oversight

More Efficient and Effective Government: 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                          Testimony
                             Before the Committee on Oversight and
                             Government Reform, House of
                             Representatives

                             More Efficient and Effective
For Release on Delivery
Expected at 9:30 a.m. EST
Tuesday, February 28, 2012

                             Government: Opportunities
                             to Reduce Duplication,
                             Overlap and Fragmentation,
                             Achieve Savings, and
                             Enhance Revenue
                             Statement of Gene L. Dodaro
                             Comptroller General of the United States




GAO-12-449T
Mr. Chairman, Ranking Member Cummings, and Members of the
Committee:

Thank you for the opportunity to discuss our 2012 annual report, which
presents 51 areas where programs may be able to achieve greater
efficiencies or become more effective in providing government services
by reducing potential duplication, overlap, or fragmentation in federal
programs and activities. 1 We have also continued to monitor
developments in the 81 areas that we identified a year ago in the first
report we issued in this series. 2 Our 2011 follow-up report released today
describes the extent to which progress has been made to address these
areas. 3 Appendix I presents a summary of our assessment of the overall
progress made in each area.

My testimony is based on our 2012 annual and 2011 follow-up reports.
Specifically, it addresses: (1) federal programs or functional areas where
unnecessary duplication, overlap, or fragmentation exists, as well as
other opportunities for potential cost savings or enhanced revenues; (2)
status of actions taken by Congress and the executive branch to address
the areas we identified in our 2011 report; (3) aspects of the GPRA
Modernization Act of 2010 that may contribute to addressing and
preventing duplication, overlap and fragmentation among federal
programs; and (4) our approach to identifying duplication or cost savings
in federal programs and activities. We conducted our work in accordance
with generally accepted government auditing standards or with our quality
assurance framework, as appropriate. For issues where information is
being reported on for the first time in this report, we sought comments
from the agencies involved, and incorporated those comments as
appropriate. In updating the actions we identified in the 2011 annual
report, we asked the agencies involved and the Office of Management




1
 GAO, 2012 Annual Report: Opportunities to Reduce Duplication, Overlap and
Fragmentation, Achieve Savings, and Enhance Revenue, GAO-12-342SP (Washington,
D.C.: Feb. 28, 2012).
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-12-449T
and Budget (OMB) for their review and incorporated comments as
appropriate.

We identified 51 areas in our 2012 annual report, including 32 areas of
potential duplication, overlap, or fragmentation as well as 19 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. These areas involve a wide range of government
missions including agriculture, defense, economic development,
education, energy, general government, health, homeland security,
international affairs, science and the environment, and social services.
Within and across these missions, the 2012 annual report touches on
virtually all major federal departments and agencies. We expanded the
scope of our work for this year’s report to focus on areas where a mix of
federal approaches is used, such as tax expenditures, direct spending,
and federal grant or loan programs.

In our 2011 follow-up report, we assessed the extent to which Congress
and the executive branch addressed the 81 areas—including a total of
176 actions—to reduce or eliminate unnecessary duplication, overlap, or
fragmentation or achieve other potential financial benefits. As of February
10, 2012, Congress and the executive branch have made some progress
in addressing the majority of the 81 areas we identified; however,
additional steps are needed to fully implement the remaining actions.
Specifically, our assessment found that all actions had been addressed in
4 areas, partially addressed in 60 areas, and not addressed in 17 areas.
In addition, OMB has instructed agencies to consider areas of duplication
or overlap identified in our 2011 report and by others in their fiscal year
2013 budget submissions and management plans. The OMB guidance
also advised agencies to take a number of other steps to enhance
efficiency, such as identifying and including in their budget submissions
cost-saving efforts that will improve operational efficiency and taxpayers’
rate of return, including program integration, reorganizations within and
between agency components, and resource realignment to improve
public services.

Under requirements established by the GPRA Modernization Act of 2010
(the Act), 4 OMB is also required to coordinate with agencies to establish


4
 Pub. L. No. 111-352, 124 Stat. 3866 (2011), amending Pub. L. No. 103-62, 107 Stat. 285
(1993).




Page 2                                                                     GAO-12-449T
                     outcome-oriented goals covering a limited number of crosscutting policy
                     areas as well as goals to improve management across the federal
                     government, and develop a governmentwide performance plan for
                     making progress toward achieving those goals. The President’s budget
                     for 2013 includes 14 such crosscutting policy goals. Aspects of several of
                     these goals—including Science, Technology, Engineering, and Math
                     Education, Entrepreneurship and Small Businesses, Job Training,
                     Cybersecurity, Information Technology Management, Procurement and
                     Acquisition Management, and Real Property Management—are
                     discussed in our March 2011 and February 2012 reports. The Act’s
                     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.

                     Opportunities exist for the Congress and federal agencies to continue to
                     address the needed actions identified in our March 2011 and February
                     2012 reports. Collectively, these reports show that, if the actions are
                     implemented, the government could potentially save tens of billions of
                     dollars annually. Cost savings related to reducing or eliminating
                     duplication, overlap, and fragmentation can be difficult to estimate
                     because the portion of agency budgets devoted to certain programs or
                     activities is often unclear, or needed information on program performance
                     or costs is not readily available. In some cases, there is sufficient
                     information to estimate potential savings or other benefits if actions are
                     taken to address individual issues. In other cases, estimates of cost
                     savings or other benefits would depend upon what congressional and
                     executive branch decisions were made, including how certain of our
                     recommendations are implemented. Nevertheless, considering the
                     amount of program dollars involved in the issues we have identified, even
                     limited adjustments could result in significant savings. Additionally, we
                     have found that agencies can often realize other kinds of benefits, such
                     as improved customer service and decreased administrative burdens.


                     Our 2012 annual report identified 51 areas where unnecessary
2012 Annual Report   duplication, overlap, or fragmentation exists as well as additional
Identified 51        opportunities for potential cost savings or enhanced revenues. We
                     identified about 130 specific actions that Congress or the executive
Opportunity Areas    branch could take to address these areas.

                     We identified 32 areas where government missions are fragmented
                     across multiple agencies or programs; agencies, offices, or initiatives may


                     Page 3                                                          GAO-12-449T
                                            have similar or overlapping objectives or may provide similar services to
                                            similar populations or target similar users; and when two or more
                                            agencies or programs are engaged in the same activities or provide the
                                            same services to the same beneficiaries (see table 1). We found
                                            instances where multiple government programs or activities have led to
                                            inefficiencies, and we determined that greater efficiencies or effectiveness
                                            might be achievable.

Table 1: Duplication, Overlap, and Fragmentation Areas Identified


Mission            Areas identified
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 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 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 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 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 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. 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 programs that
development              support entrepreneurial efforts require the Office of Management and Budget and other agencies to better
                         evaluate 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 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 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 smuggling overseas.




                                            Page 4                                                                            GAO-12-449T
Mission           Areas identified
General           11. Personnel Background Investigations: The Office of Management and Budget should take action to
government            prevent agencies from making potentially duplicative investments in electronic case management and
                      adjudication systems.
                  12. Cybersecurity Human Capital: Governmentwide initiatives to enhance the cybersecurity workforce in the
                      federal government need better structure, planning, guidance, and coordination to reduce 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 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 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 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 $3.9 billion
security/Law          to reduce the risk of potential unnecessary duplication across the more than 11,000 grant awards it makes
enforcement           annually.
                  17. Homeland Security Grants: The Department of Homeland Security needs better project 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 Homeland Security for
                      assessments that the department is not performing.
Information       19. Information Technology Investment Management: The Office of Management and Budget and the
technology            Departments of Defense and Energy need to address potentially duplicative information technology
                      investments to avoid investing in unnecessary systems.
International     20. Overseas Administrative Services: U.S. government agencies could lower the administrative cost of their
affairs               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.
                  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.
Science and the   22. Coordination of Space System Organizations: Fragmented leadership has led to program challenges and
environment           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 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 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 more fully leverage its
                      limited resources.




                                          Page 5                                                                            GAO-12-449T
Mission           Areas identified
                  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.
Social services   27. Social Security Benefit Coordination: Benefit offsets for related programs help reduce the 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 them, could help mitigate
                      overlap and fragmentation and decrease costs.
Training,         29. Early Learning and Child Care: The Departments of Education and Health and Human Services should
employment, and       extend their coordination efforts to other federal agencies with early learning and child care programs to
education             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.
                  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.
                  31. Science, Technology, Engineering, and Mathematics Education: Strategic planning is needed 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 consolidation.
                                         Source: GAO-12-342SP.



                                         Overlap and fragmentation among government programs or activities can
                                         be harbingers of unnecessary duplication. In many cases, the existence
                                         of unnecessary duplication, overlap, or fragmentation can be difficult to
                                         determine 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
                                         make programmatic data more reliable or transparent. 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.

                                         Among the 32 areas highlighted in our 2012 annual report are the
                                         following examples of opportunities for agencies or Congress to consider
                                         taking action to reduce unnecessary duplication, overlap, or
                                         fragmentation.




                                         Page 6                                                                          GAO-12-449T
•   Unmanned Aircraft Systems: The Department of Defense (DOD)
    estimates that the cost of current Unmanned Aircraft Systems (UAS)
    acquisition programs and related systems will exceed $37.5 billion in
    fiscal years 2012 through 2016. The elements of DOD’s planned UAS
    portfolio include unmanned aircraft, payloads (subsystems and equipment
    on a UAS configured to accomplish specific missions), and ground control
    stations (equipment used to handle multiple mission aspects such as
    system command and control). We have found that ineffective acquisition
    practices and collaboration efforts in DOD’s UAS portfolio creates overlap
    and the potential for duplication among a number of current programs and
    systems. We have also highlighted the need for DOD to consider
    commonality in UAS—using the same or interchangeable subsystems
    and components in more than one subsystem to improve interoperability
    of systems—to reduce the likelihood of redundancies in UAS capabilities.

    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. Illustrative of the overlap,
    the Department of the Navy (Navy) plans to spend more than $3 billion to
    develop the Broad Area Maritime Surveillance UAS, rather than the
    already fielded Air Force Global Hawk system on which it was based.
    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 the Broad Area Maritime Surveillance UAS to meet the Navy’s
    requirements versus buying more Global Hawks.

    The potential for overlap also exists among UAS subsystems and
    components, such as sensor payloads and ground control stations. DOD
    expects to spend about $9 billion to buy 42 UAS sensor payloads through
    fiscal year 2016. 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, including 29
    sensors in our review. Further, we identified overlap and potential
    duplication among 10 of 13 ground control stations that DOD plans to
    acquire at a cost of about $3 billion through fiscal year 2016. According to
    a cognizant DOD official, the associated software is about 90 percent
    duplicative because similar software is developed for each ground control
    station. DOD has created a UAS control segment working group, which is
    chartered to increase interoperability and enable software re-use and



    Page 7                                                            GAO-12-449T
    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.

    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. While DOD has
    acknowledged that many UAS systems were acquired inefficiently and
    has begun to take steps to improve outcomes as it expands these
    capabilities over the next several years, the department faces challenges
    in its ability to improve efficiency and reduce the potential for overlap and
    duplication as it buys UAS capabilities. For example, 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.

    To reduce the likelihood of overlap and potential duplication in its UAS
    portfolio, we have made several prior recommendations to DOD which
    have not been fully implemented. While DOD generally agreed with our
    recommendations, the overlap in current UAS programs, as well as the
    continued potential in future programs, shows that DOD must still do
    more to implement them. In particular, we have recommended that DOD
    (1) re-evaluate whether a single entity would be better positioned to
    integrate all crosscutting efforts to improve the management and
    operation of UAS; (2) consider an objective, independent examination of
    current UAS portfolio requirements and the methods for acquiring future
    unmanned aircraft; and (3) direct the military services to identify specific
    areas where commonality can be achieved. We believe the potential for
    savings is significant and with DOD’s renewed commitment to UAS for
    meeting new strategic requirements, all the more imperative.

•   Housing assistance: In fiscal year 2010, the federal government incurred
    about $170 billion in obligations for housing-related programs and
    estimated revenue forgone for tax expenditures of which tax expenditures
    represent $132 billion (about 78 percent). Support for homeownership in
    the current economic climate has expanded dramatically with nearly all
    mortgage originations having direct or indirect federal assistance. The


    Page 8                                                             GAO-12-449T
Department of the Treasury (Treasury) and the Board of Governors of the
Federal Reserve System together invested more than $1.67 trillion in
Fannie Mae and Freddie Mac, the government-sponsored enterprises,
which issue and guarantee mortgage-backed securities. 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.

We identified 20 different entities that administer 160 programs, tax
expenditures, and other tools that supported homeownership and rental
housing in fiscal year 2010. In addition, we identified 39 programs, tax
expenditures, and other tools that provide assistance for buying, selling,
or financing a home and eight programs and tax expenditures that
provide assistance to rental property owners. We found overlap in
products offered and markets served by the Department of Agriculture’s
(USDA) Rural Housing Service (RHS) and the Department of Housing
and Urban Development’s (HUD) Federal Housing Administration (FHA),
among others. In September 2000 and again as part of our ongoing work,
we questioned the need for maintaining separate programs for rural
areas. In September 2000, we recommended that Congress consider
requiring USDA and HUD to examine the benefits and costs of merging
programs, such as USDA’s and HUD’s single-family guaranteed loan and
multifamily portfolio management programs. 5

While USDA and HUD have raised concerns about merging programs,
our recent work has shown increased evidence of overlap and that some
RHS and FHA programs can be consolidated. For example, the two
agencies overlap in products offered (mortgage credit and rental
assistance), functions performed (portfolio management and
preservation), and geographic areas served. Specifically, RHS and HUD
guarantee single-family and multifamily loans, as well as offer rental
subsidies using similar income eligibility criteria. And, 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



5
 GAO, Rural Housing: Options for Optimizing the Federal Role in Rural Housing
Development, GAO/RCED-00-241 (Washington, D.C.: Sept. 15, 2000).




Page 9                                                                    GAO-12-449T
guarantees financed properties near urban areas—56 percent of single-
family guarantees made in fiscal year 2009 were in metropolitan counties.

Regarding consolidation, we found that RHS relies on more in-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 how the
programs are administered. 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. 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. 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 geography and
technology greatly limited communication and transportation. These
limitations have diminished and HUD programs can be used in all areas
of the country.

We first recommended in September 2000 —and have followed up since
then—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, and require these same agencies to explore
merging their single family insured lending and multifamily portfolio
management programs. At that time, USDA stated that some of the
suggestions made in our report to improve the effectiveness of current
programs may better serve rural areas. However, USDA also stated that
the gap in housing affordability between rural and urban areas, as well as
the importance of rural housing programs to the Department’s broader
Rural Development mission area, would make merging RHS’s programs
with HUD’s programs unfeasible and detrimental to rural America. HUD
also stated that it believes any opportunity to improve the delivery of rural
housing services should be explored, but stated that the differences


Page 10                                                           GAO-12-449T
between RHS’s and FHA’s single-family programs are sizable and that
without legislative changes to product terms, efforts to merge the
programs would likely result in a more cumbersome rather than a more
efficient delivery system. HUD added that it had been working with USDA
in a mutual exchange of information on best practices and would explore
possible avenues of coordination.

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 of HUD, USDA, and the Department of Veterans Affairs (VA).
According to HUD, a benchmarking effort associated with the task force
was recently begun. Our ongoing work considers options for consolidating
these programs and we expect to make additional related
recommendations.

Furthermore, Treasury and the Internal Revenue Service (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.

We 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. 6 Specifically, we recommended that the Director of OMB,
in consultation with the Secretary of the Treasury, develop and implement
a framework for conducting performance reviews of tax expenditures.
OMB, citing methodological and conceptual issues, disagreed with our
2005 recommendations. To date, OMB had not used its budget and
performance review processes to systematically review tax expenditures


6
 See GAO, 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 GAO-11-318SP.




Page 11                                                               GAO-12-449T
    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
    Modernization Act of 2010 also envisions such an approach for selected
    cross-cutting areas. Such an analysis could help identify redundancies.

•   Military and veterans health care: We found that DOD and VA need to
    improve integration across care coordination and case management
    programs to reduce duplication and better assist servicemembers,
    veterans, and their families. DOD and VA have care coordination 7 and
    case management 8 programs that are intended to provide continuity of
    care for wounded, ill, and injured servicemembers and veterans. DOD
    and VA established the Wounded, Ill, and Injured Senior Oversight
    Committee (Senior Oversight Committee) to address identified problems
    in providing care to wounded, ill, and injured servicemembers as well as
    veterans. Under the purview of this committee, the departments
    developed the Federal Recovery Coordination Program (FRCP), a joint
    program administered by VA that was designed to coordinate clinical and
    nonclinical services for “severely” wounded, ill, and injured
    servicemembers—who are most likely to be medically separated from the
    military—across DOD, VA, other federal agencies, states, and the private
    sector. 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 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
    implemented separately by each of the military services, most of which




    7
     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.
    8
     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 12                                                                       GAO-12-449T
have implemented the RCP within their existing wounded warrior
programs. 9

As a result of these multiple efforts, many recovering servicemembers
and veterans are enrolled in more than one care coordination or case
management program, and they may have multiple care coordinators and
case managers, potentially duplicating agencies’ efforts and reducing the
effectiveness and efficiency of the assistance they provide. For example,
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.

We 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. For
example, an FRCP coordinator told us 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 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 FRCP and RCP care
coordination programs, 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.


9
 The Navy, Air Force, and Marine Corps have all implemented the RCP within their
existing wounded warrior programs. The Army and the U.S. Special Operations Command
provide services that meet the requirements of the RCP, although they did not specifically
implement this program.




Page 13                                                                      GAO-12-449T
    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 wounded, ill, and injured
    servicemembers and veterans. In October 2011, we recommended that
    the Secretaries of Defense and Veterans Affairs 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 recovering
    servicemembers, veterans, and their families, including—but not limited
    to—the FRCP and RCP. 10 DOD and VA provided technical comments on
    the report, but neither specifically commented on our recommendation.
    We plan to track the extent to which progress has been made to address
    our recommendation.

•   Information technology investment management: OMB reported that in
    fiscal year 2011, there were approximately 7,200 information technology
    (IT) investments totaling at least $79 billion. OMB provides guidance to
    agencies on how to report on their IT investments and requires agencies
    to identify each investment by a single functional category and sub-
    category. These categorizations are intended to enable OMB and others
    to analyze investments with similar functions, as well as identify and
    analyze potentially duplicative investments across agencies. We found
    that DOD and the Department of Energy (DOE) need to address
    potentially duplicative IT investments to avoid investing in unnecessary
    systems.

    In February 2012, we completed a review that examined the 3 largest
    categories of IT investments within DOD, DOE, and the Department of
    Homeland Security (DHS) and found that although the departments use
    various investment review processes to identify duplicative investments,
    37 of our sample of 810 investments were potentially duplicative at DOD
    and DOE. 11 These investments account for about $1.2 billion in IT
    spending for fiscal years 2007 through 2012 for these two agencies. We
    found that DOD and DOE had recently initiated specific plans to address


    10
      GAO, DOD and VA Health Care: Action Needed to Strengthen Integration across Care
    Coordination and Case Management Programs, GAO-12-129T (Washington, D.C.: Oct. 6,
    2011).
    11
     GAO, Information Technology: Departments of Defense and Energy Need to Address
    Potentially Duplicative Investments, GAO-12-241 (Washington, D.C.: Feb. 17, 2012).




    Page 14                                                                  GAO-12-449T
    potential duplication in many of the investments we identified—such as
    plans to consolidate or eliminate systems—but these initiatives had not
    yet led to the consolidation or elimination of duplicative investments or
    functionality.

    In addition, while we did not identify any potentially duplicative
    investments at DHS within our sample, DHS officials have independently
    identified several duplicative investments and systems. DHS has plans to
    further consolidate systems within these investments by 2014, which it
    expects to produce approximately $41 million in cost savings. DHS
    officials have also identified 38 additional systems that they have
    determined to be duplicative.

    Further complicating agencies’ ability to identify and eliminate duplicative
    investments is that investments are, in certain cases, misclassified by
    function. For example, one of DHS’s Federal Emergency Management
    Agency (FEMA) investments was initially categorized within the Employee
    Performance Management sub-function, but DHS agreed that this
    investment should be assigned to the Human Resources Development
    sub-function. Proper categorization is necessary in order to analyze and
    identify duplicative IT investments, both within and across agencies.

    In February 2012, we recommended that the Secretaries of DOD and
    DOE 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 that
    we identified, as well as any other duplicative investments. The agencies
    agreed with our recommendation. We also recommended that DOD,
    DOE, and DHS correct the miscategorizations of the investments we
    identified and ensure that investments are correctly categorized in agency
    submissions, which would enhance the agencies’ ability to identify
    opportunities to consolidate or eliminate duplicative investments. DOD
    and DHS agreed with our recommendation, but DOE disagreed that two
    of the four investments we identified were miscategorized, explaining that
    its categorizations reflect funding considerations. However, OMB
    guidance indicates that investments should be classified according to
    their intended purpose. Consequently, we believe the recommendation is
    warranted.

•   Department of Homeland Security grants: From fiscal years 2002 through
    2011, FEMA, under DHS, allocated about $20.3 billion to grant recipients
    through four specific programs (the State Homeland Security Program,
    Urban Areas Security Initiative, Port Security Grant Program, and Transit


    Page 15                                                          GAO-12-449T
Security Grant Program) 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. We found that DHS needs better
project information and coordination to identify and mitigate potential
unnecessary duplication among four overlapping grant programs.

In February 2012, we identified multiple factors that contributed to the risk
of FEMA potentially funding unnecessarily duplicative projects across
these four grant programs. These factors include overlap among grant
recipients, goals, and geographic locations, combined with differing levels
of information that FEMA had available regarding grant projects and
recipients. 12 We also reported that FEMA lacked a process to coordinate
application reviews across the four grant programs and grant applications
were reviewed separately by program and were not compared across
each other to determine where possible unnecessary duplication may
occur. Specifically, FEMA’s Homeland Security Grant Program branch
administered the Urban Areas Security Initiative and State Homeland
Security Program while the Transportation Infrastructure Security branch
administered the Port Security Grant Program and Transit Security Grant
Program. We and the DHS Inspector General have concluded that
coordinating the review of grant projects internally would give FEMA more
complete information about applications across the four grant programs,
which could help FEMA identify and mitigate the risk of unnecessary
duplication across grant applications. 13

We also identified actions FEMA could take to identify and mitigate any
unnecessary duplication in these programs, such as collecting more
complete project information as well as exploring opportunities to
enhance FEMA’s internal coordination and administration of the
programs. We suggested that Congress may wish to consider requiring
DHS to report on the results of its efforts to identify and prevent
duplication within and across the four grant programs, and consider these
results when making future funding decisions for these programs.




12
  GAO, Homeland Security: DHS Needs Better Project Information and Coordination
among Four Overlapping Grant Programs, GAO-12-303 (Washington, D.C.: Feb. 28,
2012).
13
  Department of Homeland Security Office of Inspector General, Efficacy of DHS Grant
Programs, OIG-1069 (Washington, D.C.: Mar. 22, 2010).




Page 16                                                                    GAO-12-449T
•   Science, Technology, Engineering, and Math education programs:
    Federal agencies obligated $3.1 billion in fiscal year 2010 on Science,
    Technology, Engineering, and Mathematics (STEM) education programs.
    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. Recently, both Congress and the
    administration have called for a more strategic and effective approach to
    the federal government’s investment in STEM education. For example,
    Congress directed the Office of Science and Technology Policy, within
    the Executive Office of the President, to establish a committee under its
    component National Science and Technology Council to, among other
    things, develop a 5-year governmentwide STEM education strategic plan
    and identify areas of duplication among federal programs. 14 We found
    that strategic planning is needed to better manage overlapping programs
    across multiple agencies.

    In January 2012, we reported that 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 target groups—such as K-12 students, postsecondary
    students, K-12 teachers, and college faculty and staff—to achieve similar
    objectives. 15 These overlapping programs 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 related fields. Overlapping programs can lead to individuals
    and institutions being eligible for similar services in similar STEM fields
    offered through multiple programs. For example, 177 of the 209 programs
    (85 percent) were primarily intended to serve two or more target groups.
    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.



    14
     Pub. L. No. 111-358, § 101, 124 Stat. 3982, 3984 (2011).
    15
      GAO, Science, Technology, Engineering, and Mathematics Education: Strategic
    Planning Needed to Better Manage Overlapping Programs across Multiple Agencies,
    GAO-12-108 (Washington, D.C.: Jan. 20, 2012).




    Page 17                                                                 GAO-12-449T
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, we identified 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. 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.

However, little is known about the effectiveness of federal STEM
education programs. Since 2005, when we first reported on this issue, we
have 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 would not only help to improve
individual program performance, but could also inform agency- and
governmentwide decisions about which programs should continue to be
funded. Furthermore, although the National Science and Technology
Council is in the process of developing a governmentwide strategic plan
for STEM education, we found that agencies have not used outcome
measures for STEM programs in a way that is clearly reflected in their
own performance plans and performance reports—key strategic planning
documents. 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.

We reported in January 2012 that numerous opportunities exist to
improve the planning for STEM programs. For example, we
recommended that the National Science and Technology Council develop
guidance for how agencies can better incorporate governmentwide STEM
education strategic plan goals and their STEM education efforts into their
respective performance plans and reports, as well as determining the
types of evaluations that may be feasible and appropriate for different
types of STEM education programs. We also recommended that the
National Science and Technology Council work with agencies, through


Page 18                                                         GAO-12-449T
    the strategic planning process, to identify STEM education programs that
    might be candidates for consolidation or elimination. OMB stated that our
    recommendations are critical to improving the provision of STEM
    education across the federal government. In separate comments, the
    Office of Science and Technology Policy said its own analysis of STEM
    education programs identified no duplicative programs and where it
    identified overlapping programs it found that some program
    characteristics differed. As an illustration, the Office of Science and
    Technology Policy 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. We agree that it may be
    important to serve both of these populations, but it is not clear that two
    separate administrative structures are necessary to ensure both
    populations are served. The Office of Science and Technology Policy said
    it would address our recommendations in the 5-year Federal STEM
    Education Strategic Plan, which will be released in spring 2012.
    Furthermore, the President’s Fiscal Year 2013 budget established STEM
    education programs as one of fourteen cross-agency priority goals. These
    goals are intended to enhance progress in areas needing more cross-
    government collaboration.

•   Coordination of space system organizations: U.S. government space
    systems—such as the Global Positioning System (GPS) and space-
    based weather systems—provide a wide range of capabilities to a large
    number of users, including the federal government, U.S. businesses and
    citizens, and other countries. Space systems are usually very expensive,
    often costing billions of dollars to acquire. 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. Moreover, the nation’s satellites are put into orbit by
    rockets that can cost more than $100 million per launch. We have found
    that costs of space programs tend to increase significantly from initial cost
    estimates. A variety of agencies, such as the Federal Aviation
    Administration, the National Oceanic and Atmospheric Administration,
    and DHS rely on government space systems to execute their missions,
    but responsibilities for acquiring space systems are diffused across
    various DOD organizations as well as the intelligence community and the
    National Aeronautics and Space Administration. Fragmented leadership
    has led to program challenges and potential duplication in developing
    multi-billion dollar space systems. In some cases, problems with these
    systems have been so severe that acquisitions were either canceled or
    the needed capabilities were severely delayed.



    Page 19                                                           GAO-12-449T
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. For example, we
reported in April 2009 that the coordination of GPS satellites 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. 16 DOD has taken some
steps to better coordinate the GPS segments by creating the Space and
Intelligence Office within the Office of the Under Secretary of Defense for
Acquisition, Technology, and Logistics and conducting enterprise level
reviews of the GPS program. However, DOD has not yet established a
single authority responsible for ensuring that all GPS segments, including
user equipment, are synchronized to the maximum extent practicable.

DOD has also undertaken 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.
Moreover, the initiatives do not extend to the space activities across the
government. We and others, including the Commission to Assess United
States National Security Space Management and Organization, have
previously recommended a number of changes to the leadership of the
space community and have consistently reported that a lack of strong,
centralized leadership has led to inefficiencies and other problems. But
the question 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 has not been
addressed.

We have suggested that OMB work with the National Security Council to
assess whether a governmentwide oversight body for space acquisitions
is needed. OMB agreed that coordinating space activities across the U.S.



16
 GAO, Global Positioning System: Significant Challenges in Sustaining and Upgrading
Widely Used Capabilities, GAO-09-325 (Washington, D.C.: Apr. 30, 2009).




Page 20                                                                  GAO-12-449T
    government has been and continues to be a major challenge, but is
    concerned that our recommendation would add an extra layer of space
    bureaucracy on top of ongoing coordination efforts as well as additional
    costs and possible confusion regarding roles and authorities among the
    existing mechanisms. We believe that the recommendation is sufficiently
    flexible to allow for an implementation approach that would address these
    concerns.

•   Defense Language and Culture Training: 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 and it has invested millions of dollars to provide language and
    culture training to thousands of servicemembers, including those
    deploying to ongoing operations. For example, we 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. We found that
    DOD has not developed an integrated approach to reduce fragmentation
    in the military services’ language and culture training approaches and
    overlap in the content of training products acquired by the military
    services and other organizations.

    In May 2011, we reported that 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. 17 We recommended that the Office of the Under
    Secretary of Defense for Personnel and Readiness establish 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. DOD agreed with our
    recommendation.

    We also found that 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



    17
      GAO, Military Training: Additional 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).




    Page 21                                                                GAO-12-449T
    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. To illustrate, we analyzed 18 DOD language and culture
    training products and found that the content overlapped to some extent
    with at least one other training product. 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.

    We suggested that the Office of the Under Secretary of Defense for
    Personnel and Readiness and the military services 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, as well as take steps to develop and
    contract for new products that can be used by more than one military
    service. DOD agreed that departmentwide coordination efforts could be
    improved and noted that our analysis would be useful in targeting specific
    areas for improvement.

•   Federal facility risk assessments: Federal facilities continue to be
    vulnerable to terrorist attacks and other acts of violence, as evidenced by
    the 2010 attacks on the IRS building in Austin, Texas, and the federal
    courthouse in Las Vegas, Nevada, which resulted in loss of life. DHS’s
    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 under the control and custody of the General
    Services Administration. We found that agencies are making duplicate
    payments for facility risk assessments by completing their own
    assessments, while also paying DHS for assessments that the
    department is not performing.

    We reported in June 2008 and also have recently found that 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




    Page 22                                                          GAO-12-449T
services in fiscal year 2011. 18 For example, an IRS official stated 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, Environmental Protection Agency officials said that the
agency has conducted its own assessments based on concerns with the
quality and thoroughness of FPS’s assessments. These assessments are
conducted by teams of contractors and agency employees, cost an
estimated $6,000, and can take a few days to a week to complete.

FPS’s planned risk assessment tool is 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, but
it is unclear if the tool will help minimize duplication. According to an
official, FPS planned to use its Risk Assessment and Management
Program to complete assessments of about 700 federal facilities in fiscal
year 2010 and 2,500 facilities in fiscal year 2011. However, as we
reported in July 2011, FPS experienced cost overruns, schedule delays,
and operational issues with developing this program and as a result the
agency could not use it to complete risk assessments. 19 We found that
since November 2009, the agency has only completed four risk
assessments using its Risk Assessment and Management Program.

We identified several steps that DHS could take to address duplication in
FPS’s risk assessments. For example, in July 2011 we recommended
that DHS develop interim solutions for completing risk assessments while
addressing challenges with the Risk Assessment and Management
Program. In addition, in February 2012, we suggested DHS 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. DHS agreed with our July 2011 recommendation and has
begun taking action to address it, but did not comment on the action we
identified in February 2012.




18
  GAO, 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).
19
  GAO, Federal Protective Service: Actions Needed to Resolve Delays and Inadequate
Oversight Issues with FPS’s Risk Assessment and Management Program, GAO-11-705R
(Washington, D.C.: July 15, 2011).




Page 23                                                                     GAO-12-449T
                                          Our 2012 annual report also summarized 19 areas—beyond those
                                          directly related to duplication, overlap, or fragmentation—describing other
                                          opportunities for agencies or Congress to consider taking action that
                                          could either reduce the cost of government operations or enhance
                                          revenue collection for the Treasury. These cost saving and revenue-
                                          enhancing opportunities also span a wide range of federal government
                                          agencies and mission areas (see table 2).

Table 2: Cost-Saving or Revenue-Enhancing Opportunities Identified

Mission            Areas identified
Defense            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.
                   34. Defense Headquarters: The Department of Defense should review and identify further 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 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 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 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 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 Office has
development            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 provide billions
                       in revenue for the government.
General            41. General Services Administration Schedules Contracts Fee Rates: Re-evaluating fee rates on the
government             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 financial benefit
                       to the government over time.
                   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.
                   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.
Health             45. Medicare Advantage Payment: The Centers for Medicare and 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.




                                          Page 24                                                                        GAO-12-449T
Mission           Areas identified
                  46. Medicare and Medicaid Fraud Detection Systems: The Centers for Medicare and 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.
Homeland          47. Border Security: Delaying proposed investments for future acquisitions of border surveillance technology
security/Law          until the Department of Homeland Security better defines and measures benefits and estimates life-cycle
enforcement           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 could further
                      offset billions of dollars in civil aviation security costs.
                  49. Immigration Inspection Fee: The air passenger immigration inspection user fee should be reviewed and
                      adjusted to fully recover the cost of the air passenger immigration inspection activities conducted by
                      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 forces,
affairs               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 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.
                                         Source: GAO-12-342SP.



                                         Examples of opportunities for agencies or Congress to consider taking
                                         action that could either reduce the cost of government operations or
                                         enhance revenue collections include:

                                     •   Air Force food service: According to Air Force officials, most Air Force
                                         installations have their own individual contracts for food service, with a
                                         total cost of approximately $150 million per year for all Air Force
                                         installations. We found that the Air Force has opportunities to reduce its
                                         overall food service costs by millions of dollars annually by reviewing food
                                         service contracts and adjusting them, when appropriate, to better meet
                                         the needs of its installations, including aligning labor needs with the actual
                                         number of meals served by the dining facilities.

                                         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. Among other intended outcomes, Air Force
                                         officials stated that the first group of pilot installations achieved cost
                                         savings when compared to their previous contracts while also increasing
                                         hours of operation in the dining facilities and serving an additional
                                         500,000 meals per year. We compared the estimated amount of food
                                         service labor at the six pilot installations under prior contracts to the
                                         projected work schedules under the initiative and found that by adjusting



                                         Page 25                                                                        GAO-12-449T
    staffing levels for contractor staff at dining facilities, the contractor
    reduced the total number of labor hours at five of the six pilot installations
    by 53 percent. For example, at one installation, the number of estimated
    labor hours decreased from approximately 2,042 hours per week to 920.
    For the sixth installation where the labor hours did not decrease, the Air
    Force Audit Agency had recently conducted a review that found that the
    number of food service personnel did not align with workload estimates.
    As a result, the Air Force renegotiated its workload estimates and pay
    rates, resulting in savings of approximately $77,000 annually.

    During our review, we discussed the potential opportunity for achieving
    additional savings by reviewing staffing levels at other installations
    outside of the initiative with Air Force officials. As a result, the Air Force
    issued a memorandum directing a review of existing food service
    contracts to determine if the contracts meet current mission needs. The
    memorandum indicated that special attention must be given to whether
    the food service contract workload estimates were properly aligned with
    the actual number of meals served. In July 2011, we recommended that
    the Secretary of the Air Force monitor the actions taken in response to
    the direction to review food service contracts, and take actions, as
    appropriate, to ensure that cost-savings measures are implemented. 20
    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. The potential exists for other installations that rely
    on contracts to meet their food service needs to achieve similar financial
    benefits. For example, the Air Force has requested that each of its
    installations conduct a 100 percent review of existing food service
    contracts to determine if their current contract workload estimates meet
    current mission needs or if the contracts require modification. In addition,
    the Office of the Secretary of Defense planned to share the results of the
    Air Force’s review of its food service labor costs to achieve cost savings
    with the other military services.

•   Navy information technology network: In 2007, the Navy established the
    Next Generation Enterprise Network program (NGEN) to replace and
    improve the Navy Marine Corps Intranet. According to the President’s
    fiscal year 2012 budget request, the NGEN program has spent about
    $434 million on work associated with the transition from the Navy Marine


    20
     GAO, Defense Management: Actions Needed to Improve Management of Air Force’s
    Food Transformation Initiative, GAO-11-676 (Washington, D.C.: July 26, 2011).




    Page 26                                                             GAO-12-449T
    Corps Intranet. The Navy estimated that NGEN would cost approximately
    $50 billion to develop, operate, and maintain through fiscal year 2025. We
    found that better informed decisions were needed to ensure a more cost-
    effective acquisition approach for the Navy’s NGEN program.

    We reported in March 2011 that the Navy selected an approach that was
    not considered as part of its analysis of alternatives and that it estimated
    would cost at least $4.7 billion more than any of the four assessed
    alternatives. 21 In addition, we reported that the Navy’s schedule for NGEN
    also did not provide a reliable basis for program execution because it did
    not adequately satisfy key schedule estimating best practices, 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. We also found that the Navy’s acquisition
    decisions were not always performance- or risk-based. In particular,
    senior executives approved the NGEN program’s continuing progress in
    the face of known performance shortfalls and risks.

    To address these weaknesses, we recommended in March 2011 that the
    Navy limit further investment in NGEN until it conducts an immediate
    interim review to reconsider the selected acquisition approach. We also
    identified an additional action that the Navy could take to facilitate
    implementation of the approach resulting from this review by ensuring
    that the NGEN schedule reflects key schedule estimating practices and
    future program reviews and decisions fully reflect the program’s
    performance and exposure to risk. DOD agreed with our 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 agree with our recommendation to reconsider its
    acquisition approach; however, the Navy is currently in the process of
    reviewing and making changes to the NGEN acquisition strategy. We are
    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.

•   DOD health care costs: DOD spends billions of dollars annually on its
    worldwide healthcare system. Currently, health care costs constitute nearly


    21
      GAO, Information Technology: Better Informed Decision Making Needed on Navy’s Next
    Generation Enterprise Network Acquisition, GAO-11-150 (Washington, D.C.: Mar. 11,
    2011).




    Page 27                                                                 GAO-12-449T
10 percent of DOD’s baseline budget request. For its fiscal year 2012
budget, according to DOD documentation, DOD received $52.7 billion 22 to
provide health care to approximately 9.6 million active duty
servicemembers, reservists, retirees, and their dependents. DOD
recognizes that it must address the rate at which health care costs are
rising and has stated that it intends to continue to develop health care
initiatives that will improve the quality and standard of care, while reducing
growth in overall costs. 23 Our ongoing work has found that DOD has
identified 11 initiatives intended to slow the rise in its health care costs, but
it has not fully applied results-oriented management practices to its efforts
or an overall monitoring process, which limits its effectiveness in
implementing these initiatives and achieving related cost savings goals.

DOD’s initiatives consist primarily of changes to clinical and business
practices in areas ranging from primary care to psychological health to
purchased care reimbursement practices. Partly in response to our
ongoing work assessing DOD’s management of its initiatives, the
department has taken some initial steps toward managing their
implementation by developing a number of high-level, non-monetary
metrics and corresponding goals for each strategic initiative, and other
management tools, such as implementation plans that will include key
elements such as investment costs and savings estimates. However,
DOD currently has completed only one implementation plan, which
contains the one available cost savings estimate among all the initiatives.
Without completing its plans and incorporating elements such as problem
definitions, resources needed, goals, performance measures, and cost
estimates into them, DOD will not be fully aware if these initiatives are
achieving projected cost savings and other performance goals.

In addition, DOD has not completed the implementation of an overall
monitoring process across its portfolio of initiatives for overseeing the
initiatives’ progress or identified accountable officials and their roles and
responsibilities for all of its initiatives. DOD’s 2007 Task Force on the
Future of Military Health Care noted that the current Military Health



22
  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.
23
  DOD, Quadrennial Defense Review Report, February 2010.




Page 28                                                                          GAO-12-449T
    System does not function as a fully integrated health care system. 24 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. Therefore, as Military Health System leaders develop and
    implement their plans to control rising health care costs, they will need to
    work across multiple authorities and areas of responsibility. Until DOD
    fully implements a military-wide mechanism to monitor progress and
    identify accountable officials, including their roles and responsibilities
    across its portfolio of initiatives, DOD may be hindered in its ability to
    achieve a more cost-efficient military health system.

    In order to enhance its efforts to manage rising health care costs and
    demonstrate sustained leadership commitment for achieving the
    performance goals of the Military Health System’s strategic initiatives, we
    plan to recommend as part of our ongoing work that DOD complete and
    fully implement 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. We believe that DOD may
    realize projected cost savings and other performance goals by taking
    these actions 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. DOD
    generally agreed with our planned recommendations.

•   Excess uranium inventories: DOE maintains large inventories of depleted
    and natural uranium that it no longer requires for nuclear weapons or fuel
    for naval nuclear propulsion reactors. We reported in March and April
    2008 and again in June 2011 that under certain conditions, the federal




    24
      Defense Health Board, Task Force on the Future of Military Health Care, December
    2007.




    Page 29                                                                   GAO-12-449T
government could generate billions of dollars by marketing inventories of
excess uranium to commercial power plants to use in their reactors. 25

Specifically, we identified options that DOE could take to market the
excess uranium inventories for commercial use. For example, DOE could
contract to re-enrich inventories of depleted uranium hexafluoride (a by-
product of the uranium enrichment process), consisting of hundreds of
thousands of metric tons of material that are stored at DOE’s uranium
enrichment plants. Although DOE would have to pay for processing, the
resulting re-enriched uranium could be potentially sold if the sales price of
the uranium exceeded processing costs. DOE could also pursue an
option of selling the depleted uranium inventory “as-is”. This approach
would require DOE to obtain the appropriate statutory authority to sell
depleted uranium in its current unprocessed form. Firms such as nuclear
power utilities and enrichment companies might find it cost effective to
purchase the uranium and re-enrich it as a source of nuclear fuel.

If executed in accordance with federal law, DOE sales of natural uranium
could generate additional revenue for the government. Natural uranium
on its own cannot fuel nuclear reactors and weapons. Rather, it is
shipped to a conversion facility, where it is converted for the enrichment
process. We reported in September 2011 that in 7 transactions executed
since 2009 DOE has, in effect, sold nearly 1,900 metric tons of natural
uranium into the market, using a contractor as a sales agent, to fund
environmental cleanup services. 26 DOE characterized these sales as
barter transactions—exchanges of services (environmental cleanup work)
for materials (uranium). While DOE received no cash directly from the
transactions, it allowed its contractor to keep cash from the sales, which
DOE would otherwise have owed to the United States Treasury. Because
federal law requires an official or agent of the government receiving
money for the government from any source to deposit the money in the



25
  See GAO, 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.: Mar. 31, 2008); Nuclear Material: Several Potential Options for
Dealing with DOE’s Depleted Uranium Tails Could Benefit the Government, GAO-08-613T
(Washington, D.C.: Apr. 3, 2008); and 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).
26
 GAO, Excess Uranium Inventories: Clarifying DOE’s Disposition Options Could Help
Avoid Further Legal Violations, GAO-11-846 (Washington, D.C.: Sept. 26, 2011).




Page 30                                                                  GAO-12-449T
    Treasury, we found that these transactions violated the miscellaneous
    receipts statute.

    We have reported that congressional action may be needed to overcome
    legal obstacles to the pursuit of certain options for the sale of depleted
    and natural uranium. Specifically, our March 2008 report suggested that
    Congress may wish to explicitly provide direction about whether and how
    DOE may sell or transfer depleted uranium in its current form. Our
    September 2011 report suggested that if Congress sees merit in using
    the proceeds from the barter, transfer, or sale of federal uranium assets
    to pay for environmental cleanup work, it could consider providing DOE
    with explicit authority to barter excess uranium and to retain the proceeds
    from these transactions. We also suggested that Congress could direct
    DOE to sell uranium for cash and make those proceeds available by
    appropriation for environmental cleanup work.

    Congress has taken some actions in response to our work. For example,
    the Consolidated Appropriations Act, 2012, among other things, requires
    the Secretary of Energy to provide congressional appropriations
    committees with information on the transfer, sale, barter, distribution, or
    other provision of uranium in any form and an estimate of the uranium
    value along with the expected recipient of the material. The Consolidated
    Appropriations Act, 2012 also requires the Secretary to submit a report
    evaluating the economic feasibility of re-enriching depleted uranium.

•   Medicare and Medicaid fraud detection systems: We have designated
    Medicare and Medicaid as high-risk programs, in part due to their
    susceptibility to improper payments—estimated to be about $65 billion in
    fiscal year 2011. To integrate data about all types of Medicare and
    Medicaid claims and improve its ability to detect fraud, waste, and abuse
    in these programs, the Centers for Medicare and Medicaid Services
    (CMS) initiated two information technology programs—the Integrated
    Data Repository, which is intended to provide a centralized repository of
    claims data for all Medicare and Medicaid programs, and One Program
    Integrity, a set of tools that enables CMS contractors and staff to access
    and analyze data retrieved from the repository. According to CMS
    officials, the systems are expected to provide financial benefits of more
    than $21 billion by the end of fiscal year 2015. We found that CMS 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.




    Page 31                                                           GAO-12-449T
We reported in June 2011 that CMS had developed and begun using both
systems, but was not yet positioned to identify, measure, or track benefits
realized from these programs. 27 For example, although in use since 2006,
the Integrated Data Repository did not have Medicaid claims data or
information from other CMS systems that store and process data related
to the entry, correction, and adjustment of claims due to funding and other
technical issues. These data are needed to help analysts prevent
improper payments. Program officials told us that they had begun
incorporating these data in September 2011 and planned to make them
available to program integrity analysts in spring 2012. Regarding
Medicaid data, agency officials stated that they did not account for
difficulties associated with integrating data from the various types and
formats of data stored in disparate state systems 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 the Integrated
Data Repository. Lacking reliable schedules, CMS may face additional
delays in making available all the data that are needed to support
enhanced program integrity efforts.

In addition, CMS had not trained its broad community of analysts to use
the One Program Integrity system because of delays introduced by a
redesign of initial training plans that were found to be insufficient.
Specifically, program officials planned for 639 analysts to be using the
system by the end of fiscal year 2010; however only 41—less than 7
percent—were actively using it as of October 2010. 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, although we did not validate these data, CMS officials
reported that a total of 215 program integrity analysts had been trained
and were using the system. However, program officials had not finalized
plans and schedules for training all intended users.

In June 2011, we recommended that CMS take a number of actions to
help ensure the program’s success toward achieving the billions of dollars
in financial benefits that program integrity officials projected, such as


27
  GAO, Fraud Detection Systems: Centers for Medicare and Medicaid Services Needs to
Ensure More Widespread Use, GAO-11-475 (Washington, D.C.: June 30, 2011).




Page 32                                                                 GAO-12-449T
    finalizing plans and reliable schedules for incorporating additional data
    into the Integrated Data Repository and conducting training for all
    analysts who are intended to use the One Program Integrity system. CMS
    agreed with our recommendations and identified steps the agency is
    taking to implement them. We plan to conduct additional work to
    determine whether CMS has addressed our recommendations and
    identified financial benefits and progress toward meeting agency goals
    resulting from the implementation of its fraud detection systems.

•   Medicare Advantage: In fiscal year 2010, the federal government spent
    about $113 billion on the Medicare Advantage program, a private plan
    alternative to the original Medicare program that covers about a quarter of
    Medicare beneficiaries. CMS, the agency that administers Medicare,
    adjusts payments to Medicare Advantage plans based on the health
    status of each plan’s enrollees. The agency 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.

    CMS calculates a risk score for every beneficiary—a relative measure of
    health status—which 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.

    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. Policymakers have expressed
    concern that risk scores for Medicare Advantage beneficiaries have
    grown at a faster rate than those for traditional Medicare, in part because
    of differences in coding diagnoses. In 2005, Congress directed CMS to
    analyze and adjust risk scores for differences in coding practices, and in
    2010, CMS estimated that 3.41 percent of Medicare Advantage risk
    scores were due to differences in diagnostic coding practices. It reduced
    the scores by an equal percentage, thereby saving $2.7 billion.



    Page 33                                                          GAO-12-449T
    We identified shortcomings in CMS’s method for adjusting Medicare
    Advantage payments to reflect differences in diagnostic coding practices
    between Medicare Advantage and traditional Medicare. CMS did not use
    the most recent risk score data for its estimates; account for the
    increasing annual impact of coding differences over time; or account for
    beneficiary characteristics beyond differences in age and mortality
    between the Medicare Advantage and traditional Medicare populations,
    such as sex, Medicaid enrollment status, and beneficiary residential
    location. We estimated that 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. We expect that savings in future years will
    be greater. In January 2012, we recommended that CMS take action to
    help ensure appropriate payments to Medicare Advantage plans and
    improve the accuracy of the adjustment made for differences in coding
    practices over time. 28 The Department of Health and Human Services
    characterized our results as similar to those obtained by CMS.

•   User fees: User fees assign part or all of the costs of federal programs
    and activities—the cost of providing a benefit that is above and beyond
    what is normally available to the general public—to readily identifiable
    users of those programs and activities. 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.

    The Chief Financial Officers Act of 1990 (CFO Act) requires agencies to
    biennially review their fees and to recommend fee adjustments, as
    appropriate; additionally, OMB Circulars No. A-11 and No. A-25 direct
    agencies to discuss the results of these reviews and any resulting
    proposals, such as adjustments to fee rates, in the CFO annual report
    required by the CFO Act. 29 In 2011, we surveyed the 24 agencies
    covered by the CFO Act on their review of user fees. 21 of the 23
    agencies that responded reported charging more than 3,600 fees and



    28
     GAO, Medicare Advantage: CMS Should Improve the Accuracy of Risk Score
    Adjustments for Diagnostic Coding Practices, GAO-12-51 (Washington, D.C.:
    Jan. 12, 2012).
    29
         Pub. L. No. 101-576 (1990).




    Page 34                                                                GAO-12-449T
collecting nearly $64 billion in fiscal year 2010, but agency responses
indicated varying levels of adherence to the biennial review and reporting
requirements. 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
provide fee review documentation.

We found specific examples where a comprehensive review of user fees
could lead to cost savings or enhanced revenues for the government. For
example, reviewing and adjusting as needed the air passenger
immigration inspection user fee to fully recover the cost of the air
passenger immigration inspection activities could reduce general fund
appropriations for those activities. International air passengers arriving in
the United States are subject to an immigration inspection to ensure that
they have legal entry and immigration documents. International air
passengers pay the immigration inspection fee when they purchase their
airline tickets, but the rate has not been adjusted since fiscal year 2002.
In recent years, U.S. Immigration and Customs Enforcement and U.S.
Customs and Border Protection, the agencies responsible for conducting
inspection activities, have relied on general fund appropriations to help
fund activities for which these agencies have statutory authority to fund
with user fees. In fiscal year 2010, this amounted to over $120 million for
the U.S. Customs and Border Protection alone. In September 2007, we
recommended that the Secretary of Homeland Security report
immigration inspection activity costs to ensure fees are divided between
U.S. Immigration and Customs Enforcement and U.S. Customs and
Border Protection according to their respective immigration inspection
activity costs and to develop a legislative proposal to adjust the air
passenger immigration inspection fee if it was found to not recover the
costs of inspection activities. DHS agreed with our recommendations, but
some of the recommendations remain unimplemented. 30 In February
2012, we suggested that Congress may wish to require the Secretary of
Homeland Security to fully implement these recommendations which
would serve to help to better align air passenger immigration inspection
fee revenue with the costs of providing these services and achieve cost
savings by reducing the reliance on general fund appropriations.



30
   GAO, 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.: Sept. 24, 2007).




Page 35                                                                    GAO-12-449T
    Similarly, we identified options for adjusting the passenger aviation
    security fee, a uniform fee on passengers of U.S. and foreign air carriers
    originating at airports in the United States. Passenger aviation security
    fees collected offset amounts appropriated to the Transportation Security
    Administration for aviation security. In recent years, several options have
    been considered for increasing the passenger aviation security fee.
    However, the fee has not been increased since it was imposed in
    February 2002. We suggested that Congress may wish to consider
    increasing the passenger security fee. Such an increase could further
    offset the need for appropriated funds to support civil aviation security
    costs from about $2 billion to $10 billion over 5 years.

•   Tax gap: The financing of the federal government depends largely on the
    IRS’s ability to collect federal taxes every year, which totaled $2.34 trillion
    in 2010. For the most part, taxpayers voluntarily report and pay their
    taxes on time. 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. 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 that includes enhancing
    IRS’s enforcement and service capabilities can help reduce the tax gap.

    One approach we have identified is the expansion of third-party
    information reporting, which 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 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. Expanding information reporting to cover
    payments for services by all owners of rental real estate and to cover
    payments to corporations for services would improve payee compliance.
    The Joint Committee on Taxation estimated revenue increases of $5.9
    billion over a 10-year period for just these two expansions.




    Page 36                                                            GAO-12-449T
                       In our 2011 annual report, we suggested a wide range of actions for the
Status of Actions      Congress and the executive branch to consider such as developing
Taken to Address the   strategies to better coordinate fragmented efforts, implementing executive
                       initiatives to improve oversight and evaluation of overlapping programs,
Areas Identified in    considering enactment of legislation to facilitate revenue collection and
2011 Annual Report     examining opportunities to eliminate potential duplication through
                       streamlining, collocating, or consolidating efforts or administrative services.

                       Our assessment of progress made as of February 10, 2012, found that 4
                       (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. Appendix I presents GAO’s assessment of the overall progress
                       made in each area. We applied the following criteria in making these
                       overall assessments for the 81 areas. We determined that an area was:

                       •   “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 in that area were addressed.

                       As of February 10, 2012, the majority of 176 actions needed within the 81
                       areas identified by GAO have been partially addressed. Specifically, 23
                       (or 13 percent) were addressed; 31 99 (or 56 percent) were partially
                       addressed; 54 (or 31 percent) were not addressed. We applied the
                       following criteria in making these assessments.




                       31
                         In one instance, the legislative action needed required Congress to consider several
                       options, including allowing a tax credit to expire. Thus, because Congress did not renew
                       the provision, the action was considered addressed.




                       Page 37                                                                      GAO-12-449T
For legislative branch actions:

•   “addressed,” means relevant legislation is enacted and addresses all
    aspects of the action needed; 32

•   “partially addressed,” means a relevant bill has passed a committee,
    the House or Senate, or relevant legislation has been enacted, but
    only addressed part of the action needed; and

•   “not addressed,” means a bill may have been introduced, but did not
    pass out of a committee, or no relevant legislation has been
    introduced.

For executive branch actions:

•   “addressed,” means implementation of the action needed has been
    completed.

•   “partially addressed,” means the action needed is in development;
    started but not yet completed; and

•   “not addressed,” means the administration and/or agencies have
    made minimal or no progress toward implementing the action needed.

In addition to the actions reported above, Congress has held a number of
hearings and OMB has provided guidance to executive branch agencies
on areas that we identified that could benefit from increased attention and
ongoing oversight. Since the issuance of our March 2011 report, we have
testified numerous times on our first annual report and on specific issues
highlighted in the report.




32
  In situations where the action we identified as needed suggested that Congress should
let a provision expire, we classified it as “addressed” if Congress permitted such expiration
to happen.




Page 38                                                                         GAO-12-449T
                       Many federal efforts, including those related to protecting food and
GPRA Modernization     agriculture, providing homeland security, and ensuring a well trained and
Act Provides           educated workforce, transcend more than one agency, yet agencies face
                       a range of challenges and barriers when they attempt to work
Opportunities to       collaboratively. Both Congress and the executive branch have recognized
Address Duplication,   this, and in January 2011, the GPRA Modernization Act of 2010 (the Act)
Overlap, and           was enacted, updating the almost two-decades-old Government
                       Performance and Results Act. The Act establishes a new framework
Fragmentation          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 Education,
                       Entrepreneurship and Small Businesses, Job Training, Cybersecurity,
                       Information Technology Management, Procurement and Acquisition
                       Management, and Real Property Management—are discussed in our
                       2011 or 2012 annual 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.




                       Page 39                                                          GAO-12-449T
                        The areas identified in our annual reports are not intended to represent
GAO’s Approach to       the full universe of duplication, overlap, or fragmentation within the federal
Identifying Potential   government, but we have conducted a systematic examination across the
                        federal government to ensure that we have identified major instances of
Areas for               potential duplication, overlap, and fragmentation governmentwide by the
Examination             time we issue our third annual report in 2013.

                        Our examination involved a multiphased approach. First, to identify
                        potential areas of overlap, we examined the major budget functions and
                        sub-functions of the federal government as identified by OMB. 33 This was
                        particularly helpful in identifying issue areas involving multiple
                        government agencies. Second, our 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. 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.

                        Identifying, preventing, and addressing unnecessary duplication, overlap,
                        and fragmentation within the federal government is clearly challenging.
                        These are difficult issues to address because they may require agencies
                        and Congress to re-examine within and across various mission areas the
                        fundamental structure, operation, funding, and performance of a number
                        of long-standing federal programs or activities with entrenched
                        constituencies. Implementing the Act—such as its emphasis on
                        establishing priority outcome-oriented goals, including those covering
                        crosscutting policy areas—could play an important role in clarifying
                        desired outcomes, addressing program performance spanning multiple
                        organizations, and facilitating future actions to reduce unnecessary




                        33
                          The federal budget is divided into 18 broad areas (functions). Each function, in turn, is
                        divided into basic groupings of programs, called sub-functions.




                        Page 40                                                                         GAO-12-449T
duplication, overlap, and fragmentation. Continued oversight by Congress
and OMB will also be critical.


In conclusion Mr. Chairman, Ranking Member Cummings, and Members
of the Committee, opportunities exist for the Congress and federal
agencies to continue to address the identified actions needed in our 2011
and 2012 annual reports. Collectively, these reports show that, if the
actions are implemented, the government could potentially save tens of
billions of dollars annually. A number of the issues are difficult to address
and implementing many of the actions identified will take time and
sustained leadership. This concludes my prepared statement. I would be
pleased to answer any questions you may have. Thank you.

For further information on this testimony or our February 28, 2012,
reports, please contact 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 area summary in the
reports. Contact points for our Congressional Relations and Public Affairs
offices may be found on the last page of this statement.




Page 41                                                           GAO-12-449T
Appendix I: Overall Progress Made in
                                           Appendix I: Overall Progress Made in
                                           Each of the 81 Areas Identified in GAO’s 2011
                                           Annual Report


Each of the 81 Areas Identified in GAO’s 2011
Annual Report
                                           This appendix presents a summary of GAO’s assessment of the overall
                                           progress made in each of the 81 areas that we identified in our March
                                           2011 report 1 in which the Congress and the executive branch could take
                                           actions to reduce or eliminate potential duplication, overlap, and
                                           fragmentation or achieve other potential financial benefits. For each of the
                                           34 areas related to duplication, overlap, or fragmentation that GAO
                                           identified, table 3 presents GAO’s assessment of the overall progress
                                           made in implementing the actions needed in that area. For each of the 47
                                           areas where GAO identified cost saving or revenue enhancement
                                           opportunities, table 4 presents GAO’s assessment of the overall progress
                                           made in implementing the actions GAO identified.

Table 3: Overall Progress Made in Each of the GAO Identified Areas of Potential Duplication, Overlap, and Fragmentation, as
of February 10, 2012

Mission          Areas identified                                                                                    Assessment

Agriculture
                 1.


                 2.
                      Fragmented food safety system has caused inconsistent oversight, ineffective coordination,
                      and inefficient use of resources
                      Realigning DOD’s military medical command structures and consolidating common functions
                                                                                                                        ◐
Defense               could increase efficiency and result in projected savings ranging from $281 million to $460
                      million annually                                                                                  ◐
                 3.   Opportunities exist for consolidation and increased efficiencies to maximize response to
                      warfighter urgent needs                                                                           ◐
                 4.   Opportunities exist to avoid unnecessary redundancies and improve the coordination of
                      counter-improvised explosive device efforts                                                       ◐
                 5.   Opportunities exist to avoid unnecessary redundancies and maximize the efficient use of
                      intelligence, surveillance, and reconnaissance capabilities                                       ◐
                 6.   A departmentwide acquisition strategy could reduce DOD’s risk of costly duplication in
                      purchasing Tactical Wheeled Vehicles                                                              ◐
                 7.   Improved joint oversight of DOD’s prepositioning programs for equipment and supplies may
                      reduce unnecessary duplication                                                                    ◐
                 8.   DOD’s business systems modernization: opportunities exist for optimizing business operations
                      and systems                                                                                       ◐

                                           1
                                            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 42                                                                    GAO-12-449T
                                           Appendix I: Overall Progress Made in
                                           Each of the 81 Areas Identified in GAO’s 2011
                                           Annual Report




Mission         Areas identified                                                                                    Assessment

Economic
development
                9.   The efficiency and effectiveness of fragmented economic development programs are unclear
                                                                                                                       ◐
                10. The federal approach to surface transportation is fragmented, lacks clear goals, and is not
                    accountable for results                                                                            ◐
                                                                                                                       ○
                11. Fragmented federal efforts to meet water needs in the U.S.-Mexico border region have
                    resulted in an administrative burden, redundant activities, and an overall inefficient use of
                    resources

Energy          12. Resolving conflicting requirements could more effectively achieve federal fleet energy goals
                                                                                                                       ○
                13. Addressing duplicative federal efforts directed at increasing domestic ethanol production
                    could reduce revenue losses by more than $5.7 billion annually                                     ●
General
government
                14. Enterprise architectures: key mechanisms for identifying potential overlap and duplication
                                                                                                                       ◐
                15. Consolidating federal data centers provides opportunity to improve government efficiency
                                                                                                                       ◐
                16. Collecting improved data on interagency contracting to minimize duplication could help the
                    government leverage its vast buying power                                                          ◐
                17. Periodic reviews could help identify ineffective tax expenditures and redundancies in related
                    tax and spending programs, potentially reducing revenue losses by billions of dollars              ○
Health
                18. Opportunities exist for DOD and VA to jointly modernize their electronic health record
                    systems                                                                                            ◐
                19. VA and DOD need to control drug costs and increase joint contracting wherever it is cost-
                    effective                                                                                          ◐
Homeland
                20. The Department of Health and Human Services needs an overall strategy to better integrate
                    nationwide public health information systems                                                       ○
security/ Law
enforcement
                21. Strategic oversight mechanisms could help integrate fragmented interagency efforts to defend
                    against biological threats                                                                         ◐
                22. DHS oversight could help eliminate potential duplicating efforts of interagency forums in
                    securing the northern border                                                                       ○
                23. The Department of Justice plans actions to reduce overlap in explosives investigations, but
                    monitoring is needed to ensure successful implementation

                24. The Transportation Security Administration’s (TSA) security assessments on commercial
                                                                                                                       ●
                    trucking companies overlap with those of another agency, but efforts are under way to address
                    the overlap                                                                                        ◐

                                           Page 43                                                                   GAO-12-449T
                                           Appendix I: Overall Progress Made in
                                           Each of the 81 Areas Identified in GAO’s 2011
                                           Annual Report




Mission         Areas identified                                                                                           Assessment

                25. DHS could streamline mechanisms for sharing security-related information with public
                    transit agencies to help address overlapping information                                                  ◐
                26. FEMA needs to improve its oversight of grants and establish a framework for assessing
                    capabilities to identify gaps and prioritize investments                                                  ◐
International
affairs
                27. Lack of information sharing could create the potential for duplication of efforts between U.S.
                    agencies involved in development efforts in Afghanistan                                                   ◐
                28. Despite restructuring, overlapping roles and functions still exist at the Department of State’s
                    Arms Control and Nonproliferation Bureaus                                                                 ●
Social services 29. Actions needed to reduce administrative overlap among domestic food assistance programs
                                                                                                                              ○
                30. Better coordination of federal homelessness programs may minimize fragmentation and
                    overlap                                                                                                   ◐
Training,
                31. Further steps needed to improve cost-effectiveness and enhance services for transportation-
                    disadvantaged persons                                                                                     ◐
employment,
and education
                32. Multiple employment and training programs: providing information on collocating services and
                    consolidating administrative structures could promote efficiencies                                        ◐
                33. Teacher quality: proliferation of programs complicates federal efforts to invest dollars effectively
                                                                                                                              ◐
                34. Fragmentation of financial literacy efforts makes coordination essential
                                                                                                                              ◐
                                           Legend:

                                           ● = Addressed, meaning all actions needed in that area were addressed.

                                           ◐= Partially addressed, meaning at least one action needed in that area showed some
                                           progress toward implementation, but not all actions were addressed.

                                           ○ = Not addressed, meaning none of the actions needed in that area were addressed.
                                           Source: GAO analysis.



                                           As noted above, table 4 presents GAO’s assessment of the overall
                                           progress made in addressing the 47 cost-saving and revenue-enhancing
                                           areas.




                                           Page 44                                                                          GAO-12-449T
                                          Appendix I: Overall Progress Made in
                                          Each of the 81 Areas Identified in GAO’s 2011
                                          Annual Report




Table 4: Overall Progress Made to Address GAO-Identified Cost-Saving and Revenue-Enhancing Areas, as of
February 10, 2012

Mission         Areas identified                                                                                    Assessment

Agriculture
                35. Reducing some farm program payments could result in savings from
                    10 years to up to $5 billion annually
                                                                                                $800 million over
                                                                                                                       ○
                                                                                                                       ◐
                36. DOD should assess costs and benefits of overseas military presence options before
Defense             committing to costly personnel realignments and construction plans, thereby possibly saving
                    billions of dollars
                37. Total compensation approach is needed to manage significant growth in military personnel
                    costs                                                                                              ◐
                38. Employing best management practices could help DOD save money on its weapon systems
                    acquisition programs                                                                               ◐
                39. More efficient management could limit future costs of DOD’s spare parts inventory
                                                                                                                       ◐
                40. More comprehensive and complete cost data can help DOD improve the cost-effectiveness of
                    sustaining weapon systems                                                                          ◐
                41. Improved corrosion prevention and control practices could help DOD avoid billions in
                    unnecessary costs over time                                                                        ◐
Economic
development
                42. Revising the essential air service program could improve efficiency
                                                                                                                       ◐
                43. Improved design and management of the universal service fund as it expands to support
                    broadband could help avoid cost increases for consumers                                            ◐
                44. The Corps of Engineers should provide Congress with project-level information on
                    unobligated balances                                                                               ◐
Energy
                45. Improved management of federal oil and gas resources could result in approximately $1.8
                    billion over 10 years
                                          a
                                                                                                                       ◐
General
government
                46. Efforts to address governmentwide improper payments could result in significant cost savings
                                                                                                                       ◐
                47. Promoting competition for the over $500 billion in federal contracts could potentially save
                    billions of dollars over time                                                                      ◐
                48. Applying strategic sourcing best practices throughout the federal procurement system could
                    saves billions of dollars annually                                                                 ◐
                49. Adherence to new guidance on award fee contracts could improve agencies’ use of award fees
                    to produce savings                                                                                 ◐
                50. Agencies could realize cost savings of at least $3 billion by continued disposal of unneeded
                    federal real property                                                                              ◐
                51. Improved cost analyses used for making federal facility ownership and leasing decisions
                    could save tens of millions of dollars                                                             ◐
                52. OMB’s IT Dashboard reportedly has already resulted in $3 billion in savings and can further
                    help identify opportunities to invest more efficiently in information technology                   ◐
                53. Increasing electronic filing of individual income tax returns could reduce IRS’s processing
                    costs and increase revenues by hundreds of millions of dollars                                     ◐
                54. Using return on investment information to better target IRS enforcement could reduce the tax
                    gap; for example, a 1 percent reduction would increase tax revenues by $3.8 billion
                                                                                                        b
                                                                                                                       ◐
                                          Page 45                                                                    GAO-12-449T
                                     Appendix I: Overall Progress Made in
                                     Each of the 81 Areas Identified in GAO’s 2011
                                     Annual Report




Mission   Areas identified                                                                                          Assessment
          55. Better management of tax debt collection may resolve cases faster with lower IRS costs and
              increase debt collected                                                                                  ◐
          56. Broadening IRS’s authority to correct simple tax return errors could facilitate correct tax
              payments and help IRS avoid costly, burdensome audits                                                    ○
          57. Enhancing mortgage interest information reporting could improve tax compliance
                                                                                                                       ○
          58. More information on the types and uses of canceled debt could help IRS limit revenue losses of
              forgiven mortgage debt                                                                                   ◐
          59. Better information and outreach could help increase revenues by tens or hundreds of millions of
              dollars annually by addressing overstated real estate tax deductions                                     ◐
          60. Revisions to content and use of Form 1098-T could help IRS enforce higher education
              requirements and increase revenues                                                                       ◐
          61. Many options could improve the tax compliance of sole proprietors and begin to reduce their
              $68 billion portion of the tax gap                                                                       ○
          62. IRS could find additional businesses not filing tax returns by using third-party data, which
              show such businesses have billions of dollars in sales                                                   ◐
          63. Congress and IRS can help S corporations and their shareholders be more tax compliant,
              potentially increasing tax revenues by hundreds of millions of dollars each year                         ◐
          64. IRS needs an agencywide approach for addressing tax evasion among the at least 1 million
              networks of businesses and related entities                                                              ◐
          65. Opportunities exist to improve the targeting of the $6 billion research tax credit and reduce
              forgone revenue                                                                                          ○
          66. Converting the new markets tax credit to a grant program may increase program efficiency and
              significantly reduce the $3.8 billion 5-year revenue cost of the program                                 ○
          67. Limiting the tax-exempt status of certain governmental bonds could yield revenue
                                                                                                                       ○
                                                                                                                       ◐
          68. Adjusting civil tax penalties for inflation potentially could increase revenues by tens of millions
              of dollars per year, not counting any revenues that may result from maintaining the penalties’
              deterrent effect
          69. IRS may be able to systematically identify nonresident aliens reporting unallowed tax
              deductions or credits                                                                                    ●
          70. Tracking undisbursed balances in expired grant accounts could facilitate the reallocation of
              scarce resources or the return of funding to the Treasury                                                ○
Health
          71. Preventing billions in Medicaid improper payments requires sustained attention and action by
              CMS                                                                                                      ◐
          72. Federal oversight over Medicaid supplemental payments needs improvement, which could
              lead to substantial cost savings                                                                         ○
          73. Better targeting of Medicare’s claims review could reduce improper payments
                                                                                                                       ◐
          74. Potential savings in Medicare’s payment for health care
                                                                                                                       ◐

                                     Page 46                                                                         GAO-12-449T
                                          Appendix I: Overall Progress Made in
                                          Each of the 81 Areas Identified in GAO’s 2011
                                          Annual Report




Mission         Areas identified                                                                                              Assessment


                                                                                                                                   ◐
Homeland
                75. DHS’s management of acquisitions could be strengthened to reduce cost overruns and
security/ Law
                    schedule and performance shortfalls
enforcement
                76. Improvements in managing research and development could help reduce inefficiencies and
                    costs for homeland security                                                                                    ◐
                77. Validation of TSA’s behavior-based screening program is needed to justify funding or
                    expansion                                                                                                      ◐
                78. More efficient baggage screening systems could result in about $470 million in reduced TSA
                    personnel costs over the next 5 years                                                                          ◐
                79. Clarifying availability of certain customs fee collections could produce a one-time savings of
                    $640 million                                                                                                   ◐
Income
security
                80. Social Security needs data on pensions from noncovered earnings to better enforce offsets
                    and ensure benefit fairness, estimated to result in $2.4-$2.9 billion savings over 10 years                    ○
International
affairs
                81. Congress could pursue several options to improve collection of antidumping and
                    countervailing duties.                                                                                         ○
                                          Legend:

                                          ● = Addressed, meaning all actions needed in that area were addressed.

                                          ◐= Partially addressed, meaning at least one action needed in that area showed some
                                          progress toward implementation, but not all actions were addressed.

                                          ○ = Not addressed, meaning none of the actions needed in that area were addressed.
                                          Source: GAO analysis.
                                          a
                                           The Department of the Interior, Bureau of Land Management, updated the anticipated revenues from
                                          $1.75 billion to $1.8 billion in its fiscal year 2012 budget justification.
                                          b
                                           The net tax gap was updated in 2012 and estimated to be $385 billion for the 2006 tax year. Thus, a
                                          1 percent reduction would increase tax revenues by $3.8 billion.




                                          Page 47                                                                               GAO-12-449T
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