the potential to reduce overpayments. Further, in
October 2010, the SSA Office of Inspector General found that improper
payments resulted when recipients’ FECA compensation was not




5
  Prior to July 2001, the Centers for Medicare & Medicaid Services was known as the
Health Care Financing Administration. Throughout this report, we refer to the agency as
Centers for Medicare & Medicaid Services, even when describing initiatives taken prior to
its name change.
6
5 U.S.C. § 8101 et seq.




Page 182                            GAO-12-342SP Duplication, Overlap, and Fragmentation
                         recorded or accounted for in the calculation of their DI and SSI benefits. 7
                         The Office of Inspector General projected that there were approximately
                         $43 million in estimated DI overpayments and approximately $603,140 in
                         SSI overpayments, based on a sample of beneficiaries who received
                         FECA compensation any time from June 2002 to April 2010.



Actions Needed and       In response to prior recommendations, SSA has taken steps to explore
                         the possibilities of sharing information with states and the workers’
Potential Financial or   compensation insurance industry to identify persons who might be
Other Benefits           receiving workers’ compensation benefits. While some information
                         sharing has taken place, GAO continues to believe that additional
                         opportunities exist to share information. While obtaining information from
                         states is difficult, these efforts may help identify workers’ compensation
                         beneficiaries so that benefits can be appropriately and accurately offset.



Agency Comments          GAO provided a draft of this report section to the Department of Labor
                         and the Social Security Administration for review and comment. Labor did
and GAO’s Evaluation     not provide comments. SSA provided technical comments, which were
                         incorporated as appropriate. As part of their comments, SSA indicated
                         that as recently as 2011, they submitted draft legislation to Congress to
                         require state and local governments, and any other entities that
                         administer workers compensation and private disability plans, to provide
                         SSA with information on payments to individuals under such plans.



How GAO Conducted        The information contained in this analysis is based on findings from the
                         products listed in the related GAO products section as well as additional
Its Work                 audit work GAO conducted.



Related GAO              Federal Workers’ Compensation: Better Data and Management
                         Strategies Would Strengthen Efforts to Prevent and Address Improper
Products                 Payments. GAO-08-284. Washington, D.C.: February 26, 2008.

                         Supplemental Security Income: Progress Made in Detecting and
                         Recovering Overpayments, but Management Attention Should Continue.
                         GAO-02-849. Washington, D.C.: September 16, 2002.

                         SSA Disability: Enhanced Procedures and Guidance Could Improve
                         service and Reduce Overpayments to Concurrent Beneficiaries.
                         GAO-02-802. Washington, D.C.: September 5, 2002.




                         7
                          Social Security Administration, Office of Inspector General, Federal Employees
                         Receiving Both Federal Employees’ Compensation Act and Disability Insurance
                         Payments, A-15-09-19008 (Baltimore, Md.: Oct. 14, 2010).




                         Page 183                            GAO-12-342SP Duplication, Overlap, and Fragmentation
                      Workers’ Compensation: Action Needed to Reduce Payment Errors in
                      SSA Disability and Other Programs. GAO-01-367. Washington, D.C.:
                      May 4, 2001.



Contact Information   For additional information about this area, contact Charles Jeszeck at
                      (202) 512-7215 or jeszeckc@gao.gov.




                      Page 184                      GAO-12-342SP Duplication, Overlap, and Fragmentation
28. Housing Assistance
Examining the benefits and costs of housing programs and tax expenditures that address the same or similar
populations or areas, and potentially consolidating them, could help mitigate overlap and fragmentation and
decrease costs.



Why This Area Is                    The federal government has played a major role in supporting housing
                                    since the 1930s. It funds programs that assist homebuyers, renters, and
Important                           state and local governments. The goals of these efforts include
                                    encouraging homeownership and providing affordable rental housing for
                                    low-income families. Millions of Americans have benefited, whether by
                                    taking out a federally guaranteed mortgage, deducting mortgage interest
                                    or real estate taxes from income, or receiving a rental subsidy. In fiscal
                                    year 2010, the federal government incurred about $170 billion for
                                    obligations for housing-related programs and estimated revenue forgone
                                    for tax expenditures. 1 Tax expenditures represent $132 billion (about 78
                                    percent) and may be viewed as spending programs channeled through
                                    the tax system because they are federal revenue forgone due to
                                    exclusions, credits, deductions, deferrals, and preferential rates. 2

                                    In the current housing crisis, support for homeownership has expanded
                                    dramatically with nearly all mortgage originations having direct or indirect
                                    federal support. The Department of the Treasury (Treasury) and the
                                    Board of Governors of the Federal Reserve System (Federal Reserve)
                                    together invested more than $1.67 trillion in Fannie Mae and Freddie
                                    Mac, the government-sponsored enterprises, which issue and guarantee
                                    mortgage-backed securities. Specifically, Treasury purchased about $221
                                    billion of mortgage-backed securities issued by Fannie Mae and Freddie
                                    Mac and about $183 billion of senior preferred stock, and the Federal
                                    Reserve purchased $1.27 trillion in the debt and securities of Fannie Mae
                                    and Freddie Mac. The ultimate costs of these efforts are not yet known.
                                    The federal role also expanded through programs such as the Home
                                    Affordable Modification Program and the First-Time Homebuyer Credit.


                                    1
                                     The total does not include other types of emergency assistance. For loan programs,
                                    these obligations represent the expected credit subsidy costs for loan commitments made
                                    in fiscal year 2010. These estimates are revised in subsequent years and the ultimate cost
                                    will not be known until the loans mature. The amount of obligations we reported for fiscal
                                    year 2010 may include funds appropriated in the American Recovery and Reinvestment
                                    Act of 2009.
                                    2
                                     Summing tax expenditure estimates does not take into account interactions between
                                    individual provisions. This total also does not include the exclusion of imputed net rental
                                    income. Imputed net rental income is the amount that owner-occupiers would have paid to
                                    rent a home, less nondeductible costs such as depreciation and maintenance expense. It
                                    is not subject to tax. The Department of the Treasury lists the exclusion of imputed net
                                    rental income as a tax expenditure and estimated the expenditure at $41 billion for fiscal
                                    year 2010. However, the Joint Committee on Taxation does not list the exclusion as a tax
                                    expenditure because it views measuring and taxing net imputed rental income as
                                    administratively infeasible.




                                    Page 185                            GAO-12-342SP Duplication, Overlap, and Fragmentation
                 However, fiscal and budget realities call into question continued
                 maintenance of 160 different efforts with similar goals and sometimes
                 parallel delivery systems.



What GAO Found   Twenty different entities administer 160 programs, tax expenditures, and
                 other tools GAO identified that supported homeownership and rental
                 housing in fiscal year 2010 (see fig. below). 3 For example, 39 programs,
                 tax expenditures, and other tools provide assistance for buying, selling, or
                 financing a home, such as the single-family guaranteed loan program of
                 the Department of Housing and Urban Development’s (HUD) Federal
                 Housing Administration (FHA), the Department of Agriculture’s (USDA)
                 Rural Housing Service (RHS), and the Department of Veterans Affairs
                 and the capital gains exclusion on home sales administered by Treasury’s
                 Internal Revenue Service (IRS). Eight programs and tax expenditures
                 provide assistance for rental property owners, such as separate project-
                 based rental assistance programs provided by HUD and RHS and
                 accelerated depreciation on rental housing administered by the IRS.
                 Program overlap can occur when agencies and programs address the
                 same or similar needs or target similar populations, and can result in
                 fragmentation.




                 3
                  See appendix III for the list of programs, tax expenditures, and other tools that supported
                 homeownership and rental housing in fiscal year 2010 and their related budgetary
                 information. Many of these programs/activities incurred no obligations in fiscal year 2010
                 for a number of reasons, such as the program/activity was not part of the federal budget or
                 was inactive during the year.




                 Page 186                             GAO-12-342SP Duplication, Overlap, and Fragmentation
Housing Activities/Programs by Purpose and Agency in Fiscal Year 2010




                                       a
                                        Some activities may have multiple purposes.
                                       b
                                        Activities undertaken only by the Federal Reserve, not other regulators.


                                       As GAO reported in September 2000, overlap exists between products
                                       offered and markets served by USDA’s RHS, HUD, and others, and GAO
                                       questioned the need for maintaining separate programs for rural areas.
                                       GAO recommended that Congress consider requiring USDA and HUD to
                                       examine the benefits and costs of merging programs and cited RHS’s and
                                       FHA’s single-family guaranteed loan and multifamily portfolio management
                                       programs. In response, USDA noted that such a merger could be
                                       detrimental and result in rural areas losing a federal voice. In addition, HUD
                                       noted that without legislative changes, any efforts to merge the programs
                                       likely would result in a more cumbersome delivery system. The House
                                       Committee on Financial Services held hearings in 2011 considering a
                                       proposal that would move management of rural housing programs to HUD.

                                       GAO’s ongoing work has shown increased evidence that some RHS and
                                       FHA programs can be consolidated. For instance, RHS relies on more in-



                                       Page 187                                 GAO-12-342SP Duplication, Overlap, and Fragmentation
house staff to oversee its single-family and multifamily loan portfolio of
about $93 billion than HUD relies on to manage its single-family and
multifamily loan portfolio of more than $1 trillion, largely because of
differences in delivery structures. RHS has a decentralized structure of
about 500 field offices that was set up to interact directly with borrowers.
RHS relies on over 1,600 full-time equivalent staff to process and service
its direct single-family loans and grants. Since GAO’s 2000 report, the trend
away from labor-intensive direct loans to guaranteed loans has
accelerated. While RHS limits its direct loans to low-income households
and its guaranteed loans to moderate-income households, FHA has no
income limits and does not offer a comparable direct loan program. HUD
operates about 80 field offices and primarily interacts through lenders,
nonprofits, and other intermediaries. RHS and FHA programs both utilize
FHA-approved lenders and underwriting processes based on FHA’s
scorecard—an automated tool that evaluates new mortgage loans. RHS
has about 530 full-time equivalent staff to process its single-family
guaranteed loans. FHA relies on lenders to process its loans. Although
FHA insures far more mortgages than RHS guarantees, FHA has just over
1,000 full-time equivalent staff to oversee lenders and appraisers and
contractors that manage foreclosed properties—costs for overseeing and
disposing of such properties, were $887 million in 2010. In contrast, RHS’s
costs for foreclosed property management are lower because RHS
requires lenders to dispose of foreclosed properties. While the number of
RHS field offices decreased by about 40 percent since 2000, its
decentralized field structure continues to reflect the era in which it was
established—the 1930s, when geographic boundaries greatly limited
communication and transportation. These limitations have diminished and
HUD programs can be used in all areas of the country.

Additionally, the two agencies offer examples of overlap in products offered
(mortgage credit and rental assistance), functions performed (portfolio
management and preservation), and geographic areas served. For instance,
RHS and HUD guarantee single-family and multifamily loans, and offer rental
subsidies using similar income eligibility criteria. Also, both agencies have
been working to maintain and preserve existing multifamily portfolios.
Although RHS may offer its products only in rural areas, it is not always the
insurer of choice in those areas. For example, in fiscal year 2009 FHA
insured over eight times as many single-family loans in economically
distressed rural counties as RHS guaranteed. And, many RHS loan
guarantees financed properties near urban areas—56 percent of single-
family guarantees made in fiscal year 2009 were in metropolitan counties.

As shown in the figure above, Treasury and IRS provide numerous types
of housing assistance through tax expenditures. Although often
necessary to meet federal priorities, some tax expenditures can
contribute to mission fragmentation and program overlap that, in turn, can
create service gaps, additional costs, and the potential for duplication. For
example, to qualify for a historic preservation tax credit, rehabilitation
must preserve historic character, which may conflict with states’ efforts to
produce energy-efficient, low-income properties with tax credits, and
could increase project costs. Furthermore, inadequate or missing data


Page 188                       GAO-12-342SP Duplication, Overlap, and Fragmentation
                         and difficulties in quantifying the benefits of some tax expenditures can
                         impede studies of their efficiency, effectiveness, and equity.

                         Data represent a key challenge, as the data necessary to assess who
                         benefits from tax expenditures is not always collected on tax returns
                         unless IRS needs the information or collection was legislatively
                         mandated. For example, although IRS collects some data on the
                         mortgage interest deduction (the single-largest, housing-related tax
                         expenditure), the data may not contribute to analyses of its effectiveness.
                         Studies by the Joint Committee on Taxation and others differ as to the
                         extent to which the mortgage interest deduction increases
                         homeownership. Some studies suggest that the deduction increases
                         homeownership, while others suggest that the deduction increases the
                         price of housing (and higher prices are negatively associated with
                         homeownership rates). Furthermore, some analyses emphasize the need
                         for additional data to more effectively assess the impact of proposed
                         modifications to the mortgage interest deduction on homeownership.

                         GAO recommended in September 2005 that the Office of Management
                         and Budget (OMB) use information on outlay programs and tax
                         expenditures to recommend to the President and Congress the most
                         effective methods for accomplishing federal objectives. GAO concluded
                         that better targeting by Congress and the executive branch of all federal
                         spending and subsidy programs could save resources and increase
                         economic efficiency. As discussed later, OMB disagreed with GAO’s 2005
                         recommendations.



Actions Needed and       HUD and RHS have shared beneficial practices. For example, RHS
                         collaborated with HUD on restructuring multifamily mortgages, underwriting
Potential Financial or   guaranteed loans, and making properties more energy-efficient. In 2010,
Other Benefits           the White House’s Domestic Policy Council established a Rental Policy
                         Working Group to better coordinate among HUD, USDA, and Treasury.
                         The agencies have been aligning rules for rental programs, will examine
                         homeownership programs, and expect to accept each other’s inspections
                         and forms for housing programs. In 2011, the House Financial Services
                         Subcommittee on Insurance, Housing and Community Opportunity
                         developed draft legislation and hosted hearings in May and September on
                         a proposal to move management of rural housing programs from USDA to
                         HUD. At the May hearing, while some industry experts said the
                         consolidation plan merited further discussion, others stated the proposal
                         could negatively affect USDA’s efforts to deliver its other rural development
                         programs. In September, the RHS Administrator testified that while she
                         believed RHS and HUD shared an important commitment to meeting the
                         housing needs of rural America, she opposed the draft legislation. She
                         believed that RHS housing services uniquely served rural communities by
                         working in “synergy” with other rural development programs.

                         GAO recommended in September 2000 that Congress consider requiring
                         USDA and HUD to examine the benefits and costs of merging those
                         programs that serve similar markets and provide similar products.


                         Page 189                       GAO-12-342SP Duplication, Overlap, and Fragmentation
Further, GAO noted that as a first step, the Congress could consider
requiring RHS and HUD to explore merging their single-family insured
lending programs and multifamily portfolio management programs, taking
advantage of the best practices of each and ensuring that targeted
populations are not adversely affected.

The agencies have been working to align certain requirements of the various
multifamily housing programs. In addition, in February 2011, the
Administration reported to Congress that it would establish a task force to
evaluate the potential for coordinating or consolidating the housing loan
programs at HUD, USDA, and VA. According to HUD, a benchmarking effort
associated with the task force was recently begun. GAO’s ongoing work
considers options for consolidating these programs and GAO expects to
make additional recommendations.

GAO recommended in September 2005 and reiterated in March 2011 that
coordinated reviews of tax expenditures with related spending programs
could help policymakers reduce overlap and inconsistencies and direct
scarce resources to the most-effective or least-costly methods to deliver
federal support. Coordinated reviews of support of housing, which
consists of tax expenditures and federal programs and regulations, could
be useful. Specifically, GAO recommended in September 2005 and
March 2011 that the Director of OMB, in consultation with the Secretary of
the Treasury should

•   develop and implement a framework for conducting performance
    reviews of tax expenditures. This includes (1) outlining leadership
    responsibilities and coordination among agencies with related
    responsibilities; (2) setting a review schedule; (3) identifying review
    methods and ways to address the lack of credible tax expenditure
    information; and (4) identifying resources needed for tax expenditure
    reviews; and

•   require that tax expenditures be included in executive branch budget
    and performance review processes.

OMB, citing methodological and conceptual issues, disagreed with GAO’s
2005 recommendations. To date, OMB has not used its budget and
performance review processes to systematically review tax expenditures
and promote integrated reviews of related tax and spending programs.
However, in its fiscal year 2012 budget guidance, OMB instructed
agencies, where appropriate, to analyze how to better integrate tax and
spending policies with similar objectives and goals. The GPRA




Page 190                       GAO-12-342SP Duplication, Overlap, and Fragmentation
                       Modernization Act of 2010 also envisions such an approach for selected
                       crosscutting areas. 4 Such analysis could help identify redundancies.



Agency Comments        GAO provided a draft of this report section to USDA, HUD, Department of
                       Veterans Affairs, Treasury, the Internal Revenue Service, OMB, Federal
and GAO’s Evaluation   Housing Finance Agency, Federal Reserve, Federal Deposit Insurance
                       Corporation, Office of the Comptroller of the Currency, Consumer
                       Financial Protection Bureau, Federal Financial Institutions Examination
                       Council, and the Farm Credit Administration for review and comment. The
                       Department of Veterans Affairs and the Consumer Financial Protection
                       Bureau provided no comments. All other agencies provided technical
                       comments, which were incorporated as appropriate. USDA reiterated the
                       position that its rural agencies and programs, including the delivery
                       system, serve a unique purpose and are vital to the rural communities
                       they serve. In addition, USDA noted its recent efforts to streamline and
                       improve the effectiveness of federal programs that serve rural
                       communities, as part of the agency’s involvement in the President’s Rural
                       Council. OMB stated that it agrees that savings might be achieved from
                       the partial consolidation of guaranteed loan programs across agencies,
                       but noted that any savings may be limited because USDA’s decentralized
                       field offices support more than loan guarantee programs. OMB also
                       indicated that they will identify tax expenditures which support the
                       achievement of a limited number of cross-agency priority goals along with
                       the fiscal year 2013 President’s Budget, as required by the GPRA
                       Modernization Act of 2010.


How GAO Conducted      The information in this submission is based on findings from the products
                       listed in the related GAO products section and additional work GAO
Its Work               conducted. GAO reviewed prior reports as well as collected and analyzed
                       preliminary information from housing industry, USDA, and HUD officials,
                       on examples of overlap or fragmentation in products offered, functions
                       performed, and geographic areas served by various federal housing
                       programs. GAO developed a catalog of direct spending programs, tax
                       expenditures, and other activities used by federal agencies and financial
                       regulators to support rental housing and homeownership, and identified
                       what is known about the purpose, cost, eligibility, and populations served.
                       GAO reviewed the Catalog of Federal Domestic Assistance, agency
                       program documentation, and previous studies by the Congressional
                       Research Service, Congressional Budget Office, and other housing



                       4
                        The GPRA Modernization Act of 2010 established a new, crosscutting, and integrated
                       framework for achieving results and improving government performance. It requires OMB
                       to coordinate with agencies to establish outcome-oriented goals covering a limited number
                       of crosscutting policy areas and to develop a governmentwide performance plan for
                       making progress toward achieving those goals. The executive branch and Congress could
                       use this process to identify and address program areas where strengthened interagency
                       coordination is needed to better achieve results as well as areas of fragmentation,
                       overlap, and duplication.




                       Page 191                           GAO-12-342SP Duplication, Overlap, and Fragmentation
                      groups, and interviewed agency officials. GAO also reviewed the fiscal
                      year 2012 President’s Budget, agencies’ budget justification, the Joint
                      Committee on Taxation’s estimates of tax expenditures, and a
                      compendium of tax expenditures prepared by the Congressional
                      Research Service to obtain information on obligations, full-time
                      equivalents, credit subsidy costs, administrative costs, and revenue loss
                      estimates incurred by the federal government in administering housing
                      programs. Appendix III lists the programs GAO identified that may have
                      similar or overlapping objectives, provide similar services or be
                      fragmented across government missions. Overlap and fragmentation may
                      not necessarily lead to actual duplication, and some degree of overlap
                      and duplication may be justified.


Related GAO           Federal Housing Administration: Improvements Needed in Risk
                      Assessment and Human Capital Management. GAO-12-15. Washington,
Products              D.C.: November 7, 2011.

                      Tax Administration: Expanded Information Reporting Could Help IRS
                      Address Compliance Challenges with Forgiven Mortgage Debt.
                      GAO-10-997. Washington, D.C.: August 31, 2010.

                      Home Mortgage Interest Deduction: Despite Challenges Presented by
                      Complex Tax Rules, IRS Could Enhance Enforcement and Guidance.
                      GAO-09-769. Washington, D.C.: July 29, 2009.

                      Real Estate Tax Deduction: Taxpayers Face Challenges in Determining
                      What Qualifies; Better Information Could Improve Compliance.
                      GAO-09-521. Washington, D.C.: May 13, 2009.

                      Government Performance and Accountability: Tax Expenditures
                      Represent a Substantial Federal Commitment and Need to Be
                      Reexamined. GAO-05-690. Washington, D.C.: September 23, 2005.

                      Rural Housing Service: Overview of Program Issues. GAO-05-382T.
                      Washington, D.C.: March 10, 2005.

                      Elderly Housing: Federal Housing Programs That Offer Assistance for the
                      Elderly. GAO-05-174. Washington, D.C.: February 14, 2005.

                      Rural Housing: Changing the Definition of Rural Could Improve Eligibility
                      Determinations. GAO-05-110. Washington, D.C.: December 3, 2004.

                      Rural Housing Service: Opportunities to Improve Management,
                      GAO-03-911T. Washington, D.C.: June 19, 2003.

                      Rural Housing: Options for Optimizing the Federal Role in Rural Housing
                      Development. GAO/RCED-00-241. Washington, D.C.: September 15, 2000.


Contact Information   For additional information about this area, contact Mathew Scirè at
                      (202) 512-8678 or sciremj@gao.gov or James White at (202) 512-9110 or
                      whitej@gao.gov.




                      Page 192                      GAO-12-342SP Duplication, Overlap, and Fragmentation
29. Early Learning and Child Care
The Departments of Education and Health and Human Services should extend their coordination efforts to
other federal agencies with early learning and child care programs to mitigate the effects of program
fragmentation, simplify children’s access to these services, collect the data necessary to coordinate operation
of these programs, and identify and minimize any unwarranted overlap and potential duplication.



Why This Area Is                     Millions of children under the age of 5 participate each year in federally
                                     funded preschool and other early learning programs or receive federally
Important                            supported child care in a range of settings. Federal programs that funded
                                     early learning and child care as an explicit purpose received at least
                                     $13.3 billion in federal funding in fiscal year 2010. 1 Research supports the
                                     importance of providing high-quality early learning experiences during
                                     children’s formative years. 2 Furthermore, as GAO reported in May 2010,
                                     research indicates that having reliable, high-quality child care is also
                                     critical to sustaining parents’ ability to work. Federal support for early
                                     learning and child care developed over time to meet emerging needs.
                                     However, GAO previously reported that multiple federal agencies
                                     administer this important investment through numerous programs. This is
                                     perhaps a consequence of the different historical origins of early learning
                                     and child care programs, creating fragmentation of efforts, some overlap
                                     of goals or activities, and potential confusion among families and other
                                     program users.



What GAO Found                       The federal investment in early learning and child care is fragmented in
                                     that it is administered through 45 programs that provide or may support
                                     related services to children from birth through age 5, as well as five tax
                                     provisions that subsidize private expenditures in this area. 3 The programs
                                     are concentrated within the Departments of Education (Education) and
                                     Health and Human Services (HHS)—the principal administrators of the
                                     federal government’s early learning and child care programs—but are
                                     also administered by the Departments of Agriculture, the Interior, Justice,


                                     1
                                      Fiscal year 2010 is the latest date for which actual obligations have been reported, and
                                     funding data for two programs were not reported in budget justifications but obtained from
                                     federal agencies. This figure includes funding for the 12 programs GAO identified as
                                     having an explicit purpose of providing early learning or child care for children. It does not
                                     include federal programs with other purposes that permit the use of funds for early
                                     learning and child care as an allowable activity or that provide supporting services such as
                                     food and nutrition. For example, the figure does not include funding for two multipurpose
                                     block grants—the Social Services Block Grant and Temporary Assistance for Needy
                                     Families (TANF)—or for Title I Grants to Local Educational Agencies.
                                     2
                                      J. Shonkoff and D. Phillips, Eds, From Neurons to Neighborhoods: The Science of Early
                                     Childhood Development (Washington, D.C.: National Academy Press, 2000).
                                     3
                                      In identifying these programs, the criteria GAO used were that these programs (1) fund or
                                     support early education or child care services, (2) are provided to children under age 5,
                                     and (3) deliver services in an educational or child care setting.




                                     Page 193                             GAO-12-342SP Duplication, Overlap, and Fragmentation
                                             Labor, Housing and Urban Development (HUD), the General Services
                                             Administration (GSA), and the Appalachian Regional Commission. Some
                                             of these programs overlap in that they have similar goals for children
                                             under the age of 5 and are targeted to similar groups of children. For
                                             example, five programs, administered by Education and HHS, provide
                                             school readiness services to low-income children, and programs in both
                                             Education and the Interior provide funding for early learning services for
                                             Indian children.

                                             Among the 45 programs, 12 have an explicit program purpose of
                                             providing early learning or child care services. 4 GAO reported in January
                                             2000 that although individual programs may differ in the exact services
                                             provided, the distinction between early learning and child care has blurred
                                             over time as policymakers seek to make educationally enriching care
                                             available to young children. As seen in the table below, all 12 programs
                                             serve children under the age of 5, and some also serve older children;
                                             however, they vary in targeted child population. Furthermore, they vary
                                             substantially in funding levels. For example, 9 of the 12 programs
                                             obligated less than $500 million each in fiscal year 2010, while the largest
                                             program, Head Start, obligated $7.2 billion in that year. 5

Purposes and Targeted Populations of Federal Programs That Have Early Learning or Child Care as an Explicit Program
Purpose

                                                                             Specific child population targets
                     Explicit program purpose                      Age group                            Other population limits
Program name                                                              Larger age             Low-         Children       Other
by federal          Early learning   Child care         Children under group, including         income          with       targeted
agency                services        services            5 primarily  children under 5         children     disabilities populations
Department of Education
Child Care
Access Means
Parents in                               •                                       •                  •                             •
School
Indian Education-
Grants to Local
Educational               •                                                      •                                                •
Agencies
Race to the Top
– Early Learning          •                                   •                                     •
Challenge




                                             4
                                              GAO considers a program as having an explicit early learning or child care purpose when
                                             the program objectives in the Catalog of Federal Domestic Assistance or other agency
                                             documents refer to early learning or child care.
                                             5
                                              This figure excludes American Recovery and Reinvestment Act of 2009 funds. Pub. L.
                                             No. 111-5. See appendix III for information on fiscal year 2010 program obligations for
                                             early learning and child care programs.




                                             Page 194                            GAO-12-342SP Duplication, Overlap, and Fragmentation
                                                                                           Specific child population targets
                     Explicit program purpose                               Age group                                          Other population limits
Program name                                                                 Larger age                               Low-              Children       Other
by federal          Early learning   Child care            Children under group, including                           income               with       targeted
agency                services        services               5 primarily  children under 5                           children          disabilities populations
Special
Education-Grants
for Infants and           •                                          •                                                                        •          •
Families
Special
Education-                •                                          •                                                                        •
Preschool Grants
State Fiscal
Stabilization
Fund - Education          •                                                                     •                                                        •
State Grants,
Recovery Act
Striving Readers
Comprehensive             •                                                                     •                          •
Literacy
Department of Health and Human Services
Child Care and
Development
            a
                                         •                                                      •                          •
Block Grant
Child Care
Mandatory and
Matching Funds
of the Child Care                        •                                                      •                          •
and
Development
Funda
Head Start                •                                          •                                                     •                  •

Department of the Interior
Indian Child and
Family Education          •                                          •                                                                                   •
(FACE)
General Services Administration
The General
Services
Administration’s                         •                           •                                                                                   •
Child Care
Program
                                             Source: GAO analysis of Catalog of Federal Domestic Assistance and federal agency program information.

                                             Note: All programs included in this table are those for which early learning or child care is explicitly
                                             described as a program purpose, according to GAO’s analysis of Catalog of Federal Domestic
                                             Assistance and other agency information. It does not include additional programs that either support
                                             early learning or child care or that allow such services. All programs GAO identified are listed in
                                             appendix III.
                                             a
                                             In combination, Child Care and Development Block Grant funds and Child Care Mandatory and
                                             Matching Funds are referred to as the Child Care and Development Fund.


                                             However, the majority of the 45 programs GAO identified do not have the
                                             explicit purpose of delivering early learning or child care services, but
                                             rather permit use of funds for this purpose or provide supportive services
                                             to facilitate such care.



                                             Page 195                                           GAO-12-342SP Duplication, Overlap, and Fragmentation
•   Some programs are multipurpose block grants for which early learning
    or child care is not a primary purpose but which are nevertheless
    known to provide significant funding for child care. For example, the
    Temporary Assistance for Needy Families block grant accounted for
    $3.5 billion in child care funding in fiscal year 2009.

•   Other programs may allow funds to be used for early learning or child
    care, but these are not among their primary goals and such uses do
    not typically represent a significant portion of available program funds.
    For example, the Department of Justice has one program to help
    victims of violence that can provide child care as a short-term,
    ancillary service, and Title I Grants to Local Educational Agencies, an
    Education grant, spent about 2 percent of total obligations on early
    education programs in fiscal year 2009.

•   Some programs provide supportive services that can facilitate early
    learning or child care. For example, the Department of Agriculture has
    four programs whose primary purpose is to provide food and nutrition
    services to mostly school-age low-income children, though preschool
    children also receive program services in some cases. 6

In addition to these federally funded programs, five federal tax provisions
support early education and care by forgoing tax revenue to subsidize the
private purchase of child care services. Some tax provisions are for
families and some are for employers that provide child care at the
workplace. These five tax expenditures accounted for at least $3.1 billion
of forgone tax revenue for the U.S. Treasury in fiscal year 2010. 7 The
revenue that the government forgoes through tax expenditures can be
viewed as spending channeled through the tax system, contributing to
mission fragmentation and program overlap. As GAO previously reported
in September 2005, coordinated reviews of tax expenditures and related
programs may reduce fragmentation and overlap. 8 While it may be
possible for some families to receive benefits through both tax provisions


6
 GAO has described the fragmentation and overlap of these and other nutrition assistance
programs in Domestic Food Assistance: Complex System Benefits Millions, but Additional
Efforts Could Address Potential Inefficiency and Overlap among Smaller Programs,
GAO-10-346 (Washington, D.C.: Apr. 15, 2010).
7
 Two of the five tax expenditures—Exclusion Of Benefits Provided Under Cafeteria Plans
and Exclusion of Income Earned by Voluntary Employees Beneficiary Associations—
include revenue used for health care and other benefits besides child care.
8
 In September 2005, GAO recommended that the Office of Management and Budget
(OMB), in consultation with the Secretary of the Treasury, develop and implement a
framework to review tax expenditures. In March 2011, GAO reported that OMB, in its fiscal
year 2012 budget guidance, instructed agencies, where appropriate, to analyze how to
better integrate tax and spending policies that have similar goals and objectives. See
Government Performance and Accountability: Tax Expenditures Represent a Substantial
Federal Commitment and Need to Be Reexamined, GAO-05-690 (Washington, D.C.:
Sept. 23, 2005), and Opportunities to Reduce Potential Duplication in Government
Programs, Save Tax Dollars, and Enhance Revenue, GAO-11-318SP (Washington, D.C.:
Mar. 1, 2011).




Page 196                           GAO-12-342SP Duplication, Overlap, and Fragmentation
and federal early learning and child care programs in a particular year,
many families eligible to participate in federal programs may not have tax
liabilities due to their low incomes and would not benefit from these tax
provisions. 9

Although some programs fund similar types of services for similar
populations, differing program structures, eligibility requirements, and
data limitations create obstacles to assessing whether actual duplication
exists among these programs.

•    Programs are differently structured, administered, and regulated. For
     example, the two largest programs—funded under Head Start and the
     Child Care and Development Fund (CCDF)—differ significantly in their
     structure. 10 Head Start was created in part to support children’s early
     development by offering comprehensive, community-based services
     to meet multiple needs and, as such, provides federal grants directly
     to community-based public and private service providers. CCDF,
     created under welfare reform, helps states reduce dependence on
     public assistance by subsidizing child care to support parents’
     involvement in the workforce and provides grants to states, which they
     in turn generally provide as subgrants to counties or other local
     entities for distribution to parents.

•    The nature of eligibility requirements also differs among programs,
     even for similar subgroups of children, such as those from low-income
     families. For example, Head Start serves primarily low-income
     children under the age of 5 whose families have incomes at or below
     the official federal poverty guidelines, while CCDF funds services to
     children under age 13 whose parents are working or in school and
     who may earn up to 85 percent of state median income.

•    For some programs, relevant programmatic information is sometimes
     not readily available. For example, Education and HHS officials were
     unable to provide GAO with information on the number of children
     served for several programs. As GAO previously reported in 2005 and
     September 2011, HHS did not collect data on working families who
     receive child care assistance directly funded by TANF, and GAO
     suggested that Congress may wish to require this data collection.




9
 These tax provisions primarily benefit families with higher incomes than those eligible for
CCDF or Head Start. For example, more than half of the beneficiaries of the Child and
Dependent Care Tax Credit earned incomes of at least $50,000 annually in fiscal year
2009. In contrast, the Child Care and Development Fund generally limits eligibility to
families at or below 200 percent of the federal poverty guidelines (that is, about $37,000 or
less for a family of 3 in 2011), and Head Start eligibility is closer to 100 percent of the
poverty guidelines.
10
  Preliminary fiscal year 2009 data are the latest available for number of children served
under CCDF.




Page 197                             GAO-12-342SP Duplication, Overlap, and Fragmentation
•    Inadequate or missing data, as well as difficulties quantifying the
     benefits of some tax expenditures, can make it difficult to study the
     efficiency of these expenditures. 11

To the extent that programs in different agencies have similarities,
fragmentation and program overlap can create an environment in which
programs may not serve children and families as efficiently and effectively
as possible. The existence of multiple programs can also create added
administrative costs, such as costs associated with determining eligibility
and meeting varied reporting requirements. However, despite some
overlap in program purposes and targets, it is likely that service gaps exist,
since these programs generally are not designed as entitlements that serve
all eligible children. For example, as GAO previously reported in May 2010,
about one-third or fewer of potentially eligible children received child care
subsidies from CCDF, Temporary Assistance for Needy Families, and the
Social Services Block Grant between fiscal years 2004 and 2007,
according to GAO’s review of several HHS estimates. HHS has identified
improving program access and quality as high-priority performance goals
for both Head Start and child care programs.

Coordinating the administration and evaluation of early learning and child
care programs can help mitigate the effects of program fragmentation and
overlap and potentially help bridge service gaps; however, there is
currently no federal interagency workgroup that coordinates early learning
and child care efforts across all federal agencies with such programs.
Education and HHS have numerous coordinating initiatives and
agreements with each other, within their departments, and in support of
state and local coordination. For example, Education and HHS formed an
interagency policy board in August 2010 whose goals included improving
the quality and effectiveness of Education and HHS early learning
programs; increasing the coordination of research, technical assistance
and data systems; and, in an advisory role, maximizing resources. In
2009, HHS established an executive-level liaison office to coordinate
interagency efforts, and Education proposed establishing a similar
coordination office in 2011. Education and HHS have also collaborated in
jointly administering the Race to the Top - Early Learning Challenge. In
addition, the two departments have supported early learning and child
care coordination at the state and local levels, such as through State
Advisory Councils on Early Childhood Education and Care and other
early childhood programs. 12 HHS has also established workgroups and



11
  As GAO noted in earlier work, tax returns generally do not collect information necessary
to assess how often a tax expenditure is used and by whom unless the IRS needs the
information or collection is legislatively mandated. See GAO-05-690.
12
  The Improving Head Start for School Readiness Act of 2007 required the governor of
each state to designate or establish State Advisory Councils, and funds provided under
the American Recovery and Reinvestment Act of 2009 were used to support them. Pub. L.
No. 110-134, § 11(b) (codified at 42 U.S.C. § 9837b(b)(1)(A)) and Pub. L. No. 111-5, 123
Stat. 115, 178.




Page 198                            GAO-12-342SP Duplication, Overlap, and Fragmentation
                         collaborative efforts with several other individual federal departments,
                         such as Agriculture, Defense, and HUD, to increase the availability and
                         quality of child care or for other goals. However, these workgroups do not
                         bring multiple agencies together, and GSA, the Departments of the
                         Interior, Justice, Labor, and the Appalachian Regional Commission also
                         have programs with some child care component that are not part of
                         broader cross-agency initiatives but could likely benefit from the expertise
                         of Education and HHS.

                         The GPRA Modernization Act of 2010 (GPRAMA) could serve as a
                         vehicle for furthering interdepartmental coordination of early learning and
                         child care. The Act established a new, cross-cutting, and integrated
                         framework for achieving results and improving government
                         performance. 13 Among other things, each agency is to identify the
                         various federal organizations and activities—both within and external to
                         the agency—that contribute to its goals, and describe how the agency is
                         working with other agencies to achieve its goals as well as any relevant
                         crosscutting goals. The executive branch and Congress could use this
                         process to identify and address program areas where strengthened
                         interagency coordination is needed to better achieve results as well as
                         areas of fragmentation, overlap and duplication.



Actions Needed and       As the principal administrators of the federal government’s early learning
                         and child care programs, and consistent with Education’s and HHS’s
Potential Financial or   identification of early learning access and quality as priorities, the
Other Benefits           Secretaries of Education and HHS should

                         •     deepen and extend their ongoing coordination efforts by including all
                               the federal agencies that provide or support early learning or child
                               care services in an inter-departmental workgroup that focuses on this
                               population.

                         Using the GPRAMA framework, workgroup goals could include mitigating
                         the effects of program fragmentation (for example, through simplifying
                         children’s access to these services), identifying and managing service
                         gaps, meeting data requirements for the coordinated operation and
                         evaluation of these programs, and identifying and minimizing any
                         unwarranted overlap. These efforts could also provide a vehicle to
                         conduct a coordinated analysis of child care tax expenditures and
                         program spending.


Agency Comments          GAO provided a draft of this report section to Education, HHS, and OMB.
                         HHS provided written comments. Education and OMB, as well as HHS,
and GAO’s Evaluation     provided technical comments, which were incorporated as appropriate.




                         13
                              Pub. L. No. 111-352 (2011).




                         Page 199                           GAO-12-342SP Duplication, Overlap, and Fragmentation
All three agencies agreed on the importance of further coordination of the
federal programs supporting early learning and child care. Education
explicitly agreed with GAO’s recommended action and identified an
existing interagency workgroup as a means of coordinating early learning
and child care services. This group currently focuses primarily on services
for youth from early to late adolescence. HHS acknowledged but did not
explicitly agree or disagree with the specific action GAO recommended,
while OMB questioned the need for a new interagency working group and
the efficiency of including agencies whose programs are not explicitly
designed to deliver early learning or child care services. GAO believes
that agencies with some, but not extensive, investment in early learning
or child care might benefit greatly from such inclusion to reduce any
effects of fragmentation. Extending interagency coordination could be
efficiently accomplished through an existing workgroup on early learning
and child care, for example, by establishing a subcommittee with
representation from the additional agencies. GAO has modified the
recommended action to clarify that inclusion of these additional agencies
does not necessarily entail establishing a new federal interagency
workgroup.

HHS also highlighted information on its ongoing coordination efforts and
noted concerns with the report’s treatment of specific issues. Specifically,
HHS stated that the report did not fully explore how program services
may be complementary rather than duplicative, take into account that
many states jointly administer flexible funding streams to provide services
to children and families, or adequately explain the distinction between
federally funded early learning and child care programs and federally
funded programs that permit the use of funds for the provision of child
care. As noted in this report, the complexity of the current service delivery
system, combined with data limitations, form significant obstacles to
assessing the extent to which services are complementary or duplicative.
GAO’s report acknowledges the role that states play in coordinating these
programs but, as HHS’s comments indicate, the extent to which states
coordinate the administration of early learning and child care funding
streams can and does vary. Moreover, the federal government also has
an important role in program administration, necessitating a federal role in
coordination. Further, GAO clearly distinguished between programs that
have an explicit purpose to provide these services, like CCDF and Head
Start, and those that permit the use of funds for these services or that
provide supportive services to facilitate such care; however, it remains
important to note that some of the latter group, such as Temporary
Assistance for Needy Families nonetheless provide significant funding for
child care.

OMB recommended that GAO remove two programs from the list of
programs with an explicit early learning or child care purpose; however,
GAO did not change the program list because the programs met GAO’s
criteria.




Page 200                       GAO-12-342SP Duplication, Overlap, and Fragmentation
                    As part of its routine audit work, GAO will monitor the progress agencies
                    make in addressing this needed action and report to Congress. All written
                    comments are reprinted in appendix IV.



How GAO Conducted   The information contained in this analysis is based on findings from the
                    products listed in the related GAO products section as well as additional
Its Work            work GAO conducted. GAO searched the Catalog of Federal Domestic
                    Assistance to identify federal early learning and child care programs;
                    obtained supplementary information from Education, HHS, and other
                    agencies; and reviewed previous GAO reports on early learning and child
                    care. 14 GAO did not conduct a separate legal review to identify and
                    analyze relevant programs. In its work, GAO identified 45 early learning
                    and child care programs that met its criteria for analysis: those that (1)
                    fund or support early education or child care services; (2) are provided to
                    children under age 5; and (3) deliver services in an educational or child
                    care setting. GAO also identified a subset of 12 programs with early
                    learning and child care as an explicit program purpose. GAO determined
                    that the Catalog of Federal Domestic Assistance was sufficiently reliable
                    for GAO’s purposes by confirming with federal agency officials that the
                    programs identified met GAO’s criteria and obtaining information from
                    agencies about any additional programs for GAO consideration. GAO
                    searched the Congressional Research Service’s 2010 Tax Expenditures:
                    Compendium of Background Material on Individual Provisions to identify
                    five tax expenditures that met similar criteria for early learning and child
                    care. 15 GAO obtained and analyzed descriptions of Education and HHS
                    coordination efforts for early learning and child care programs, but
                    assessing the effectiveness of these two particular agencies’ coordination
                    efforts was beyond the scope of this study. Appendix III lists the programs
                    GAO identified that may have similar or overlapping objectives, provide
                    similar services or be fragmented across government missions. Overlap
                    and fragmentation may not necessarily lead to actual duplication, and
                    some degree of overlap and duplication may be justified. Appendix III also
                    lists related tax expenditures.




                    14
                         See the related GAO products section.
                    15
                     Those that (1) fund or support early education or child care services, (2) are obtained on
                    behalf of children under 5, and (3) forgo taxes that can be used to purchase child care
                    services occurring in an educational or child care setting.




                    Page 201                              GAO-12-342SP Duplication, Overlap, and Fragmentation
Related GAO           Temporary Assistance for Needy Families: Update on Families Served
                      and Work Participation. GAO-11-880T. Washington, D.C.: September 8,
Products              2011.

                      Human Services Programs: Opportunities to Reduce Inefficiencies.
                      GAO-11-531T. Washington, D.C.: April 5, 2011.

                      Federal Education Funding: Overview of K-12 and Early Childhood
                      Education Programs. GAO-10-51. Washington, D.C.: January 27, 2010.

                      Child Care: Multiple Factors Could Have Contributed to the Recent
                      Decline in the Number of Children Whose Families Receive Subsidies.
                      GAO-10-344. Washington, D.C.: May 5, 2010.

                      Human Service Programs: Demonstration Projects Could Identify Ways to
                      Simplify Policies and Facilitate Technology Enhancements to Reduce
                      Administrative Costs. GAO-06-942. Washington, D.C.: September 19,
                      2006.

                      Child Care: Additional Information Is Needed on Working Families
                      Receiving Subsidies. GAO-05-667. Washington, D.C.: June 29, 2005.

                      GAO Update on the Number of Prekindergarten Care and Education
                      Programs. GAO-05-678R. Washington, D.C.: June 2, 2005.

                      Head Start and Even Start: Greater Collaboration Needed on Measures
                      of Adult Education and Literacy. GAO-02-348. Washington, D.C.: March
                      29, 2002.

                      Early Education and Care: Overlap Indicates Need to Assess
                      Crosscutting Programs. GAO/HEHS-00-78. Washington, D.C.: April 28,
                      2000.

                      Early Childhood Programs: Characteristics Affect the Availability of
                      School Readiness Information. GAO/HEHS-00-38. Washington, D.C.:
                      February 28, 2000.



Contact Information   For additional information about this area, contact Kay E. Brown at (202)
                      512-7215 or brownke@gao.gov.




                      Page 202                      GAO-12-342SP Duplication, Overlap, and Fragmentation
30. Employment for People with Disabilities
Better coordination among 50 programs in nine federal agencies that support employment for people with
disabilities could help mitigate program fragmentation and overlap, and reduce the potential for duplication or
other inefficiencies.



Why This Area Is                     Nearly one in five people in the United States has a disability. 1 In fiscal
                                     year 2010, the federal government obligated at least $3.5 billion in
Important                            employment supports to help this population become more self-sufficient.
                                     Even so, in December 2011, the unemployment rate for people with
                                     disabilities was 13.5 percent, higher than the rate for people without
                                     disabilities (8.1 percent). Research has shown that people with disabilities
                                     may face multiple barriers to employment, including poor health or
                                     functioning; inadequate skills or training; lack of accessible workplaces or
                                     accommodations; and discrimination. Over the years, many programs
                                     across the federal government, including within the Departments of
                                     Education; Health and Human Services; Labor; and Veterans Affairs and
                                     other agencies, have been created or have evolved to address these
                                     barriers.

                                     For 15 years, GAO has reported on the need for better coordination
                                     among all disability programs to mitigate fragmentation, overlap, and
                                     potential for duplication. As GAO reported in September 1996, programs
                                     helping people with disabilities were not working together efficiently, and
                                     people with disabilities may have been receiving duplicate services or
                                     facing service gaps due to lack of coordination. Over a decade later, in
                                     May 2008, GAO and others recommended establishing a coordinating
                                     entity—perhaps under the leadership of the executive branch—to develop
                                     a federal strategy to integrate services and support for individuals with
                                     disabilities. To date, no coordinating entity has been established, and this
                                     lack of coordination was a factor in federal disability programs remaining
                                     on GAO’s high-risk list in February 2011.



What GAO Found                       GAO identified 50 programs that, in fiscal year 2010, supported
                                     employment for people with disabilities and found that these programs
                                     were fragmented and often provided similar services to similar
                                     populations. 2 Among these programs, GAO included six programs that



                                     1
                                      U.S. Census Bureau, Americans with Disabilities: 2005. (Washington, D.C.: December
                                     2008). Data come from the Survey of Income and Program Participation, June –
                                     September 2005.
                                     2
                                      In commenting on a draft of this section, a Department of Defense official requested that
                                     GAO add two programs that he believed to be within the scope of this review. GAO has
                                     added the two programs to the list in appendix III. GAO will pursue additional information
                                     on these programs for a final report on employment support for people with disabilities, to
                                     be issued later in 2012.




                                     Page 203                             GAO-12-342SP Duplication, Overlap, and Fragmentation
were eliminated or are slated to end by the end of fiscal year 2012. 3 The
50 programs were administered by nine federal agencies and were
overseen by even more congressional committees (see figure below). 4
More than half (30) of these programs served only people with disabilities,
while the other programs served a broader population but provided
special consideration or gave priority in service to people with disabilities
or their employers. The definitions of disability that programs used varied,
and 20 percent of programs reported having no specific definition of
disability. Fragmented programs that do not coordinate effectively could
waste scarce funds, confuse and frustrate program beneficiaries, and limit
the overall effectiveness of the federal effort.




3
 Specifically, five programs—two of which were demonstration studies of limited
duration—had ended by December 2011 and agency officials expected one more to
sunset by the end of fiscal year 2012. The Department of Education’s fiscal year 2012
budget request proposed eliminating or consolidating an additional three programs into its
Vocational Rehabilitation State Grants program in order to reduce duplication of effort and
administrative costs, streamline program administration at the federal and local levels, and
improve efficiency and accountability. However, funds were appropriated for all three
programs in fiscal year 2012. GAO did not include or review programs that may have been
created or revised after fiscal year 2010.
4
 Programs that serve wounded, ill, or injured servicemembers were included within the
scope of analysis.




Page 204                             GAO-12-342SP Duplication, Overlap, and Fragmentation
Programs Supporting Employment for People with Disabilities, in Fiscal Year 2010,
Were Fragmented across Nine Federal Agencies




  a
   The Department of Labor jointly administers the Workforce Recruitment Program with the
  Department of Defense and the Work Opportunity Tax Credit with the Internal Revenue Service.
  These programs are therefore included under both the Department of Labor and each of their
  respective agencies in the above graphic.


  Many of the 50 programs GAO identified overlapped in that they provided
  similar employment services to similar populations. GAO surveyed the
  programs and found that they provided a range of services, from
  employment counseling and job search assistance to tax credits for
  employers who hire people with disabilities. Overlap was the greatest in
  programs serving two distinct population groups—veterans and
  servicemembers; and students and young adults. GAO identified 18
  programs that limited eligibility to veterans and servicemembers, 6 that
  limited eligibility to students and young adults, and 14 programs that did
  not limit eligibility to any particular population and were potentially
  available to individuals in these groups. For example, as shown in the
  table, officials at five of the six youth programs reported that they
  provided employment counseling, assessment, and case management.
  At the same time, any youth could have received these services from nine
  other programs that did not limit eligibility to a particular population.




  Page 205                               GAO-12-342SP Duplication, Overlap, and Fragmentation
Programs Providing Similar Employment Services to Similar Populations, in Fiscal Year 2010

                                                  Programs that       Programs that
                                               limited eligibility limited eligibility  Programs that                                  Programs
                                                     to service-        to students, limited eligibility                             that served              Total
                                                      members,        transition age          to other                                 all people        programs
                                               veterans, and/or        youth, and/or   populations or                                        with    offering each
                                                   their families      young adults        disabilities                              disabilities       service (50
                                                        (18 total)         (6 total )a      (12 total)b                                 (14 total)            total)
Employment-related information                                     17                            5                          10                 10                42
dissemination
Employment counseling, assessment,                                 15                            5                          10                  9                39
and case management
Job readiness skills                                               16                            5                            9                 8                38
Job search or job placement activities                             15                            5                            9                 8                37
Job recruitment and referrals                                      15                            5                            9                 7                36
Assistive technology and workplace                                 12                            4                          10                 10                36
accommodations
Job development                                                    14                            4                            9                 7                34
Job retention training                                             13                            4                            9                 7                33
Support and services to employers of                               13                            3                            8                 8                32
people with disabilities
On-the-job training                                                10                            4                            9                 7                30
Occupational or vocational training                                11                            3                            8                 6                28
Work experience                                                    12                            5                            6                 4                27
Entrepreneurship training and support                              10                            3                            7                 6                26
Vocational rehabilitation                                          10                            1                            9                 5                25
Supported employment                                                9                            1                            8                 6                24
Assistance in earning a high school                                 6                            5                            5                 6                22
diploma or its equivalent
Remedial academic, English language                                 6                            4                            5                 4                19
skills, or basic adult literacy
Tax expenditures related to workers with                            2                            0                            0                 0                 2
disabilities
                                           Source: GAO survey of federal programs that support employment for people with disabilities.
                                           a
                                            Although the Job Corps program is generally limited to youth, eligible people with disabilities can
                                           participate in the program at any age. Therefore, GAO included the Job Corps program in the
                                           category, “programs that served all people with disabilities.”
                                           b
                                             Some programs within this category limited eligibility to similar populations, such as recipients of
                                           Social Security Disability Insurance and Supplemental Security Income, while others were unique in
                                           limiting eligibility to certain populations. For example, one program in this category limited eligibility to
                                           Native Americans, another limited eligibility to people who are blind, and a third limited eligibility to
                                           people with disabilities and their families engaged in production agriculture.


                                           Some programs that provided similar services to similar populations had
                                           a greater potential for duplication than others. For example, the
                                           Department of Labor’s Disabled Veterans’ Outreach Program and the
                                           Local Veterans’ Employment Representatives program both reported that
                                           they provided job search and placement services to veterans with
                                           disabilities, among other similar services. Labor officials said that the
                                           veterans’ employment representatives were intended to reach out to
                                           employers and the disabled veterans’ outreach specialists were intended
                                           to work with job seekers. However, as GAO reported in May 2007, staff



                                           Page 206                                             GAO-12-342SP Duplication, Overlap, and Fragmentation
often performed the same roles in one-stop career centers and, in some
cases, the roles were carried out by the same staff member. A recent law
gave states the flexibility—subject to the approval of the Secretary of
Labor—to consolidate these two programs in order to promote more
efficient provision of services. 5

In contrast, some overlapping programs have meaningful differences in
their specific eligibility criteria or program design that could reduce their
potential for duplication. For example, the Department of Labor’s
YouthBuild program provides disadvantaged youth with education and
employment skills necessary in high-demand occupations, such as
construction trades; whereas the Workforce Recruitment Program for
College Students with Disabilities places college students and recent
graduates with disabilities in jobs and internships with primarily federal
employers. In addition, while GAO identified two employment-related tax
expenditures that affect veterans, the programs’ approaches differed. The
Work Opportunity Tax Credit provides a tax credit to employers who hire
individuals from target groups, including disabled veterans, while VA’s
Compensated Work Therapy program exempts disabled veterans from
paying federal taxes on income earned through the program. Finally,
certain programs that provide similar services may have less potential for
duplication because they may not have the capacity to serve all who
apply. For instance, officials from seven programs reported a waiting list
for their services.

Better coordination or streamlining of agency roles and responsibilities may
address fragmentation and potential duplication or unmet needs, but
officials that GAO surveyed reported limited coordination among the 50
programs. GAO asked respondents to indicate whether their program
coordinated with any of the other programs surveyed. In 8 percent of
cases, two programs mutually reported coordinating. However, in most
cases, respondents either reported not coordinating or inconsistently
reported coordinating with other programs. For example, although the
Department of Education’s Vocational Rehabilitation Services program
reported coordinating with the Department of Health and Human Services’
Medicaid 1915(c) Home and Community Based Services Waiver program
and the Department of Labor’s Disabled Veterans’ Outreach Program, only
one of these two programs—the waiver program—reported coordinating
with the Vocational Rehabilitation Services program. GAO plans to conduct
additional work on the extent of coordination among selected programs as
part of a more detailed report on programs that support employment for
people with disabilities.

As GAO reported in October 2006, interagency collaboration can be
enhanced when agencies work toward a common goal, establish
complementary strategies for achieving that goal, and use common



5
VOW to Hire Heroes Act of 2011, Pub. L. No. 112-56, § 241(c), 125 Stat. 712, 728.




Page 207                          GAO-12-342SP Duplication, Overlap, and Fragmentation
                         performance measures when appropriate. 6 Although 82 percent (41) of
                         the 50 programs tracked at least one employment-related outcome
                         measure, the measures varied across programs. Twenty-two programs
                         reported that they did not track or monitor any outcome measures
                         specifically for people with disabilities—mostly those that did not limit
                         eligibility to this population. Only six programs monitored whether they
                         helped reduce participants’ reliance on federal cash benefits. In August
                         2007, experts at a GAO forum recommended that the federal government
                         establish a set of program outcome indicators to measure the success of
                         federal disability programs. An important consideration in developing such
                         measures is the challenge of comparing outcomes while accounting for
                         variations in the type and severity of participants’ disabilities.



Actions Needed and       The federal government spends several billion dollars each year to help
                         people with disabilities retain or obtain employment, a relatively small
Potential Financial or   sum compared to the amount the government spends on providing cash
Other Benefits           benefits and other assistance to this population. Despite this federal
                         investment, the unemployment rate among people with disabilities
                         remains relatively high and very few Social Security disability
                         beneficiaries earn enough to terminate federal cash assistance. While a
                         low return-to-work rate among Social Security disability beneficiaries is
                         not necessarily surprising, given that eligibility for the program is based
                         on the inability to work, some beneficiaries can and do work. Even small
                         shifts in the employment rate of disability beneficiaries could mean
                         substantial savings to the federal government, which is particularly
                         significant since the Social Security Administration’s Disability Insurance
                         trust fund is expected to be exhausted by 2018. In this context, the
                         number of programs providing similar employment services to people with
                         disabilities raises questions about the efficiency and effectiveness of the
                         current structure of federal disability programs. In its February 2011 high-
                         risk update, GAO reported that an overall federal strategy and
                         governmentwide coordination among programs is needed to align
                         disability policies, services, and supports. At the same time, the GPRA
                         Modernization Act of 2010 (GPRAMA) established a new, cross-cutting,
                         and integrated framework for achieving results and improving government
                         performance. 7 It requires the Office of Management and Budget (OMB) to
                         coordinate with agencies to establish outcome-oriented goals covering a
                         limited number of crosscutting policy areas and to develop a
                         governmentwide performance plan for making progress toward achieving
                         those goals.




                         6
                          GAO, Results-Oriented Government: Practices That Can Help Enhance and Sustain
                         Collaboration among Federal Agencies, GAO-06-15 (Washington, D.C.: Oct. 21, 2005).
                         7
                         Pub. L. No. 111-352, 124 Stat. 3866 (2011).




                         Page 208                          GAO-12-342SP Duplication, Overlap, and Fragmentation
                       Consistent with that effort, to improve performance through greater
                       coordination among the many federal programs that support employment
                       for people with disabilities, OMB should

                       •   consider establishing measurable, governmentwide goals for
                           employment of people with disabilities. Given the number of federal
                           agencies and approaches involved in supporting employment for
                           people with disabilities, governmentwide goals could help spur greater
                           coordination and more efficient and economical service delivery in
                           overlapping program areas. To determine whether these goals are
                           being met, agencies should establish related measures and indicators
                           and collect additional data to inform these measures.

                       Establishing governmentwide goals and measures for employment of
                       people with disabilities is a critical first step in developing an overall
                       federal strategy to align disability policy, services, and supports—a
                       recommendation GAO first made to Congress in May 2008.

                       It is difficult to recommend specific areas for cost savings or streamlining
                       because there are, at present, limited data available to determine which
                       programs are achieving positive outcomes for people with disabilities in
                       the most cost-effective way. Nevertheless, to achieve the greatest
                       efficiency and effectiveness, OMB should

                       •   continue to work with executive agencies that administer overlapping
                           programs to determine whether program consolidation might result in
                           administrative savings and more effective and efficient delivery of
                           services. Executive agencies should seek any necessary statutory
                           authority to consolidate programs if there would be sufficient savings
                           to merit such an action.



Agency Comments        GAO provided a draft of this report section to OMB and the nine federal
                       agencies that administer the programs within the scope of this report for
and GAO’s Evaluation   review and comment. The Departments of Education and Veterans’
                       Affairs (VA) had no comments. The Departments of Agriculture (USDA),
                       Defense (DOD), Labor, Health and Human Services (HHS); the Internal
                       Revenue Service; OMB; the Social Security Administration (SSA); and
                       the U.S. AbilityOne Commission provided technical comments, which
                       were incorporated or summarized and discussed below, as appropriate.
                       Labor provided written comments. All written comments are reprinted in
                       appendix IV.

                       In response to GAO’s recommendations, OMB noted that, in fiscal year
                       2012, the Administration’s Domestic Policy Council will conduct an
                       internal review of ways to improve the effectiveness of disability programs
                       through better coordination and alignment of priorities and strategies. The
                       Council will work with agencies to explore how they can achieve better
                       results for people with disabilities through sharing data and defining
                       shared objectives, among other activities. GAO supports such efforts to
                       improve coordination among programs, and looks forward to the results of



                       Page 209                       GAO-12-342SP Duplication, Overlap, and Fragmentation
the review with respect to setting governmentwide goals for people with
disabilities and identifying opportunities for more efficient and effective
delivery of services to this population.

In addition, OMB noted that the current administration has set
governmentwide goals for employment and inclusion of people with
disabilities in the federal government. Specifically, in 2010, the President
issued an executive order stating that the federal government should be a
model for the employment of people with disabilities and reaffirming a
goal set in 2000 to hire 100,000 individuals with disabilities over 5 years. 8
The President issued another executive order in 2011 that resulted in the
Office of Personnel Management’s Government-wide Diversity and
Inclusion Strategic Plan. 9

OMB also highlighted some specific ongoing or planned efforts to improve
employment for people with disabilities. For example, OMB noted that
Labor issued a proposed rule to strengthen affirmative action
requirements for federal contractors and subcontractors, and that SSA
has set a goal of assisting 118,000 Disability Insurance and Supplemental
Security Income (SSI) beneficiaries obtain employment in 2012 through
the Ticket to Work program. In addition, OMB noted that the Promoting
Readiness of Minors in SSI (PROMISE) program will involve several
federal agencies to test interventions to improve outcomes—including
employment outcomes—for children with disabilities and their families.

In their comments, both Labor and HHS expressed concern that GAO
found fragmentation and/or duplication without providing a more detailed
explanation of its findings. GAO did not find duplication, but rather, found
fragmentation and overlap among programs providing employment
support for people with disabilities that suggests the need to look more
closely at the potential for unnecessary duplication. GAO stated that
some programs have a greater potential for duplication than others, and
provided some examples. GAO plans to issue a more detailed report on
fragmentation, overlap, and the potential for duplication among programs
that support employment for people with disabilities in 2012.

Labor asserted that GAO’s findings implied that one agency or program
could address the needs of all people with disabilities. GAO agrees with
Labor that people with disabilities have varied needs that may not
adequately be served by one program alone. However, GAO still
recommends that OMB and the agencies continue to work together to
determine whether consolidating some overlapping programs might result
in either cost savings or address service gaps through more efficient
delivery of services. Labor also pointed out that several of the programs
included in the scope of GAO’s study were not created specifically to


8
Exec. Order No. 13,548, 75 Fed. Reg. 45,039 (July 30, 2010).
9
Exec. Order No. 13,583, 76 Fed. Reg. 52,847 (Aug. 23, 2011).




Page 210                          GAO-12-342SP Duplication, Overlap, and Fragmentation
                    provide employment support for people with disabilities, and that service
                    inclusion and integration is consistent with disability civil rights laws. GAO
                    agrees and included such programs to provide a more comprehensive
                    picture of the services and supports available to help people with
                    disabilities stay at work or return to work.

                    Four agencies—USDA, HHS, Labor, and SSA—highlighted unique
                    characteristics of their programs, with respect to the actual services
                    provided, program design used, and populations served. For example,
                    USDA noted that the AgrAbility program is the only federally funded
                    program that has developed expertise to accommodate disability among
                    those working in agriculture. GAO revised the report to more clearly
                    reflect program variation, as appropriate.

                    Labor questioned whether servicemembers and veterans should be
                    considered similar populations. While there are obvious distinctions, GAO
                    included programs serving these populations in one category because
                    most DOD programs in the scope of this review reported facilitating the
                    transition of servicemembers into veteran status. In addition, there are a
                    number of programs that serve both servicemembers and veterans, such
                    as Labor’s America’s Heroes at Work program and REALifelines
                    program.

                    Two agencies commented on their programs’ outcomes related to
                    employment. SSA pointed out that a low return-to-work rate among its
                    disability beneficiaries does not necessarily raise questions about the
                    efficiency and effectiveness of its disability program, and also noted that
                    programs that support employment for people with disabilities have
                    varying definitions of disability, which may affect the return-to-work
                    objectives of any given program. In addition, USDA noted that most
                    participants in its AgrAbility program were able to continue working, and
                    that the program has demonstrated a high return on investment. GAO
                    modified language and added some additional information to the report to
                    address these points.

                    Finally, Labor provided examples of coordination within and among
                    agencies that GAO did not identify through its survey. GAO made
                    changes to the report, as appropriate, and plans to include additional
                    information on coordination among selected programs in its 2012 report.



How GAO Conducted   The information contained in this analysis is based on findings from the
                    products listed in the related GAO products section as well as additional
Its Work            work GAO conducted to be published as a separate product in 2012.
                    GAO identified programs that support employment for people with
                    disabilities by reviewing the Catalog of Federal Domestic Assistance and
                    GAO’s prior work and consulting stakeholders. GAO included programs
                    that served only people with disabilities, as well as programs that served




                    Page 211                       GAO-12-342SP Duplication, Overlap, and Fragmentation
              a broader population but provided special consideration to people with
              disabilities or their employers. 10 GAO did not conduct an independent
              legal analysis to identify relevant programs. GAO validated this list of
              programs with agency officials and fielded a web-based survey to these
              programs from August 2011 to October 2011. GAO used the survey to
              collect information on programs’ objectives, eligibility criteria, services
              offered, and program obligations in fiscal year 2010, among other data.
              When programs were jointly administered by two or more federal
              agencies, GAO consulted with the agencies and asked them to designate
              one official to fill out the survey for that program. GAO incorporated data
              reliability checks into the survey instrument, reviewed documentation, and
              conducted follow-up interviews, as necessary. GAO followed up with
              some survey respondents based on electronic checks of data
              submissions and other criteria. GAO determined that the data used in this
              report were sufficiently reliable for the purposes of this report. GAO also
              interviewed researchers knowledgeable about employment and disability
              issues. Appendix III lists the programs GAO identified that may have
              similar or overlapping objectives, provide similar services, or be
              fragmented across government missions. Overlap and fragmentation may
              not lead to actual duplication, and some degree of overlap and duplication
              may be justified.



Related GAO   Social Security Disability: Ticket to Work Participation Has Increased, but
              Additional Oversight Needed. GAO-11-324. Washington, D.C.: May 6,
Products      2011.

              High-Risk Series: An Update. GAO-11-278. Washington, D.C.: February
              2011.

              Highlights of a Forum: Actions that Could Increase Work Participation for
              Adults with Disabilities. GAO-10-812SP. Washington, D.C.: July 2010.

              Federal Disability Programs: More Strategic Coordination Could Help
              Overcome Challenges to Needed Transformation. GAO-08-635.
              Washington, D.C.: May 20, 2008.

              Highlights of a Forum: Modernizing Federal Disability Policy.
              GAO-07-934SP. Washington, D.C.: August 2007.




              10
                Specifically, in order to be considered within GAO’s scope, agencies must have reported
              that their programs met at least one of the following criteria and provided an employment-
              related service in fiscal year 2010: (1) people with disabilities are mentioned in the
              legislation as a targeted group, (2) people are eligible for the program wholly because of a
              disability, (3) people are eligible for the program partially because of a disability, (4)
              people with disabilities are given special consideration in eligibility determinations, (5)
              people with disabilities are given priority in being served, or (6) employers of people with
              disabilities are a targeted group.




              Page 212                             GAO-12-342SP Duplication, Overlap, and Fragmentation
                      Veterans’ Employment and Training Service: Labor Could Improve
                      Information on Reemployment Services, Outcomes, and Program Impact.
                      GAO-07-594. Washington, D.C.: May 24, 2007.

                      Federal Disability Assistance: Wide Array of Programs Needs to Be
                      Examined in Light of 21st Century Challenges. GAO-05-626. Washington,
                      D.C.: June 2, 2005.

                      People with Disabilities: Federal Programs Could Work Together More
                      Efficiently to Promote Employment. GAO-HEHS-96-126. Washington,
                      D.C.: September 3, 1996.



Contact Information   For additional information about this area, contact Daniel Bertoni at (202)
                      512-7215 or bertonid@gao.gov.




                      Page 213                      GAO-12-342SP Duplication, Overlap, and Fragmentation
31. Science, Technology, Engineering, and
Mathematics Education
Strategic planning is needed to better manage overlapping programs across multiple agencies.



Why This Area Is                   Federal agencies obligated $3.1 billion in fiscal 2010 on Science,
                                   Technology, Engineering, and Mathematics (STEM) education programs.
Important                          These programs can serve an important role both by helping to prepare
                                   students and teachers for careers in STEM fields and by enhancing the
                                   nation’s global competitiveness. In addition to the federal effort, state and
                                   local governments, universities and colleges, and the private sector have
                                   also developed programs that provide opportunities for students to pursue
                                   STEM education and occupations. However, research shows that despite
                                   this investment, the United States lacks a strong pipeline of future
                                   workers in STEM fields and that U.S. students continue to lag behind
                                   students in other highly technological nations in mathematics and science
                                   achievement.

                                   Over the decades, Congress and the executive branch have continued to
                                   create new STEM education programs, even though there is a general lack
                                   of assessment of how well the programs are working. Recently, both
                                   Congress and the administration called for a more strategic and effective
                                   approach to the federal government’s investment in STEM education. The
                                   America COMPETES Reauthorization Act of 2010 requires the Director of
                                   the Office of Science and Technology Policy (OSTP) within the Executive
                                   Office of the President to establish a committee under the National Science
                                   and Technology Council (NSTC) to (1) develop a 5-year strategic plan that
                                   includes common measures to assess progress towards the plan’s goals,
                                   (2) coordinate STEM education activities and programs among respective
                                   federal agencies, and (3) develop an inventory of federal STEM education
                                   programs and identify areas of duplication among those programs. 1


What GAO Found                     In fiscal year 2010, 173 of the 209 (83 percent) STEM education
                                   programs administered by 13 federal agencies overlapped to some
                                   degree with at least 1 other program in that they offered similar services
                                   to similar target groups in similar STEM fields to achieve similar
                                   objectives (see fig. below). 2 Federal STEM education programs are also



                                   1
                                    Pub. L. No. 111-358, § 101 (2011).
                                   2
                                    For purposes of GAO’s engagement, we defined a federally funded STEM education
                                   program as a program funded in fiscal year 2010 by congressional appropriation or
                                   allocation that includes one or more of the following as a primary objective: (1) attracting
                                   and preparing students throughout their academic careers in STEM areas, (2) improving
                                   teacher education in STEM areas, (3) improving or expanding the capacity of K-12
                                   schools or postsecondary institutions to promote or foster education in STEM fields, or (4)
                                   conducting research to enhance the quality of STEM education provided to students.




                                   Page 214                              GAO-12-342SP Duplication, Overlap, and Fragmentation
                                     fragmented across a number of agencies. The number of programs each
                                     of the 13 agencies administered in 2010 ranged from 3 to 46. Three
                                     agencies—the Department of Health and Human Services, the
                                     Department of Energy, and the National Science Foundation—administer
                                     more than half of all programs—112 of 209. These programs range from
                                     being narrowly focused on a specific group or field of study to offering a
                                     range of services to students and teachers across STEM fields. Agencies
                                     obligated over $3 billion to STEM education programs in fiscal year 2010.
                                     The National Science Foundation and the Department of Education
                                     programs account for over half of this funding. Almost a third of the
                                     programs had obligations of $1 million or less, with 5 programs having
                                     obligations more than $100 million each.

Overlapping Federal STEM Education Programs




                                     This complicated patchwork of fragmented and overlapping programs has
                                     largely resulted from federal efforts to both create and expand programs
                                     across many agencies in an effort to improve STEM education and
                                     increase the number of students going into STEM fields. Program officials
                                     reported that approximately one-third of STEM education programs
                                     funded in fiscal year 2010 were first funded between 2005 and 2010.
                                     Indeed, the creation of new programs during that time frame may have
                                     contributed to overlap and, ultimately, to inefficiencies in how STEM
                                     programs across the federal government are focused and delivered.
                                     Overlapping programs can lead to individuals and institutions being
                                     eligible for similar services in similar STEM fields offered through multiple
                                     programs. Without information sharing, this could lead to the same
                                     service being provided to the same individual or institution (see fig.
                                     below). Fragmentation and overlap can frustrate federal officials’ efforts to
                                     administer programs in a comprehensive manner, limit the ability of
                                     decision makers to determine which programs are most cost-effective,
                                     and ultimately increase program administrative costs.

                                     Many programs provided services to similar target groups, such as K-12
                                     students, postsecondary students, K-12 teachers, and college faculty and


                                     Page 215                       GAO-12-342SP Duplication, Overlap, and Fragmentation
                                      staff. The vast majority of programs (170) serve postsecondary students.
                                      Ninety-five programs served college faculty and staff, 75 programs served
                                      K-12 students, and 70 programs served K-12 teachers. In addition, many
                                      programs served multiple target groups. In fact, 177 programs were
                                      primarily intended to serve two or more target groups. In addition, as the
                                      figure below illustrates, many STEM education programs provide similar
                                      services.

Services Provided by Federal STEM Education Programs




                                      Furthermore, it is important to compare programs’ target groups and
                                      academic STEM fields that are a focus of the program (a STEM field of
                                      focus) together to get a better picture of the potential target beneficiaries
                                      that could be served within a given STEM discipline. As the table below
                                      illustrates, many programs are designed to serve multiple target groups
                                      across multiple STEM fields of focus. The majority of programs served
                                      target groups across four or more STEM fields of focus, with only 23
                                      programs focusing on one specific STEM field.




                                      Page 216                       GAO-12-342SP Duplication, Overlap, and Fragmentation
STEM Fields of Focus and Target Groups of Federal STEM Education Programs

                  Agricultural                          Computer      Earth                                                     Social
Target groups       sciences     Biology   Chemistry      science sciences               Engineering   Mathematics Physics   sciences    Technology
K-12 students               8        40           36              30             38              32            33       31         19           43
Postsecondary              22        99           85              84             64              89            79       76         62           87
students
K-12 teachers               5        36           33              25             39              26            28       29         17           38
College faculty            17        49           42              43             35              47            37       36         30           50
and staff
                                              Source: GAO analysis of survey responses

                                              Note: Many STEM education programs serve multiple target groups with multiple STEM fields of
                                              focus. The totals cited in this table do not sum to 209, the number of programs in GAO’s review. Earth
                                              sciences includes atmospheric and ocean sciences; social sciences includes psychology, sociology,
                                              anthropology, cognitive science, economics, and behavior sciences.


                                              However, even when programs overlap, the services they provide and the
                                              populations they serve may differ in meaningful ways and would therefore
                                              not necessarily be duplicative. There may be important differences
                                              between the specific STEM field of focus and the program’s stated goals.
                                              For example, there were 31 programs that provided scholarships or
                                              fellowships to doctoral students in the field of physics. However, one
                                              program’s goal was to increase environmental literacy related to estuaries
                                              and coastal watersheds while another program focused on supporting
                                              education in nuclear science, engineering, and related trades. In addition,
                                              programs may be primarily intended to serve different specific populations
                                              within a given target group. Indeed, of the 34 programs providing services
                                              to K-12 students in the field of technology, 10 are primarily intended to
                                              serve specific underrepresented, minority, or disadvantaged groups and 2
                                              are limited geographically to individual cities or universities. As NSTC
                                              develops its 5-year strategic plan, it will need to conduct more analysis of
                                              each program to avoid potential duplication and ensure that the federal
                                              investment in these programs advances the governmentwide goals
                                              expressed in the strategic plan.

                                              In addition to the fragmented and overlapping nature of federal STEM
                                              education programs, little is known about the effectiveness of these
                                              programs. Since 2005, when GAO first reported on this issue, GAO found
                                              that the majority of programs have not conducted comprehensive
                                              evaluations of how well their programs are working. Agency and program
                                              officials would benefit from guidance and information sharing within and
                                              across agencies about what is working and how to best evaluate
                                              programs. This could not only help to improve individual program
                                              performance, but could also inform agency- and governmentwide
                                              decisions about which programs should continue to be funded. Without
                                              an understanding of what is working in some programs, it will be difficult
                                              to develop a clear strategy for how to spend limited federal funds.

                                              Finally, although NSTC is in the process of developing a governmentwide
                                              strategic plan for STEM education consistent with the requirements of the
                                              America COMPETES Reauthorization Act of 2010, GAO found that
                                              agencies in its 2005 review do not use outcome measures for STEM



                                              Page 217                                        GAO-12-342SP Duplication, Overlap, and Fragmentation
                         programs in a way that is clearly reflected in their own performance plans
                         and performance reports—key strategic planning documents. 3 The
                         absence of clear links between the programs and agencies’ planning
                         documents may hinder decision makers’ ability to assess how agencies’
                         STEM efforts contribute to agencywide performance goals and the overall
                         federal STEM effort. Moving forward, the GPRA Modernization Act of
                         2010 requires agencies to identify program activities and other activities
                         that contribute to each performance goal, and as agencies implement this
                         provision, more information about STEM education efforts in performance
                         plans and reports can be expected. In addition, NSTC’s ongoing strategic
                         planning efforts provide an opportunity to develop guidance on how to
                         incorporate STEM- and program-specific education goals and measures
                         in agencies’ performance planning and reporting process.



Actions Needed and       GAO recommended in January 2012 that the Director of OSTP direct
                         NSTC to take several actions related to STEM education programs and
Potential Financial or   related activities.
Other Benefits           To ensure the federal government strategically invests limited funds in an
                         efficient and effective manner that achieves the greatest impact in
                         developing a pipeline of future workers in STEM fields, the Director of
                         OSTP should direct NSTC to

                         •   work with agencies, through its strategic planning process to identify
                             programs that might be candidates for consolidation or elimination.
                             Specifically, this could be achieved through an analysis that includes
                             information on program overlap, similar to the analysis conducted by
                             GAO in this report, and information on program effectiveness. As part
                             of this effort, OSTP should work with agency officials to identify and
                             report any changes in statutory authority necessary to execute each
                             specific program consolidation identified by NSTC’s strategic plan.

                         To ensure NSTC’s strategic planning process enhances the federal
                         government’s ability to assess what works and the process for identifying
                         potential program consolidation includes information on program
                         effectiveness, the Director of OSTP should direct NSTC to

                         •   develop guidance to help agencies determine the types of evaluations
                             that may be feasible and appropriate for different types of STEM



                         3
                          These strategic planning documents were required under the Government Performance
                         and Results Act (GPRA) and continue to be required under the GPRA Modernization Act
                         of 2010. We did not assess agencies’ plans and reports for compliance with GPRA and
                         the GPRA Modernization Act of 2010 requirements, and our findings that some agencies
                         did not include STEM education programs in their plans and reports should not be read to
                         suggest that we identified instances of noncompliance. For example, we did not assess
                         whether a particular STEM education program is a “program activity” as that term is
                         defined by GPRA for purposes of determining what STEM education programs are
                         required to be covered in agency performance plans and reports. 31 U.S.C. § 1115(h)(11).




                         Page 218                           GAO-12-342SP Duplication, Overlap, and Fragmentation
                           education programs and develop a mechanism for sharing this
                           information across agencies. This could include guidance and sharing
                           of information that outlines practices for evaluating similar types of
                           programs.

                       To ensure agencies’ efforts are better aligned to governmentwide STEM
                       education goals and federal resources are concentrated on advancing
                       those goals, the Director of OSTP should direct NSTC to

                       •   develop guidance for how agencies can better incorporate each
                           agency’s STEM education efforts and the goals from NSTC’s 5-year
                           STEM education strategic plan into each agency’s own performance
                           plans and reports.

                       To improve transparency and strengthen accountability of NSTC’s
                       strategic planning and coordination efforts, the Director of OSTP should
                       direct NSTC to

                       •   develop a framework for how agencies will be monitored to ensure
                           that they are collecting and reporting on NSTC strategic plan goals.
                           This framework should include alternatives for a sustained focus on
                           monitoring coordination of STEM education programs if the NSTC
                           Committee on STEM terminates in 2015 as called for in its charter.



Agency Comments        GAO provided a draft of its January 2012 report to OSTP and the Office
                       of Management and Budget (OMB) for review and comment. OSTP
and GAO’s Evaluation   provided technical comments, which were incorporated as appropriate.
                       OMB stated it had no concerns with GAO’s report.

                       GAO also provided a draft of this report section to OMB and OSTP for
                       review and comment. OMB provided technical comments, which were
                       incorporated as appropriate. OMB stated that GAO’s four
                       recommendations are critical to improving the provision of STEM
                       education across the federal government. OSTP provided written
                       comments and noted that its analysis of overlap and duplication in STEM
                       education programs identified no duplicative programs. In cases where it
                       identified overlapping programs it found that some program
                       characteristics differed. As an illustration, OSTP explained that there
                       could be two STEM education programs, one that worked with inner city
                       children in New York City and another with rural children in North Dakota.
                       GAO notes that while it may be important to serve both of these
                       populations, it is not clear that two separate administrative structures are
                       necessary to ensure both populations are served. OSTP agreed to
                       consider program consolidation or elimination as part of its strategic
                       planning process, but also said that it would consider other approaches
                       such as strategic alignment of program goals, joint solicitations, improved
                       program design and execution, and memoranda of understanding to
                       increase efficiency and effectiveness of federal STEM Education
                       spending. OSTP stated that they will address GAO’s recommendations in
                       the NSTC 5-Year Federal STEM Education Strategic Plan, which will be



                       Page 219                      GAO-12-342SP Duplication, Overlap, and Fragmentation
                      released in spring 2012. OMB added that joint administration of programs
                      across agencies is also an effective measure at eliminating duplication
                      and overlap and guaranteeing that the best resources are devoted to
                      programming. As part of GAO’s routine audit work, GAO will track agency
                      actions to address these recommendations and report to Congress. All
                      written comments are reprinted in appendix IV.



How GAO Conducted     The information contained in this analysis is based on findings from the
                      products listed in the related GAO products section as well as additional
Its Work              work GAO conducted. GAO reviewed relevant federal laws, regulations,
                      and relevant literature and past reports. GAO interviewed officials from
                      OSTP and OMB, and officials from other federal agencies that administer
                      STEM education programs. In addition, to gather information on federal
                      STEM education programs and to assess the level of fragmentation,
                      overlap, and potential duplication, GAO surveyed over 200 programs
                      across 13 agencies that met GAO’s definition of a STEM education
                      program, asking questions about program objectives, target populations,
                      services provided, interagency coordination, outcome measures and
                      evaluations, and funding. Furthermore, to gather information on program
                      effectiveness, GAO reviewed evaluations provided by program officials,
                      as well as agencies’ annual performance plans and reports. Appendix III
                      lists the programs GAO identified that may have similar or overlapping
                      objectives, provide similar services or be fragmented across government
                      missions. Overlap and fragmentation may not necessarily lead to actual
                      duplication, and some degree of overlap and duplication may be justified.



Related GAO           Science, Technology, Engineering, and Mathematics Education: Strategic
                      Planning Needed to Better Manage Overlapping Programs across
Products              Multiple Agencies. GAO-12-108. Washington, D.C.: January 20, 2012.

                      Science, Technology, Engineering, and Mathematics Education: Survey
                      of Federal Programs (GAO-12-110SP, January 2012), an E-supplement
                      to GAO-12-108. GAO-12-110SP. Washington, D.C.: January 20, 2012.

                      Higher Education: Federal Science, Technology, Engineering, and
                      Mathematics Programs and Related Trends. GAO-06-114. Washington,
                      D.C.: October 12, 2005.



Contact Information   For additional information about this area, contact George A. Scott at
                      (202) 512-7215 or scottg@gao.gov.




                      Page 220                      GAO-12-342SP Duplication, Overlap, and Fragmentation
32. Financial Literacy
Overlap among financial literacy activities makes coordination and clarification of roles and responsibilities
essential, and suggests potential benefits of consolidation.



Why This Area Is                      Financial literacy plays an important role in helping to ensure the financial
                                      health and stability of individuals and families, and economic changes in
Important                             recent years have further highlighted the need to empower all Americans
                                      to make informed financial decisions. As GAO reported in March 2011,
                                      federal financial literacy activities are fragmented among multiple federal
                                      agencies, which increases the risk of inefficient, uncoordinated, or
                                      redundant use of resources. This year’s report provides updated
                                      information on coordination activities, as well as additional information on
                                      areas of overlap and on the evolving role of the new Bureau of Consumer
                                      Financial Protection.



What GAO Found                        Federal financial literacy programs and resources are spread widely
                                      among many different federal agencies. A 2009 survey conducted by the
                                      Departments of the Treasury and Education, which GAO cited in its
                                      March 2011 report, asked federal agencies to self-identify their financial
                                      literacy efforts, and 56 programs related to financial literacy were reported
                                      by 20 federal agencies. However, GAO’s subsequent analysis found that
                                      there was a high degree of inconsistency in how different agencies
                                      defined financial literacy programs and whether they counted related
                                      activities as one or multiple programs.

                                      Using a more consistent set of criteria, GAO has identified 15 significant
                                      financial literacy programs or activities among 13 federal agencies. These
                                      efforts are defined as relatively comprehensive in scope or scale and
                                      include financial literacy as a key objective rather than a tangential goal. 1
                                      As seen in appendix III, the estimated cost for 13 of these 15 financial
                                      literacy programs or activities was about $30.7 million in fiscal year 2010;
                                      GAO is still in the process of developing cost estimates for the activities of


                                      1
                                        According to GAO’s criteria, significant financial literacy and education activities and
                                      programs were those whose primary goals were to educate, inform, or encourage
                                      individuals to make informed judgments and take effective actions regarding the current
                                      and future use and management of money. However, GAO excluded (1) those for which
                                      financial literacy was only a minimal component; (2) programs that provided financial
                                      information related to the administration of the program itself (e.g., information on applying
                                      for student financial aid or evaluating Medicare choices) rather than information aimed at
                                      increasing the beneficiaries’ financial literacy and comprehension more generally; (3)
                                      activities or programs that were purely internal to the agency, such as information
                                      provided to agency employees on their employment and retirement benefits; and (4)
                                      activities that represented individualized services or advice (e.g. assistance with tax
                                      preparation or development of a debt management plan). For the purposes of this report,
                                      GAO counted as a federal agency NeighborWorks® America, a government-chartered,
                                      nonprofit corporation that receives federal funding for housing counseling, including
                                      through an annual appropriation from Congress.




                                      Page 221                             GAO-12-342SP Duplication, Overlap, and Fragmentation
the Department of Defense (DOD) and for the Bureau of Consumer
Financial Protection, which was not created until July 2010.

In addition, federal agencies spent about $136.6 million in fiscal year
2010 on housing counseling. GAO has separated out costs for housing
counseling programs because education is only a limited aspect of most
housing counseling, which often consists largely of one-on-one service
and assistance to address individual situations. For example, foreclosure
mitigation counseling typically focuses on helping financially distressed
homeowners avoid foreclosure by working with lenders to remedy
mortgage delinquency.

Having multiple federal agencies involved in financial literacy efforts can
have certain advantages. In particular, agencies may have deep and
long-standing expertise and experience addressing specific issue areas
or serving specific populations. For example, the Securities and
Exchange Commission has efforts in place to protect securities investors
from fraudulent schemes, while the Department of Housing and Urban
Development (HUD) oversees most, but not all, federally supported
housing counseling. Moreover, DOD may be the agency most able to
efficiently and effectively deliver financial literacy programs and products
to servicemembers and their families. However, as GAO stated in a June
2011 report, relatively few evidence-based evaluations of financial literacy
programs have been conducted, limiting what is known about which
specific methods and strategies—and which federal financial literacy
activities—are most effective.

In addition, fragmentation increases the risk of inefficiency and
redundancy and highlights the need for strong coordination, or potential
consolidation, of these efforts. In general, GAO has found that the
coordination and collaboration among federal agencies with regard to
financial literacy has improved substantially in recent years. The
multiagency Financial Literacy and Education Commission (Commission)
was created by Congress in 2003 and charged, among other things, with
developing a national strategy to promote financial literacy and education,
coordinating federal efforts, and identifying areas of overlap and
duplication. Among other things, the Commission in concert with the
Department of the Treasury, which provides its primary staff support, has
served as a central clearinghouse for federal financial literacy
resources—for example, it created a centralized federal website and has
an ongoing effort to develop a catalog of federal research on financial
literacy. The Commission’s 2011 national strategy identified five action
areas, one of which was to further emphasize the role of the Commission
in coordination. The strategy’s accompanying Implementation Plan lays
out plans to coordinate communication among federal agencies, improve
strategic partnerships, and develop channels of communication with other
entities, including the President’s Advisory Council on Financial Capability
and the National Financial Education Network of State and Local
Governments. The Commission’s success in implementing these
elements of the National Strategy is key given the inherently challenging
task of coordinating the work of the Commission’s many member


Page 222                      GAO-12-342SP Duplication, Overlap, and Fragmentation
agencies—each of which has its own set of interests, resources, and
constituencies. Further, the addition of the Bureau of Consumer Financial
Protection, whose director serves as the Vice Chair of the Commission,
adds a new player to the mix that will influence the Commission’s
success.

GAO’s review thus far shows that there is little evidence of duplication
among existing federal financial literacy activities—that is, cases where
two or more agencies or programs are engaging in the same activities
and providing the same services to the same beneficiaries. However,
GAO did identify cases in which there is overlap—multiple agencies or
programs with similar goals and activities—that raise questions about the
efficiency of some federal financial literacy and housing counseling
efforts. For example, four federal agencies and one government-
chartered nonprofit corporation provide various forms of housing
counseling to consumers—DOD, HUD, the Department of Veterans
Affairs (VA), the Department of the Treasury, and NeighborWorks
America.

•   HUD obligated about $65.4 million in fiscal year 2010 for certifying
    and overseeing housing counseling agencies, training housing
    counselors, and providing counseling agencies with competitive
    grants. The Dodd-Frank Wall Street Reform and Consumer Protection
    Act (Dodd-Frank Act) required HUD to establish an Office of Housing
    Counseling, although as of October 2011, the office had not yet been
    established, in part due to budget constraints. HUD also has 15 other
    active programs that allow some portion of their funding to be used for
    housing counseling or have some housing counseling component. 2

•   The federally chartered nonprofit corporation NeighborWorks America
    received an appropriation from Congress in fiscal year 2010 that
    included $65 million for the National Foreclosure Mitigation
    Counseling Program; the organization also spent $2 million of its
    appropriated funds for other housing counseling activities.

•   VA has loan counselors that address housing issues in its Regional
    Loan Centers to help veterans facing foreclosure or other financial
    problems. VA often recommends HUD-approved housing counseling
    to veterans who are seeking VA-guaranteed loans but does not
    require it.


2
 These programs are the Federal Housing Administration’s Home Equity Conversion
Mortgage, Community Development Block Grant, HOME Investment Partnership
Program, Second Mortgage Assistance for First-Time Homebuyers, Rural Housing
Stability Grant Program, Public Housing Operating Fund, Section 8 Tenant-Based Rental
Assistance Homeownership Option, Demolition and Disposition of Public Housing, Family
Self-Sufficiency, Public Housing Resident Homeownership Programs, Conversion of
Distressed Public Housing to Tenant-Based Assistance, Low Income Housing
Preservation and Resident Homeownership Act Prepayment Options, Native American
Housing Assistance and Self Determination Act Housing Block Grants, Native Hawaiian
Housing Block Grants, and Section 8 Rental Assistance.




Page 223                          GAO-12-342SP Duplication, Overlap, and Fragmentation
•   DOD has a foreclosure counseling program for servicemembers
    returning from active duty abroad. This program is administered
    through the Military OneSource and the Military and Family Life
    Consultant Program.

•   The Department of the Treasury’s Financial Literacy and Education
    Counseling Pilot Program, created by the Housing and Economic
    Recovery Act of 2008, provided $4.15 million in grants in fiscal year
    2010 for financial literacy counseling to prospective homebuyers. 3

Another example of overlap lies in the financial literacy responsibilities of
the Bureau of Consumer Financial Protection, created by the Dodd-Frank
Act. The act established within the bureau an Office of Financial
Education and charged this office with developing and implementing a
strategy to improve financial literacy through activities including
opportunities for consumers to access, among other things, financial
counseling; information to assist consumers with understanding credit
products, histories, and scores; information about saving and borrowing
tools; and assistance in developing long-term savings strategies. This
office presents an opportunity to further promote awareness, coordinate
efforts, and fill gaps related to financial literacy. At the same time, the
duties this office is charged with fulfilling are in some ways similar to
those of a separate Office of Financial Education and Financial Access
within the Department of the Treasury, a small office that also seeks to
broadly improve Americans’ financial literacy. In addition, the Dodd-Frank
Act charges the Bureau of Consumer Financial Protection with developing
and implementing a strategy on improving the financial literacy of
consumers, even though the multiagency Financial Literacy and
Education Commission already has its own statutory mandate to develop,
and update as necessary, a national strategy for financial literacy. As the
bureau has been staffing up and planning its financial education activities,
it has been in regular communication with the Department of the Treasury
and with other members of the Financial Literacy and Education
Commission, and agency staff say they are seeking to coordinate their
respective roles and activities.

In addition, the Dodd-Frank Act created within the Bureau of Consumer
Financial Protection several offices that are charged by statute with duties
that are in some ways similar to those of other federal agencies. For
instance, the act created an Office of Service Member Affairs, which is
responsible for developing and implementing initiatives for
servicemembers and their families intended to educate and empower
them to make better informed decisions regarding consumer financial
products and services; monitoring complaints by service members and
their families; and coordinating with federal and state agencies regarding


3
 The Financial Literacy and Education Counseling Pilot Program was appropriated $2
million in fiscal year 2009 and $4.15 million in fiscal year 2010; the program was not
appropriated funds in fiscal years 2011 and 2012.




Page 224                            GAO-12-342SP Duplication, Overlap, and Fragmentation
                         consumer protection measures relating to consumer financial products
                         and services offered to, or used by, service members and their families.
                         These activities potentially overlap with those of DOD’s Financial
                         Readiness Campaign, in which Personal Financial Managers on military
                         bases provide financial educational programs, partnerships, counseling,
                         legal protections, and other resources designed to help servicemembers
                         and their families reach financial goals such as reducing debt, setting up
                         a spending plan, saving for college, addressing consumer protection
                         matters, and many others. Staff from the Bureau of Consumer Financial
                         Protection and DOD told GAO they are working closely to coordinate their
                         efforts.

                         The Dodd-Frank Act also creates within the bureau an Office of Financial
                         Protection for Older Americans, which is charged with helping seniors
                         recognize warning signs of unfair, deceptive, or abusive practices and
                         protect themselves from such practices; providing one-on-one financial
                         counseling on issues including long-term savings and later-life economic
                         security; and monitoring the legitimacy of certifications of financial
                         advisers who advise seniors. Potential overlap exists with the Federal
                         Trade Commission, which also plays a role in helping seniors avoid unfair
                         and deceptive practices. Further, the Department of Labor and the Social
                         Security Administration both have initiatives in place to help consumers
                         plan for retirement, and the Securities and Exchange Commission has
                         recently initiated efforts to address concerns about the designations and
                         certifications used by financial advisers. 4 Officials at the Bureau of
                         Consumer Financial Protection told GAO that they have been discussing
                         and coordinating their financial literacy roles and activities with those of
                         other federal agencies to avoid duplication of effort.



Actions Needed and       GAO expects to recommend that Congress may wish to consider

Potential Financial or   •   requiring federal agencies to evaluate the effectiveness of their
Other Benefits               financial literacy efforts and, if appropriate, to identify options for
                             consolidating such efforts. Federal agencies could potentially make
                             the most of scarce resources by consolidating financial literacy efforts
                             into the activities and agencies that are most effective. In addition to
                             improving effectiveness, such consolidation could have potential
                             monetary savings, an issue GAO is examining as part of ongoing
                             work; and




                         4
                          The Federal Trade Commission’s Division of Consumer and Business Education plans,
                         develops, and implements various web-based financial literacy activities that focus on
                         consumer protection, some of which has focused on scams targeted at seniors. The
                         Department of Labor’s Retirement Savings Education Campaign seeks to increase
                         retirement savings through workplace plans so that employees are better prepared for a
                         secure retirement. The Social Security Administration’s Special Initiative to Encourage
                         Savings focuses on saving and retirement issues and informing the public about SSA’s
                         programs related to old-age, survivors, and disability insurance system.




                         Page 225                           GAO-12-342SP Duplication, Overlap, and Fragmentation
                       •   monitoring the implementation of the Bureau of Consumer Financial
                           Protection’s efforts. As the bureau’s financial literacy activities evolve
                           and are implemented, it will be important to evaluate how those efforts
                           are working and make appropriate adjustments that might promote
                           greater efficiency and effectiveness.

                       The Bureau of Consumer Financial Protection should

                       •   delineate roles and responsibilities related to its new offices of
                           Financial Education, Service Member Affairs, and Financial Protection
                           for Older Americans. As these offices form more fully, they will need
                           to continue their efforts to work with federal agencies that have
                           overlapping responsibilities so as to carefully delineate their
                           respective activities and avoid duplication.



Agency Comments        GAO provided a draft of this report section to the Bureau of Consumer
                       Financial Protection, the Department of the Treasury, and the Department
and GAO’s Evaluation   of Housing and Urban Development for review and comment. The Bureau
                       of Consumer Financial Protection and the Department of the Treasury
                       provided written comments. The Department of Housing and Urban
                       Development provided technical comments, which were incorporated as
                       appropriate. GAO also provided selected portions of the draft report
                       section to those agencies listed in appendix III for their technical review,
                       and GAO incorporated those technical comments as appropriate. All
                       written comments are reprinted in appendix IV.

                       The Department of the Treasury said that it agreed that federal agencies
                       should evaluate the effectiveness of their financial literacy efforts and, if
                       appropriate, identify options for consolidating such efforts. However, the
                       department noted that it would be necessary for funding to be
                       appropriated for such evaluation. In addition, the department said it
                       believed that continued and enhanced coordination among agencies may
                       lead to greater effectiveness, in some cases, than consolidation. The
                       Bureau of Consumer Financial Protection’s written response highlighted
                       the bureau’s efforts to coordinate its activities, avoid duplication with other
                       agencies, and promote the evaluation of financial literacy efforts.



How GAO Conducted      The information contained in this analysis is based on findings from the
                       products listed in the related GAO products section and additional work
Its Work               GAO conducted. GAO collected information on the purpose,
                       beneficiaries, costs, and subject matter of federal financial literacy
                       programs and activities through interviews with staff of federal agencies
                       and through budget justifications, strategic plans, and other documents.
                       In some cases, costs provided are estimates because financial literacy
                       activities are not organized as separate budget line items or cost centers
                       within an agency. GAO also reviewed the Financial Literacy and
                       Education Commission’s 2011 national strategy and implementation plan
                       and memorandums of understanding and other documents related to
                       collaborations among federal agencies. Appendix III lists the programs



                       Page 226                       GAO-12-342SP Duplication, Overlap, and Fragmentation
                      GAO identified that may have similar or overlapping objectives, provide
                      similar services or be fragmented across government missions. Overlap
                      and fragmentation may not necessarily lead to actual duplication, and
                      some degree of overlap and duplication may be justified.



Related GAO           Highlights of a Forum: Financial Literacy: Strengthening Partnerships in
                      Challenging Times. GAO-12-299SP. Washington, D.C.: February 9,
Products              2012.

                      Financial Literacy: A Federal Certification Process for Providers Would
                      Pose Challenges. GAO-11-614. Washington, D.C.: June 28, 2011.

                      Financial Literacy: The Federal Government’s Role in Empowering
                      Americans to Make Sound Financial Choices. GAO-11-540T.
                      Washington, D.C.: April 12, 2011.

                      Financial Literacy and Education Commission: Progress Made in
                      Fostering Partnerships, but National Strategy Remains Largely
                      Descriptive Rather Than Strategic. GAO-09-638T. Washington, D.C.:
                      April 29, 2009.

                      Financial Literacy and Education Commission: Further Progress Needed
                      to Ensure an Effective National Strategy. GAO-07-100. Washington, D.C.:
                      December 4, 2006.

                      Highlights of a GAO Forum: The Federal Government’s Role in Improving
                      Financial Literacy. GAO-05-93SP. Washington, D.C.: November 15, 2004.



Contact Information   For additional information about this area, contact Alicia Puente Cackley
                      at (202) 512-8678 or cackleya@gao.gov.




                      Page 227                      GAO-12-342SP Duplication, Overlap, and Fragmentation
Section II: Areas in Which GAO Has
Identified Other Cost Savings or Revenue
Enhancement Opportunities
              This section summarizes 19 additional opportunities for agencies or
              Congress to consider taking action that could either reduce the cost of
              government operations or enhance revenue collections for the Treasury.




              Page 228          GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
33. Air Force Food Service
The Air Force has opportunities to achieve millions of dollars in cost savings annually by reviewing and
renegotiating food service contracts, where appropriate, to better align with the needs of installations.



Why This Area Is                     The Air Force has 149 main dining facilities at installations nationwide. 1
                                     According to Air Force officials, most installations have their own
Important                            individual contracts for food service, ranging from full-service contracts,
                                     providing cooking, cashiering, and cleaning services at Air Force dining
                                     facilities, to contracts that cover only basic cleaning services. The cost for
                                     these contracts, according to Air Force officials, ranges from $725,000 to
                                     $21.4 million per year, with a total cost of approximately $150 million per
                                     year for all Air Force installations. GAO has previously reported that,
                                     when contracting for services, properly defined requirements are a
                                     prerequisite to obtaining value for the department.

                                     As GAO reported in July 2011, the Air Force recently undertook an
                                     initiative to improve food service at six pilot installations, with intentions to
                                     eventually expand this initiative to more Air Force installations in the
                                     United States over the next 5 years. This Food Transformation Initiative is
                                     primarily designed to improve the quality, variety, and availability of food.
                                     In the process, however, according to Air Force officials, the first group of
                                     pilot installations achieved cost savings compared to their previous
                                     contracts while increasing hours in the dining facilities and serving an
                                     additional 500,000 meals per year.



What GAO Found                       The Air Force has opportunities to reduce its overall food service costs at
                                     installations by reviewing food service contracts and adjusting them, when
                                     appropriate, to better meet the needs of the installation, including aligning
                                     labor needs with the actual number of meals served by the dining facilities.
                                     The Food Transformation Initiative contract was awarded to Aramark, a
                                     large company experienced in food service. The new contractor reviewed
                                     and adjusted staffing levels for contractor staff at the main dining facilities
                                     to better meet the needs of the facilities. As GAO reported in July 2011, the
                                     Air Force and Aramark anticipated reducing labor hours at five of the six
                                     Food Transformation Initiative pilot locations and using the savings to offset
                                     the costs of the Food Transformation Initiative contract. According to Air
                                     Force officials, savings for fiscal year 2010 were approximately 8 percent
                                     compared to the cost of the previous contracts. GAO compared the
                                     estimated amount of food service labor for which the Air Force contracted
                                     at the six pilot installations prior to the implementation of the Food
                                     Transformation Initiative to Aramark’s projected work schedules under the


                                     1
                                      The Air Force calls its main dining facilities “mission essential feeding facilities.” GAO
                                     uses the term main dining facilities to refer to these appropriated fund dining facilities in
                                     this report.




                                     Page 229                 GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
initiative and found that, even with expanded hours of operation and
anticipated increases in the number of meals served, Aramark reduced the
total number of labor hours at five of the six pilot installations by 53 percent.
For example, at Travis Air Force Base, the number of labor hours for the
mess attendant contract decreased by more than half—from approximately
2,042 hours per week to 920 hours per week. At Elmendorf Air Force Base,
labor hours decreased from approximately 1,350 hours per week to 588
hours per week. The table below shows the change in the number of labor
hours at all six pilot locations.

Comparison of Labor Hours under Previous Contract to Labor Hours under the
Food Transformation Initiative Contract

                               Estimated weekly labor hours      Estimated weekly labor hours
 Air Force base                 under the previous contract            under the new contract
 Elmendorf                                              1,350                              588
 Fairchild                                                979                              476
 Little Rock                                            1,548                              303
 MacDill                                                1,201                             1,063
 Patrick                                                1,218                             1,349
 Travis                                                 2,042                              920
 Total                                                  8,338                             4,699
Source: GAO analysis of Air Force data.



Patrick Air Force Base was the only pilot base where the labor hours
were not reduced and the only one of the pilot installations where the
previous food service contract had recently been audited. The results of
the audit, conducted by the Air Force Audit Agency in 2009, showed that
the food service personnel did not align with the contract workload
estimates with actual meals served. Specifically, meal counts were
overstated, resulting in the installation paying more for contracted food
services than necessary. As a result of this audit, in October 2009, Patrick
Air Force Base renegotiated its workload estimates and pay rates,
resulting in savings of approximately $77,000 annually.

Although it is unclear whether the opportunity for savings at the pilot
installations is representative of the savings that could be realized by
other installations, the potential exists for other Air Force installations that
rely on contracts to meet their food service needs to achieve similar
financial benefits. Prior to the implementation of the Food Transformation
Initiative, the Air Force did not closely monitor the number of labor hours
required to provide food services. Air Force officials told GAO that they
did not realize how poorly their food service contracts were structured, in
that these contracts might not be matched to the labor needs of the
installation.




Page 230                          GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
Actions Needed and       The Air Force has opportunities to significantly reduce its food service
                         costs at Air Force installations that are not part of the Food
Potential Financial or   Transformation Initiative pilot. 2 During GAO’s review of the Air Force’s
Other Benefits           Food Transformation Initiative, GAO discussed this potential opportunity
                         for savings with Air Force officials. As a result, the Air Force issued a
                         memorandum to the Major Commands directing a review of existing food
                         service contracts to determine if the contracts meet current mission
                         needs. For example, the memorandum indicates that special attention
                         must be given to whether the food service contract workload estimates
                         were properly aligned with the actual number of meals served. GAO
                         believes that this is a good first step toward addressing this issue. GAO
                         recommended in July 2011 that the Secretary of the Air Force should

                         •   monitor the actions taken by the Air Force Major Commands in
                             response to the direction to review food service contracts, and take
                             actions, as appropriate, to ensure that cost-savings measures are
                             implemented.



Agency Comments          GAO provided a draft of its July 2011 report to the Department of Defense
                         for review and comment. The Department of Defense agreed with this
and GAO’s Evaluation     recommendation and stated that the Commander of the Air Force
                         Services Agency requested that each Air Force Major Command task its
                         bases to conduct a 100 percent review of existing food service to
                         determine if their current contract workload estimates meet current
                         mission needs or if the contracts require modifications. According to Air
                         Force officials, eight installations have recently reviewed and renegotiated
                         their food service contracts for a total savings of over $2.5 million per
                         year. Further, Air Force officials told GAO that the Air Force continues to
                         review contracts for additional savings opportunities. The Department of
                         Defense further noted that it intends to share the results of the Air Force’s
                         review of its food service labor costs to achieve cost savings with the
                         other services, where similar reviews could result in substantial financial
                         benefits. GAO agrees that the other services should similarly consider
                         reviewing their food service contracts for potential cost savings where
                         appropriate. As part of its routine audit work, GAO will track the extent to
                         which progress has been made to address the identified action and report
                         to Congress.




                         2
                          The National Defense Authorization Act for Fiscal Year 2012 contains a provision
                         requiring the Secretary of the Air Force to submit certain information regarding the Food
                         Transformation Initiative prior to further implementation. See Pub. L. No. 112-81, § 352
                         (2011). The report may provide an opportunity to evaluate the opportunities for reducing
                         food service costs under the initiative.




                         Page 231               GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
How GAO Conducted     The information contained in this analysis is based on findings from the
                      product listed in the related GAO products section as well as additional
Its Work              work GAO conducted. GAO obtained documentation from the pilot
                      installations regarding labor hours under the previous contracts, including
                      memoranda showing how the contract prices were negotiated and
                      contractor price proposals that estimated the number of labor hours for
                      these contracts. Although these documents do not contain the precise
                      number of labor hours for the main dining facilities, they provided the best
                      estimates of labor costs available. GAO reviewed this information from
                      the Air Force about the amount of labor included in previous food service
                      contracts at the six pilot locations and compared this to information from
                      the Air Force and Aramark presented in projected work schedules for the
                      Food Transformation Initiative contract. Further, GAO talked with Air
                      Force officials about opportunities for reducing food service costs outside
                      of the Food Transformation Initiative. Finally, GAO spoke with Air Force
                      officials about cost savings achieved from reviewing food service
                      contracts.



Related GAO Product   Defense Management: Actions Needed to Improve Management of Air
                      Force’s Food Transformation Initiative. GAO-11-676. Washington, D.C.:
                      July 26, 2011.



Contact Information   For additional information about this area, contact Brian Lepore at (202)
                      512-4523 or leporeb@gao.gov.




                      Page 232           GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
34. Defense Headquarters
The Department of Defense should review and identify further opportunities for consolidating or reducing the
size of headquarters organizations.



Why This Area Is                    In 2010, the Secretary of Defense expressed concerns about the
                                    dramatic growth in Department of Defense’s (DOD) headquarters and
Important                           support organizations that had occurred since 2001, including increases
                                    in spending, staff, numbers of senior executives, and proliferation of
                                    management layers. DOD has multiple layers of headquarters
                                    management with complex, overlapping relationships. Such layers
                                    include, but are not limited to, the Office of the Secretary of Defense, the
                                    Joint Staff, and portions of the military departments, defense agencies,
                                    and DOD field activities. In DOD Instruction 5100.73, DOD defines those
                                    headquarters whose primary mission is to manage or command the
                                    programs and operations of DOD and its components, and their major
                                    military units, organizations, or agencies as major DOD headquarters
                                    activities. 1 Since the mid-1980s, Congress has enacted statutory limits on
                                    the number of major DOD headquarters activity personnel, to include the
                                    Office of the Secretary of Defense; the headquarters of the combatant
                                    commands; the Office of the Secretary of the Army and the Army Staff;
                                    the Office of the Secretary of the Air Force and the Air Staff; the Office of
                                    the Secretary of the Navy, the Office of the Chief of Naval Operations,
                                    and the Headquarters, Marine Corps; and the headquarters of the
                                    defense agencies and DOD field activities. 2 In addition, Congress has
                                    enacted various reporting requirements related to major DOD
                                    headquarters activity personnel.

                                    In 2010, the Secretary of Defense directed DOD to undertake a
                                    departmentwide initiative to assess how the department is staffed,
                                    organized, and operated, with the goal of reducing excess overhead costs
                                    and reinvesting these savings toward sustainment of DOD’s current force
                                    structure and modernizing its weapons portfolio. This effort identified
                                    efficiency initiatives totaling about $178 billion in projected savings across
                                    the military departments and other DOD components from fiscal year
                                    2012 through fiscal year 2016, about $24.1 billion of which is estimated to
                                    be achieved in fiscal year 2012. DOD’s efficiency initiatives included a
                                    broad range of efforts, such as holding the civilian workforce at fiscal year



                                    1
                                     Department of Defense Instruction 5100.73, Major DOD Headquarters Activities (Dec. 1,
                                    2007).
                                    2
                                     Applicable limits to major DOD headquarters personnel are included in sections 143,
                                    194, 3014, 5014, and 8014 of Title 10 of the U.S. Code. In some circumstances, statutory
                                    waivers, exceptions, exemptions and authorities to adjust those limits may apply. For
                                    example, acquisition personnel hired under an expedited hiring authority are exempt from
                                    the baseline personnel limitations, established under the previously mentioned sections of
                                    Title 10.




                                    Page 233               GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
                 2010 levels; reducing the numbers of senior leaders, both officer and
                 civilian; and reducing reliance on service support contractors. Some
                 headquarters were planned to be closed and their missions and functions
                 absorbed into other organizations, while others were reorganized. More
                 recently, in January 2012, the administration released strategic guidance
                 to guide defense priorities and spending over the coming decade. It lays
                 out several principles to guide the development of DOD’s force structure,
                 such as reducing DOD’s cost of doing business by finding further
                 efficiencies in headquarters and other overhead.



What GAO Found   Based on ongoing work for a report that GAO plans to issue in 2012,
                 GAO found that DOD has taken some steps to examine its headquarters
                 resources for efficiencies, but additional opportunities for cost savings
                 may exist. For purposes of the Secretary of Defense’s efficiency initiative,
                 DOD components, including the military departments, were asked to
                 focus, in particular, on headquarters and administrative functions, support
                 activities, and other overhead in their portfolios. DOD’s fiscal year 2012
                 budget request included several initiatives related to headquarters
                 organizations or personnel. Two organizations, the Joint Forces
                 Command and Business Transformation Agency, were disestablished
                 and some of their functions were absorbed into other organizations. DOD
                 estimated that closing these two organizations would save approximately
                 $2.2 billion through fiscal year 2016.

                 Other headquarters-related efficiency initiatives that GAO reviewed
                 generally fell into two categories: (1) consolidating or eliminating
                 organizations based on geographic proximity or span of control, and (2)
                 centralizing overlapping functions and services. 3 For example, the Navy
                 merged the staff of the U.S. Fleet Forces Command and the U.S. 2nd
                 Fleet. The missions of the two organizations were found to have
                 converged over time, and the Navy decided that an integrated staff could
                 better adapt to changing missions than two separate staffs and doing so
                 would have the added benefit of eliminating redundant personnel. The
                 result was the elimination of 344 military personnel for an expected
                 cumulative savings of $100.8 million by fiscal year 2016. In another
                 example, the Air Force is centralizing installation support functions, such
                 as civil engineering, environmental quality and planning programs, real
                 property programs, and family support services, among others, at field
                 operating agencies or Air Force headquarters, eliminating 354 positions
                 for an expected cumulative savings of $148.1 million by fiscal year 2016.

                 The DOD efficiencies that GAO reviewed to reduce headquarters
                 resources are expected by DOD to save about $2.9 billion through fiscal
                 year 2016, less than 2 percent of the $178 billion in savings DOD



                 3
                  Span of control refers to the number of subordinates or activities under the control of a
                 single commander.




                 Page 234                GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
projected departmentwide. In January 2012, DOD announced it had
found about $60 billion in additional efficiencies and overhead savings
over fiscal years 2013 to 2017, but did not indicate what portion of these
savings were specific to headquarters. GAO’s work indicates that DOD
may be able to find additional efficiencies by further examining
opportunities to consolidate organizations or centralize functions at
headquarters. DOD may not have identified all areas where reductions in
headquarters personnel and operating costs could be achieved because,
according to DOD officials, the department was working quickly to identify
savings in the fiscal year 2012 budget. To accomplish this quickly, DOD
used a top-down approach that identified several targets of opportunity to
reduce costs, to include headquarters organizations, but left limited time
for a detailed data-driven analysis.

One key factor inhibiting DOD from conducting systematic analyses of
headquarters is the lack of complete and reliable data about the resources
being devoted to such headquarters. According to GAO internal control
standards, an agency must have relevant, reliable, and timely information
in order to run and control its operations. Moreover, accurate, timely, and
useful financial information is essential for sound management analysis,
decision making, and reporting within DOD. The department has had long-
standing challenges in identifying and tracking personnel and other
resources devoted to headquarters; in the late 1990s, GAO reported that
the number of personnel and costs associated with major DOD
headquarters activities were significantly higher than DOD reported to
Congress due to inconsistencies in how DOD tracked headquarters data.

GAO’s ongoing work has found that these problems are unresolved and
the data on major DOD headquarters activities are still incomplete and
unreliable for decision making. As the department did not have reliable
major DOD headquarters activity data, DOD gathered information from
multiple sources to compile headquarters-related information for the
Secretary of Defense’s 2010 efficiency initiative. According to DOD
officials, the ever-changing statutory reporting requirements have
contributed to DOD’s failure to report to Congress about the numbers of
headquarters personnel. DOD is required to report major DOD
headquarters activities annually in the Defense Manpower Requirements
Report, which is to be submitted to Congress no later than 45 days after
the President’s budget. 4 Specifically, DOD is to report the number of
military and civilian personnel assigned to major DOD headquarters
activities in the preceding fiscal year and estimates of such numbers for
the current and subsequent fiscal year. It must also include a summary of
the replacement of contract workyears providing support to major DOD
headquarters activities with military or civilian personnel during the


4
 National Defense Authorization Act for Fiscal Year 2010, Pub. L. No. 111-84, §1109
(2009), codified at 10 U.S.C. §115a. The Defense Manpower Requirements Report is an
annual report to Congress that displays DOD’s manpower requirements, to include military
and civilians, as reflected in the President’s budget request for the current fiscal year.




Page 235               GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
preceding fiscal year, including an estimate of the number of contract
workyears associated with the replacement of contracts performing
inherently governmental or exempt functions. DOD must also report on
the plan for continued review of contract personnel supporting major DOD
headquarters activities for possible conversion to military or civilian
positions in accordance with other legal requirements. Additionally, DOD
must report the amount of any adjustment in personnel limits made by the
Secretary of Defense or the secretary of a military department, and for
each adjustment made pursuant to section 1111(b)(2) of the fiscal year
2009 National Defense Authorization Act, the purpose of the adjustment. 5
DOD officials are aware of the reporting requirements and expect to
report some of the major DOD headquarters activity data to Congress in
the fiscal year 2012 Defense Manpower Requirements Report; however,
it is unclear what information will be included in the report.

Furthermore, DOD Instruction 5100.73, which guides the compilation of
data on major DOD headquarters activities, is outdated and does not
identify all organizations that should be included, such as the component
command headquarters of the Departments of Navy and Air Force at U.S.
Africa Command and certain Marine Corps components; this potentially
omits hundreds of personnel and associated operating costs from being
counted as part of headquarters. Second, the Instruction does not
explicitly address how and to what extent the thousands of contractors
that work at headquarters around DOD should be included as part of its
major headquarters activity data. DOD has increasingly relied on
contractors to provide a range of services at headquarters, such as
management and administrative support, information technology, and
base operations support. Some of the services and functions performed
by contractors could be considered as major DOD headquarters activities.

GAO’s work over the past decade on DOD’s contracting activities has
noted the need for DOD to obtain better data on its contracted services
and personnel to enable it to make more informed management
decisions, ensure departmentwide goals and objectives are achieved,
and to have the resources to achieve desired outcomes, which could
include reducing overhead. GAO reported in January 2011 that further
action was needed by DOD to better implement its requirements for
conducting an inventory of its service contractor activities and made two
recommendations, to include that DOD develop a plan of action to collect
manpower data from contractors. In response to GAO’s report, DOD has
outlined its approach for collecting these data, but does not anticipate
complete reporting until 2016.



5
 Section 1111 of the Duncan Hunter National Defense Authorization Act for Fiscal Year
2009, Pub. L. No. 110-417 (2008), allows for the adjustment of statutory personnel limits
to fill a gap in DOD’s civilian workforce, identified by the Secretary of Defense in a
strategic human capital plan submitted to Congress, or to accommodate increases in
workload or modify the type of personnel required to accomplish work for purposes
specified in section 1111(c) of the Act.




Page 236               GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
                         In light of changes in DOD’s strategic priorities, complete and reliable
                         headquarters information will be even more important to support a
                         systematic examination of DOD’s future structure. Without such information,
                         efforts to re-examine its headquarters resources on a more comprehensive
                         basis to identify additional efficiencies will be hampered, and DOD may miss
                         opportunities to further shift resources from overhead to forces.



Actions Needed and       In the report that GAO anticipates issuing in March 2012, GAO expects to
                         recommend several actions to facilitate reliable reporting on headquarters
Potential Financial or   staffing and improve information available for decision making.
Other Benefits           Specifically, DOD should

                         •   revise its Instruction on tracking of headquarters resources to include
                             all major DOD headquarters activity organizations;

                         •   specify how contractors performing headquarters functions will be
                             identified and included in headquarters reporting;

                         •   clarify how components are to compile the major DOD headquarters
                             activities information needed to respond to the reporting requirements
                             in section 1109 of the fiscal year 2010 National Defense Authorization
                             Act; and

                         •   establish time frames for implementing the actions above to improve
                             tracking and reporting headquarters resources.

                         In addition, to further DOD’s ability to find efficiencies in headquarters and
                         other overhead, GAO expects to recommend in the March 2012 report
                         that DOD should

                         •   continue to examine opportunities to consolidate or eliminate defense
                             headquarters organizations that are geographically close or have
                             similar missions, as well as seek further opportunities to centralize
                             administrative and command support services, functions, or programs.

                         GAO is unable to quantify the potential for further financial benefits
                         because reliable headquarters data are unavailable. Although GAO
                         cannot quantify the potential for additional financial benefits, further
                         efforts by DOD to examine its headquarters resources and improve its
                         headquarters data could present opportunities for additional cost savings.



Agency Comments          GAO provided a draft of this report section to DOD for review and
                         comment. DOD provided technical comments, which were incorporated
and GAO’s Evaluation     as appropriate. DOD officials generally agreed with the actions needed
                         identified by GAO. Specifically, DOD officials told GAO that the
                         department focused on broader reductions for purposes of the Secretary
                         of Defense’s 2010 efficiency initiative, not merely those activities
                         identified as major DOD headquarters activities. GAO recognizes that
                         major DOD headquarters activities are a subset of what DOD considered



                         Page 237            GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
                      for its efficiency initiatives. However, given the Secretary’s focus on
                      finding efficiencies in headquarters, both as part of his overall efficiency
                      initiative, as well as DOD’s recent 2012 strategic guidance, GAO believes
                      complete and reliable headquarters-specific data is even more important
                      in guiding an examination of DOD resources. Without this data on
                      headquarters personnel and operating costs, DOD will not have the
                      information it needs, which could impact its efforts to direct resources
                      toward its main priorities.



How GAO Conducted     The information in this draft is based on findings from the reports listed in
                      the related GAO products section as well as additional work GAO
Its Work              conducted to be published as a separate product in 2012. GAO selected
                      and assessed DOD efficiency initiatives related to headquarters based on
                      GAO’s analysis of information included in DOD’s fiscal year 2012 budget
                      request and the Secretary of Defense’s Track Four Efficiency Initiatives
                      Decisions memo. GAO then obtained and analyzed documentary and
                      testimonial evidence on these selected headquarters-related efficiency
                      initiatives, including the analysis conducted to identify headquarters-related
                      resources and the approach taken to develop selected headquarters-
                      related efficiency initiatives. GAO also obtained and analyzed documentary
                      and testimonial evidence from DOD components detailing the policies and
                      procedures, as well as roles and responsibilities, for tracking and reporting
                      headquarters personnel and operating costs, such as DOD Instruction
                      5100.73 Major DOD Headquarters Activities. 6



Related GAO           Defense Acquisitions: Further Action Needed to Better Implement
                      Requirements for Conducting Inventory of Service Contract Activities.
Products              GAO-11-192. Washington, D.C.: January 14, 2011.

                      Defense Headquarters: Status of Efforts to Reduce Headquarters
                      Personnel. GAO/NSIAD-00-224. Washington, D.C.: September 6, 2000.

                      Defense Headquarters: Status of Efforts to Reduce Headquarters
                      Personnel. GAO/NSIAD-99-45. Washington, D.C.: February 17, 1999.

                      Defense Headquarters: Total Personnel and Costs Are Significantly
                      Higher Than Reported to Congress. GAO/NSIAD-98-25. Washington,
                      D.C.: October 30, 1997.



Contact Information   For additional information about this area, contact John Pendleton at
                      (404) 679-1816 or pendletonj@gao.gov.




                      6
                       Department of Defense Instruction 5100.73, Major DOD Headquarters Activities (Dec. 1,
                      2007).




                      Page 238              GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
35. Defense Real Property
Ensuring the receipt of fair market value for leasing underused real property and monitoring administrative
costs could help the military services’ enhanced use lease programs realize intended financial benefits.



Why This Area Is                     With a real estate portfolio of over 539,000 facilities and 28 million acres
                                     of land, the Department of Defense (DOD) has been challenged to
Important                            effectively manage deteriorating facilities and underused and excess
                                     property. To address these challenges, DOD has pursued a multipart
                                     strategy involving the base realignment and closure process, housing
                                     privatization, and demolition of facilities that are no longer needed. In
                                     addition, DOD has pursued a strategy it calls enhanced use leasing,
                                     which involves leasing underused real property to gain additional
                                     resources for the maintenance and repair of existing facilities or the
                                     construction of new facilities. 1 According to the military services,
                                     enhanced use leases (EUL) offer significant opportunities to reduce
                                     DOD’s infrastructure costs and could provide hundreds of millions of
                                     dollars to improve installation facilities, rather than financing these
                                     improvements through annual appropriations.

                                     The secretaries of the military departments have authority 2 to lease
                                     nonexcess military real property under the control of the respective
                                     departments in exchange for cash or in-kind consideration that is not less
                                     than the fair market value 3 of the lease interest, subject to certain
                                     conditions. Some EULs involve complex agreements and long terms. For
                                     example, an EUL might provide for a 50-year lease of military land to a
                                     private developer that would be expected to construct office or other
                                     commercial buildings on the land and then rent the facilities to private
                                     sector tenants for profit. As consideration, the military might receive cash
                                     or in-kind services valued at an amount equal to a share of the net rental
                                     revenues from the developed property. As of the end of fiscal year 2010,
                                     the military services reported that 17 EULs were in place—the Army
                                     reported 7, the Navy reported 5, and the Air Force reported 5. The
                                     services also reported that 37 additional EULs were in various phases of
                                     review or negotiation for possible future implementation. However, as
                                     GAO previously reported in June 2011, the services did not always
                                     realize expected financial benefits from the EUL program.




                                     1
                                      Section 2667 of Title 10 of the United States Code provides authority to secretaries of the
                                     military departments to lease nonexcess real property under the control of the respective
                                     departments, subject to certain conditions.
                                     2
                                      10 U.S.C. § 2667.
                                     3
                                      In the enhanced use leasing context, the fair market value of the lease is determined by
                                     the appropriate departmental secretary.




                                     Page 239               GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
What GAO Found   GAO’s detailed case studies of nine EULs found that the services’
                 management of the EUL program contains internal control weaknesses
                 related to policies and procedures and performance monitoring.
                 Specifically, it is not clear how and to what extent the services have
                 ensured the receipt of the fair market value of the lease interest, as
                 required by the authorizing statute. In addition, GAO found that the
                 services have not regularly monitored or performed periodic analyses of
                 EUL program administration costs. Therefore, it is unclear whether such
                 costs are in line with the potential program benefits.

                 While the statute leaves the determination of fair market value to the
                 discretion of the secretary of each military service, and thus a particular
                 methodology for determining fair market value is not required, GAO found
                 cases where receipt of fair market value was questionable, largely because
                 service guidance for determining and ensuring the receipt of fair market
                 value for proposed EULs was not clear. In implementing an internal
                 controls framework, as outlined in GAO’s Standards for Internal Control in
                 the Federal Government, 4 management is responsible for developing
                 detailed policies, procedures, and practices to fit their agency’s operations
                 and to ensure that those controls are built into and are an integral part of
                 operations. However, GAO found, in the absence of clear guidance, at
                 least one instance where the Air Force agreed to an amount of lease
                 consideration below one estimate of the value of the leased property. For
                 example, in an Eglin Air Force Base EUL, referred to as the Okaloosa
                 County Regional Airport Enhanced Use Lease, the Air Force hired a
                 company to estimate the fair market value of the property. Although the
                 company estimated a value of $1,274,000 annually, after negotiations with
                 the lessee, the Air Force agreed to accept $318,000 annually as
                 consideration. Thus, the negotiated amount was $956,000, or 75 percent,
                 less per year than the appraised value of the property. Because the
                 services lack clear and consistent guidance on how the fair market value of
                 lease interest should be determined and how the receipt of the fair market
                 value can be best ensured, it is not clear how the officials involved in this
                 and other cases determined whether the services received the fair market
                 value of the leased property.

                 In addition, GAO found that the services have not regularly monitored or
                 performed periodic analyses of EUL program administration costs to help
                 ensure that such costs are in line with program benefits. According to
                 internal control standards, activities need to be established to monitor
                 performance measures and indicators, such as analyses of data
                 relationships, so that appropriate actions can be taken, if needed. Without
                 regular monitoring and analysis, the services have less assurance that
                 their EUL program administration costs are in line with program benefits.
                 While the services have no criteria for how much they should be spending



                 4
                  GAO, Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1
                 (Washington, D.C.: November 1999).




                 Page 240              GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
                         on EUL program administration costs relative to program benefits, GAO’s
                         analysis showed that EUL program administration costs ranged from 31
                         percent to 135 percent of the total EUL consideration received during
                         fiscal years 2006 through 2010. Specifically, GAO’s analysis of
                         information provided by the services concluded that EUL program
                         administration costs, including personnel and consultant costs, equaled
                         about 31 percent of the total EUL consideration received by the Army and
                         the Navy and about 135 percent of the total EUL consideration received
                         by the Air Force. The Air Force spent about $10.4 million more to
                         administer its EUL program than the amount of consideration received
                         from its five EULs during fiscal years 2006 through 2010.



Actions Needed and       To help effectively implement the EUL program in order to maximize the
                         potential economic benefits, GAO recommended in June 2011 that the
Potential Financial or   departmental secretaries should
Other Benefits           •   review and clarify guidance describing how the fair market value of
                             the lease interest should be determined and how the receipt of fair
                             market value can be best ensured; and

                         •   develop procedures to regularly monitor and analyze EUL program
                             administration costs to help ensure that the costs are in line with
                             program benefits.



Agency Comments          GAO provided a draft of its June 2011 report to DOD for review and
                         comment. DOD agreed with GAO’s previous recommendations and
and GAO’s Evaluation     stated that the military services were taking appropriate measures to
                         implement the recommendations. According to a DOD official, as of
                         January 19, 2012, DOD did not have the formal status of actions taken to
                         respond to the recommendations in GAO’s report, but verified that they
                         have begun the process of making those changes. As part of its routine
                         audit work, GAO will track the extent to which progress has been made to
                         address the identified actions and report to Congress.



How GAO Conducted        The information contained in this analysis is based on findings from the
                         reports listed in the related products section. GAO reviewed statutory
Its Work                 requirements; examined military service policies, instructions, and other
                         guidance; and interviewed officials from the Office of the Secretary of
                         Defense, the Army, the Navy, and the Air Force to discuss implementation
                         of the EUL program. While GAO reviewed information on all 17 EULs in
                         place at the end of fiscal year 2010, GAO selected 9 of the 17 EULs for
                         detailed case study review. The EULs were selected non-randomly to
                         include three from each service and a range of lease purposes, estimated
                         financial benefits, and geographic locations. For the nine case studies,
                         GAO reviewed how the services provided for the receipt of the fair market
                         value of the leased property and how the services monitored program
                         administration costs in relation to program benefits.




                         Page 241           GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
Related GAO           Defense Infrastructure: The Enhanced Use Lease Program Requires
                      Management Attention. GAO-11-574. Washington, D.C.: June 30, 2011.
Products
                      Federal Real Property: Authorities and Actions Regarding Enhanced Use
                      Leases and Sale of Unneeded Real Property. GAO-09-283R.
                      Washington, D.C.: February 17, 2009.



Contact Information   For additional information about this area, contact Brian J. Lepore, at
                      (202) 512-4523 or leporeb@gao.gov.




                      Page 242           GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
36. Military Health Care Costs
To help achieve significant projected cost savings and other performance goals, DOD needs to complete,
implement, and monitor detailed plans for each of its approved health care initiatives.



Why This Area Is                   As GAO reported in February 2005, the Department of Defense’s (DOD)
                                   health care system is an example of a key challenge facing the U.S.
Important                          government in the 21st century, as well as an area in which DOD could
                                   achieve economies of scale and improve delivery of services. 1 Currently,
                                   health care costs constitute nearly 10 percent of DOD’s baseline budget
                                   request. For its fiscal year 2012 budget, according to DOD
                                   documentation, DOD received $52.7 billion 2 to provide health care to
                                   approximately 9.6 million active duty servicemembers, reservists, retirees,
                                   and their dependents. According to a 2011 Congressional Budget Office
                                   report, military health spending could reach $59 billion by 2016, and is
                                   projected to grow to $92 billion by 2030. 3 In 2009, the Defense Business
                                   Board, 4 a group of private sector experts who advise DOD on its overall
                                   management and governance, expressed concern at the rise in military
                                   health care costs and noted such spending could eventually begin to
                                   divert funding away from other priorities such as critical national security
                                   initiatives, compensation and personnel costs, and the acquisition of
                                   equipment.

                                   Congressional leaders also share concerns over rising military health
                                   costs. For example, the House Committee on Armed Services’ Print
                                   accompanying the Ike Skelton National Defense Authorization Act for
                                   Fiscal Year 2011 5 noted that DOD had not yet developed a
                                   comprehensive plan to enhance quality, efficiencies, and savings in the
                                   Military Health System. 6 Furthermore, DOD officials also agree that the


                                   1
                                    GAO, 21st Century Challenges: Reexamining the Base of the Federal Government,
                                   GAO-05-325SP (Washington, D.C.: February 2005).
                                   2
                                    DOD’s fiscal year 2012 budget of $52.7 billion for its Unified Medical Budget includes
                                   $32.5 billion for the Defense Health Program, $8.3 billion for military personnel, $1.1 billion
                                   for military construction, and $10.8 billion for the Medicare Eligible Retiree Health Care
                                   Fund. The total excludes overseas contingency operations funds and other transfers.
                                   3
                                    Congressional Budget Office, Long-Term Implications of the 2012 Future Years Defense
                                   Program, Pub. No. 4281, June 2011.
                                   4
                                       Defense Business Board, Focusing a Transition, January 2009.
                                   5
                                    The Ike Skelton National Defense Authorization Act for Fiscal Year 2011 (Pub. L. No.
                                   111-383 (2010)) was not accompanied by a conference report. In lieu of a formal
                                   conference report and joint explanatory statement, House Armed Services Committee
                                   Print No. 5 (Dec. 2010) was provided to show congressional intent and maintain legislative
                                   history.
                                   6
                                    The Military Health System refers to DOD’s health operations as a whole, and consists of
                                   the Office of the Assistant Secretary of Defense for Health Affairs; the medical
                                   departments of the Army, the Navy, the Air Force and Joint Chiefs of Staff; the Combatant
                                   Command surgeons; and the TRICARE network of health care providers.




                                   Page 243                 GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
                 rate at which health care costs are rising must be addressed, as noted in
                 the 2010 Quadrennial Defense Review, 7 which stated that DOD intends
                 to continue to develop health care initiatives that will improve the quality
                 and standard of care, while reducing growth in overall costs.

                 Under the current structure of DOD’s Military Health System, the
                 responsibilities and authorities for its management are distributed among
                 several organizations—including the Assistant Secretary of Defense for
                 Health Affairs and the military services. Health Affairs 8 is responsible for
                 creating and submitting a unified medical budget and allocating funds to
                 the military services for their respective medical systems; however,
                 Health Affairs lacks direct command and control of the services’ military
                 treatment facilities. Additionally, the three departments each have
                 Surgeons General to oversee their deployable medical forces and
                 operate their own health care systems, including training for medical
                 personnel. In GAO’s first report issued in response to its mandate to
                 report on duplication, overlap, and fragmentation within the federal
                 government, 9 GAO stated that realigning DOD’s military medical
                 command structures and common functions could increase efficiency and
                 result in projected savings ranging from $281 million to $460 million
                 annually. 10 GAO is currently conducting additional work to look beyond
                 these potential governance transformation efforts and to examine other
                 initiatives DOD is undertaking that could help contain its rising health care
                 costs. These other initiatives—with the exception of one which is related
                 to governance—are focused on reducing per capita costs, 11 improving its
                 servicemembers’ medical readiness, and improving its beneficiaries’
                 overall health and experience of care.



What GAO Found   GAO’s ongoing work has found that DOD has begun a number of health
                 care initiatives intended to slow the rise in its health care costs, but it has
                 not fully applied results-oriented management practices to its efforts,
                 which limits its effectiveness in implementing these initiatives and
                 achieving related cost savings and other performance goals. The Senior
                 Military Medical Advisory Committee—a committee that functions as an




                 7DOD,   Quadrennial Defense Review Report, (Washington, D.C.: Feb. 1, 2010).
                 8
                  For purposes of this report, the Office of the Assistant Secretary of Defense for Health
                 Affairs will be called Health Affairs.
                 9
                  GAO, Opportunities to Reduce Potential Duplication in Government Programs, Save Tax
                 Dollars, and Enhance Revenue, GAO-11-318SP (Washington, D.C.: March 1, 2011).
                 10
                   This estimate is based on a May 2006 report by the Center for Naval Analyses and were
                 adjusted by GAO from 2005 to 2010 dollars.
                 11
                   DOD monitors the annual increase in costs for enrollees in its TRICARE Prime benefit
                 and measures it against a civilian benchmark.




                 Page 244                GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
executive-level discussion and advisory group, 12 has approved 11
strategic initiatives that it believes will help reduce rising health care
costs. DOD’s strategic initiatives consist primarily of changes to clinical
and business practices in areas ranging from primary care to
psychological health to purchased care reimbursement practices. DOD
was experiencing a 5.5 percent annual increase in per capita costs for its
enrolled population, according to data available as of December 2011, but
DOD had set its target ceiling for per capita health care cost increases for
fiscal year 2011 at a lower rate of 3.1 percent. According to DOD
calculations using 2011 enrollee and cost data, if DOD had met its target
ceiling of a 3.1 percent increase as opposed to a 5.5 percent increase,
the 2.4 percent reduction would have resulted in approximately $300
million in savings.

Partly in response to GAO’s ongoing work assessing DOD’s management
of its initiatives, the department has taken some initial steps toward
managing their implementation. GAO found that, in addition to developing
a number of high-level, non-monetary metrics and corresponding goals
for each strategic initiative, DOD has developed a dashboard
management tool that will include elements such as an explanation of the
initiative’s purpose, measures, and funding requirements for
implementation. In December 2011, the Senior Military Medical Advisory
Committee approved 6 dashboards that were significantly, but not entirely
completed. A Health Affairs official stated that only one initiative out of 11
currently has a cost savings estimate associated with it. Cost savings
estimates are critical to successful management of the initiatives so that
DOD can achieve its goal of reducing growth in medical costs as stated in
the 2010 Quadrennial Defense Review. In addition, DOD has developed
a template, or a more detailed implementation plan, that is to be
completed for each dashboard and is intended to include general
timelines and milestones, key risks, and cost savings estimates. DOD
currently has one completed implementation plan, which also contains the
one available cost savings estimate among all the initiatives. See the
table below for a list of the 11 initiatives and their current status as of
January 13, 2012.




12
  This group is chaired by the Assistant Secretary of Defense for Health Affairs and
includes the Surgeons General from the Army, the Navy, and the Air Force; the Joint Staff
Surgeon; and four Deputy Assistant Secretaries of Defense.




Page 245               GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
Progress made in Developing a Dashboard and Detailed Implementation Plans for Each of DOD’s Strategic Initiatives as of
January 13, 2012

                                                                                    Dashboard      Implementation            Estimated net
Description of DOD’s strategic initiatives                                          approved?      plan approved?              savingsa
Implement the Patient Centered Medical Home model of care to
increase satisfaction, improve care and reduce costs
                                                     b                                                                       $39.3 million

Integrate psychological health programs to improve outcomes and
enhance value                                                                           
Implement incentives to encourage adherence to medical
standards based on evidence to increase patient satisfaction,                           
improve care and reduce per capita health care costs
Implement alternative payment mechanisms to reward value in
health care services                                                                    
Revise DOD’s future purchased care contracts to offer more and
varied options for care delivery from private sector heath care                         
providers
Improve the measurement and management of DOD’s population
health by moving away from focusing on illness and disease to an
emphasis on prevention, intervention, and wellness by health care                       
providers
Optimize pharmacy practices to improve quality and reduce cost
Implement policies, procedures, and partnerships to meet
individual servicemembers’ medical readiness goals
Implement DOD and Veterans Affairs joint strategic plan for
mental health to improve coordination
Implement modernized electronic health record to improve
outcomes and enhance interoperability
Improved governance to achieve better performance in
multiservice medical markets
                                             Source: GAO analysis of DOD information.
                                             a
                                              The net savings is DOD’s estimate and it covers fiscal years 2012 through 2016. GAO did not
                                             independently assess the reliability of this cost savings estimate.
                                             b
                                              DOD estimates that its investment in Patient Centered Medical Home will be $571.4 million in total
                                             from fiscal years 2010 through 2016.


                                             As shown above, DOD has not fully completed the dashboards,
                                             implementation plans, and cost savings estimates for its 11 initiatives as
                                             of January 13, 2012. GAO has found that comprehensive, results-
                                             oriented plans are key to effectively implementing agency strategies. 13 As
                                             DOD completes its dashboards, implementation plans, and cost savings
                                             estimates, it could benefit from the application of a comprehensive,
                                             results-oriented management framework, including a robust description of
                                             the initiatives’ mission statement; problem definition, scope, and
                                             methodology; goals, activities and performance measures; resources and
                                             investments; organizational roles, responsibilities, and coordination; and
                                             key external factors that could affect goals. Without completing its plans



                                             13
                                               GAO, Combating Terrorism: Evaluation of Selected Characteristics in National
                                             Strategies Related to Terrorism, GAO-04-408T (Washington, D.C.: Feb. 3, 2004).




                                             Page 246                        GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
and incorporating these principles into them, DOD will be limited in its
ability to implement these initiatives and achieve cost savings.

In addition, DOD has not completed the implementation of an overall
monitoring process across its portfolio of initiatives for overseeing the
initiatives’ progress and has not completed the process of identifying
accountable officials and their roles and responsibilities for all of its
initiatives. Further, GAO’s work on results-oriented management
practices has found that a process for monitoring progress and defining
roles and responsibilities is key to successful implementation. 14 As
Military Health System leaders develop and implement their plans to
control rising health care costs, they will also need to work across multiple
authorities and areas of responsibility. As the 2007 Task Force on the
Future of Military Health Care noted, the current Military Health System
does not function as a fully integrated health care system. 15 For example,
while the Assistant Secretary of Defense for Health Affairs controls the
Defense Health Program budget, the services directly supervise their
medical personnel and manage their military treatment facilities.

As GAO reported in October 2005, agreement upon roles and
responsibilities is a key step to successful collaboration when working
across organizational boundaries, such as the military services. 16
Committed leadership by those involved in the collaborative effort, from
all levels of the organization, is also needed to overcome the many
barriers to working across organizational boundaries. For example,
Health Affairs manages the medical budget by allocating money to the
services, but it lacks direct command and control of the military treatment
facilities. DOD’s one approved implementation plan provides further
information on how DOD has applied a monitoring structure and has
defined accountable officials and assigned roles and responsibilities in
the case of this one initiative. However, DOD has not completed this
process for the remainder of its initiatives. Without sustained top civilian
and military leadership that is consistently involved throughout the
implementation of its various initiatives and until DOD fully implements for
all of its initiatives a mechanism to monitor progress and identify
accountable officials including their roles and responsibilities, DOD may
be hindered in its ability to achieve a more cost-efficient military health
system and at the same time address its medical readiness goals,
improve its overall population health, as well as increase its patients’
experience of care.




14
 GAO-04-408T.
15
  Defense Health Board, Task Force on the Future of Military Health Care, December
2007.
16
 GAO, Results-Oriented Government: Practices That Can Enhance and Sustain
Collaboration Among Federal Agencies, GAO-06-15 (Washington, D.C.: Oct. 21, 2005).




Page 247              GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
Actions Needed and       Based on ongoing work, GAO expects to recommend that, in order to
                         enhance its efforts to manage rising health care costs and demonstrate
Potential Financial or   sustained leadership commitment for achieving the performance goals of
Other Benefits           the Military Health System’s strategic initiatives, DOD should

                         •   complete and fully implement the dashboards and detailed
                             implementation plans for each of the approved health care initiatives
                             in a manner consistent with results-oriented management practices,
                             such as the inclusion of upfront investment costs and cost savings
                             estimates; and

                         •   complete the implementation of an overall monitoring process across
                             its portfolio of initiatives for overseeing the initiatives’ progress and
                             identifying accountable officials and their roles and responsibilities for
                             all of its initiatives.

                         DOD may realize projected cost savings and other performance goals by
                         taking the actions GAO describes to help ensure the successful
                         implementation of its cost savings initiatives. Given that DOD identified
                         these initiatives as steps to slow the rapidly growing costs of its medical
                         program, if implemented these initiatives could potentially save DOD
                         millions of dollars. For example, according to a DOD calculation, if it had
                         met its cost growth target for fiscal year 2011, it could have saved
                         approximately $300 million.



Agency Comments          GAO provided a draft of this report section to DOD for review and
                         comment. DOD provided technical comments, which were incorporated
and GAO’s Evaluation     as appropriate. DOD agreed with GAO’s finding on the need to complete,
                         implement and monitor plans for each of its approved health care
                         initiatives. Further, DOD officials agreed with GAO’s expected
                         recommendation to complete and fully implement, for each of their
                         initiatives, detailed implementation plans in a manner consistent with
                         results-oriented management practices, such as the inclusion of upfront
                         investment costs and cost savings estimates. They stated that quantifying
                         the financial benefits of programs that change the way care is delivered is
                         an extremely complex task but that they are committed to trying to do so.
                         Additionally, these officials agreed with GAO’s second expected
                         recommendation to complete and fully implement, for each of their
                         initiatives, an overall monitoring process across DOD’s portfolio of
                         initiatives, and to identify accountable officials and their roles and
                         responsibilities. As part of its routine audit work, GAO will track the extent
                         to which progress has been made to address the identified actions and
                         report to Congress.




                         Page 248            GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
How GAO Conducted     The information contained in this analysis is based on findings from the
                      products listed in the related GAO products section as well as additional
Its Work              work GAO conducted to be published as a separate product in 2012.
                      GAO interviewed DOD officials in the Health Budgets and Financial Policy
                      Office and in the Office of Strategy Management, within the Office of the
                      Assistant Secretary of Defense for Health Affairs, as well as officials in
                      the TRICARE Management Activity concerning their 11 health care
                      initiatives and obtained and reviewed documentation concerning their
                      efforts. GAO compared DOD’s efforts to its prior work on results-oriented
                      key management practices. GAO obtained available documentation and
                      interviewed DOD officials to determine DOD’s approach for monitoring
                      the initiatives’ progress, identifying accountable officials, and defining
                      their roles and responsibilities. GAO did not assess the reliability of any
                      financial data since GAO was using the data for illustrative purposes to
                      provide context on DOD’s efforts and to make broad estimates about
                      potential cost savings from these efforts, and GAO determined that this
                      data did not materially affect the nature of its findings.



Related GAO           Opportunities to Reduce Potential Duplication in Government Programs,
                      Save Tax Dollars, and Enhance Revenue. GAO-11-318SP. Washington,
Products              D.C.: March 1, 2011.

                      Defense Health Care: DOD Needs to Address the Expected Benefits,
                      Costs, and Risks for Its Newly Approved Medical Command Structure.
                      GAO-08-122. Washington, D.C.: October 12, 2007.



Contact Information   For additional information about this area, contact Brenda S. Farrell at
                      202-512-3604 or farrellb@gao.gov .




                      Page 249           GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
37. Overseas Defense Posture
The Department of Defense could reduce costs of its Pacific region presence by developing comprehensive
cost information and re-examining alternatives to planned initiatives.



Why This Area Is                   According to the 2010 Quadrennial Defense Review, approximately
                                   400,000 U.S. military personnel are forward-stationed or rotationally
Important                          deployed, or postured, around the world on any given day—including
                                   those involved in operations in Afghanistan and Iraq. In addition to the
                                   costs of supporting ongoing combat operations, the Department of
                                   Defense (DOD) spends billions of dollars annually on its network of
                                   installations around the world that supports its overseas defense posture.
                                   In last year’s report on opportunities to reduce potential duplication in
                                   government programs, GAO reported that DOD should assess the costs
                                   and benefits of its overseas installations before committing to costly
                                   realignments and construction plans. For this year’s analysis, GAO is
                                   focusing on DOD’s presence in the Pacific region.

                                   As GAO reported in May 2011, from 2006 through 2010, DOD obligated
                                   $24.6 billion to build, operate, and maintain installations in support of its
                                   defense posture in the Pacific. Additionally, the report stated that DOD is
                                   currently conducting the largest transformation of its defense posture in
                                   the Pacific since the end of World War II, including initiatives that will cost
                                   billions of dollars in resource investments and take many years—perhaps
                                   decades—to complete. Although DOD’s new defense strategy identifies
                                   U.S. presence in the Pacific as important, questions have arisen about
                                   the magnitude and costs of overseas basing projects and whether DOD’s
                                   planned investments support a coherent and affordable strategy.



What GAO Found                     Although DOD has taken steps to improve its planning for overseas
                                   defense posture, it has not fully identified costs or provided an analysis of
                                   alternatives for basing U.S. forces in the Pacific. Having U.S. troops
                                   permanently stationed overseas provides benefits—such as deterring
                                   aggression against U.S. allies—but it incurs significant costs. In previous
                                   GAO reports on overseas defense posture, GAO emphasized the need
                                   for DOD to assess the costs and benefits of options for the U.S. overseas
                                   military presence before committing to costly personnel realignments and
                                   construction plans. However, in the case of DOD’s overseas presence in
                                   the Pacific, GAO found that comprehensive cost information is not
                                   systematically used to inform DOD’s planning for its overseas defense
                                   posture. As a consequence, DOD and Congress lack reasonable
                                   assurance that overseas presence in the Pacific is being planned and
                                   implemented in a cost-effective and financially sustainable way. Reliable
                                   and complete cost estimates are critical to allow analyses of alternatives
                                   and oversight by decision makers.

                                   As GAO reported in May 2011, several evolving defense posture
                                   initiatives in the Pacific have the potential to cost the department billions


                                   Page 250            GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
of dollars. Through informed decision making based on comprehensive
information and analysis of alternatives for some of its planned defense
posture initiatives in that region, DOD may be able to reduce some of
these costs. For example:

•   South Korea tour normalization initiative. DOD is transforming its
    defense posture in South Korea through a series of interrelated
    initiatives that DOD estimates will total $17.6 billion through fiscal year
    2020. The largest of these initiatives, tour normalization, would
    increase the tour lengths of personnel stationed in South Korea and
    move thousands of military dependents to South Korea. According to
    DOD officials, the decision to move forward with tour normalization
    was made to achieve certain strategic objectives, such as providing
    military commanders greater flexibility in how U.S. military forces
    assigned to South Korea are used and to improve the quality of life for
    military service members and their families. This initiative alone could
    cost DOD $5 billion by fiscal year 2020 and $22 billion or more
    through 2050; however, prior to making the decision to move forward
    with the tour normalization initiative, DOD did not complete a business
    case analysis that would have considered alternative courses of
    action for achieving its strategic objectives, and the costs and benefits
    associated with any alternatives. Potential alternatives might be to
    maintain current primarily 1-year unaccompanied tour lengths,
    partially implement tour normalization at select locations, or other
    possibilities that would help achieve United States Forces Korea’s
    strategic objectives. DOD is embarking on an initiative that involves
    moving thousands of U.S. civilians to locations in South Korea, mainly
    Camp Humphreys, and constructing schools, medical facilities, and
    other infrastructure to support them—without fully understanding the
    costs involved or considering potential alternatives that might more
    efficiently achieve U.S. strategic objectives.

•   Japan and Guam realignment initiatives. DOD has embarked on a
    major realignment of its defense posture in mainland Japan, Okinawa
    and Guam but has not developed comprehensive cost estimates for
    this work. Approximately $29.1 billion in costs—primarily in
    construction costs—is anticipated to be shared by the United States
    and Japan to implement these realignment initiatives. DOD officials
    stated that total cost estimates for these initiatives—including
    operation and maintenance costs to DOD—were not available
    because of the significant uncertainty surrounding initiative-
    implementation schedules. In February 2012, the United States and
    Japan released a joint statement indicating that the two governments
    have started official discussions to revise current posture plans,
    specifically the plans to relocate the Marines to Guam. In July 2010,
    the Senate Appropriations Committee directed DOD to provide status
    updates on defense posture initiatives in Korea, Japan, Guam, and
    the Northern Mariana Islands, as an appendix to the annual DOD
    Global Posture Report, to address such items as schedule status,
    facilities requirements, and total costs—including operation and
    maintenance costs. These updates should be provided annually,
    beginning with the submission of the fiscal year 2012 budget request,



Page 251            GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
    until the restructuring initiatives are complete or funding requirements
    to support them are satisfied. The Committee renewed its direction in
    June 2011. If DOD is fully responsive to the Committee’s reporting
    direction, these updates should provide needed visibility into the cost
    and funding of the initiatives. According to DOD officials, DOD will
    submit an appendix as part of its 2012 Global Posture Report that
    includes updates to posture initiatives in Korea, Japan, and Guam.
    They anticipate the report will be issued in the spring of 2012.

•   U.S. Pacific Command operation and maintenance costs. Service
    officials estimated that operation and maintenance costs for
    installations in the Pacific region would be about $2.9 billion per year
    through 2015. 1 However, GAO found that, of the approximately $24.6
    billion reported as obligated by the military services to build, operate,
    and maintain installations in the Pacific from 2006 through 2010,
    approximately $18.7 billion—or about $3.7 billion per year—was for
    operation and maintenance costs, an increase of over 27 percent per
    year over the service officials’ estimate through 2015. 2 Further, the
    planned defense posture initiatives in South Korea, Japan, and Guam
    may significantly increase operation and maintenance costs over the
    long term, potentially through 2015 and beyond. For example, DOD has
    yet to estimate costs associated with furnishing and equipping
    approximately 321 new buildings and 578 housing units in Okinawa. In
    the United States Department of Defense Fiscal Year 2011 Budget
    Request Overview, prepared by the Office of the Under Secretary of
    Defense (Comptroller), DOD outlined the need to reform the way it
    buys its weapons and other important systems and investments,
    including strengthening front-end scrutiny of costs and not relying on
    overly optimistic or underestimated cost estimates. In June 2011, DOD
    revised posture-related guidance to require full project costs, including
    any operation and maintenance costs, for all ongoing, current, and 5-
    year planned posture initiatives to be submitted as part of a combatant
    commander’s theater posture plan. In the October 2011, U.S. Pacific
    Command’s Theater Posture Plan, neither operation and maintenance,
    nor total costs for posture initiatives had yet been included. GAO will
    continue to monitor future updates to the plan.




1
 Operation and maintenance funding provides for a large number of expenses. With
respect to DOD installations, operation and maintenance funding provides for such
aspects as base operation support and sustainment, restoration, and modernization of
buildings and infrastructure.
2
 These costs do not include (1) supplementary funding provided to support ongoing
operations, (2) costs reimbursed by tenant organization at installations in the U.S. Pacific
Command’s area of responsibility, and (3) personnel costs for troops stationed at
installations in the U.S. Pacific Command’s area of responsibility.




Page 252                GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
Actions Needed and       To provide DOD and Congress with the comprehensive defense posture
                         cost information needed to fully evaluate investment decisions and the
Potential Financial or   affordability of defense posture initiatives, GAO recommended in May
Other Benefits           2011 that the Secretary of Defense

                         •   identify and direct appropriate organizations within DOD to complete a
                             business case analysis, including an evaluation of alternative courses
                             of action, for the strategic objectives that have to this point driven the
                             decision to implement tour normalization in South Korea;

                         •   identify and limit investments and other financial risks associated with
                             construction programs at Camp Humphreys, South Korea, that are
                             affected by decisions related to tour normalization until a business
                             case analysis is reviewed and the most cost-effective approach is
                             approved by the Secretary of Defense; and

                         •   direct the Secretaries of the military departments to develop annual
                             cost estimates for defense posture in the Pacific that provide a
                             comprehensive assessment of defense posture-related costs,
                             including costs associated with operating and maintaining existing
                             defense posture, as well as costs associated with defense posture
                             initiatives, in accordance with guidance developed by the Under
                             Secretary of Defense (Comptroller).

                         Additionally, in light of the United States and Japan’s joint statement
                         announcing discussions to revise U.S. posture plans in the Pacific, it will
                         be critical for DOD to develop comprehensive cost estimates—including
                         estimates of operation and maintenance costs—as it evaluates cost
                         effective alternatives for the future. To facilitate congressional oversight of
                         plans to realign U.S. defense posture in the Pacific, and to provide
                         reasonable assurance that DOD will take all appropriate measures to
                         mitigate financial risks and better define future requirements, the
                         Secretary of Defense should provide Congress

                         •   specifics regarding corrective actions the department plans to take;
                             and

                         •   time frames for completion.

                         By assessing alternatives, conducting comprehensive cost analyses, and
                         providing comprehensive annual defense posture cost estimates, DOD
                         will be in a better position to fully evaluate investment requirements, and
                         make more informed decisions regarding the affordability of its overseas
                         defense posture. Furthermore, congressional committees will have the
                         appropriate financial context to determine funding needs for specific
                         posture-related initiatives and construction programs. Cost savings or
                         avoidance would depend on the nature of changes made to DOD’s plans
                         and how DOD implements its chosen options.




                         Page 253            GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
Agency Comments        GAO provided its May 2011 report to DOD for review and comment.
                       DOD agreed with GAO’s recommendations and stated that it would work
and GAO’s Evaluation   with its components to implement them. Insufficient time has passed
                       since the issuance of the report for GAO to fully evaluate DOD’s
                       implementation. As part of its routine audit work, GAO will track the extent
                       to which progress has been made to address the identified actions and
                       report to Congress.



How GAO Conducted      The information contained in this analysis is based on findings from the
                       reports listed in the related GAO products section. GAO assessed DOD
Its Work               policies and procedures, interviewed relevant DOD and State Department
                       officials, and analyzed cost data from the military services.



Related GAO            Defense Management: Comprehensive Cost Information and Analysis of
                       Alternatives Needed to Assess Military Posture in Asia. GAO-11-316.
Products               Washington. D.C.: May 25, 2011.

                       Opportunities to Reduce Potential Duplication in Government Programs,
                       Save Tax Dollars, and Enhance Revenue. GAO-11-318SP. Washington,
                       D.C.: March 1, 2011.

                       Defense Management: Additional Cost Information and Stakeholder Input
                       Needed to Assess Military Posture in Europe. GAO-11-131. Washington
                       D.C.: February 3, 2011.

                       Defense Planning: DOD Needs to Review the Costs and Benefits of
                       Basing Alternatives for Army Forces in Europe. GAO-10-745R.
                       Washington D.C.: September 13, 2010.

                       Force Structure: Actions Needed to Improve DOD’s Ability to Manage,
                       Assess, and Report on Global Defense Posture Initiatives. GAO-09-706R.
                       Washington D.C.: July 2, 2009.

                       Defense Management: Actions Needed to Address Stakeholder
                       Concerns, Improve Interagency Collaboration, and Determine Full Costs
                       Associated with the U.S. Africa Command. GAO-09-181. Washington
                       D.C.: February 20, 2009.



Contact Information    For additional information about this area, contact Brian J. Lepore at
                       (202) 512-4523 or leporeb@gao.gov.




                       Page 254           GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
38. Navy’s Information Technology Enterprise
Network
Better informed decisions are needed to ensure a more cost-effective acquisition approach for the Navy’s Next
Generation Enterprise Network.



Why This Area Is                    In 2007, the Department of the Navy (Navy) established the Next
                                    Generation Enterprise Network (NGEN) program to replace and improve
Important                           the Navy Marine Corps Intranet, which provides about 382,000
                                    workstations to approximately 700,000 users across 2,500 Navy and
                                    Marine Corps locations around the world. NGEN is intended to provide
                                    secure data and information technology services, such as data storage,
                                    e-mail, and video-teleconferencing. It is also intended to provide the
                                    foundation for the Navy’s future Naval Networking Environment—a set of
                                    integrated, phased programs that share a common enterprise architecture
                                    and standards.

                                    As envisioned, NGEN’s capabilities are to be incrementally acquired
                                    through multiple providers (contractors). The first increment is to provide
                                    capabilities comparable to the Navy Marine Corps Intranet, as well as
                                    enhanced information assurance and increased government control over
                                    network operations.

                                    To date, according to the President’s fiscal year 2012 budget, the NGEN
                                    program has spent about $434 million on work associated with the
                                    transition from the Navy Marine Corps Intranet. The first increment is to
                                    be fully operational in March 2014 and is to cost approximately $50 billion
                                    to develop, operate, and maintain through fiscal year 2025.



What GAO Found                      As GAO reported in March 2011, the Navy did not have sufficient basis
                                    for knowing that it is pursuing the most cost-effective approach for
                                    acquiring NGEN capabilities. According to the Department of Defense
                                    guidance, 1 an analysis of alternatives should examine viable solutions
                                    with the goal of identifying the most promising option, thereby informing
                                    acquisition decision making. While the Navy conducted an analysis of
                                    alternatives, it ultimately selected an approach that was not considered in
                                    this analysis and that the Navy estimated would cost at least $4.7 billion
                                    more than any of the four assessed alternatives. Further, the analysis of
                                    alternatives highlighted the potential for greater schedule and
                                    performance risks as the number of contractual relationships in the
                                    approach increases. Given that the selected approach includes a larger



                                    1
                                     Defense Acquisition University, Defense Acquisition Guidebook, Section 3.3 “Analysis of
                                    Alternatives” (accessed Mar. 19, 2010).




                                    Page 255               GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
number of such relationships than the assessed alternatives, the relative
schedule and performance risks for this approach are likely greater, and
therefore are likely to result in greater costs. (See the table below for the
contractual relationships and Navy’s estimated costs of the assessed
alternatives and the selected approach.)

NGEN Alternative and Selected Approaches

                                                                                                                        Selected
                                   Status quo               Alt. 2        Alt. 3 variant              Alt. 3           approach
    Contractual                                   3               3                        10              15                21
    relationships
    Estimated costa                         $10.3          $10.8                      $10.8           $10.7                $15.6
Sources: Navy data (status quo and alternatives 2, 3 variant, and 3); GAO analysis of Navy data (selected approach).
a
 Fiscal years 2011-2015 in billions (adjusted for inflation).


Navy officials did not view the differences in contractual relationships and
schedule and performance risks between the approach selected and the
assessed alternatives as significant, despite the difference in cost.
Nevertheless, by using this acquisition approach, Navy decision makers
lack assurance that their selected approach is the most promising and
cost-effective course of action.

GAO also determined that the Navy’s schedule for NGEN did not
adequately satisfy key schedule estimating best practices, which GAO
has previously identified, such as establishing the critical path (the
sequence of activities that, if delayed, impacts the planned completion
date of the project) and assigning resources to all work activities.
Because it did not satisfy these practices, the schedule does not provide
a reliable basis for program execution. According to program officials,
schedule estimating was constrained by staffing limitations. However,
these weaknesses have contributed to delays in key NGEN events and
milestones, including the completion of multiple major acquisition reviews
and program plans.

Additionally, successful execution of system acquisition programs
depends in part on effective executive-level governance, to include
having organizational executives review these programs at key
milestones in their life cycles and make informed performance- and risk-
based decisions as to how they should proceed. 2 NGEN acquisition
decisions were not always performance- and risk-based. In particular,
senior executives approved the program’s continuing progress in the face
of known performance shortfalls and risks. For example, in November
2009, the program was approved at a key acquisition review despite the
lack of defined requirements, which officials recognized as a risk that


2
 GAO, Information Technology: Federal Agencies Need to Strengthen Investment Board
Oversight of Poorly Planned and Performing Projects, GAO-09-566 (Washington, D.C.:
June 30, 2009).




Page 256                          GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
                         would impact the completion of other key documents, such as the test
                         plan. According to Navy officials, the decisions to proceed were based on
                         their view that they had sufficiently mitigated known risks and issues.
                         However, Navy officials later realized the risk from a lack of defined
                         requirements was a critical issue.

                         By selecting an approach that carries greater relative schedule and
                         performance risks than other alternatives and that is being executed
                         against an unreliable program schedule, the department increases the
                         risk that its approach will lead to future cost overruns. Furthermore, if the
                         department proceeds along its current course, the issues GAO has
                         identified with the program’s schedule, along with the delays already
                         experienced, raise concerns that it will be unable to complete the
                         transition as planned.



Actions Needed and       To ensure that NGEN capabilities are acquired in the most cost-effective
                         manner, GAO recommended in March 2011 that Secretary of Defense
Potential Financial or   should
Other Benefits           •   limit further investment in NGEN until the Navy conducts an
                             immediate interim review to reconsider the selected acquisition
                             approach. At a minimum, this review should ensure that the Navy
                             pursues the most advantageous acquisition approach, as evidenced
                             by a meaningful analysis of all viable alternative acquisition
                             approaches; it also should consider existing performance shortfalls
                             and known risks.

                         Furthermore, to facilitate implementation of the acquisition approach
                         resulting from this review, the Secretary of the Navy should

                         •   ensure that the NGEN schedule substantially reflects the key
                             schedule estimating practices, and that future NGEN acquisition
                             reviews and decisions fully reflect the state of the program’s
                             performance and its exposure to risks.

                         The Navy has subsequently indicated that changes to the acquisition
                         strategy are under way. GAO is undertaking work that will assess the
                         extent to which the Navy has conducted its interim review to reconsider
                         its acquisition approach and evaluate the revised strategy, including the
                         basis for determining that this approach is the most cost-effective. GAO
                         will also determine the extent to which Navy has implemented key
                         schedule estimating practices and has made performance- and risk-
                         based decisions. If fully implemented, GAO’s key recommended actions
                         should help the Navy ensure that the most cost-effective approach is
                         pursued.




                         Page 257            GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
Agency Comments        GAO provided a copy of its March 2011 report to the Department of
                       Defense for review and comment. The department agreed with the
and GAO’s Evaluation   recommendation to ensure that future NGEN acquisition reviews and
                       decisions fully reflect the state of the program’s performance and its
                       exposure to risks. The department did not concur with the
                       recommendation to reconsider its acquisition approach. However, as
                       noted earlier, the Navy is currently in the process of reviewing and
                       making changes to its acquisition strategy. Further, the department
                       partially concurred with the recommendation to ensure that the NGEN
                       schedule substantially reflects the key schedule estimating practices,
                       stating that it would consider incorporating practices found to be
                       beneficial. GAO believes that incorporating all of the best practices for
                       schedule estimating in the NGEN master schedule would help the
                       department manage and measure its progress in executing the work
                       needed to transition from the Navy Marine Corps Intranet to NGEN. As
                       part of its routine audit work, GAO will track agency actions to address
                       these recommendations and report to Congress.



How GAO Conducted      The information contained in this analysis is based primarily on findings
                       from the products listed in the related GAO products section. GAO
Its Work               analyzed the NGEN alternatives analysis report and underlying support,
                       the program’s master schedule, program performance assessments and
                       risk reports, and executive acquisition decision briefings and meeting
                       minutes, among other things. GAO also interviewed cognizant agency
                       and program officials regarding the analysis of alternatives’ development
                       and results, development and management of the program schedule, and
                       NGEN performance and program risks.



Related GAO            Information Technology: Better Informed Decision Making Needed on
                       Navy’s Next Generation Enterprise Network Acquisition. GAO-11-150.
Products               Washington, D.C.: March 11, 2011.

                       Information Technology: DOD Needs to Ensure That Navy Marine Corps
                       Intranet Program Is Meeting Goals and Satisfying Customers.
                       GAO-07-51. Washington, D.C.: Dec. 8, 2006.



Contact Information    For additional information about this area, contact Valerie C. Melvin at
                       (202) 512-6304 or melvinv@gao.gov.




                       Page 258           GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
39. Auto Recovery Office
Unless the Secretary of Labor can demonstrate how the Auto Recovery Office has uniquely assisted auto
communities, Congress may wish to consider prohibiting the Department of Labor from spending any of its
appropriations on the Auto Recovery Office and instead require that the department direct the funds to other
federal programs that provide funding directly to affected communities.



Why This Area Is                     In 2008 and 2009, the Department of the Treasury (Treasury) committed
                                     $62 billion in Troubled Asset Relief Program funding to General Motors
Important                            (GM) and Chrysler to help the companies restructure. Anticipating the
                                     possible effects of the companies’ restructuring on communities that
                                     relied heavily on these companies and their suppliers for employment and
                                     economic investment, in June 2009 the President issued Executive Order
                                     13509 establishing the White House Council on Automotive Communities
                                     and Workers (the Council)—composed of over 20 members, including the
                                     heads of all domestic cabinet agencies and key White House offices—to
                                     coordinate a federal response to issues affecting these communities and
                                     others that rely on GM, Chrysler, or other auto companies and suppliers. 1
                                     The staff and the funding for the Council were housed within the
                                     Department of Labor’s Office of Recovery for Auto Communities and
                                     Workers (Auto Recovery Office).

                                     As GAO reported in May 2011, GM and Chrysler restructured their
                                     operations from 2008 through 2010 in part by closing or halting
                                     production at 22 plants 2 (16 GM and 6 Chrysler), and communities in
                                     which these plants were located experienced economic challenges in
                                     addition to those they already faced. GAO visited six of these
                                     communities and found that unemployment in all of them increased after
                                     the plants closed. Staff of the Auto Recovery Office have tried to help
                                     communities address these challenges by serving as a listening post and
                                     federal liaison to agencies and programs that might assist them, but it is
                                     not clear whether the office provided communities with assistance that
                                     they otherwise would not have received. Nevertheless, the Department of
                                     Labor received funding for its management expenses, which it allocated
                                     to the office in fiscal years 2011 and 2012. The office spent approximately
                                     $1.2 million in fiscal year 2011. The Auto Recovery Office does not
                                     receive a direct line item appropriation, but rather negotiates an annual
                                     spending plan with the Secretary of Labor based on projected needs and
                                     historical data, and officials told GAO that they expect the same will occur
                                     for the fiscal year 2013 budget.




                                     1
                                     Executive Order No. 13509, 74 Fed. Reg. 30903 (June 23, 2009).
                                     2
                                      In September 2011, GM announced that it planned to reopen its Spring Hill, Tennessee,
                                     plant where it had previously halted production.




                                     Page 259              GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
What GAO Found   Since the Auto Recovery Office was established, it has not accomplished
                 half of the responsibilities set forth in executive orders, and has not been
                 able to demonstrate the results of its efforts to assist auto communities. In
                 July 2011, the President issued Executive Order 13578 to continue
                 assisting auto communities and workers. 3 While this executive order
                 revoked the previous one establishing the Council, it contains essentially
                 the same responsibilities, but with the Secretary of Labor performing them
                 instead of the Council. These responsibilities include (1) working among
                 executive departments and agencies to coordinate a federal response to
                 issues that impact auto communities and workers; (2) conducting
                 outreach to nonprofits, businesses, local governments, and others that
                 could assist in bringing to the President’s attention concerns, ideas, and
                 policy options for enhancing efforts to revitalize auto communities; (3)
                 advising the President on the potential effects of pending legislation; and
                 (4) providing recommendations to the President on changes to federal
                 policies and programs to address issues of special importance to
                 automotive communities and workers.

                 As GAO reported in May 2011, the Auto Recovery Office’s efforts were
                 focused primarily on the first two of these functions—coordinating the
                 efforts and support of federal agencies to ensure a coordinated federal
                 response to issues that affect auto communities and workers, and
                 conducting outreach—and this continues to be the case. As part of their
                 coordination efforts, the Council members and Auto Recovery Office staff
                 visited auto communities around the country, met with local officials to
                 understand the key challenges facing each community, and connected
                 them to the appropriate federal agencies and resources. A specific Auto
                 Recovery Office staff member was assigned to each auto community and
                 state to serve as a point person for each auto community. These staff
                 members responded to their assigned communities’ needs, such as by
                 providing technical assistance or identifying contacts, and continued to
                 connect the communities to resources and individuals as appropriate.

                 Although officials in communities GAO visited in 2010 and 2011
                 acknowledged the efforts of Council members and Auto Recovery Office
                 staff, they also reported securing much of the assistance they received
                 following plant closures without those efforts. For instance, officials told
                 GAO that much of the federal assistance they received was targeted to
                 individuals recently laid off from auto plants and delivered through
                 Department of Labor resources outside the Council and Auto Recovery
                 Office, such as the Workforce Investment Act Dislocated Workers
                 Program and Trade Adjustment Assistance.

                 In August 2011 a new executive director joined the Auto Recovery Office,
                 filling a position that had been vacant for almost a year. The new director
                 and staff have visited eight communities, including communities and



                 3
                 Executive Order No. 13578, 76 Fed. Reg. 40591 (July 6, 2011).




                 Page 260             GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
officials identified by the office in the past as well as new individuals. They
are also planning to visit additional communities where office staff noted
that automotive plant closures have been announced, such as
Shreveport, Louisiana and St. Paul, Minnesota. The office staff stated that
they continue to provide technical assistance to auto communities and
have also participated in webinars and other events related to auto
community interests, such as events hosted by the Mayors Automotive
Coalition, and RACER—the environmental trust established to remediate
old GM plants. However, while the Auto Recovery Office has continued its
efforts, it still has not fulfilled its other two responsibilities—advising the
President on pending legislation and making recommendations to the
President on changes to federal policies and programs—for which it was
established. Auto Recovery Office officials told GAO that they plan to
make policy recommendations to the White House in fiscal year 2012.

Further, as GAO also reported in May 2011, neither the Council nor the
Auto Recovery Office systematically tracked, measured, or assessed their
assistance to auto communities and GAO recommended that they do so.
GAO has reported in the past that federal agencies engaged in
collaborative efforts need to create the means to monitor and evaluate
their efforts so that they can identify areas for improvement. 4 However,
since the Council and Auto Recovery Office did not keep an inventory of
assistance that they had provided or funding they had helped
communities secure, analyze the inventory for trends, or publish the
results of their analysis, it was difficult to identify that assistance. In their
response to GAO’s May 2011 report, the Department of Labor noted the
challenges in developing a set of metrics that measures activities such as
facilitation and process and that the more traditional measures of
performance-based results are being tracked by the agencies that are
responsible for administering the actual delivery of services.

Since then, the office has provided some additional examples of
assistance provided to specific communities, for example noting that its
staff helped Kokomo, Indiana, secure Economic Development
Administration funding to hire a “recovery coordinator” to support a
regional economic development strategic plan, and helped Kokomo
negotiate with Chrysler to receive over $25 million in personal property
taxes the company owed the county. The office plans to publish some of
these examples on its website. In addition, the office reported that it is in
the process of developing measures to assess its work, including
“assessments of needs of affected communities” and “strategic
collaboration/recovery plans tailored to affected communities.” However,
the Auto Recovery Office still does not have a process to systematically
inventory and analyze all assistance provided to auto communities,
without which it cannot ensure that it has identified all relevant areas for



4
 GAO, Results-Oriented Government: Practices That Can Help Enhance and Sustain
Collaboration among Federal Agencies, GAO-06-15 (Washington, D.C.: Oct. 21, 2005).




Page 261              GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
                         improvement or made the appropriate recommendations, including to the
                         President, as it was tasked to do.

                         Finally, Auto Recovery Office officials told GAO the office’s unique role is
                         to serve as an ombudsman between auto communities undergoing
                         economic and social distress and federal initiatives that could be of value
                         to those communities, and that they see a need for this role continuing as
                         long as auto factories are marked for closure. However, there are other
                         efforts within the executive branch to assist economically distressed
                         communities. For example, the White House’s Office of Domestic Policy
                         is overseeing the Strong Cities, Strong Communities program, which also
                         involves multiple agencies collaborating to assist communities facing
                         economic challenges. This program has selected six communities to
                         receive technical assistance, and at least one—Detroit—is an auto
                         community that the Auto Recovery Office has also assisted.



Actions Needed and       Though the Auto Recovery Office has made progress toward tracking its
                         assistance to auto communities, it still has not implemented three of
Potential Financial or   GAO’s prior recommendations, making it difficult to identify the office’s
Other Benefits           assistance or benefit to auto communities. GAO recommended in May
                         2011 that the Secretary of Labor

                         •   direct the Auto Recovery Office to (1) document the office’s
                             achievements to date, including its assistance to various auto
                             communities; (2) establish a process for measuring the office’s
                             results; and (3) determine when and how the specialized assistance
                             provided by the office can be transitioned to existing federal
                             programs.

                         In addition, in the absence of documented results, Congress may wish to

                         •   consider prohibiting the Department of Labor from spending any of its
                             appropriations on the Auto Recovery Office and instead require that
                             the department direct the funds to other federal programs that provide
                             funding directly to affected communities.



Agency Comments          GAO provided a draft of this report section to the Department of Labor for
                         review and comment. The department provided written comments and
and GAO’s Evaluation     agreed with GAO’s recommendations. In its comments, the department
                         reiterated that the Auto Recovery Office is the only executive office that
                         deals specifically with the needs of auto communities, and thus it is more
                         effective than other federal programs at helping communities address the
                         complex effects of automotive industry restructuring. The department
                         notes that Strong Cities, Strong Communities, the initiative GAO cites as
                         an example of other interagency efforts to assist economically distressed
                         communities, was not designed to deal with issues unique to automotive
                         communities, and therefore GAO should not suggest that it replace the
                         Auto Recovery Office. In the report, GAO does not suggest that this
                         initiative replace the Auto Recovery Office, but rather highlights that other



                         Page 262            GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
                      executive efforts exist to help communities facing economic challenges,
                      regardless of the cause of these challenges. The department also
                      provided additional examples of auto communities the office is assisting,
                      which GAO incorporated as appropriate. Finally, the department writes
                      that the Auto Recovery Office has fulfilled its responsibilities to advise the
                      President on pending legislation, in part by participating in administrative
                      review of pending legislation, preparing portions of the President’s
                      budget, and engaging with the National Economic Council’s Office of
                      Manufacturing Policy to inform policy decisions affecting proposed
                      manufacturing legislation. While GAO recognizes that the Auto Recovery
                      Office is involved in executive branch discussions regarding policies that
                      could affect auto communities, the tasks the department cites, such as
                      preparing the President’s budget, are tasks in which all executive
                      agencies engage. Outside of these typical agency tasks, the department
                      did not identify instances in which the Auto Recovery Office formally
                      advised the President. More importantly, the Auto Recovery Office has
                      not fulfilled GAO’s recommendations to track and measure its assistance,
                      without which neither GAO nor Congress can identify what the office has
                      done or accomplished with the funding provided to date. Given the
                      challenges auto communities face, it is important to maximize federal
                      assistance to these communities. As such, GAO suggested the
                      department, if unable to demonstrate the results of the Auto Recovery
                      Office’s efforts, redirect funds from the office to other departmental
                      programs. As part of GAO’s routine audit work, GAO will track agency
                      actions to address these recommendations and report to Congress. All
                      written comments are reprinted in appendix IV.



How GAO Conducted     The information contained in this analysis is based on findings from the
                      products listed in the related GAO products section as well as additional
Its Work              work GAO conducted. GAO interviewed the Auto Recovery Office to
                      obtain updated information on its activities and accomplishments. GAO
                      also reviewed existing documentation related to the data and interviewed
                      Auto Recovery Office staff. GAO determined that the data were
                      sufficiently reliable to describe the Auto Recovery Office’s spending.



Related GAO           Troubled Asset Relief Program: Treasury’s Exit from GM and Chrysler
                      Highlights Competing Goals, and Results of Support to Auto Communities
Products              Are Unclear. GAO-11-471. Washington, D.C.: May 10, 2011.

                      Troubled Asset Relief Program: Continued Stewardship Needed as
                      Treasury Develops Strategies for Monitoring and Divesting Financial
                      Interests in Chrysler and GM. GAO-10-151. Washington, D.C.:
                      November 2, 2009.



Contact Information   For additional information about this area, contact A. Nicole Clowers at
                      (202) 512-8678 or clowersa@gao.gov.




                      Page 263            GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
40. Excess Uranium Inventories
Marketing the Department of Energy’s excess uranium could provide billions in revenue for the government.



Why This Area Is                    Uranium—a naturally occurring radioactive element—is used in nuclear
                                    weapons, as well as in fuel for nuclear power plants. In the United States,
Important                           20 percent of the nation’s electricity comes from nuclear power, and
                                    growing anxiety over climate change generated by ever-growing demand
                                    for fossil fuels has sparked interest in increasing the use of nuclear
                                    power, despite ongoing concerns about safety in light of the March 2011
                                    nuclear accident in Japan. A healthy domestic uranium industry is
                                    considered essential to ensuring that commercial nuclear power remains
                                    a reliable option for supporting the nation’s energy needs.

                                    The Department of Energy (Energy) maintains large inventories of
                                    uranium that it no longer requires for nuclear weapons or fuel for naval
                                    nuclear propulsion reactors. A large portion of Energy’s inventories
                                    consists of depleted uranium hexafluoride, otherwise known as “tails”— a
                                    byproduct of the uranium enrichment process. Although once considered
                                    an environmental liability, recent increases in uranium prices could
                                    transform these tails into a lucrative source of revenue for the
                                    government. Hundreds of thousands of metric tons of tails are stored at
                                    Energy’s uranium enrichment plants in Portsmouth, Ohio, and Paducah,
                                    Kentucky.

                                    In addition to tails, Energy maintains thousands of tons of natural
                                    uranium, which likewise could be sold to utilities or others for additional
                                    revenue. For example, since December 2009, Energy has used some of
                                    this uranium to pay for environmental cleanup work at its Portsmouth
                                    uranium enrichment plant.



What GAO Found                      The Energy uranium inventories are worth potentially billions of dollars to
                                    commercial nuclear power plants that can use the material as fuel in their
                                    reactors.

                                    With regard to the Energy depleted uranium tails, as GAO reported in
                                    March and April 2008 and again in June 2011, under certain conditions,
                                    pursuing the following options could generate significant revenue:

                                    •   Energy could contract to re-enrich the tails. Uranium tails lack
                                        sufficient quantities of the fissile uranium-235 isotope necessary for
                                        nuclear fuel. Considerable enrichment is required to further increase
                                        the concentration of uranium-235. In the past, low uranium prices
                                        meant that the cost of enrichment would have been greater than the
                                        proceeds the government would receive for the relatively small
                                        amount of uranium-235 extracted. But increases in uranium prices—
                                        from a nominal price of approximately $21 per kilogram of uranium in
                                        the form of uranium hexafluoride in November 2000 to about $160 per



                                    Page 264           GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
    kilogram in May 2011—could make tails re-enrichment profitable.
    Although Energy would have to pay for processing, the resulting re-
    enriched uranium could be profitably sold if the sales price of the
    uranium exceeded processing costs.

•   Provided appropriate statutory authority, Energy could sell the tails “as
    is.” Although GAO found that Energy generally has the legal authority
    to process the tails and sell the resulting re-enriched uranium, GAO
    found that the department lacks authority to sell depleted uranium tails
    in their current form. While Energy disagrees and believes it currently
    has the necessary legal authority, it is nonetheless planning no sale of
    depleted uranium tails in the near term. Instead, Energy is committed
    to converting the tails to a more stable chemical form for safe long-
    term storage, which involves additional processing and stockpiling
    thousands of protective cylinders to contain the material indefinitely. If
    Congress were to provide the department with the needed legal
    authority to sell the tails, however, firms such as nuclear power
    utilities and enrichment companies might find it cost-effective to
    purchase these tails and re-enrich them as a source of nuclear fuel.

With regard to Energy’s inventories of natural uranium, as GAO reported
in March and April 2008 and again in June 2011, the department has the
general legal authority to sell this material; and in September 2011, GAO
reported that in seven transactions executed since 2009, Energy has, in
effect, “sold” nearly 1,900 metric tons of natural uranium into the market,
using its contractor as a sales agent, receiving from $109 to $183 per
kilogram. The total proceeds from these transactions funded over $250
million in environmental cleanup services by that contractor at the
Portsmouth uranium enrichment plant. Although Energy characterized
these sales as barter transactions— exchanges of services
(environmental cleanup work) for materials (uranium)—GAO’s review
showed that they were sales of natural uranium through a sales agent.
While Energy received no cash from the transactions, it allowed USEC,
Inc. to keep cash from the sales. Energy thus violated the miscellaneous
receipts statute, which requires an official or agent of the government
receiving money for the government from any source to deposit the
money in the U.S. Treasury. Executed in accordance with federal law,
however, future sales of natural uranium by Energy could generate
additional revenue for the government.

Ultimately, the extent to which sales of Energy’s uranium inventories
would generate financial benefits for the government depends on several
factors:

•   The market price of uranium. The price for uranium is historically
    volatile, affected greatly by speculation regarding supply and demand,
    the price of competing energy resources, and domestic and
    international political and economic events or natural disasters, such
    as the March 2011 nuclear accident in Japan.




Page 265            GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
                         •   The price and availability of re-enrichment services. Only two
                             companies currently provide enrichment services domestically.
                             Energy would have to find a company with excess enrichment
                             capacity beyond its current commitments, which may be difficult if
                             large amounts of enrichment processing were required.

                         •   An existing commitment to domestic uranium producers to limit
                             Energy inventory sold. Under its December 2008 Excess Uranium
                             Inventory Management Plan, Energy committed to limit the amount of
                             uranium sold in a given year to no more than 10 percent of the
                             domestic requirements for nuclear fuel. The sudden introduction of
                             hundreds of tons of uranium into the market could topple prices and
                             not only reduce the government’s revenue from such sales, but could
                             also undermine profitability of the domestic uranium industry.

                         As GAO reported in June 2011, the potential value of Energy’s tails is
                         currently substantial, but changing market conditions could greatly affect
                         the tails’ value over time. GAO estimated the value of the tails at $4.2
                         billion based on May 2011 uranium prices and enrichment costs and
                         assuming sufficient re-enrichment capacity was available.



Actions Needed and       In Energy’s 2008 uranium management plan, the department summarized
                         its intent to sell or transfer uranium to the commercial market through
Potential Financial or   2017, including plans to re-enrich and sell depleted uranium tails. But
Other Benefits           because DOE has decided to use uranium to fund environmental cleanup
                         at the Portsmouth site, more uranium has been released into the market
                         than articulated in the 2008 plan. As a result, Energy tabled plans to also
                         sell uranium tails, because doing so would violate the commitment the
                         department made to domestic uranium producers to limit the amount of
                         uranium Energy sells in a given year.

                         Even in the absence of such a commitment, however, legal obstacles to
                         the pursuit of certain options for its uranium tails and natural uranium
                         exist. GAO previously found that Energy lacked the necessary legal
                         authority to pursue potential options for its tails and natural uranium and
                         that the following congressional action may be needed. Specifically

                         GAO recommended in March 2008 that Congress may wish to

                         •   clarify Energy’s statutory authority regarding depleted uranium,
                             explicitly providing direction about whether and how Energy may sell
                             or transfer the tails in their current form. Depending on the terms of
                             the legislation, and given the significant amount of tails in inventory,
                             the government could garner substantial revenue as a result.

                         GAO recommended in September 2011 that if Congress sees merit in
                         using the proceeds from the barter, transfer, or sale of federal uranium
                         assets to pay for environmental cleanup of uranium enrichment plants, it
                         could consider




                         Page 266            GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
                       •   providing Energy with explicit authority to barter excess uranium and
                           to retain the proceeds from all three types of uranium transactions
                           (barter, transfer, and sale). Likewise, Congress could direct Energy to
                           sell uranium for cash and make those proceeds available by
                           appropriation for decontamination and decommissioning expenses at
                           Energy’s uranium enrichment plants.

                       Congress has taken some actions in response to GAO’s work. For
                       example, the Consolidated Appropriations Act, 2012, among other things,
                       requires the Secretary of Energy to report to the House and Senate
                       Appropriations Committees not less than 30 days prior to the transfer,
                       sale, barter, distribution, or other provision of uranium in any form specific
                       details on the transactions, including the amounts of uranium to be
                       provided and an estimate of the uranium value along with the expected
                       recipient of the material. The act also requires the Secretary to submit a
                       report evaluating the economic feasibility of re-enriching depleted
                       uranium.



Agency Comments        GAO provided a draft of its September 2011 report to Energy. Energy
                       provided written comments that stated that because it did not receive
and GAO’s Evaluation   money for the uranium it used to pay for environmental cleanup work, it
                       did not violate the miscellaneous receipts statute. However, GAO and the
                       courts have found in a number of instances that an entity does not have
                       to receive actual cash to trigger a responsibility to deposit money into the
                       U.S. Treasury. Energy also disagreed with GAO’s estimate of the value of
                       Energy’s depleted uranium tails, stating that it did not include additional
                       costs that may be incurred processing tails including, among other things,
                       the costs of re-enriching the tails and packaging and transporting the
                       material. The estimate does include the costs of re-enriching the tails, but
                       it does not include some other costs, including packaging and
                       transportation, because those costs are unknown. Furthermore, as GAO’s
                       March and April 2008, June 2011, and September 2011 reports noted,
                       GAO’s estimate is very sensitive to changing uranium prices, as well as to
                       the availability of sufficient enrichment capacity. Uranium prices are
                       volatile, and a sharp rise or fall can greatly affect the value of the tails.
                       Any estimates of the value of the Energy tails are therefore subject to
                       great uncertainty. As part of its routine audit work, GAO will track agency
                       actions to address its recommendations and report to Congress.



How GAO Conducted      The information contained in this analysis is based on findings from the
                       products listed the related GAO products section. These reports reviewed
Its Work               Energy’s management of its uranium inventories and the department’s
                       transactions using its uranium to pay for environmental cleanup and other
                       services. GAO reviewed Energy documents detailing the transactions the
                       department has engaged in involving its uranium, assessments of the
                       value of uranium in each transaction, and analyses of the impact of
                       DOE’s activities on the uranium market.




                       Page 267            GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
Related GAO           Excess Uranium Inventories: Clarifying DOE’s Disposition Options Could
                      Help Avoid Further Legal Violations. GAO-11-846. Washington, D.C.:
Products              September 26, 2011.

                      Nuclear Material: DOE’s Depleted Uranium Tails Could Be a Source of
                      Revenue for the Government. GAO-11-752T. Washington, D.C.: June 13,
                      2011.

                      Department of Energy: December 2004 Agreement with the United States
                      Enrichment Corporation. B-307137. Washington, D.C.: July 12, 2008.

                      Nuclear Material: Several Potential Options for Dealing with DOE’s
                      Depleted Uranium Tails Could Benefit the Government. GAO-08-613T.
                      Washington, D.C.: April 3, 2008.

                      Nuclear Material: DOE Has Several Potential Options for Dealing with
                      Depleted Uranium Tails, Each of Which Could Benefit the Government.
                      GAO-08-606R. Washington, D.C.: March 31, 2008.



Contact Information   For additional information about this area, contact Gene Aloise at (202)
                      512-3841 or aloisee@gao.gov.




                      Page 268           GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
41. General Services Administration
Schedules Contracts Fee Rates
Re-evaluating fee rates on the General Services Administration’s Multiple Award Schedules contracts could
result in significant cost savings governmentwide.



Why This Area Is                    In recent years, federal agencies spent nearly $40 billion each fiscal year
                                    procuring goods and services through the General Services
Important                           Administration’s (GSA) Multiple Award Schedules (MAS) contracts. MAS
                                    contracts are operated to help leverage the buying power of the federal
                                    government by providing cost savings at prices associated with volume
                                    buying on millions of commercial goods and services. GSA awards and
                                    administers over 19,000 contracts with vendors under the MAS program.

                                    As permitted by statute, GSA charges customer agencies a fee when
                                    they place orders under MAS contracts. The MAS program’s fee rate,
                                    which is expressed as a percentage of the dollar value of the order, has
                                    remained stable for the last 5 fiscal years at 0.75 percent. In fiscal year
                                    2010, GSA collected approximately $282 million in fee revenue from
                                    agencies that use the MAS contracts. GSA retains this revenue to support
                                    the MAS program.



What GAO Found                      As GAO reported in September 2011, the revolving fund statute under
                                    which GSA operates its MAS program requires that GSA set its
                                    interagency contract fee rate to recover the costs of the program’s
                                    operations. 1 It also provides that GSA may establish reserves for
                                    operating needs. The program is not required to break even on an annual
                                    basis. As such, the program is permitted to have excess revenue in a
                                    given year or annual costs that exceed revenue. The figure below shows
                                    the fee revenue GSA collected and GSA’s costs to operate the MAS
                                    program during fiscal years 2007 through 2010, and illustrates the
                                    difference between those amounts, which GAO refers to as excess
                                    revenue. The figure also illustrates that although the annual excess
                                    revenue generated by GSA’s MAS program has declined over those
                                    years, GSA’s MAS program averaged an excess of $62.2 million in
                                    revenue over program costs, before contributions to reserves, each fiscal
                                    year.




                                    1
                                    40 U.S.C. § 321(d)(2), which requires cost recovery “so far as practicable.”




                                    Page 269              GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
Fee Revenue versus Costs for the GSA MAS Program—Fiscal Years 2007 through
2010




Note: All data and calculations are in nominal dollars.


GSA maintains three reserves for all the programs operated through the
revolving fund that includes the MAS program:

•    the Working Capital Reserve, an operating reserve,

•    the Business Reserve, which is to be used for planned improvement
     projects, and

•    the Investment Reserve, which is to be used for improvements that
     were not planned when the revenue was placed in the reserve.

Excess revenue accumulates in the reserves until it is used for operations
or improvement projects.

From fiscal years 2007 to 2010 GSA’s reserve balances grew
significantly, largely due to this excess revenue generated annually by the
MAS program. At the end of fiscal year 2010, the combined balance of
GSA’s three reserves was over $800 million—about $350 million of which
resided in the Working Capital Reserve to cover shortfalls in operating
funds. Although GSA reviews its program fee rate annually as part of its
budget process, there is nothing in GSA’s internal guidance that would
trigger an evaluation of the fee rate of an individual program, such as the
MAS program, that consistently generates excess revenue resulting in the
continuous growth of the reserve balances.



Page 270                   GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
                         A reduction in the fee rate for the MAS program could generate significant
                         cost savings for every agency of the federal government that uses the
                         MAS program. For example, a reduction of 0.10 percentage points—from
                         the current rate of 0.75 percent to 0.65 percent—would generate a
                         savings of almost $40 million per year.



Actions Needed and       To improve the management of the MAS program, GAO recommended in
                         September 2011 that the Administrator of General Services direct the
Potential Financial or   Federal Acquisition Service Commissioner to
Other Benefits           •   develop and implement guidance for evaluation of current fee rates
                             when an individual program consistently transfers excess revenue to
                             the reserve funds.

                         Such an evaluation would allow GSA to determine whether a reduction in
                         the fee rate of any of its programs might be warranted. A reduction of the
                         fee rate for the MAS program alone would provide federal agencies
                         potentially significant cost savings.



Agency Comments          GAO provided GSA with a copy of its September 2011 report for review
                         and comment. GSA agreed with GAO’s recommendation to develop and
and GAO’s Evaluation     implement guidance. GSA is planning to issue a new policy in February
                         2012 that establishes an annual process to determine the need to
                         conduct fee rate reviews for programs that produce an excess (or
                         shortfall) of over $5 million in revenue on average over any 3-year period.
                         The draft policy also requires an automatic review of the fee rate of the
                         MAS program each year. GSA plans to perform these assessments
                         annually beginning in March 2012. GSA expressed concern about
                         reducing the current fee rate in light of recent reductions in excess
                         revenue. In this regard, GSA pointed out that it needs to ensure sufficient
                         levels of reserves to fund needed improvements in the information
                         technology systems that support its programs. GAO believes the annual
                         process will provide for a more rigorous monitoring of the fee rates
                         charged by GSA and provide a trigger for fee rate reviews when
                         appropriate. The annual process could also give GSA further insight into
                         the level of reserve funds that will be available for its information
                         technology improvement projects.

                         As part of its routine audit work, GAO will track agency action to address
                         the recommendation and report to Congress.



How GAO Conducted        The information contained in this analysis is based on the findings in the
                         report listed in the related GAO product section as well as additional work
Its Work                 GAO conducted. GAO analyzed cost and revenue data on the program
                         for fiscal years 2007 through 2010. GAO also interviewed officials from
                         GSA’s MAS program, policy, and financial offices.




                         Page 271           GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
Related GAO Product   Interagency Contracting: Improvements Needed in Setting Fee Rates for
                      Selected Programs. GAO-11-784. Washington, D.C.: September 9, 2011.



Contact Information   For additional information about this area, contact William T. Woods at
                      (202) 512-4841 or woodsw@gao.gov.




                      Page 272           GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
42. U.S. Currency
Legislation replacing the $1 note with a $1 coin would provide a significant financial benefit to the government
over time.



Why This Area Is                     Over the past 40 years, many nations have replaced lower-denomination
                                     notes with coins as a means of providing a financial benefit to their
Important                            governments. GAO has reported five times over the past 22 years that
                                     replacing the $1 note with a $1 coin would provide a net benefit to the
                                     government of hundreds of millions of dollars annually. 1



What GAO Found                       The federal government realizes a financial gain when it issues notes or
                                     coins because both forms of currency usually cost less to produce than
                                     their face value. This gain, which is known as “seigniorage,” equals the
                                     difference between the face value of currency and its costs of
                                     production. 2 Seigniorage reduces the government’s need to raise
                                     revenues through borrowing, and with less borrowing, the government
                                     pays less interest over time, resulting in a financial benefit.

                                     GAO updated its most recent March 2011 estimate 3 due to changes by
                                     the Federal Reserve and Department of the Treasury (Treasury) in note
                                     processing and $1 coin production 4 and found that replacing the $1 note
                                     with a $1 coin would provide a net benefit to the government of
                                     approximately $4.4 billion over 30 years, amounting to an average yearly
                                     discounted net benefit 5 of about $146 million. This benefit occurs
                                     because, based on differences in how notes and coins are used in the
                                     economy, more coins than notes will have to be circulated to meet


                                     1
                                      Over time, GAO’s estimate has changed due to a variety of reasons, including the
                                     increased lifespan of the $1 note and different assumptions in its analyses.
                                     2
                                      Traditionally, seigniorage is defined as the difference between the face value of coins
                                     and their cost of production. As long as there is public demand, the government creates
                                     this net value when it puts coins into circulation. Similarly, when the Federal Reserve
                                     issues notes, it creates an analogous net value for the federal government, equal to the
                                     face value of the notes less their production costs.
                                     3
                                      In March 2011, GAO estimated that replacing the $1 note with a $1 coin would provide a
                                     net financial benefit to the government of about $5.5 billion over 30 years.
                                     4
                                       In April 2011, the Federal Reserve put in place new equipment to process notes that
                                     extended the life of the $1 note to approximately 56 months; GAO used an estimated note
                                     life of 40 months in its 2011 report. In December 2011, the Treasury Department decided
                                     to stop producing $1 coins for circulation, relying on coins currently stored at the Federal
                                     Reserve to meet the relatively small transactional demand for $1coins.
                                     5
                                      A discounted net value uses a rate, known as the discount rate, to convert the value of
                                     payments or receipts expected in future years to today’s value, taking into account that the
                                     further into the future an amount is paid or received, the smaller its value is today.
                                     Applying a discount rate establishes a consistent basis for comparing alternative
                                     investments that will have differing patterns of costs and benefits over many years.




                                     Page 273                GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
demand, and therefore more seignorage will be created. This estimate
differs from what GAO reported in March 2011 because it takes into
account the Treasury’s decision in December 2011 to stop producing $1
coins for circulation immediately. To meet public demand for the coins,
the Treasury intends to rely on the approximately 1.4 billion $1 coins
currently stored with the Federal Reserve as of September 30, 2011. The
current estimate also differs from the 2011 estimate because it uses a
revised forecast that anticipates a lower government borrowing rate over
the next 30 years and a longer life expectancy for the $1 note that results
from efficiencies in the way the Federal Reserve processes notes, which
began in April 2011.

GAO’s current estimate assumes a 4-year transition period beginning in
2012 during which the production of $1 notes stops immediately and $1
coins are quickly produced to meet demand for this currency
denomination. This replacement scenario is compared to a status quo
scenario under which $1 notes remain the primary single dollar currency.
The status quo scenario also incorporates the Treasury’s December 2011
decision to rely on $1 coins in storage to meet public demand for $1 coins
until that stock is nearly depleted, at which time production of $1 coins
would resume. According to the Treasury, the coins in storage could meet
current levels of circulating demand for more than a decade. As shown in
the figure below, the annual net benefit from replacing the $1 note with a
$1 coin would vary over the 30 years—the government would incur a net
loss in 6 of the first 7 years and then realize a net benefit in the remaining
years. The early net loss from replacing the $1 note is due in part to the
up-front costs to the United States Mint of increasing its coin production
during the transition, together with the limited interest expense the
government would avoid in the first few years after replacement began.
GAO’s net benefit estimate is due solely to seigniorage and not to
reduced production costs. In fact, the production costs of transitioning to a
$1 coin are never recovered during the 30-year period. And like all
estimates, it is uncertain, particularly in the later years, and thus the
benefit could be greater or smaller than estimated.




Page 274            GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
Discounted Net Benefit to the Government of Replacing $1 Notes with $1 Coins over 30 Years, by Year




                                        The December 2011 action by the Treasury to stop producing $1 coins for
                                        circulation and to meet public demand for the coin by using the $1 coins
                                        currently being stored will reduce government costs by preventing the
                                        overproduction of $1 coins. The overproduction results from the
                                        presidential $1 coin program, which requires four new presidential $1 coin
                                        designs, featuring images of past presidents in the order they served, to
                                        be issued each year. 6 According to Federal Reserve officials, because
                                        the United States Mint delivers each new presidential coin design to
                                        banks in large quantities, banks have no choice but to order more coins
                                        than they ultimately need to fulfill the demand for new coins. 7 As a result,
                                        unneeded coins are returned to the Federal Reserve, which held over 1.4
                                        billion $1 coins in storage as of September 30, 2011. The Treasury
                                        estimates that stopping production of $1 coins for circulation while it
                                        draws down the coins in storage will save about $50 million per year over
                                        the next several years in coin production costs. However, GAO estimates
                                        that eliminating $1 notes and replacing them with a $1 coin will have
                                        larger net benefit over time.




                                        6
                                         Presidential $1 Coin Act of 2005, Pub. L. No. 109-145 (2005), codified at 31 U.S.C. §
                                        5112(p)(3)(D).
                                        7
                                         Twelve regional Federal Reserve banks order coins from the United States Mint, which
                                        distributes coins directly to those banks. The Federal Reserve banks distribute coins as
                                        well as notes to commercial banks to meet the demand of retailers and the public. Some
                                        coins and notes are returned by commercial banks as deposits to the Federal Reserve
                                        banks, where they are processed for storage or recirculation. According to Federal
                                        Reserve officials, each new presidential coin design is delivered in units of 1,000.




                                        Page 275               GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
Actions Needed and       To reduce the costs associated with the $1 note and $1 coins in the long
                         term, Congress may wish to consider
Potential Financial or
Other Benefits           •   replacing the $1 note with a $1 coin to achieve an estimated financial
                             benefit of $4.4 billion over 30 years. Legislation has been proposed
                             that would make this replacement. 8



Agency Comments          GAO provided a draft of this report section to the Federal Reserve and
                         Treasury for review and comment. The Federal Reserve provided written
and GAO’s Evaluation     comments that noted it believes GAO’s estimate overstates the net
                         financial benefit to the government because it does not (1) adequately
                         address the costs to the Federal Reserve to reinforce the floors of its
                         bank vaults to accommodate the heavier weight of coins or (2) consider
                         potential increases in raw material costs for coins or possible future
                         changes in discount rates. GAO included all costs to the Federal Reserve
                         that the agency provided data on. The Federal Reserve provided no
                         estimate of the additional cost to accommodate heavier coins. GAO used
                         the best data available on coin production costs, which accounts for the
                         cost of raw materials, and discount rate. The Federal Reserve also noted
                         an increased risk of counterfeiting $1 coins and the lack of a GAO
                         sensitivity analysis that reflected further increases in electronic payments
                         by the public. GAO reported in 2011 that counterfeiting of U.S. coins is
                         currently minimal, according to the U.S. Secret Service. Furthermore, in
                         2011, GAO reported the results of a sensitivity analysis in which the
                         replacement leads to a decrease in the demand for currency as people
                         switch to electronic means of payment. GAO recognizes that changing
                         conditions, such as how people use cash and the cost of materials in the
                         future, may alter the total cost savings associated with the $1 coin. The
                         Treasury provided e-mailed comments that pointed out that GAO’s
                         analysis does not account for the impact on or costs to the private sector;
                         both Treasury and the Federal Reserve noted that the analysis should not
                         include seigniorage. As GAO reported in 2011, it found no quantitative
                         estimates of the cost of replacement to the private sector that could be
                         evaluated or modeled. GAO believes that seigniorage cannot be set aside
                         since it is a result of issuing currency. The Treasury also provided
                         technical comments, which were incorporated as appropriate. All written
                         comments are reprinted in appendix IV.




                         8
                          Currency Optimization, Innovation, and National Savings Act, H.R. 2977, 112th Cong.
                         (2011). Other legislation has been proposed that would postpone the minting of new $1
                         coins until the inventory of stored $1 coins has been reduced (Currency Efficiency Act of
                         2011, S. 1624, 112th Cong. (2011).




                         Page 276               GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
How GAO Conducted     The information contained in this analysis is based on findings from the
                      product listed in the related GAO products section as well as additional
Its Work              work GAO conducted. GAO reviewed the Federal Reserve’s June 2011
                      report on the $1 coin 9 and recent proposed legislation; and conducted
                      interviews with senior officials from the Federal Reserve, the United
                      States Mint, the Bureau of Engraving and Printing, and the Department of
                      the Treasury. To estimate the net benefit to the government of replacing
                      the $1 note with a $1 coin, GAO constructed an economic model with
                      data from the Federal Reserve, the Bureau of Engraving and Printing,
                      and the United States Mint. GAO’s model assumptions covered a range
                      of factors including the replacement ratio of coins to notes, the expected
                      rate of growth in the demand for currency over 30 years, the costs of
                      producing and processing both coins and notes, and the differential life
                      spans of coins and notes. GAO arrived at its estimate of net benefit to the
                      government by subtracting the benefit from a status quo scenario from
                      the benefit of a replacement scenario. In the status quo scenario, notes
                      remain the dominant form of currency at the $1 denomination, the United
                      States Mint ceases production of $1 coins until the current stored coins
                      are all released into circulation to meet public demand, and production of
                      $1 coins resumes after the stored coins are depleted. In the replacement
                      scenario, GAO assumed, among other things, that the production of $1
                      notes would stop immediately; no notes would be withdrawn from
                      circulation, but because of their shorter life span, they would naturally fall
                      out of circulation within a few years; and the United States Mint would
                      expand its production of $1 coins during the first 4 years. In estimating the
                      net benefit to the government of replacing the $1 note with a $1 coin,
                      GAO considered only the financial effect of this change on the
                      government and did not consider other factors, such as the relative
                      environmental and societal costs and benefits due to data limitations.
                      GAO conducted sensitivity analyses that decreased the demand for
                      currency as people switch to electronic payments and changed the
                      number of coins needed to replace each note.



Related GAO Product   U.S. Coins: Replacing the $1 Note with a $1 Coin Would Provide a
                      Financial Benefit to the Government. GAO-11-281. Washington, D.C.:
                      March 4, 2011.



Contact Information   For additional information about this area, contact Lorelei St. James at
                      (202) 512-2834 or stjamesl@gao.gov.




                      9
                       Board of Governors of the Federal Reserve System, Annual Report to the Congress on
                      the Presidential $1 Coin Program (June 2011).




                      Page 277              GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
43. Federal User Fees
Regularly reviewing federal user fees and charges can help the Congress and federal agencies identify
opportunities to address inconsistent federal funding approaches and enhance user financing, thereby
reducing reliance on general fund appropriations.



Why This Area Is                    Federal user fees and charges are generally related to some voluntary
                                    transaction or request for government goods or services beyond what is
Important                           normally available to the public, such as fees for national park entrance,
                                    patent applications, and customs inspections. Twenty-three federal
                                    agencies reported collecting nearly $64 billion in fees or charges in fiscal
                                    year 2010. As GAO reported in May 2008, well-designed user fees can
                                    reduce the burden on taxpayers to finance those portions of activities that
                                    provide benefits to identifiable users. Regular, comprehensive fee reviews
                                    can help identify duplicative fee-funded activities, prevent misalignment
                                    between fees and the activities they cover, and maximize opportunities for
                                    user financing.



What GAO Found                      In many instances, Congress has provided specific authority to federal
                                    agencies to assess user fees in agency authorization or appropriations
                                    legislation. Agencies that lack specific statutory authority to charge fees
                                    can rely on the Independent Offices Appropriation Act of 1952 1 which
                                    provides broad authority to assess user fees or charges on identifiable
                                    beneficiaries by administrative regulation. 2 When a fee’s authorizing
                                    statute does not specify review and reporting requirements, and for fees
                                    that derive their statutory authority from the Independent Offices
                                    Appropriation Act, the CFO Act of 1990 3 (CFO Act) and OMB Circular No.
                                    A-25 directs agencies to biennially review their fees and to recommend
                                    fee adjustments as appropriate. In addition, OMB Circular No. A-25
                                    directs agencies to include non-fee-funded programs in these reviews to
                                    determine whether fees should be initiated for government services or
                                    goods for which fees are not currently charged. Further, if imposing such
                                    fees is prohibited or restricted by law, agencies are to recommend
                                    legislative changes as appropriate. Moreover, agencies are to discuss the


                                    1
                                     Pub. L. No. 82-137 (Aug. 31, 1951), codified at, 31 U.S.C. § 9701.
                                    2
                                     User fees assessed under the Independent Offices Appropriation Act’s authority must be
                                    (1) fair and (2) based on costs to the government, the value of the service or thing to the
                                    recipient, public policy or interest serviced, and other relevant facts. Fees collected under
                                    this authority are deposited in the general fund of the U.S. Treasury and are generally not
                                    available to the agency or the activity generating the fees. Unless otherwise authorized by
                                    law, the act requires that agency regulations establishing a user fee are subject to policies
                                    prescribed by the President.
                                    3
                                     Pub. L. No. 101-576 (Nov. 15, 1990), codified at, 31 U.S.C. § 902. The CFO Act requires
                                    agencies to report on “fees, royalties, rents, and other charges imposed by the agency for
                                    services and things of value it provides.” For the purposes of this discussion, GAO
                                    collectively refers to all of these as user fees.




                                    Page 278                GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
results of these reviews and any resulting proposals, such as adjustments
to fee rates, in the CFO annual report required by the CFO Act. This
discussion may be included in agency performance and accountability
reports. Lastly, budget formulation guidance to agencies in OMB Circular
No. A-11 directs agencies to follow fee review guidance in OMB Circular
No. A-25 and to report on the results of fee reviews in CFO Act reports.

GAO previously reported that not reviewing fees regularly can result in
large fee increases and create costly challenges. For example, prior to its
2007 fee review, U.S. Citizenship and Immigration Services had not
conducted a comprehensive review of its immigration and naturalization
fees in 9 years and, as a result, had to increase fees by an average of 86
percent to cover its costs. Further, during the month before the fee
increase took effect, applications increased an unprecedented 100
percent over the prior month, far outpacing the agency’s processing
capacity. As a result, 1.47 million applications were delayed and the
agency incurred unplanned costs to secure additional facilities to store
these applications.

In May 2008, GAO issued its User Fee Design Guide, which examined
how the four key design and implementation characteristics—how fees
are set, collected, used, and reviewed—may affect the economic
efficiency, equity, revenue adequacy, and administrative burden of the
fees. The Design Guide also stated that the tools for congressional and
stakeholder oversight could be enhanced by agencies reporting the
methods for setting fees, including an accounting of program costs and
assumptions it uses to project future program costs and fee collections.

In GAO’s 2011 survey of the 24 agencies covered by the CFO Act and
OMB Circular No. A-25, 21 of the 23 agencies that responded reported
charging more than 3,600 fees and collecting nearly $64 billion in fiscal
year 2010, but agency responses indicated varying levels of adherence to
the biennial review and reporting requirements of the CFO Act and OMB
Circular No. A-25. 4 The survey responses indicated that for most fees,
agencies (1) had not discussed fee review results in annual reports, and
(2) had not reviewed the fees and were inconsistent in their ability to



4
 Twenty-three of the 24 departments covered by the CFO Act and OMB Circular No. A-25
responded to GAO’s survey. The Department of Defense did not respond to GAO’s
survey. The Department of Education and the National Science Foundation reported no
fees. The Department of Commerce’s National Technical Information Service is a fee-
based agency that charges more than 3 million different fees as a clearing house for
government-funded, technical, engineering and business related information. The service
reported these as a single fee. For all Department of Commerce Bureaus, other than the
U.S. Patent and Trademark Office, fee collections are as of June 30, 2010, per the
Department of Commerce. The U.S. Patent and Trademark Office reported collections for
all of fiscal year 2010. There may be some duplication of reported fees as both the
Department of Commerce and Department of State reported collecting fees for
Commercial Services. The Mint reported a single fee and collection amount for the fees
related to all Numismatic products which account for $3.25 billion of the Department of the
Treasury’s total collections.




Page 279               GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
provide fee review documentation. Specifically, agencies reported that
only 29 percent of the fees (1,064 fees), representing only 37 percent
($23.6 billion) of total fee collections in fiscal year 2010 were discussed in
their CFO annual report as directed by OMB Circular No. A-25. However,
agencies reported reviewing 1,687 fees, which make up about 46 percent
of the total 3,666 fees charged. 5 This suggests that agencies are
reviewing more fees than are being discussed in their annual reports. For
agency responses, please see the table below. While these reviews may
provide information for agency management and decision making, the
extent to which this information is being shared with congressional
decision makers or other stakeholders appears far more limited. When
asked why they did not review individual reported fees, agencies most
commonly chose “other” amongst the survey responses provided. When
selecting “other,” agency-provided responses included that fees were
based upon market prices, that the fee was set or administrated by
another agency, or that they did not review some fees because the fee
was set in legislation, and therefore they may not have the authority to
revise the fee. Agencies also commonly selected responses that GAO
provided, including minimal total fee collections or that fee requirements
were not clear. GAO has previously reported that to ensure decision
makers have complete information about program costs and activities,
agencies must substantively review and report on all cost-based fees
regularly, regardless of whether agencies have sole discretion for revising
fee rates.




5
 Agency documentation of these fee reviews varied, limiting GAO’s ability to corroborate
individual fee reviews and the recency and frequency of these fee reviews.




Page 280               GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
Agencies Reported Fiscal Year 2010 Total Fee Collections and Adherence to the CFO Act and OMB Circular No. A-25
Guidance on Reviewing and Discussing Results of Biennial Fee Reviews

Dollars in millions
                                                                                                            Reported percentage of fees
                                                                                   Reported percentage of         and charges reviewed
                                              Reported FY 2010 total                     fees and charges    biennially and discussed in
Agency                                               fee collections                            revieweda        CFO annual documents
Department of Health and Human Services                             $31,545                          84%                                  30%
Department of the Treasury                                              9,789                         97                                    67
Department of Homeland Security                                         8,784                         87                                    96
Department of Agriculture                                               3,991                        100                                   100
Department of Energy                                                    2,498                         86                                     0
Department of Commerce                                                  2,136                         83                                    65
Department of State                                                     1,896                        100                                    73
Department of Interior                                                  1,320                           6                                    5
Department of Justice                                                     777                         71                                    65
Social Security Administration                                            370                        100                                   100
Department of Transportation                                              214                         89                                     0
Department of Labor                                                       164                         90                                     0
Environmental Protection Agency                                             84                       100                                    29
National Aeronautics and Space                                              61                        83                                     0
Administration
Department of Veterans Affairs                                              51                        80                                    47
Small Business Administration                                               16                       100                                   100
Office of Personnel Management                                                8                         0                                    0
General Services Administration                                               6                       50                                     0
United States Agency for International                                        5                         0                                    0
Development
Nuclear Regulatory Commission                                                 2                      100                                    50
Department of Housing and Urban                                         0.043                        100                                     0
Development
                                          Source: GAO summary of agency-reported data.
                                          a
                                           The third column, “reported percentage of fees and charges reviewed” is generally inclusive of fees
                                          and charges reported in the fourth column as reviewed biennially and discussed in CFO annual
                                          documents.


                                          Agencies were inconsistent in their ability to provide documentation for
                                          their fee reviews. For example, the Department of Agriculture provided
                                          documentation of reviews for all of its fees, while a few agencies did not
                                          provide any documentation. Even for agencies that provided
                                          documentation however, GAO found the reviews contained varying levels
                                          of detail and analysis, potentially limiting their value to decision makers.
                                          For one agency, it was not clear when the reviews had been conducted.
                                          GAO has previously reported that decision makers must understand the
                                          decisions and tradeoffs made when designing fees to achieve specific
                                          policy goals and the costs of these decisions in determining if the policy
                                          goals were being met. Finally, most of the reporting agencies (16 out of
                                          23) reported reviewing at least some of their non-fee-funded programs for
                                          opportunities to initiate new fees for government services or goods.



                                          Page 281                       GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
                         Without regular comprehensive reviews, agencies and Congress may
                         miss opportunities to make improvements to a fee’s design which, if left
                         unaddressed, could contribute to inefficient use of government resources.
                         For example, fee reviews could help ensure that fees are properly set to
                         cover the total costs of those activities which are intended to be fully fee-
                         funded, thus eliminating the need for direct appropriations for those
                         activities. Fee reviews may also

                         •   allow agencies and Congress to identify where similar activities are
                             funded differently; for example, one by fees and one by
                             appropriations. One such example is the export control system, in
                             which the State Department charges fees for the export of items on
                             the U.S. Munitions List, while the Commerce Department does not
                             charge fees for those items exported under its jurisdiction. Fee
                             reviews may thereby assist in eliminating or managing inconsistent or
                             overlapping funding sources for similar activities; and

                         •   be a useful step toward examining whether the activities themselves
                             are duplicative or overlapping.

                         As GAO reported in September 2007, fragmentation exists in the
                         Department of Homeland Security’s One Face at the Border program,
                         which integrated the customs, agriculture, and immigration air passenger
                         inspection programs and is funded by three separate fees and general
                         fund appropriations, creating administrative, operational, and oversight
                         challenges. GAO also reported in February 2008 that fragmentation in
                         Harbor Maintenance Fee administration between the Army Corps of
                         Engineers and Department of Homeland Security’s U.S. Customs and
                         Border Protection inhibits oversight. Further, regular reviews increase
                         congressional and agency awareness of federal program costs, and
                         therefore may increase incentives to reduce costs where possible.



Actions Needed and       Federal agencies reported collecting nearly $64 billion in federal user fees
                         and charges in fiscal year 2010. Regular fee reviews can help the
Potential Financial or   Congress and federal agencies identify opportunities to revise fees in
Other Benefits           ways that enhance user funding of goods or services above and beyond
                         what is normally available to the public, and can be a useful step towards
                         examining whether the activities themselves are duplicative or
                         overlapping. GAO has ongoing work evaluating federal user fee reviews
                         and opportunities to initiate new fees for government services or goods.
                         The Director of the Office of Management and Budget (OMB) should use
                         its budget reviews to ensure that agencies

                         •   review their fee-funded programs biennially, as required by the CFO
                             Act and consistent with GAO’s User Fee Design Guide, to help
                             identify opportunities to improve the (1) efficiency, equity, revenue
                             adequacy, and administrative burden of the fee design and (2)
                             alignment of fee collections with program costs over time; and




                         Page 282            GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
                       •   review their non-fee-funded programs on a regular basis, in
                           accordance with OMB Circular No. A-25 guidance, and discuss the
                           results in their CFO annual report. Regular reviews of non feefunded
                           programs can help agencies and Congress determine whether
                           programs funded with general fund revenues could be fully or partially
                           funded with user fees.

                       Further, the Director of OMB could direct agencies to

                       •   use a framework such as GAO’s User Fee Design Guide when
                           designing or redesigning user fees.



Agency Comments        GAO provided a draft of this report section to OMB as well as the
                       Departments of State, Commerce, and Homeland Security. OMB as well
and GAO’s Evaluation   as the Departments of State and Commerce provided technical
                       comments, which were incorporated as appropriate. The Department of
                       Homeland Security responded that it generally agreed.

                       OMB said that two of our three recommended actions—that is, that OMB
                       use its budget reviews to (1) ensure that agencies review their fee-funded
                       programs biennially and (2) review their non fee-funded programs—seem
                       unnecessary. OMB Circular No. A-11 guidance directs agencies to
                       comply with the user fee review requirements in OMB Circular No. A-25
                       and the CFO Act. OMB did not comment on our third recommended
                       action.

                       As we note above, agencies review less than half of the fees that they
                       charge, and report the reviews of less than one-third of the fees charged.
                       In addition, as noted above, 16 out of the 23 agencies told us that they
                       review at least some of their non fee-funded programs to determine
                       whether fees should be assessed.

                       GAO continues to believe that the recommended actions have merit.
                       Especially in light of the significant impact user fees can have on the
                       federal treasury given the current budgetary outlook, we believe that OMB
                       should do more to ensure that agencies comply with OMB’s own
                       guidance. We have added clarifying language regarding OMB’s direction
                       to agencies. As part of its routine audit work, GAO will track the extent to
                       which progress has been made to address the identified actions and
                       report to Congress.



How GAO Conducted      The information contained in this analysis is based on findings from the
                       products listed in the related GAO products section, as well as work GAO
Its Work               conducted between May 2011 and February 2012. GAO surveyed 24
                       agencies covered by the CFO Act to obtain (1) the number of fees the
                       department or agency administered, (2) the basis for setting the fee
                       amounts, (3) the aggregate amount of fees collected for fiscal year 2010,
                       (4) the most recent CFO Act/OMB Circular No. A-25 review date, (5)
                       documentation of fee reviews, and (6) in cases where reviews were not



                       Page 283           GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
                      conducted, the reasons why. Because this was not a sample survey, there
                      are no sampling errors. However, the practical difficulties of conducting any
                      survey may introduce nonsampling errors, such as variation in how
                      respondents interpret questions and their willingness or ability to offer
                      accurate responses. GAO took steps to minimize nonsampling errors. For
                      example, prior to surveying agencies, GAO pretested the survey with three
                      agencies with differing numbers of fees, as well as varying values of total
                      collections, to ensure that GAO’s questions were clear and that the
                      definitions used in the survey were correct and understandable to the
                      respondents. GAO revised the final survey instrument based on the pretest
                      results. Since this was a self-administered survey using a spreadsheet
                      completed by the respondents, there was no need to have data entered by
                      another party, thus eliminating another source of error. Finally, all
                      calculations used in the analysis of the data were reviewed by another
                      GAO analyst. GAO did not independently verify survey responses provided
                      by the 23 agencies. GAO did not verify that the results of these fee reviews
                      and any resulting proposals were discussed in the CFO annual report, per
                      OMB Circular No. A-25. Some fees have more specific, statutorily-set
                      review and reporting requirements, and are therefore not subject to the
                      CFO Act’s or OMB Circular No. A-25’s biennial review. As a result, GAO
                      did not independently verify whether agencies reported all of the applicable
                      user fees.



Related GAO           Budget Issues: Better Fee Design Would Improve Federal Protective
                      Service’s and Federal Agencies’ Planning and Budgeting for Security.
Products              GAO-11-492. Washington, D.C.: May 20, 2011.

                      Budget Issues: Electronic Processing of Non-IRS Collections Has
                      Increased but Better Understanding of Cost Structure Is Needed.
                      GAO-10-11. Washington, D.C.: November 20, 2009.

                      Federal User Fees: Additional Analyses and Timely Reviews Could
                      Improve Immigration and Naturalization User Fee Design and USCIS
                      Operations. GAO-09-180. Washington, D.C.: January 23, 2009.

                      Federal User Fees: A Design Guide. GAO-08-386SP. Washington, D.C.:
                      May 29, 2008.

                      Federal User Fees: Substantive Reviews Needed to Align Port-Related
                      Fees with the Programs They Support. GAO-08-321. Washington, D.C.:
                      February 22, 2008.

                      Federal User Fees: Key Aspects of International Air Passenger Inspection
                      Fees Should Be Addressed Regardless of Whether Fees Are
                      Consolidated. GAO-07-1131. Washington, D.C.: September 24, 2007.



Contact Information   For additional information about this area, contact Susan J. Irving at
                      (202) 512-6806 or irvings@gao.gov.



                      Page 284            GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
44. Internal Revenue Service Enforcement
Efforts
Enhancing the Internal Revenue Service’s enforcement and service capabilities can help reduce the gap
between taxes owed and paid by collecting billions in tax revenue and facilitating voluntary compliance.



Why This Area Is                    The financing of the federal government depends largely on the Internal
                                    Revenue Service’s (IRS) ability to collect federal taxes every year, which
Important                           totaled $2.34 trillion in 2010. For the most part, taxpayers voluntarily
                                    report and pay their taxes on time with no direct enforcement and little
                                    interaction with IRS. However, the size and persistence of the tax gap—
                                    estimated in 2012 for the 2006 tax year to be a $385 billion difference
                                    between the taxes owed and taxes IRS ultimately collected for that year—
                                    highlight the need to make progress in improving compliance by those
                                    taxpayers who do not voluntarily pay what they owe. IRS’s enforcement
                                    of tax laws remains on GAO’s high-risk list.

                                    Given that tax noncompliance ranges from simple math errors to willful
                                    tax evasion, no single approach is likely to fully and cost-effectively
                                    address the tax gap. A multifaceted approach to improving compliance—
                                    one that covers both IRS’s enforcement and taxpayer service programs
                                    and also leverages external resources such as tax whistleblowers—could
                                    increase legally owed revenue collection by billions of dollars and result in
                                    cost savings for IRS. Without continued attention to IRS’s enforcement
                                    and taxpayer service efforts, taxpayers could feel that the tax system is
                                    not administered fairly and not everyone is paying their fair share, which
                                    could undermine voluntary compliance.



What GAO Found                      GAO identified a range of areas where IRS can improve its programs
                                    which can help it collect billions in tax revenue, facilitate voluntary
                                    compliance, or reduce IRS’s costs. These include pursuing stronger
                                    enforcement through increasing third-party information reporting and
                                    identifying and pursuing abusive tax avoidance transactions; 1 making
                                    more use of external resources such as tax whistleblowers to prevent and
                                    detect compliance problems; and improving telephone and online
                                    services provided to taxpayers.

                                    •   Expanding third-party information reporting improves taxpayer
                                        compliance and enhances IRS’s enforcement capabilities. The tax
                                        gap is due predominantly to taxpayer underreporting and
                                        underpayment of taxes owed. At the same time, taxpayers are much



                                    1
                                     Abusive tax avoidance transactions range from tax schemes based on clearly frivolous
                                    arguments to highly technical and abusive tax shelters.




                                    Page 285              GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
    more likely to report their income accurately when the income is also
    reported to IRS by a third party. By matching information received
    from third-party payers with what payees report on their tax returns,
    IRS can detect income underreporting, including the failure to file a
    tax return.

    As GAO reported in August 2008, one area where information
    reporting could be expanded is payments made to contractors
    (payees) by owners of rental real estate (third-party payers). Like
    other businesses entities, under current law, taxpayers who rent out
    real estate are required to report to IRS expense payments for certain
    services, such as payments for property repairs, as long as their
    rental activity is considered a trade or business (which includes
    activities engaged in for profit as well as activities by certain
    nonprofits). However, the law does not clearly spell out how to
    determine when rental real estate activity is considered a trade or
    business. Consequently, determining whether an information return
    should be filed requires a case-by-case analysis of when rental real
    estate is, or is not, a trade or business depending on the facts and
    circumstances for each taxpayer. As GAO reported in August 2008,
    without clear statutory language, it may be difficult for payers with
    rental real estate activity to determine if they are required to report
    certain expense payments to IRS, and as a result, it is possible that
    some third-party payers who should report do not. Expanding
    information reporting to cover payment for services by all owners of
    rental real estate would provide clarity on reporting requirements and
    improve payee compliance.

    In another case, as GAO reported in November 2010, under existing
    law, businesses (payers) must report to IRS payments for services
    they made to unincorporated persons or businesses, but payments to
    corporations generally do not have to be reported. Extending reporting
    to cover payments to corporations for services would increase payee
    compliance. Congress enacted a more expansive regime in March
    2010, covering goods as well as services, and repealed it in 2011.
    GAO believes the more narrow extension to include services, but not
    goods, provided by corporations—which would match the provision for
    unincorporated persons or businesses—remains an important option
    for improving compliance. 2




2
 In March 2010, pursuant to the Patient Protection and Affordable Care Act, information
reporting requirements were expanded to cover payments for goods as well as services
and payments to corporations. Pub. L. No. 111-148, § 9006. Later in September 2010,
pursuant to the Small Business Jobs Act of 2010 information reporting requirements were
expanded to include landlords who have generally not been considered to be engaged in
a trade or business. Pub. L. No. 111-240, § 2101.These provisions were repealed by the
Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy
Overpayments Act of 2011. Pub. L. No. 112-9, §§ 2(a), 3 (2011).




Page 286              GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
    In 2010, the Joint Committee on Taxation estimated revenue
    increases for a 10-year period from third-party reporting of (1) rental
    real estate service payments to be $2.5 billion and (2) service
    payments to corporations to be $3.4 billion.

•   Pursuing abusive tax avoidance transactions has been a long-
    standing tax evasion problem that results in potentially billions of
    dollars in tax losses. As GAO reported in May 2011, IRS had
    incomplete data on the results of abusive tax avoidance transaction
    (ATAT) related enforcement efforts, so it is unable to assess the
    effectiveness of these efforts. More could also be done to ensure
    compliance with ATAT disclosure requirements. For example, while
    investigations of those who promoted ATATs were often closed
    without penalties or injunctions to stop promoters, IRS had incomplete
    data on why these investigations were closed. During fiscal year
    2011, IRS started tracking the amount of additional taxes collected as
    a result of taxpayer audits, where ATATs were at least one of the
    audited issues, but the amounts collected from ATAT issues alone
    could not be isolated.

    Pursuant to the American Jobs Creation Act of 2004, IRS expanded
    requirements for both promoters and taxpayers to disclose their use of
    certain transactions and enhanced penalties for improper disclosure—
    failure to disclose, delinquent disclosure, and incomplete disclosure.
    However, as GAO reported in May 2011, IRS did not know whether it
    received all the disclosures it should have from taxpayers and did not
    verify the completeness of those disclosures it received. IRS also did
    not track how quickly all those who promoted ATATs provided lists of
    their investors when either required or requested. Without complete
    data on enforcement outcomes or full disclosure from promoters and
    taxpayers, IRS is less able to assess the effectiveness of ATAT
    enforcement efforts, make informed resource allocation decisions, or
    identify transactions that merit auditing or penalties.

•   Leveraging external resources such as tax whistleblowers can
    contribute to taxpayer compliance. GAO reported in August 2011, IRS
    did not collect or report complete data on, nor have a systematic
    process to manage the timeliness of, processing claims from
    whistleblowers, in part, because of how it set up its claims tracking
    system. As a result, claims alleging millions or potentially billions of
    dollars in tax noncompliance may not receive the attention or
    resources they need. Moreover, without complete and accurate data
    or processes to follow up on claims that exceed established review
    time targets, IRS may not be able to identify aspects of the program
    that could be improved to more effectively address noncompliance.
    Collecting and reporting such data could also improve the
    transparency of the program, which may result in additional
    whistleblowers coming forward.

•   Improving taxpayer services can benefit voluntary compliance by
    making it easier for taxpayers to pay what they owe. As GAO reported



Page 287            GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
                             in December 2011, determining the costs and benefits of enhancing
                             certain services for taxpayers, such as providing more automated
                             telephone applications, could lead to faster service for taxpayers and
                             lower IRS costs. Similarly, GAO also reported that completing a
                             comprehensive online services plan might include an assessment of
                             and justification for giving taxpayers the ability to access and update
                             account information online, which may simultaneously improve
                             taxpayer services and lower IRS’s costs. In addition to reducing costs,
                             providing more automated taxpayer services could increase revenue
                             collection by supporting greater voluntary compliance and allow
                             resources to be shifted to other priorities.



Actions Needed and       GAO continues to suggest Congress consider expanding third-party
                         information reporting, which improves taxpayer compliance, by amending
Potential Financial or   the Internal Revenue Code. GAO recommended that Congress may wish
Other Benefits           to

                         •   make owners of rental real estate subject to the same payment
                             reporting requirements regardless of whether they engaged in a trade
                             or business under current law (GAO-08-956); and

                         •   require payers to report service payments to corporations, thereby
                             reducing payers’ burden to determine which payments require
                             reporting (GAO-11-218T, GAO-09-238).

                         IRS has agreed with and taken action on some GAO recommendations—
                         for example, by providing taxpayers with rental real estate activity
                         additional guidance on their reporting obligations. However, other
                         recommendations remain to be addressed. Specifically, to increase
                         revenue, reduce costs, and promote voluntary compliance, GAO
                         recommended that IRS:

                         •   track the examination results for ATAT versus non-ATAT issues
                             separately and check whether taxpayers filed all required ATAT-
                             related disclosure forms (GAO-11-493);

                         •   collect and report more information on the whistleblower program and
                             establish a process to follow up on claims that exceed review time
                             targets (GAO-11-683);

                         •   determine the costs and benefits of creating automated telephone
                             applications and automate those where benefits exceed the costs
                             (GAO-12-176); and

                         •   finalize a more comprehensive plan for online services, including an
                             assessment of granting taxpayers the ability to update their account
                             information online (GAO-12-176).

                         These actions can lead to increased revenue collections and cost savings
                         totaling billions of dollars, which would help reduce the $385 billion tax



                         Page 288           GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
                       gap. Although precise estimates of total cost savings are not available, for
                       just the two congressional actions cited above, the Joint Committee on
                       Taxation estimated revenue increases of $5.9 billion over 10 years. As
                       part of its routine audit work, GAO will continue to track the extent to
                       which progress has been made to address the identified actions and
                       report to Congress.



Agency Comments        GAO provided a draft of its previously issued reports to IRS for review
                       and comment. IRS generally agreed with GAO’s recommendations on
and GAO’s Evaluation   checking taxpayer ATAT filing obligations, return preparer oversight, and
                       whistleblower information and processing but has not yet completed the
                       recommended actions. IRS said it will consider reporting summary
                       whistleblower statistics and improving online taxpayer services. Finally,
                       IRS agreed that the recommendations regarding tracking ATAT issues
                       and determining the costs and benefits of automating selected telephone
                       applications had merit, but that resources for tracking or telephone
                       automation were not available.

How GAO Conducted      The information contained in this analysis is based on findings from the
                       products listed in the related GAO products section.
Its Work

Related GAO            2011 Filing Season: Processing Gains, but Assistance Could Be
                       Enhanced by More Self-Service Tools. GAO-12-176. Washington, D.C.:
Products               December 15, 2011.

                       Tax Whistleblowers: Incomplete Data Hinders IRS’s Ability to Manage
                       Claim Processing Time and Enhance External Communication.
                       GAO-11-683. Washington, D.C.: August 10, 2011.

                       Abusive Tax Avoidance Transactions: IRS Needs Better Data to Inform
                       Decisions about Transactions. GAO-11-493. Washington, D.C.: May 12,
                       2011.

                       High Risk Series: An Update. GAO-11-278. Washington, D.C.: February
                       2011.

                       Small Businesses: Tax Compliance Benefits and Opportunities to Mitigate
                       Costs on Third Parties of Miscellaneous Income Reporting Requirements.
                       GAO-11-218T. Washington, D.C.: November 18, 2010.

                       Tax Gap: IRS Could Do More to Promote Compliance by Third Parties
                       with Miscellaneous Income Reporting Requirements. GAO-09-238.
                       Washington, D.C.: January 28, 2009.

                       Tax Gap: Actions That Could Improve Rental Real Estate Reporting
                       Compliance. GAO-08-956. Washington, D.C.: August 28, 2008.




                       Page 289           GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
Contact Information   For additional information about this area, contact Michael Brostek or
                      James R. White at brostekm@gao.gov or whitej@gao.gov or
                      (202) 512-9110.




                      Page 290           GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
45. Medicare Advantage Payment
The Centers for Medicare & Medicaid Services could achieve billions of dollars in additional savings by better
adjusting for differences between Medicare Advantage plans and traditional Medicare providers in the reporting
of beneficiary diagnoses.



Why This Area Is                    In fiscal year 2010, the federal government spent about $113 billion on
                                    the Medicare Advantage program, a private plan alternative to the original
Important                           Medicare program that covers about a quarter of Medicare beneficiaries.
                                    Medicare Advantage plans are paid a fixed monthly amount to provide
                                    beneficiaries with the same services as traditional Medicare. Most of
                                    these plans receive larger payments than would be required to provide
                                    traditional Medicare services. This allows them to provide additional
                                    services not covered by traditional Medicare.

                                    The Centers for Medicare & Medicaid Services (CMS), the agency that
                                    administers Medicare, adjusts payments to Medicare Advantage plans
                                    based on the health status of each plan’s enrollees. This adjustment is
                                    intended to provide higher payments for sicker patients and lower
                                    payments for those who are less sick. CMS calculates a risk score—
                                    which is a relative measure of health status—for every beneficiary. The
                                    risk score is based on a beneficiary’s demographic characteristics, such
                                    as age and gender, and major medical conditions. To obtain information
                                    on the medical conditions of beneficiaries in traditional Medicare, CMS
                                    generally analyzes diagnoses—numerically coded by providers into
                                    Medicare defined categories—on the claims that providers submit for
                                    payment. For beneficiaries enrolled in Medicare Advantage plans, which
                                    do not submit claims, CMS requires plans to submit diagnostic codes for
                                    each beneficiary. Analysis has shown that risk scores are higher for
                                    Medicare Advantage beneficiaries than for beneficiaries in traditional
                                    Medicare with the same characteristics, and CMS has taken steps to
                                    reduce Medicare Advantage payments, saving $2.7 billion in 2010.



What GAO Found                      Risk scores for beneficiaries with the same demographic characteristics
                                    and health conditions should be identical, regardless of whether the
                                    beneficiaries are in a Medicare Advantage plan or traditional Medicare.
                                    This will be true if Medicare Advantage and traditional providers code
                                    medical diagnoses with the same level of reliability and completeness.
                                    However, Medicare Advantage plans and providers in traditional
                                    Medicare may code diagnoses differently. Medicare Advantage plans
                                    have a financial incentive to ensure that all relevant diagnoses are coded,
                                    as this can increase beneficiaries’ risk scores and, ultimately, payments
                                    to the plans. Many traditional Medicare providers are paid for services
                                    rendered, and providers have less incentive to code all relevant
                                    diagnoses. If Medicare Advantage risk scores are higher than traditional
                                    Medicare scores for beneficiaries with the same demographic
                                    characteristics and medical conditions simply because Medicare
                                    Advantage diagnostic coding is more comprehensive, then CMS’s


                                    Page 291           GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
payment adjustment will not be accurate and Medicare Advantage
payments will be too high.

Policymakers have expressed concern that risk scores for Medicare
Advantage beneficiaries have grown at a faster rate than those for
traditional Medicare beneficiaries, and some believe that systematic
differences in coding diagnoses have contributed to this growth. The
Deficit Reduction Act of 2005 directed CMS to conduct an analysis and
adjust risk scores for differences in coding practices, to the extent that
such differences could be identified in 2008, 2009, and 2010. The Health
Care and Education Reconciliation Act of 2010 directed CMS to continue
adjusting risk scores until the agency implements risk adjustment using
Medicare Advantage data. In 2010, CMS estimated that 3.41 percent of
Medicare Advantage risk scores were due to differences in diagnostic
coding practices, and it reduced the scores by 3.41 percent, thereby
saving $2.7 billion.

As GAO reported in January 2012, three major shortcomings exist in
CMS’s method for adjusting Medicare Advantage payments to reflect
differences in diagnostic coding practices between Medicare Advantage
and traditional Medicare. A revised methodology that addressed these
shortcomings could have saved Medicare between $1.2 billion and $3.1
billion in 2010 in addition to the $2.7 billion in savings that CMS’s 3.41
percent adjustment produced—a total savings of between $3.9 billion and
$5.8 billion. GAO expects savings in 2011 and future years will be
greater. However, CMS has continued to use, or plans to use, its 2010
adjustment of 3.41 percent in 2011 and 2012.

First, CMS did not use the most recent data for its estimates. For 2010,
the agency did not incorporate in its estimates 2008 data, the most recent
data available. Similarly, the agency did not incorporate 2009 and 2010
data as it became available to update its estimates for 2011 and 2012.
The most recent risk score data used by CMS in any of these estimates
was 2007.

Second, CMS assumed that the annual impact of coding differences
remained constant relative to coding differences from 2004 to 2007,
despite evidence that the impact was increasing over time. Although
CMS’s 2010 estimate accounted for the cumulative impact of coding
differences over the 3 prior years, CMS did not account for any additional
years of accumulated impact in its 2011 or 2012 estimates.

Third, CMS only accounted for differences in age and mortality between
the Medicare Advantage and traditional Medicare populations. GAO
accounted for additional beneficiary characteristics, such as sex,
diagnoses as a proxy for health status, Medicaid enrollment status,
beneficiary residential location, and whether the original reason for
Medicare entitlement was disability, thereby improving the accuracy of the
estimate.




Page 292           GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
Actions Needed and       CMS could enhance its efforts to estimate effects of coding differences
                         between Medicare Advantage and traditional Medicare and realize even
Potential Financial or   greater cost savings than the $2.7 billion that it has identified. GAO
Other Benefits           demonstrated a methodology which incorporated additional data and
                         identified additional savings—$1.2 billion to as much as $3.1 billion in
                         payment reductions to Medicare Advantage plans. In January, 2012,
                         GAO made the following recommendations:

                         To help ensure appropriate payments to Medicare Advantage plans and
                         improve the accuracy of the adjustment made for differences in coding
                         practices over time, the Secretary of Health and Human Services should
                         direct the Administrator of CMS

                         •   incorporate the most recent data available in its estimates and identify
                             and account for all years of diagnostic coding differences that could
                             affect the payment year for which any adjustment is made;

                         •   take into account the upward trend of annual impact of coding
                             differences in its estimates; and

                         •   account, insofar as possible, for all relevant differences in beneficiary
                             characteristics between the Medicare Advantage and traditional
                             Medicare populations.



Agency Comments          GAO provided a draft of its January 2012 report to the Department of
                         Health and Human Services. The Department of Health and Human
and GAO’s Evaluation     Services did not comment on GAO’s recommendations but provided
                         general and technical comments, which were incorporated as
                         appropriate. The Department of Health and Human Services
                         characterized GAO’s results as “similar” to those obtained by CMS, and
                         found GAO’s methodological approach and findings informative.



How GAO Conducted        The information contained in this analysis is based on findings from the
                         report listed in the related GAO product section. GAO estimated the
Its Work                 impact of coding differences between Medicare Advantage and traditional
                         Medicare on Medicare Advantage risk scores and payment to plans. GAO
                         compared risk score growth for Medicare Advantage beneficiaries with an
                         estimate of what risk score growth would have been if they had been in
                         traditional Medicare.



Related GAO Product      Medicare Advantage: CMS Should Improve the Accuracy of Risk Score
                         Adjustments for Diagnostic Coding Practices. GAO-12-51. Washington,
                         D.C.: January 12, 2012.



Contact Information      For additional information about this area, contact James C. Cosgrove at
                         (202) 512-7114 or cosgrovej@gao.gov.




                         Page 293            GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
46. Medicare and Medicaid Fraud Detection
Systems
The Centers for Medicare & Medicaid Services needs to ensure widespread use of technology to help detect
and recover billions of dollars of improper payments of claims and better position itself to determine and
measure financial and other benefits of its systems.



Why This Area Is                    GAO has designated Medicare and Medicaid as high-risk programs, in
                                    part due to their susceptibility to improper payments—estimated to be
Important                           about $65 billion in fiscal year 2011. 1 As the administrator of these
                                    programs, the Centers for Medicare & Medicaid Services (CMS) is
                                    responsible for safeguarding them from loss and for performing functions
                                    intended to help ensure the integrity of the programs, such as reviewing
                                    paid claims to identify patterns that may indicate cases of fraud, waste,
                                    and abuse, or other payment errors. These and other program integrity
                                    functions are conducted by CMS staff and several types of contractors.

                                    To integrate data about all types of Medicare and Medicaid claims and
                                    improve its ability to detect fraud, waste, and abuse in these programs,
                                    CMS initiated two information technology programs: the Integrated Data
                                    Repository (IDR) and One Program Integrity (One PI). IDR is intended to
                                    provide a centralized repository of claims data for all Medicare and
                                    Medicaid programs, and One PI is a set of tools that enables CMS’s
                                    program integrity contractors and staff to access and analyze data
                                    retrieved from IDR. The intent of these programs is to provide enhanced
                                    capabilities and support to help CMS achieve goals for improving
                                    outcomes of its program integrity initiatives. Among other things, these
                                    enhancements are intended to improve CMS’s ability to detect and
                                    recover funds lost to improper payments, and according to CMS officials,
                                    are expected to provide financial benefits of more than $21 billion by the
                                    end of fiscal year 2015.



What GAO Found                      As GAO reported in June 2011, CMS had developed and begun using
                                    both IDR and One PI, but was not yet positioned to identify, measure, or
                                    track benefits realized from these programs. Although IDR had been
                                    implemented and in use since 2006, it did not include all the data that
                                    were planned to be incorporated by fiscal year 2010. Specifically, while
                                    IDR included most types of Medicare claims data, it did not include the
                                    Medicaid data needed to help analysts detect improper payments of
                                    Medicaid claims. IDR also did not include data from other CMS systems
                                    that store and process data related to the entry, correction, and



                                    1
                                     Improper payments may be made as a result of several causes, such as submissions of
                                    duplicate claims or fraud, waste, and abuse.




                                    Page 294              GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
adjustment of claims prior to payment. These data are needed to help the
agency’s program integrity analysts prevent improper payments.
According to program officials, the data were not incorporated because of
obstacles introduced by delays in funding and technical issues.
Specifically, funding to support activities to incorporate data from the
other CMS systems was not approved until summer 2010. In November
2011, program officials stated that they had begun incorporating these
data in September 2011 and planned to make them available to program
integrity analysts in spring 2012.

Regarding the Medicaid data, IDR officials stated that they did not
account for difficulties and resulting delays associated with integrating
into IDR the various types and formats of data stored in disparate state
systems. Further, the agency did not finalize plans or develop reliable
schedules for its efforts to incorporate these data. In particular, program
officials did not consider certain risks and obstacles, such as technical
challenges, as they developed schedules for implementing IDR. Until it
does so, CMS may face additional delays in making available all the data
that are needed to support enhanced program integrity efforts.

Additionally, CMS developed and deployed to users its One PI system—a
web-based portal that is to provide CMS program integrity analysts a
single point of access to data contained in IDR, along with tools for
analyzing those data. Nonetheless, few program integrity analysts were
using the system. Specifically, One PI program officials planned for 639
analysts to be using One PI by the end of fiscal year 2010; however, only
41—less than 7 percent—were actively using the portal and tools as of
October 2010.

According to program officials, the agency had not trained its broad
community of analysts to use the system because of delays introduced
when they took time to redesign initial training plans, which were found to
be insufficient. Specifically, the initial plan provided training for the use of
the One PI system and IDR data in a 3-and-a-half-day course, whereas
the redesigned plan includes courses on each of the components and
allows trainees time to use them to reinforce learning before taking
additional courses. Because of these delays, the initial use of the system
was limited to a small number of CMS staff and contractors. In updating
the status of the training efforts in November 2011, CMS officials reported
that a total of 215 program integrity analysts had been trained and were
using One PI. 2 However, until program officials finalize plans and
schedules for training all intended users and expanding the use of One
PI, the agency may continue to experience delays in reaching widespread
use of the system and realizing expected financial benefits.




2
We did not validate the data provided in November 2011.




Page 295             GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
                         Further, while CMS made some progress toward its goals to provide a
                         single repository of data and enhanced analytical capabilities for program
                         integrity efforts, the agency was not positioned to identify, measure, or
                         track financial benefits or progress toward meeting program goals as a
                         result of its efforts. Specifically, although IDR program officials stated that
                         they avoided technology costs as a result of implementing IDR, they did
                         not identify financial benefits of using IDR based on the recovery of
                         improper payments.

                         According to agency officials, CMS expected to realize more than $21
                         billion in benefits as a result of using One PI from 2006 through 2015.
                         These benefits were expected to accrue as CMS’s broad community of
                         program integrity analysts used the systems to identify increasing
                         numbers of improper payments. However, these officials further stated
                         that because the agency did not meet its goal for widespread use of One
                         PI, there were not enough data available to quantify benefits attributable
                         to the use of the system. In this regard, we found that CMS did not
                         produce outcomes that positioned the agency to identify or measure
                         financial benefits, or to gauge its progress toward achieving the $21
                         billion in benefits that it expected.

                         CMS officials also did not develop quantifiable measures that could be
                         used to determine whether the agency was making progress toward
                         meeting program goals through the use of One PI. For example,
                         performance measures for one PI included increases in the detection of
                         improper payments for Medicare Parts A and B claims. However,
                         program integrity officials stated that measures were not quantified
                         because they had not identified ways to determine the extent to which
                         increases in the detection of errors could be attributed to the use of One
                         PI. Additionally, the limited use of the system did not generate enough
                         data to quantify the amount of funds recovered from improper payments.



Actions Needed and       To better position the agency to measure, gauge, and take actions to help
                         ensure the program’s success toward achieving the $21 billion in financial
Potential Financial or   benefits that program integrity officials projected, GAO recommended in
Other Benefits           June 2011 that the Administrator of CMS

                         •   finalize plans and schedules for incorporating additional data into IDR
                             that consider risks and obstacles to the program;

                         •   implement and manage plans for incorporating data into IDR to meet
                             schedule milestones;

                         •   establish plans and schedules for training all program integrity
                             analysts who are intended to use One PI;

                         •   establish and communicate deadlines for program integrity
                             contractors to complete training and use One PI in their work;

                         •   conduct training in accordance with plans and deadlines;



                         Page 296            GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
                       •   define any measurable financial benefits expected from the
                           implementation of IDR and One PI; and

                       •   establish measures for IDR and One PI that gauge progress toward
                           meeting program goals.



Agency Comments        GAO provided a draft of its June 2011 report to CMS for review and
                       comment. CMS agreed with all of GAO’s recommendations and identified
and GAO’s Evaluation   steps agency officials were taking to implement them. GAO expects to
                       conduct additional work to determine whether CMS has addressed its
                       recommendations and identified financial benefits and progress toward
                       meeting agency goals resulting from the implementation of IDR and One
                       PI for program integrity purposes. As part of its routine audit work, GAO
                       will track agency actions to address these recommendations and report to
                       Congress.


How GAO Conducted      The information contained in this analysis is based on findings from the
                       products listed in the related GAO products section. GAO reviewed IDR
Its Work               and One PI system and program management plans and other
                       documents and compared them to key practices. GAO also interviewed
                       program officials, analyzed system data, and reviewed reported costs and
                       benefits.



Related GAO            Fraud Detection Systems: Centers for Medicare and Medicaid Services
                       Needs to Expand Efforts to Support Program Integrity Initiatives.
Products               GAO-12-292T. Washington, D.C.: December 7, 2011.

                       Fraud Detection Systems: Centers for Medicare and Medicaid Services
                       Needs to Ensure More Widespread Use. GAO-11-475. Washington, D.C.:
                       June 30, 2011.

Contact Information    For additional information about this area, contact Valerie C. Melvin at
                       (202) 512-6304 or melvinv@gao.gov.




                       Page 297           GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
47. Border Security
Delaying proposed investments for future acquisitions of border surveillance technology until the Department of
Homeland Security better defines and measures benefits and estimates life-cycle costs could help ensure the
most effective use of future program funding.



Why This Area Is                     Securing the Arizona portion of the approximately 2,000-mile southwest
                                     border that the United States shares with Mexico—while keeping illegal
Important                            flows of people and drugs elsewhere under control—is a top priority for
                                     the Department of Homeland Security’s (DHS) U.S. Customs and Border
                                     Protection (CBP).

                                     Following the 2011 cancellation of CBP’s costly Secure Border Initiative
                                     Network (SBInet), CBP has taken steps to develop and implement a new
                                     Arizona Border Surveillance Technology Plan (the Plan) for the remainder
                                     of the Arizona border. This Plan is the first step in a multiyear, multibillion-
                                     dollar effort to secure the southwest border. The Plan is intended to guide
                                     the identification, acquisition, and deployment of additional surveillance
                                     technology, as well as any modifications needed to adjust them to varying
                                     terrain along the Arizona border to enhance situational awareness of
                                     illegal intrusions. CBP requested $242 million to fund the new Plan for
                                     fiscal year 2012 and estimates that the total costs of acquiring and
                                     maintaining all of the proposed new systems for the Arizona border over
                                     their expected 10-year life cycle will be about $1.5 billion.

                                     CBP began development of SBInet in 2005 as a combination of
                                     surveillance technologies that relied primarily on radar and camera towers
                                     to create a “virtual fence” along the southwest border in order to enhance
                                     CBP’s capability to detect, identify, classify, track, and respond to illegal
                                     breaches at and between land ports of entry. After 5 years and a cost of
                                     nearly $1 billion, SBInet systems are now deployed along the 53 miles of
                                     Arizona’s 378-mile border with Mexico that represent the highest-risk area
                                     for illegal entry attempts.

                                     Since its inception, SBInet experienced continued and repeated technical
                                     problems, cost overruns, and schedule delays, which raised serious
                                     questions about the program’s ability to meet CBP’s needs for
                                     surveillance technology along the border. GAO issued 26 reports and
                                     testimonies identifying operational and program management
                                     weaknesses that contributed to SBInet’s performance shortfalls, including
                                     cost overruns and schedule slippages. For example, as GAO reported in
                                     November 2008 and June 2010, deficiencies existed in CBP’s timely
                                     preparation and completion of key acquisition documents essential to
                                     setting operational requirements, identifying and mitigating risks, and
                                     establishing the cost, schedule, and performance requirements of the




                                     Page 298            GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
                 project and the technology to be delivered. 1 In May 2010, GAO concluded
                 that it was unclear whether the department’s pursuit of SBInet was a cost-
                 effective course of action, and whether it would produce expected results
                 on time and within budget. In part based on these concerns, the
                 Secretary of Homeland Security announced the cancellation of further
                 procurements of SBInet systems in January 2011.

                 Given the previously reported challenges and eventual cancellation of
                 SBInet, and the fact that similar challenges could affect CBP’s current
                 plan to acquire and deploy surveillance technology, GAO analyzed CBP’s
                 business case for its new initiative. This business case is important in
                 light of DHS’s overall management of acquisitions. GAO has reported that
                 DHS faces significant challenges in managing its acquisitions, including
                 programs not meeting their cost, schedule, and performance
                 expectations. Further, strengthening its acquisition management process
                 would help DHS to deliver critical mission capabilities that meet identified
                 needs on time and within budget, including helping to reduce the cost
                 overruns and schedule delays that DHS continues to experience in many
                 of the major acquisition programs GAO has reviewed. 2



What GAO Found   CBP’s proposed approach is at an increased risk of not cost-effectively
                 accomplishing its goal in support of Arizona border security because CBP
                 has not provided support for its business case for investing in the Plan.
                 As GAO reported in November 2011, CBP has taken some steps to
                 develop a business case for the Plan, but the agency has not (1)
                 documented the analysis justifying the specific types, quantities, and
                 deployment locations of border surveillance technologies proposed in the
                 Plan in accordance with Standards for Internal Control in the Federal
                 Government; (2) defined the mission benefits or developed performance
                 metrics to assess its implementation of the Plan; or (3) developed a
                 robust life-cycle cost estimate that can be relied on for the purposes of
                 budget requests for fiscal year 2012 and beyond.

                 CBP program officials developed and proposed the Plan without
                 documenting the analysis justifying the specific types, quantities, and
                 deployment locations of border surveillance technologies proposed in the
                 Plan. These technologies include a mix of currently employed
                 technologies, such as unattended ground sensors, as well as new
                 alternatives, such as Integrated Fixed Tower systems (that include fixed
                 towers, cameras and radar, a data communications network, facilities


                 1
                  GAO, Department of Homeland Security: Billions Invested in Major Programs Lack
                 Appropriate Oversight, GAO-09-29 (Washington, D.C.: Nov. 18, 2008) and Department of
                 Homeland Security: Assessments of Selected Complex Acquisitions, GAO-10-588SP
                 (Washington. D.C.: June 30, 2010).
                 2
                  GAO, Opportunities to Reduce Potential Duplication in Government Programs, Save Tax
                 Dollars, and Enhance Revenue, GAO-11-318SP (Washington, D.C.: Mar. 1, 2011) and
                 GAO-10-588SP.




                 Page 299              GAO-12-342SP Cost Savings or Revenue Enhancement Opportunities
upgrades, information displays, and an information management system).
According to the Plan, CBP will begin acquiring and deploying three
Integrated Fixed Tower systems in Arizona in 2012, with two others to be
deployed by 2015, depending on funding availability. Standards for
Internal Control in the Federal Government call for agencies to promptly
record and clearly document transactions and significant events to
maintain their relevance and value to management in controlling
operations and making decisions and to ensure that agency objectives
are met. The senior CBP official responsible for the program’s
acquisitions told GAO that he believed the process used to develop and
support the plan justified acquisition decisions called for in the Plan.
However, documenting the analysis justifying the specific types,
quantities, and deployment locations of border surveillance technologies
proposed in the Plan would allow an independent party to confirm the
process followed, and to assess the validity of the decisions made.

The Secretary of Homeland Security reported to Congress in January
2011 that the Plan is expected to provide situational awareness for the
entire Arizona border by 2014. However, CBP officials have not yet
defined the expected benefits or developed measurable and quantifiable
performance metrics which could show progress toward achieving that
goal. 3 In September 2011, CBP officials reported that they are developing
new measures to determine whether and how investments impact border
security. They acknowledged that since large investments have been
made in border security, it is critical to assess the impacts these
investments have had on improving border security, as well as projecting
the additional impact future investments will have on their ability to
manage the borders. However, CBP officials had not yet determined the
key attributes of these new measures. The Clinger-Cohen Act of 1996
and Office of Management and Budget (OMB) guidance emphasize the
need to ensure that information