United States Government Accountability Office GAO Report to Congressional Addressees February 2012 Follow-up on 2011 Report: Status of Actions Taken to Reduce Duplication, Overlap, and Fragmentation, Save Tax Dollars, and Enhance Revenue GAO-12-453SP Contents Letter 1 Enclosure I Overall Progress Made in Each of the 81 Areas 7 Enclosure II Progress Update for Each of the 176 Actions Needed within the 81 Areas 13 Enclosure III Scope and Methodology 110 Tables Table 1: Overall Progress Made in Each of the GAO Identified Areas of Potential Duplication, Overlap, and Fragmentation, as of February 10, 2012 7 Table 2: Overall Progress Made to Address GAO-Identified Cost-Saving and Revenue-Enhancing Areas, as of February 10, 2012 10 Page i GAO-12-453SP Follow-up on 2011 Report Abbreviations ASC alternative simplified credit ATF Bureau of Alcohol, Tobacco, Firearms, and Explosives BEST Border Enforcement Security Task Force BLM Bureau of Land Management CBP Customs and Border Protection CDE Community Development Entity CIO Chief Information Officer CMS Centers for Medicare & Medicaid Services Commerce Department of Commerce CDBG Community Development Block Grant Coordinating Interagency Transportation Coordinating Council on Council Access and Mobility Corps U.S. Army Corps of Engineers CPRA Civilian Real Property Realignment Act DHS Department of Homeland Security DOD Department of Defense DOT Department of Transportation EAS Essential Air Service EDA Economic Development Administration ESEA Elementary and Secondary Education Act of 1965 FAM Foreign Affairs Manual FBI Federal Bureau of Investigation FCC Federal Communications Commission FEMA Federal Emergency Management Agency FMCSA Federal Motor Carrier Safety Administration GPRAMA Government Performance and Results Modernization Act of 2010 GSA General Services Administration HHS Department of Health and Human Services HUD Department of Housing and Urban Development IBET Integrated Border Enforcement Team IED improvised explosive device iEHR integrated electronic health record IILCM integrated investment life cycle model Interior Department of the Interior IPERA Improper Payments Elimination and Recovery Act of 2010 IRS Internal Revenue Service IT information technology JIEDDO Joint Improvised Explosive Device Defeat Organization Justice Department of Justice Page ii GAO-12-453SP Follow-up on 2011 Report Labor Department of Labor MOU memorandum of understanding MPPR multiple procedure payment reduction NSS National Security Staff OFPP Office of Federal Procurement Policy OMB Office of Management and Budget O&S operating and support PAR Performance and Accountability Report RAC recovery audit contractor R&D research and development ROI return on investment SBA Small Business Administration SIOC Strategic Information Operation Centers SPOT Screening of Passengers by Observation Techniques S&T Science and Technology Directorate State Department of State TANF Temporary Assistance for Needy Families T&E testing and evaluation Treasury Department of the Treasury TRIAD Transit and Rail Intelligence Awareness Daily TSA Transportation Security Administration USAID U.S. Agency for International Development USDA U.S. Department of Agriculture USICH U.S. Interagency Council on Homelessness VA Department of Veterans Affairs VEETC Volumetric Ethanol Excise Tax Credit VR vocational rehabilitation This is a work of the U.S. government and is not subject to copyright protection in the United States. The published product may be reproduced and distributed in its entirety without further permission from GAO. However, because this work may contain copyrighted images or other material, permission from the copyright holder may be necessary if you wish to reproduce this material separately. Page iii GAO-12-453SP Follow-up on 2011 Report United States Government Accountability Office Washington, DC 20548 February 28, 2012 Congressional Addressees In March 2011, GAO issued its first annual report to the Congress on potential duplication, overlap, and fragmentation in the federal government.1 The report also identified opportunities to achieve cost savings and enhance revenues. We identified 81 areas—which span a wide range of government missions2—with a total of 176 actions3 that the Congress and the executive branch could take to reduce or eliminate unnecessary duplication, overlap, and fragmentation or achieve other potential financial benefits. We also presented areas where programs may be able to achieve greater efficiencies or become more effective in providing government services. In many areas, we suggested actions— identifying some new options, as well as underscoring numerous existing GAO recommendations—that policymakers could consider. This status report provides an overall assessment of progress in implementing actions for the 81 areas, as well as an assessment of each of the 176 suggested actions. As of February 10, 2012, the Congress and the executive branch had made some progress in addressing the majority of the 81 areas that we identified, including the implementation of all actions in 4 areas; however, additional steps are needed to fully implement the remaining actions to achieve associated benefits. GAO suggested a wide range of actions for the Congress and the executive branch to consider, such as developing strategies to better coordinate fragmented efforts, implementing executive 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). This report was issued in response to a new statutory requirement that GAO identify federal programs, agencies, offices, and initiatives, either within departments or governmentwide, which have duplicative goals or activities. Congress asked GAO to conduct this work and to report annually on our findings. See Pub. L. No. 111-139, §21, 124 Stat. 29 (2010), 31 U.S.C. § 712 Note. 2 Agriculture, defense, economic development, energy, general government, health, homeland security, international affairs, and social services were among the government missions included in the March 2011 report. 3 These actions were identified in the “Actions Needed” section for each respective issue area. Page 1 GAO-12-453SP Follow-up on 2011 Report initiatives to improve oversight and evaluation of overlapping programs, considering enactment of legislation to facilitate revenue collection, and examining opportunities to eliminate potential duplication through streamlining, collocating, or consolidating program efforts or administrative services. GAO’s specific assessment of progress as of February 10, 2012, showed 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. Enclosure I presents GAO’s assessment of the overall progress made in each area. GAO 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 needed 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 addressed4; 99 (or 56 percent) were partially addressed; 54 (or 31 percent) were not addressed5. Enclosure II presents a progress update for each of the 176 legislative and executive actions needed that GAO identified within the 81 areas, as well as GAO’s assessment of that progress. GAO applied the following criteria in making these assessments. 4 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. 5 Members of Congress have introduced a wide range of bills and amendments, that if enacted, could help address a number of the issues raised in our March 2011 report. However, for the purposes of this report, only those bills that have passed a committee are discussed in the progress updates contained in Enclosure II. Page 2 GAO-12-453SP Follow-up on 2011 Report For legislative branch actions: “addressed,” means relevant legislation is enacted and addresses all aspects of the action needed;6 “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; “not addressed,” means the administration and/or agencies have made minimal or no progress toward implementing the action needed. In addition to the actions taken reported above, Congress has held a number of hearings and the Office of Management and Budget (OMB) has provided guidance to executive branch agencies on areas that GAO identified that could benefit from increased attention and ongoing oversight. Since the issuance of our March 2011 report, GAO has testified numerous times on its first annual report and on specific issues highlighted in the report. On August 17, 2011, OMB issued its Fiscal Year 2013 Budget Guidance, which stated that agencies’ 2013 budget submissions and management plans should take into consideration areas of duplication or overlap identified by GAO, as well as by others. The guidance also advised agencies to take a number of other steps to achieve efficiency increases, such as identifying and including in their 6 In situations where our action needed suggested that Congress should let a provision expire, we classified it as “addressed” if Congress permitted such expiration to happen. Page 3 GAO-12-453SP Follow-up on 2011 Report 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. Streamlining federal efforts, reducing government costs, and enhancing revenue collections can offer financial and other benefits. Today, and concurrently with this report, GAO issued its second annual report to Congress in response to the statutory requirement that GAO identify federal programs, agencies, offices, and initiatives with duplicative goals or activities.7 That report identifies 51 additional issue areas and numerous actions within those issue areas that, if implemented, may further improve programs’ effectiveness and efficiency, achieve cost savings, and enhance revenues. Opportunities exist for the Congress and federal agencies to continue to address the identified actions needed in our March 2011 and February 2012 reports. Collectively, these reports show that, if the actions are implemented, the government could 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. To prepare this report, we conducted our work from July 2011 through February 2012 in accordance with all sections of GAO’s Quality Assurance Framework that are relevant to our objectives. The framework requires that we plan and perform the engagement to meet our stated objectives and to discuss any limitations in our work. We believe that the information and data obtained, and the analysis conducted, provide a reasonable basis for any findings and conclusions in this product. GAO provided the draft to the agencies involved and OMB for their comments and incorporated comments as appropriate. The information in this report is current as of February 10, 2012 and does not reflect any actions that might have been taken after that date. Enclosure III contains additional details of our scope and methodology. 7 GAO, 2012 Annual Report: Opportunities to Reduce Duplication, Overlap and Fragmentation, Achieve Savings, and Enhance Revenue, GAO-12-342SP (Washington, D.C.: February 28, 2012). Page 4 GAO-12-453SP Follow-up on 2011 Report This report was prepared under the coordination of Janet St. Laurent, Managing Director, Defense Capabilities and Management, who may be reached at (202) 512-4300, or email@example.com and Zina Merritt, Director, Defense Capabilities and Management, who may be reached at (202) 512-4300 or firstname.lastname@example.org. Gene L. Dodaro Comptroller General of the United States Page 5 GAO-12-453SP Follow-up on 2011 Report List of Congressional Addressees The Honorable Daniel K. Inouye Chairman The Honorable Thad Cochran Vice Chairman Committee on Appropriations United States Senate The Honorable Kent Conrad Chairman The Honorable Jeff Sessions Ranking Member Committee on the Budget United States Senate The Honorable Joseph I. Lieberman Chairman The Honorable Susan M. Collins Ranking Member Committee on Homeland Security and Governmental Affairs United States Senate The Honorable Harold Rogers Chairman The Honorable Norman D. Dicks Ranking Member Committee on Appropriations House of Representatives The Honorable Paul Ryan Chairman The Honorable Chris Van Hollen Ranking Member Committee on the Budget House of Representatives The Honorable Darrell Issa Chairman The Honorable Elijah E. Cummings Ranking Member Committee on Oversight and Government Reform House of Representatives The Honorable Scott Brown United States Senate The Honorable Tom Coburn United States Senate The Honorable Claire McCaskill United States Senate The Honorable Mark R. Warner United States Senate Page 6 GAO-12-453SP Follow-up on 2011 Report Enclosure I: Overall Progress Made in Each of the 81 Areas This enclosure 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 report1 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 1 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 2 presents GAO’s assessment of the overall progress made in implementing the actions GAO identified. Table 1: 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 Page Agriculture 1. Fragmented food safety system has caused inconsistent oversight, ineffective coordination, and inefficient use of resources ◐ 14 ◐ 2. Realigning DOD’s military medical command structures and consolidating Defense common functions could increase efficiency and result in projected savings 15 ranging from $281 million to $460 million annually 3. Opportunities exist for consolidation and increased efficiencies to maximize response to warfighter urgent needs ◐ 16 4. Opportunities exist to avoid unnecessary redundancies and improve the coordination of counter-improvised explosive device efforts ◐ 17 5. Opportunities exist to avoid unnecessary redundancies and maximize the efficient use of intelligence, surveillance, and reconnaissance capabilities ◐ 18 6. A departmentwide acquisition strategy could reduce DOD’s risk of costly duplication in purchasing Tactical Wheeled Vehicles ◐ 19 7. Improved joint oversight of DOD’s prepositioning programs for equipment and supplies may reduce unnecessary duplication ◐ 20 8. DOD’s business systems modernization: opportunities exist for optimizing business operations and systems ◐ 21 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 7 GAO-12-453SP Follow-up on 2011 Report Mission Areas identified Assessment Page Economic development 9. The efficiency and effectiveness of fragmented economic development programs are unclear ◐ 23 10. The federal approach to surface transportation is fragmented, lacks clear goals, and is not accountable for results ◐ 25 ○ 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 26 overall inefficient use of resources Energy 12. Resolving conflicting requirements could more effectively achieve federal fleet energy goals ○ 27 13. Addressing duplicative federal efforts directed at increasing domestic ethanol production could reduce revenue losses by more than $5.7 billion annually ● 28 General government 14. Enterprise architectures: key mechanisms for identifying potential overlap and duplication ◐ 29 15. Consolidating federal data centers provides opportunity to improve government efficiency ◐ 30 16. Collecting improved data on interagency contracting to minimize duplication could help the government leverage its vast buying power ◐ 31 ○ 17. Periodic reviews could help identify ineffective tax expenditures and redundancies in related tax and spending programs, potentially reducing 32 revenue losses by billions of dollars Health 18. Opportunities exist for DOD and VA to jointly modernize their electronic health record systems ◐ 34 19. VA and DOD need to control drug costs and increase joint contracting wherever it is cost-effective ◐ 35 20. HHS needs an overall strategy to better integrate nationwide public health information systems ○ 37 Homeland security/ Law enforcement 21. Strategic oversight mechanisms could help integrate fragmented interagency efforts to defend against biological threats ◐ 38 22. DHS oversight could help eliminate potential duplicating efforts of interagency forums in securing the northern border ○ 39 23. The Department of Justice plans actions to reduce overlap in explosives investigations, but monitoring is needed to ensure successful implementation ● 40 24. TSA’s security assessments on commercial trucking companies overlap with those of another agency, but efforts are under way to address the overlap ◐ 41 25. DHS could streamline mechanisms for sharing security-related information with public transit agencies to help address overlapping information ◐ 42 26. FEMA needs to improve its oversight of grants and establish a framework for assessing capabilities to identify gaps and prioritize investments ◐ 43 Page 8 GAO-12-453SP Follow-up on 2011 Report Mission Areas identified Assessment Page 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 ◐ 46 28. Despite restructuring, overlapping roles and functions still exist at State’s Arms Control and Nonproliferation Bureaus ● 47 Social services 29. Actions needed to reduce administrative overlap among domestic food assistance programs ○ 48 30. Better coordination of federal homelessness programs may minimize fragmentation and overlap ◐ 49 31. Further steps needed to improve cost-effectiveness and enhance services for transportation-disadvantaged persons ◐ 50 Training, employment, 32. Multiple employment and training programs: providing information on colocating and education services and consolidating administrative structures could promote efficiencies ◐ 51 33. Teacher quality: proliferation of programs complicates federal efforts to invest dollars effectively ◐ 53 34. Fragmentation of financial literacy efforts makes coordination essential ◐ 54 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 2 presents GAO’s assessment of the overall progress made in addressing the 47 cost-saving and revenue-enhancing areas. Page 9 GAO-12-453SP Follow-up on 2011 Report Table 2: Overall Progress Made to Address GAO Identified Cost-Saving and Revenue-Enhancing Areas, as of February 10, 2012 Mission Areas identified Assessment Page Agriculture 35. Reducing some farm program payments could result in savings from $800 million over 10 years to up to $5 billion annually ○ 56 Defense 36. DOD should assess costs and benefits of overseas military presence options before committing to costly personnel realignments and construction plans, thereby possibly saving billions of dollars ◐ 57 37. Total compensation approach is needed to manage significant growth in military personnel costs ◐ 58 38. Employing best management practices could help DOD save money on its weapon systems acquisition programs ◐ 59 39. More efficient management could limit future costs of DOD’s spare parts inventory ◐ 60 40. More comprehensive and complete cost data can help DOD improve the cost- effectiveness of sustaining weapon systems ◐ 61 41. Improved corrosion prevention and control practices could help DOD avoid billions in unnecessary costs over time ◐ 63 Economic development 42. Revising the essential air service program could improve efficiency ◐ 64 43. Improved design and management of the universal service fund as it expands to support broadband could help avoid cost increases for consumers ◐ 66 44. The Corps of Engineers should provide Congress with project-level information on unobligated balances ◐ 67 Energy 45. Improved management of federal oil and gas resources could result in approximately $1.8 billion over 10 yearsa ◐ 68 General government 46. Efforts to address governmentwide improper payments could result in significant cost savings ◐ 70 47. Promoting competition for the over $500 billion in federal contracts could potentially save billions of dollars over time ◐ 71 48. Applying strategic sourcing best practices throughout the federal procurement system could saves billions of dollars annually ◐ 72 49. Adherence to new guidance on award fee contracts could improve agencies’ use of award fees to produce savings ◐ 73 50. Agencies could realize cost savings of at least $3 billion by continued disposal of unneeded federal real property ◐ 74 51. Improved cost analyses used for making federal facility ownership and leasing decisions could save tens of millions of dollars ◐ 75 52. The Office of Management and Budget’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 ◐ 76 53. Increasing electronic filing of individual income tax returns could reduce IRS’s processing costs and increase revenues by hundreds of millions of dollars ◐ 77 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 billion b ◐ 78 Page 10 GAO-12-453SP Follow-up on 2011 Report Mission Areas identified Assessment Page 55. Better management of tax debt collection may resolve cases faster with lower IRS costs and increase debt collected ◐ 79 56. Broadening IRS’s authority to correct simple tax return errors could facilitate correct tax payments and help IRS avoid costly, burdensome audits ○ 80 57. Enhancing mortgage interest information reporting could improve tax compliance ○ 81 58. More information on the types and uses of canceled debt could help IRS limit revenue losses of forgiven mortgage debt ◐ 82 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 ◐ 83 60. Revisions to content and use of Form 1098-T could help IRS enforce higher education requirements and increase revenues ◐ 84 61. Many options could improve the tax compliance of sole proprietors and begin to reduce their $68 billion portion of the tax gap ○ 85 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 ◐ 86 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 ◐ 87 64. IRS needs an agencywide approach for addressing tax evasion among the at least 1 million networks of businesses and related entities ◐ 88 65. Opportunities exist to improve the targeting of the $6 billion research tax credit and reduce forgone revenue ○ 89 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 ○ 90 67. Limiting the tax-exempt status of certain governmental bonds could yield revenue ○ 91 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 ◐ 92 69. IRS may be able to systematically identify nonresident aliens reporting unallowed tax deductions or credits ● 93 70. Tracking undisbursed balances in expired grant accounts could facilitate the reallocation of scarce resources or the return of funding to the Treasury ○ 94 Health 71. Preventing billions in Medicaid improper payments requires sustained attention and action by CMS ◐ 95 72. Federal oversight over Medicaid supplemental payments needs improvement, which could lead to substantial cost savings ○ 96 73. Better targeting of Medicare’s claims review could reduce improper payments ◐ 97 74. Potential savings in Medicare’s payment for health care ◐ 98 Page 11 GAO-12-453SP Follow-up on 2011 Report Mission Areas identified Assessment Page Homeland security/ Law enforcement 75. DHS’s management of acquisitions could be strengthened to reduce cost overruns and schedule and performance shortfalls ◐ 100 76. Improvements in managing research and development could help reduce inefficiencies and costs for homeland security ◐ 102 77. Validation of TSA’s behavior-based screening program is needed to justify funding or expansion ◐ 104 78. More efficient baggage screening systems could result in about $470 million in reduced TSA personnel costs over the next 5 years ◐ 106 79. Clarifying availability of certain customs fee collections could produce a one- time savings of $640 million ◐ 107 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 ○ 108 International affairs 81. Congress could pursue several options to improve collection of antidumping and countervailing duties. ○ 109 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 12 GAO-12-453SP Follow-up on 2011 Report Enclosure II: Progress Update for Each of the 176 Actions Needed within the 81 Areas Page 13 GAO-12-453SP Follow-up on 2011 Report Agriculture Overall assessment 1. Fragmented food safety system has caused ◐ inconsistent oversight, ineffective coordination, and inefficient use of resources Action 1 Action 1 progress The Office of Management and Budget OMB participates in the President’s Food Safety Working Group, created in (OMB) in consultation with the relevant March 2009, to coordinate federal efforts and set food safety goals to make food agencies should develop a safer. OMB and the federal agencies that have food safety responsibilities have governmentwide performance plan for not developed a plan to improve coordination and provide a comprehensive food safety that includes results- picture of, or performance measures for, the federal government’s food safety oriented goals and performance efforts. However, governmentwide coordination may be fostered by the measures and a discussion of provisions of the FDA Food Safety Modernization Act that require interagency strategies and resources. coordination, including the preparation of certain reports and plans.1 For example, in April 2011, the Department of Health and Human Services (HHS) ◐ issued its first annual report on interagency coordination and cooperation on Partially addressed food safety inspections, as required by the act. In addition, in December 2011 the Food Safety Working Group released a report describing the steps it has taken over the past 2 years to improve food safety, its plans for the next year, and how the agencies are coordinating on these efforts. Taken together, these reports by HHS and the Food Safety Working Group are first steps that may help address interagency coordination on food safety and inform a governmentwide plan. Action 2 Action 2 progress Congress should consider No legislative action identified. commissioning the National Academy of Sciences or a blue ribbon panel to conduct a detailed analysis of alternative food safety organizational structures. Not addressed ￮ Action 3 Action 3 progress Congress should consider enacting The FDA Food Safety Modernization Act, which was signed into law in January comprehensive risk-based food safety 2011, is intended to strengthen a major part of the food safety system, but does legislation. not apply to the entire federal food safety system or create a new risk-based food safety structure. The law does, however, include several sections that Not addressed ￮ require interagency coordination on food safety oversight in areas such as inspections, seafood safety, and food imports. For more information, contact Lisa Shames at (202) 512-3841 or email@example.com. See GAO-11-318SP Actions Needed 1 Pub. L. No. 111-353 (2011). Page 14 GAO-12-453SP Follow-up on 2011 Report Defense Overall assessment 2. Realigning DOD’s military medical command ◐ structures and consolidating common functions could increase efficiency and result in projected savings ranging 2 from $281 million to $460 million annually Action 1 Action 1 progress The Department of Defense (DOD) In June 2011, the Deputy Secretary of Defense commissioned a task force to could take action to further assess provide a report that includes an assessment of the governance of the military alternatives for restructuring the health system as a whole and in multi-service medical markets. This review was governance structure of the military completed in September 2011, but the final report, with recommendations, has health care system. not been officially released. According to senior DOD officials, this report will be used as the basis for a report required by the National Defense Authorization Act for Fiscal Year 2012;3 however, the act did not establish a completion date for Partially addressed ◐ the report. Specifically, the act requires the Secretary of Defense to submit to Congress a report that includes, among other things, a description of options developed and considered for the military health system’s governance model, analysis of the strengths and weaknesses of each option, and estimated costs savings of each option, if any. The act also mandated that the Comptroller General conduct a detailed review of those governance options, and report on that review to Congress not later than 180 days after the submission of the Secretary of Defense’s report. The act restricts the ability of the Secretary of Defense to restructure or reorganize the military health system until 120 days after the Comptroller General’s report is submitted. For more information, contact Brenda S. Farrell at (202) 512-3604 or 2 FarrellB@gao.gov. CNA’s Center for Naval Analyses developed the savings estimates, and GAO adjusted the estimates from 2005 to 2010 dollars. 3 See GAO-11-318SP Actions Needed Pub. L. No. 112-81, § 716 (2011). Page 15 GAO-12-453SP Follow-up on 2011 Report Defense Overall assessment 3. Opportunities exist for consolidation and increased ◐ efficiencies to maximize response to warfighter urgent needs Action 1 Action 1 progress The Department of Defense (DOD) In March 2011, DOD began an evaluation of the department’s processes for the needs to perform its own analysis of rapid fielding of capabilities in response to urgent operational needs, as required options aimed at potential by the Ike Skelton National Defense Authorization Act for Fiscal Year 2011;4 consolidations and increased however, the department has not yet completed its evaluation. According to the efficiencies in streamlining its urgent department, this evaluation, which was due in January 2012, will be delivered needs entities and processes. This later in 2012 and will examine areas of duplication identified by GAO, evaluate analysis should carefully weigh the the potential for consolidations, and describe specific policy actions implemented advantages and disadvantages of the to improve the department's overall urgent needs processes. DOD officials also options identified to determine the noted other actions it has taken, including the establishment of a senior-level optimal course of action. working group in June 2011 to provide oversight of DOD-wide efforts to fulfill urgent needs. Also, DOD issued guidance in January 2012, in part to standardize the definition of an urgent operational need. Partially addressed ◐ For more information, contact Cary Russell at (404) 679-1808 or firstname.lastname@example.org. See GAO-11-318SP Actions Needed 4 See Pub. L. No. 111-383, § 804(a) (2011) (10 U.S.C. § 2302 note). Page 16 GAO-12-453SP Follow-up on 2011 Report Defense Overall assessment 4. Opportunities exist to avoid unnecessary redundancies ◐ and improve the coordination of counter-improvised explosive device efforts Action 1 Action 1 progress The Department of Defense’s (DOD) JIEDDO is currently developing a new information technology architecture, and senior leadership, to include the plans to develop a database for counter-IED efforts across DOD as part of this Deputy Secretary of Defense, should new architecture. However, this effort is in the conceptualization stage, and DOD consider what actions the department officials do not anticipate completion before the end of fiscal year 2012. Further, can take to assure that the Joint according to JIEDDO, in early 2012 DOD plans to revise the directive Improvised Explosive Device Defeat establishing JIEDDO to require the services and DOD agencies to report Organization (JIEDDO) can centrally counter-IED initiatives to JIEDDO. collect information and coordinate efforts, and whether it should enhance its tools to ensure all information on departmentwide counter-improvised explosive device (IED) programs is centrally collected and evaluated to limit unnecessary duplication, overlap, and fragmentation. Partially addressed ◐ For more information, contact Cary Russell at (404) 679-1808 or email@example.com. See GAO-11-318SP Actions Needed Page 17 GAO-12-453SP Follow-up on 2011 Report Defense Overall assessment 5. Opportunities exist to avoid unnecessary redundancies ◐ and maximize the efficient use of intelligence, surveillance, and reconnaissance capabilities Action 1 Action 1 progress The Department of Defense (DOD) DOD is designing an intelligence, surveillance, and reconnaissance architecture, could develop an integrated called the “Defense Intelligence Information Enterprise,” to provide a common intelligence, surveillance, and framework of tools for security and intelligence sharing. DOD plans to begin reconnaissance architecture, including implementing the Defense Intelligence Information Enterprise framework in fiscal manned and unmanned systems, to year 2013 and intends to revise its departmentwide strategic goals in its next align departmentwide strategic goals. intelligence, surveillance, and reconnaissance strategic plan. Partially addressed ◐ Action 2 Action 2 progress DOD could continue to develop tools— DOD continues to explore collaborative portfolio management tools that capture such as the Joint Staff’s decision operational needs and consider the measured or projected performance of support tool—and performance intelligence, surveillance, and reconnaissance systems. The Office of the Under measures to inform investment Secretary of Defense for Intelligence is collaborating with the Joint Staff to decisions. enhance their developmental decision support tool to address operational requirements and inform investment decisions across its intelligence enterprise. Partially addressed ◐ DOD has not yet completed development of this tool. In addition, DOD plans to develop and include performance metrics in its 2012 strategic plan. Action 3 Action 3 progress DOD could establish linkages between Recent agreements between the Director of National Intelligence and the Under intelligence, surveillance, and Secretary of Defense (Intelligence) have resulted in the creation of the reconnaissance acquisition plans and Consolidated Intelligence Guidance, which is expected to help synchronize strategic goals to better inform investments between the Director of National Intelligence and DOD. According investment decisions. to DOD, this guidance, issued for fiscal year 2012, is goal-based and is designed to improve effectiveness in managing the shorter-term decisions in Partially addressed ◐ future defense budgets, acquisition plans, and investment decisions. DOD officials stated that this guidance has resulted in better alignment of investments with strategic goals. DOD plans to explicitly address the linkages between strategic goals and planned investments in the next intelligence, surveillance, and reconnaissance strategic plan scheduled for release in spring 2012. Action 4 Action 4 progress DOD could develop and enforce DOD stated that it is developing new methodologies for intelligence information commonality and interoperability sharing, such as the Distributed Common Ground/Surface System, to facilitate standards for sharing of intelligence, integration of intelligence capabilities, provide tools and systems that can work surveillance, and reconnaissance data together to fulfill mission requirements, and share information among war and establish timelines for fighting and coalition partners. DOD officials stated that the department plans to implementation. include standards for information sharing and timelines for information sharing in its new Defense Intelligence Information Enterprise framework. Partially addressed ◐ For more information, contact Brian Lepore at (202) 512-4523 or firstname.lastname@example.org. See GAO-11-318SP Actions Needed Page 18 GAO-12-453SP Follow-up on 2011 Report Defense Overall assessment 6. A departmentwide acquisition strategy could reduce ◐ DOD’s risk of costly duplication in purchasing Tactical Wheeled Vehicles Action 1 Action 1 progress The Department of Defense (DOD) DOD has taken steps to begin implementing this action; however, the needs to complete its planned department has not completed a tactical wheeled vehicle strategy or conducted departmentwide tactical wheeled a cost-benefit analysis for the acquisition and support costs of various programs. vehicle strategy to determine (1) what The Office of the Under Secretary of Defense for Acquisition, Technology, and capabilities the Joint Light Tactical Logistics has initiated a Ground Vehicle Portfolio Review, through which it plans Vehicle will have, (2) the scope and to develop a unified, comprehensive, long-term tactical wheeled vehicle strategy cost of any recapitalization of other that describes to key stakeholders how DOD plans to acquire and sustain an vehicles or production effort, and (3) operationally relevant fleet. According to DOD officials, the portfolio review is the sustainment cost of placing the planned to be continuous; outputs will support relevant program milestone Mine Resistant Ambush Protected decisions and annual program reviews, and will be closely coordinated with the family of vehicles in its force structures. service strategies. Phase 1 of the portfolio review, which is intended to build a DOD should include in the strategy a comprehensive description of the current Tactical Wheeled Vehicle and Ground cost-benefit analysis that could Combat Vehicle fleets, is under way. Milestones for subsequent phases will be minimize the collective acquisition and established during Phase 1. Subsequent phases of the portfolio review should support costs of the various tactical benefit from the knowledge resulting from planned near-term decisions, wheeled vehicle programs and reduce including budget decisions, regarding Joint Light Tactical Vehicle capabilities, the risk of unplanned overlap or High Mobility Multipurpose Wheeled Vehicle recapitalization, sustainment of the duplication. Mine Resistant Ambush Protected family of vehicles, and budgeted acquisition and support costs associated with those vehicles. In addition, the Army and Marine Corps updated their individual tactical wheeled vehicle strategies in Partially addressed ◐ January 2011 and June 2011, respectively. Additionally, in March 2011, as directed by the Senate Armed Services Committee, both services provided congressional defense committees with acquisition strategies and plans for recapitalizing their respective High Mobility Multipurpose Wheeled Vehicle fleets. These plans are currently under review in light of the department’s ongoing work to align strategic priorities and its budget. For more information, contact Belva Martin at (202) 512-4841 or email@example.com. See GAO-11-318SP Actions Needed Page 19 GAO-12-453SP Follow-up on 2011 Report Defense Overall assessment 7. Improved joint oversight of DOD’s prepositioning ◐ programs for equipment and supplies may reduce unnecessary duplication Action 1 Action 1 progress The Secretary of Defense should direct DOD has taken some actions to strengthen joint oversight of prepositioned the Under Secretary of Defense for stocks. For example, DOD broadened membership of its Global Prepositioning Acquisition, Technology, and Logistics, Materiel Capabilities Working Group to include a core member from the Office of in coordination with the Chairman of the Under Secretary of Defense for Policy, the office responsible for developing the Joint Chiefs of Staff, to strengthen related departmentwide prepositioned stocks strategy. DOD has also added joint the Department of Defense’s (DOD) staff representatives to this group. However, additional action is needed to codify joint oversight of its prepositioned lines of authority and reporting between the working group and DOD stocks through such actions as components. clarifying lines of authority and reporting between the joint prepositioning working group and other components within DOD. Partially addressed ◐ Action 2 Action 2 progress The Secretary of Defense should direct DOD officials have stated that the department is examining opportunities to the Chairman of the Joint Chiefs of synchronize DOD prepositioning efforts as part of two ongoing departmentwide Staff and the Secretaries of the military studies to determine how to manage prepositioned stocks. One study was services to synchronize at a planned for completion in the fall of 2011, but has not yet been released. departmentwide level, as appropriate, According to a DOD official, the other study is projected for completion in 2012. the services’ prepositioning programs However, DOD has not yet completed updating its requirements or identifying so that they include updated specific ways that prepositioned assets can be managed more efficiently. requirements and maximize efficiency in managing prepositioned assets and activities across the department to reduce unnecessary duplication. Partially addressed ◐ Action 3 Action 3 progress The Secretary of Defense should direct No executive action taken. the Office of the Under Secretary of Defense for Policy to develop strategic guidance that includes planning and resource priorities, linking the department’s current and future needs for prepositioned stocks to evolving national defense objectives. Not addressed ￮ For more information, contact Cary Russell at (404) 679-1808 or firstname.lastname@example.org. See GAO-11-318SP Actions Needed Page 20 GAO-12-453SP Follow-up on 2011 Report Overall assessment Defense 8. DOD’s business systems modernization: opportunities ◐ exist for optimizing business operations and systems Action 1 Action 1 progress The Department of Defense (DOD) DOD continues to release updates to its corporate enterprise architecture, but needs to develop supporting the architecture has yet to be federated through development of aligned component architectures and align subordinate architectures for each of the military departments. In this regard, them with its corporate architecture to each of the military departments has made progress in managing its respective complete the federated business architecture program. For example, each department has established or is in the enterprise architecture. process of establishing an executive committee with responsibility and accountability for the enterprise architecture. However, there are still limitations ◐ in the scope and completeness, as well as the maturity of the military Partially addressed department architecture programs. For example, no military department has fully developed an enterprise architecture methodology or a well-defined business enterprise architecture and transition plan to guide and constrain business transformation initiatives. In April 2011, DOD’s Deputy Chief Management Officer issued a memorandum that requires integration of end-to-end business models and use of common standards for the development of the Business Enterprise Architecture and all subordinate architectures that federate or assert compliance with the Business Enterprise Architecture. While DOD recently drafted a technical transition plan that describes a vision for how standards will benefit the implementation of and ensure compliance with the Business Enterprise Architecture, the department has yet to finalize this plan or provide additional details for the plan’s execution with associated timelines and metrics. Action 2 Action 2 progress DOD should leverage its federated DOD has taken minimal steps to avoid duplicative investments, and it has yet to architecture to avoid investments that develop a well-defined federated architecture along with well-defined investment provide similar but duplicative management policies and procedures that it could use to manage the thousands functionality in support of common of business systems in a consistent, repeatable, and effective manner and that, DOD activities. among other things, maximizes mission performance while minimizing or eliminating system overlap and duplication. DOD officials have stated that operational activities identified by programs in its systems repository can be Not addressed ￮ compared by the investment review boards to identify those activities that are 100 percent identical. However, this process depends on self-reported data from the programs, and there is little validation or verification of the information. DOD officials have also stated that they are working on selecting tools that, along with their adoption of common business process modeling standards, will allow them to compare activities proposed in a new investment to activities and services defined in the architecture. However, success of this type of tool depends on the amount of activities and services defined in the architecture, and the department has more work to do in this area. For example, DOD has identified 15 business processes to be defined in the Business Enterprise Architecture; however, only 2 of these processes will be fully defined by the end of fiscal year 2012. Page 21 GAO-12-453SP Follow-up on 2011 Report Defense 8. DOD’s business systems modernization (continued) Action 3 Action 3 progress DOD should work to institutionalize its DOD continues to establish investment management processes, but neither business systems investment process department-level organizations nor the military departments have at all levels of the organization. institutionalized the full range of project-level and portfolio-based information technology investment management policies and procedures that are necessary Partially addressed ◐ to meet the investment selection and control provisions of the Clinger-Cohen Act of 1996.5 Specifically, GAO found that the DOD enterprise, Air Force, and Navy have yet to fully define 56 percent of the project-level practices, and Army has yet to do so for 78 percent of the practices.6 With regard to the portfolio-level practices, DOD enterprise, Air Force, and Navy have yet to fully define 80 percent, and Army has yet to do so for any of the practices. For example, while DOD and the military departments have a process that calls for investments to be, among other things, compliant with DOD’s Business Enterprise Architecture and economically justified, this process does not specify how the investment review boards are to use the full range of cost, schedule, and benefit data in making selection (i.e., certification) decisions. Action 4 Action 4 progress DOD must ensure that effective system DOD has taken steps to increase acquisition oversight for some business acquisition management controls are system modernization investments, but ensuring that effective system implemented on each business system acquisition and management controls are implemented on each business investment. system investment continues to remain a formidable challenge. GAO continues to identify weaknesses in such areas as architectural alignment, informed investment decision making, earned value management, economic justification, Partially addressed ◐ risk management, requirements management, and test management.7 In February 2011, the milestone decision authority for major business systems (except for logistics) was delegated to the Deputy Chief Management Officer, who was also given authority to assign an overarching integrated product team lead to coordinate preparation for acquisition decisions. This change in policy should provide the Deputy Chief Management Officer with increased acquisition insight and control for several of the largest business systems modernization investments, which include key enterprise resource programs that account for billions of dollars of development funding intended to transform DOD's business operations. Further, in June 2011, the Under Secretary of Defense for Acquisition, Technology, and Logistics established a policy requiring the use of the Business Capabilities Lifecycle as the acquisition process for defense business systems modernizations with a total cost of over $1 million. While the Business Capabilities Lifecycle is intended to divide system development into discrete, fully-funded, and manageable increments to facilitate development and implementation, it is too early to determine the extent to which this new process will improve acquisition management controls. An independent risk assessment for major investments was developed to provide information to milestone decision authorities before major milestone decisions. According to officials, four such reviews have occurred in the last 2 years. However, DOD has not fully demonstrated how these risk assessments have influenced investment decision makers. 5 40 U.S.C. §§ 11311-11313. 6 For more information, contact Valerie C. GAO, Department of Defense: Further Actions Needed to Institutionalize Key Business Melvin at (202) 512-6304 or System Modernization Management Controls, GAO-11-684 (Washington, D.C.: June 29, email@example.com. 2011). 7 GAO-11-684 and GAO, High-Risk Series: An Update, GAO-11-278 (Washington, D.C.: See GAO-11-318SP Actions Needed February 2011). Page 22 GAO-12-453SP Follow-up on 2011 Report Economic Development Overall assessment 9. The efficiency and effectiveness of fragmented Action 1 ◐ economic development programs are unclear Action 1 progress The Departments of Commerce, Three of the four agencies have taken initial steps to implement at least one of Housing and Urban Development, and the collaborative practices that GAO has previously identified to administer their Agriculture, and the Small Business economic development programs.8 For example, in April 2010 the U.S. Administration need to further utilize Department of Agriculture (USDA) and the Small Business Administration (SBA) promising practices for enhanced signed a memorandum of understanding (MOU) in response to GAO’s collaboration. The actions that the four recommendation that defined and articulated a common outcome focused on agencies should consider include improving service delivery to small businesses in underserved rural areas. seeking more opportunities for Under the MOU, USDA and SBA agreed that their field offices would advise resource-sharing across economic development programs with shared potential borrowers of the other agency’s programs that may meet their small outcomes, and identifying ways to business financing needs and coordinate the referral of small business leverage each program’s strengths to applicants to one another where appropriate, work to make each agency’s improve their existing collaborative programs more complementary by minimizing differences in program fees and efforts. processing and closing procedures, and develop joint training seminars on each agency’s programs. In addition, USDA and SBA agreed to measure progress under the MOU. USDA’s April 2011 survey of state directors indicates progress Partially addressed ◐ under the MOU in several areas, including field offices advising borrowers of SBA’s programs, referring borrowers to SBA and its resource partners, and exploring ways to make USDA and SBA programs more complementary. The Department of Commerce (Commerce) also provided information on its collaborative efforts with other federal agencies. For example, according to Economic Development Administration (EDA) officials, the agency has led an interagency effort called the i6 Challenge, which leverages resources from multiple federal agencies, with the common goal of spurring commercialization and manufacturing. The Department of Housing and Urban Development (HUD) has not taken similar steps to define and articulate common outcomes with other federal agencies. Moreover, HUD, USDA, and SBA have provided limited evidence that they have taken steps to develop compatible policies or procedures with other federal agencies, or to search for opportunities to leverage physical and administrative resources with their federal partners. Action 2 Action 2 progress The Departments of Commerce, The four agencies have made minimal progress to collect more accurate and Housing and Urban Development, and complete data on the outcomes for each of their economic development Agriculture, and the Small Business programs and to use the information to assess the effectiveness of each Administration need to collect accurate program. However, each agency has recently provided information on its plans and complete data on program to address this action. For example, EDA is developing a new performance outcomes and use the information to management logic model to help EDA understand how various inputs, activities, assess each program’s effectiveness. outputs, and outcomes lead the agency to its desired vision of economic growth and prosperity. In addition, HUD officials told us that the department has plans ￮ for improving the quality of data for its Community Development Block Grant Not addressed (CDBG) programs. In fiscal year 2012, HUD plans to fund improvements to its Integrated Disbursement and Information System; these improvements are intended to improve HUD’s ability to track the progress of CDBG grantees in implementing activities and gather improved performance data. Similarly, according to USDA officials, the Rural Business Program office is in the process of updating its policies, procedures, and program guidelines in an effort to improve the accuracy and reliability of its program data. Finally, according to SBA officials, its Offices of International Trade and Entrepreneurial Development are implementing processes to capture outcomes for their respective programs. 8 GAO, Opportunities to Reduce Potential Duplication in Government Programs, Save Tax Dollars, and Enhance Revenue, GAO-11-318SP (Washington, D.C.: Mar. 2, 2011). Page 23 GAO-12-453SP Follow-up on 2011 Report Economic Development 9. Economic development programs (continued) Action 3 Action 3 progress Additional work to assess progress in No executive action taken. collaboration and evaluation could identify areas for improvement, consolidation, or elimination. More analysis is needed by the Departments of Commerce, Housing and Urban Development, and Agriculture, and the Small Business Administration and the Office of Management and Budget to determine the actual amount of duplicative spending in programs that are designed to target similar economic development activities, locations, and applicants. Not addressed ￮ For more information, contact William B. Shear at (202) 512-8678 or firstname.lastname@example.org. See GAO-11-318SP Actions Needed Page 24 GAO-12-453SP Follow-up on 2011 Report Economic Development Overall assessment 10. The federal approach to surface transportation is ◐ fragmented, lacks clear goals, and is not accountable for results Action 1 Action 1 progress A fundamental re-examination and Comprehensive legislative action has not been taken to fundamentally re- reform of the nation's surface examine the nation’s surface transportation policies. However, several transportation policies is needed. congressional committees have approved bills to reauthorize and reform surface GAO has identified a number of transportation programs. For example, the Senate Environment and Public principles that can help guide Works Committee approved a bill on November 9, 2011, reauthorizing the Congress in re-examining and highway portion of the surface transportation program.9 This bill contains reforming the nation’s surface measures to increase accountability for results by entities receiving federal funds transportation policies. These and consolidate federal programs. In addition, the House Transportation and principles include ensuring the federal Infrastructure Committee approved a bill on February 2, 2012, that includes role is defined based on identified consolidating or eliminating a number of programs.10 When GAO completed its areas of national interest and goals, work for this report, floor action was pending in the Senate. GAO is evaluating incorporating accountability for results the extent to which ongoing legislative actions better define federal roles and by entities receiving federal funds, goals, incorporate accountability for results, emphasize return on federal employing the best tools and investment, and ensure fiscal sustainability. approaches to emphasize return on targeted federal investment, and ensuring fiscal sustainability. Applying these principles to a re-examination and reform of surface transportation programs would potentially result in a more clearly defined federal role in relation to other levels of government and thus a more targeted federal role focused around evident national interests. Partially addressed ◐ For more information, contact Susan Fleming at (202) 512-2834 or FlemingS@gao.gov. 9 S. 1813, 112th Cong. (2011). See GAO-11-318SP Actions Needed 10 H.R. 7, 112th Cong. (2012). Page 25 GAO-12-453SP Follow-up on 2011 Report Economic Development Overall assessment 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 Action 1 Action 1 progress Congress may wish to consider No legislative action identified. requiring federal agencies to establish In January 2012, officials from several of the federal agencies11 said they are an interagency mechanism or process, working to coordinate their efforts in the border region within the current such as a task force on water and statutory authorities that exist; however, GAO continues to believe that a task wastewater infrastructure, in the border force would allow the agencies to better coordinate. GAO notes that the region. Congress could direct a group administration has established the White House Rural Council to coordinate or task force to conduct certain federal funding provided to rural communities, which may provide the activities. Specifically, GAO suggested opportunity to coordinate agencies’ infrastructure funding in the border region. that a task force, in partnership with state and local officials, should leverage collective resources to identify needs within the border region and establish compatible and coordinated polices across relevant agencies, such as a coordinated process for the selection of projects, and standardize applications, environmental review requirements, and engineering requirements to the extent possible. Not addressed ￮ For more information, contact David C. 11 Trimble at (202) 512-3841 or These federal agencies include the Environmental Protection Agency, the Department email@example.com. of Agriculture, the Department of Housing and Urban Development, the U.S. Army Corps of Engineers, the Department of Health and Human Service’s Indian Health Service, the See GAO-11-318SP Actions Needed Department of Commerce’s Economic Development Administration, and the Department of the Interior’s Bureau of Reclamation. Page 26 GAO-12-453SP Follow-up on 2011 Report Energy Overall assessment 12. Resolving conflicting requirements could more ○ effectively achieve federal fleet energy goals Action 1 Action 1 progress Changes in existing laws could No legislative action identified. streamline the requirements and However, there has been related executive branch action. In May 2011, the provide fleet managers with more President issued additional directives for federal fleet managers in his flexibility in meeting goals. Presidential Memorandum on Federal Fleet Performance. Among other activities, this memorandum directs that by the end of 2015, all light-duty federal Not addressed ￮ fleet vehicle acquisitions must be alternative-fueled vehicles. According to Department of Energy officials, this order does not reconcile conflicting requirements that federal fleets increase use of alternative fuels, reduce petroleum use, and reduce greenhouse gas emissions or provide additional flexibility to fleet managers, but the order does require activities that will help meet existing requirements. For more information, contact Susan Fleming at (202) 512-2834 or firstname.lastname@example.org. See GAO-11-318SP Actions Needed Page 27 GAO-12-453SP Follow-up on 2011 Report Energy Overall assessment 13. Addressing duplicative federal efforts directed at ● increasing domestic ethanol production could reduce revenue losses by more than $5.7 billion annually Action 1 Action 1 progress Congress may wish to consider Congress allowed the VEETC to expire at the end of 2011. The most recent whether revisions to the ethanol tax extension of the credit—set at 45-cents-per-gallon in the Tax Relief, credit are needed. Options could Unemployment Insurance Reauthorization, and Job Creation Act of 201012— include the following: expired on December 31, 2011. Fuel blenders that purchase and blend ethanol with gasoline no longer receive the credit. Maintain the volumetric ethanol excise tax credit (VEETC) at current levels. Allow the VEETC to expire at the end of 2011. Reduce the VEETC as Congress did in the 2008 Farm Bill, when the ethanol tax credit was reduced from 51 cents to 45 cents per gallon. Phase out the VEETC over a number of years. Modify the VEETC to counteract fluctuations in other commodities that can influence ethanol production, such as changes in crude oil prices. For instance, the ethanol tax credit could increase when crude oil prices are low and decrease when crude oil prices are high. Addressed ● For more information, contact Frank Rusco at (202) 512-3841 or email@example.com See GAO-11-318SP Actions Needed 12 Pub. L. No. 111-312 (2010). Page 28 GAO-12-453SP Follow-up on 2011 Report General Government Overall assessment 14. Enterprise architectures: key mechanisms for ◐ identifying potential overlap and duplication Action 1 Action 1 progress Agencies should measure and report The majority of the enterprise architecture efforts of the 27 agencies GAO enterprise architecture results and reviewed can still be viewed as a work in progress, with much remaining to be outcomes (e.g., costs avoided through accomplished. Since we reported in March 2011 that the Department of the eliminating duplicative information Interior demonstrated that it had used enterprise architecture to avoid costs, an technology investments). additional 4 agencies have measured and reported financial benefits from their respective enterprise architecture programs: Department of Agriculture expects to save $27 million over 5 years (2011 Partially addressed ◐ through 2015) by moving 120,000 e-mail users to a cloud-based solution. Department of Defense, Office of the Secretary, described in its April 2011 Congressional Report on Defense Business Operations about $179 million in financial savings between fiscal years 2008 and 2010 by streamlining Navy business operations, retiring legacy systems, and moving toward a real-time paperless business environment that reduces time and costs for processing vendor payments. Nuclear Regulatory Commission achieved an estimated $1.3 million cost avoidance in 2011 by eliminating duplicative staff planning systems. Department of Health and Human Services saved about $21 million while sustaining increased network usage in fiscal year 2011 by moving to a new telecommunications contract, which was facilitated by its enterprise architecture program. Twelve agencies reported financial benefits; however, they did not reliably measure them (i.e., they did not provide supporting documentation): Department of Commerce; Office of Personnel Management; Department of Education; General Services Administration; Department of Energy; Small Business Administration; Department of Homeland Security; Social Security Administration; Department of Justice; Department of the Army; and Department of Transportation; Department of State. An additional 10 agencies did not report financial benefits, although 8 of these agencies reported that they have established or expect to establish a process to measure benefits in the future: Department of the Air Force; Environmental Protection Agency; Department of Housing and Urban National Aeronautics and Space Development; Administration; Department of Labor; National Science Foundation; and Department of the Navy; U.S. Agency for International Department of the Treasury; Development. Department of Veterans Affairs; For more information, contact David A. Powner at (202) 512-9286 or firstname.lastname@example.org. See GAO-11-318SP Actions Needed Page 29 GAO-12-453SP Follow-up on 2011 Report Overall assessment General Government 15. Consolidating federal data centers provides ◐ opportunity to improve government efficiency Action 1 Action 1 progress It will be important for individual The administration’s Implementation Plan to Reform Information Technology, agencies to move quickly to correct dated December 2010, identifies steps and milestones to (1) consolidate at least any missing items in their plans, 800 federal data centers by 2015, and (2) establish a governmentwide establish sound baselines so that marketplace for data center availability in 2012. progress and efficiencies can be measured, begin their consolidation In July 2011, OMB required the 24 federal agencies participating in the Federal efforts, track their progress, and report Data Center Consolidation Initiative to complete their consolidation plans. to the Office of Management and Beginning in October 2011, all of the agencies posted their updated plans Budget (OMB) on their progress over online. GAO has ongoing work assessing the completeness of these plans. A time. preliminary analysis shows that not all agency plans have been updated to include all required information. Partially addressed ◐ In December 2011, the Federal Chief Information Officer (CIO) announced that the definition of a data center had been expanded from facilities over 500 square feet to one that includes data centers of all sizes. This change resulted in an expanded data center baseline of 3,133 centers, an increase from the 2,094 centers originally reported by agencies. The Federal CIO reported that agencies planned to close 525 of these centers by the end of calendar year 2012 and 1,080 by the end of 2015. The Federal CIO also announced a further goal of closing 40 percent, or at least 1,200, of the 3,133 centers. Action 2 Action 2 progress OMB should work with agencies to The Analytical Perspectives for the President’s budget for fiscal year 2012 also establish goals and targets for addresses data center consolidation. It notes the importance of the federal data consolidation (both in terms of cost center consolidation effort and identifies for each of the 24 participating savings and reduced data centers), agencies, the number of data centers in 2010, as well as the agencies’ 2015 maintain strong oversight of the consolidation targets. agencies’ efforts, and look for consolidation opportunities across As noted above, in July 2011, OMB required the 24 federal agencies agencies. participating in the Federal Data Center Consolidation Initiative to complete their consolidation plans, including required information on consolidation savings and ◐ goals. Beginning in October 2011, all of the agencies posted their updated plans Partially addressed online. GAO has ongoing work assessing the extent to which agencies have updated this required information. A preliminary analysis shows that not all agency plans have been updated to include all required information. GAO also has ongoing work assessing OMB’s continuing oversight of the consolidation initiative. OMB also has a planned initiative to look for consolidation opportunities across agencies. Specifically, it plans to develop a governmentwide marketplace for data center availability in 2012. Further, OMB has developed a cost model for agencies to use to estimate consolidation cost savings. OMB’s continued oversight of agencies’ data center consolidation efforts will help better ensure that the federal consolidation initiative meets its cost savings and data center reduction targets. For more information, contact David Powner at (202) 512-9286 or email@example.com. See GAO-11-318SP Actions Needed Page 30 GAO-12-453SP Follow-up on 2011 Report Overall assessment General Government 16. Collecting improved data on interagency contracting ◐ to minimize duplication could help the government leverage its vast buying power Action 1 Action 1 progress The Office of Management and Budget OMB is working with agencies to improve data on interagency contracting, and (OMB) will need to fully implement the some actions are in the early stages of implementation. OMB notes that steps it is taking to address identified continued investment in centralized procurement data systems is required in shortcomings in the management of order to sustain improvements in the collection and use of procurement data, interagency contracting. including data on interagency contracts, and that the first phase of a centralized data system, called the System for Award Management, is scheduled to be ◐ launched in May 2012. OMB’s Office of Federal Procurement Policy (OFPP) Partially addressed provided an update describing actions it is taking to address identified shortcomings in the management of interagency contracting. In particular, OFPP noted that it is working with agencies to update current data on interagency contracts. OFPP also noted that it may not be necessary to create a new database on interagency contracts because much of this information is already available. OFPP plans to notify agencies of a new page on OMB’s budget information Web site with links to information on existing interagency contract vehicles, new multiagency contracts, and new multiagency blanket purchase agreements. OFPP still needs to decide on the need to create a centralized database containing this information. Action 2 Action 2 progress The General Services Administration GSA has prepared an action plan that addresses identified shortcomings in the (GSA) will need to fully implement the management of interagency contracting, but the action plan has not yet been steps it is taking to address identified fully implemented. GSA has completed a high-level analysis of options for shortcomings in the management of collecting transactional data on orders through the Multiple Award Schedule interagency contracting. program and plans to implement and evaluate a pilot program for collecting this information. Partially addressed ◐ Action 3 Action 3 progress Improvements are still needed OFPP has worked with agencies to ensure that data in the Federal Procurement regarding the accuracy of the federal Data System are accurate and complete, including a random sampling of fiscal contracts database in order to year 2010 contract actions, which reflected a 96.5 percent accuracy rate. OFPP determine whether the contracts are also established an interagency procurement data quality working group to being used in an efficient and effective review various efforts agencies are employing to improve data quality and manner. leverage successful efforts across the acquisition community. Addressed ● Action 4 progress Action 4 Require business case analyses for On September 29, 2011, the Administrator of OFPP issued a memorandum that new multiagency contracts. provided guidance for development of a business case analysis for certain interagency contracts, including new multiagency contracts. 13 In addition, on ● January 3, 2012, a final rule was issued amending the Federal Acquisition Regulation to require a business case analysis to support the creation of certain Addressed of these contracts.14 For more information, contact William T. Woods at (202) 512-4841 or WoodsW@gao.gov. 13 OFPP Memorandum, “Development, Review and Approval of Business Cases for See GAO-11-318SP Actions Needed Certain Interagency and Agency-Specific Acquisitions” (Sept. 29, 2011). 14 77 Fed. Reg. 183 (Jan. 3, 2012). Page 31 GAO-12-453SP Follow-up on 2011 Report General Government Overall assessment 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 Action 1 Action 1 progress The Director of the Office of No executive action taken. OMB did not agree with this recommendation and Management and Budget (OMB) in favors reporting tax expenditures separately from the rest of the budget. consultation with the Secretary of the Although OMB had begun presenting tax expenditure sums alongside outlays Treasury should present tax and credit activity for each budget function in the federal budget from fiscal year expenditures in the budget together 1998 through fiscal year 2002, OMB discontinued the practice. Tax expenditures with related outlay programs. were not integrated in the President’s fiscal year 2012 budget. Not addressed ￮ Action 2 Action 2 progress The Director of OMB in consultation The Director of OMB has not developed a framework for reviewing tax with the Secretary of the Treasury expenditure performance. The President’s fiscal year 2012 budget stated that should develop and implement a developing an evaluation framework is a significant challenge and that the framework for conducting performance administration’s focus is on addressing challenges with data availability and reviews of tax expenditures. This analytical constraints so that the administration can work towards crosscutting includes (1) outlining leadership analyses examining tax expenditures alongside related spending programs; responsibilities and coordination however, no timetable or specifics were included. In January 2012, OMB among agencies with related officials stated that the President’s fiscal year 2012 budget proposed numerous responsibilities; (2) setting a review reforms to tax expenditures, which it estimated would save billions in total; schedule; (3) identifying review published evaluations supporting the proposals were not available. methods and ways to address the lack of credible tax expenditure performance information; and (4) identifying resources needed for tax expenditure reviews. Not addressed ￮ Action 3 Action 3 progress The Director of OMB in consultation OMB guidance has not explicitly addressed how agencies should incorporate tax with the Secretary of the Treasury expenditures in strategic plans and annual performance plans and reports. should develop guidance on Moving forward, the GPRA Modernization Act of 2010 (GPRAMA)15 calls for a incorporating tax expenditures in more coordinated approach to focus on results and improve government agencies’ strategic plans and performance. OMB, in coordination with agencies, is to develop a limited number performance reports. of outcome-oriented, crosscutting policy goals and indicates that it will identify the relevant agencies and federal activities—including tax expenditures—that ￮ contribute to each crosscutting goal. OMB has issued some guidance to help Not addressed agencies implement GPRAMA, and OMB plans to address tax expenditures in guidance forthcoming in 2012. 15 Pub. L. No. 111-352 (2011). Page 32 GAO-12-453SP Follow-up on 2011 Report General Government 17. Tax expenditures (continued) Action 4 Action 4 progress The Director of OMB in consultation OMB has not made progress on systematically including tax expenditures along with the Secretary of the Treasury with related outlay programs in the Executive Branch’s budget and performance should require that tax expenditures be review processes. The President’s fiscal year 2012 budget stated that the included in Executive Branch budget Administration will be working towards examining the objectives and effects of and performance review processes. the wide range of tax expenditures in the budget, though no timetable or specifics were provided. Not addressed ￮ Effective GPRAMA implementation could help inform reexamination or restructuring efforts and lead to more efficient and economical service delivery in overlapping program areas by identifying the various agencies and federal activities—including tax expenditures—that contribute to crosscutting outcomes. As noted above, OMB has stated that forthcoming OMB GPRAMA guidance will address tax expenditures. For more information, contact Michael Brostek at (202) 512-9110 or firstname.lastname@example.org. See GAO-11-318SP Actions Needed Page 33 GAO-12-453SP Follow-up on 2011 Report Overall assessment Health 18. Opportunities exist for DOD and VA to jointly ◐ modernize their electronic health record systems Action 1 Action 1 progress The Secretaries of Defense and The Departments of Defense (DOD) and Veterans Affairs (VA) have taken steps Veterans Affairs should revise the to discuss and improve their electronic health record system capabilities, but departments’ joint strategic plan to they have not yet revised their joint strategic plan to include these efforts or include information discussing their indicate how they will address common health care business needs. The electronic health record system Secretaries of DOD and VA have met to discuss their respective departments’ modernization efforts and how those efforts to pursue joint development and acquisition of integrated electronic health efforts will address the departments’ record (iEHR) capabilities. Among other things, the Secretaries have established common health care business needs. the departments’ interagency program office as the single point of accountability for the development and implementation of the iEHR, while also improving their ◐ efforts to further implement joint health information technology (IT) capabilities at Partially addressed DOD and VA’s first fully integrated health care center in North Chicago, Illinois. The departments plan further action to address this area. Specifically, DOD and VA intend to issue an addendum to their joint strategic plan for fiscal years 2011 through 2013 that is to include objectives and goals related to the departments’ iEHR efforts. Action 2 Action 2 progress The Secretaries of Defense and The DOD and VA have taken steps toward developing a joint health Veterans Affairs should further develop architecture, but the architecture is not sufficiently mature and the departments the departments’ joint health have not defined how they intend to transition from their current architecture to a architecture to include their planned planned future state. The Secretaries of DOD and VA agreed in May 2011 that future state and transition plan from the departments would implement a common architecture for the iEHR. The their current state to the next departments have since developed, and the Secretaries have approved, a high- generation of electronic health record level representation of the “to be” architecture for the iEHR. In addition, the capabilities. interagency program office is to facilitate further development and maintenance of the iEHR architecture in conjunction with the departments’ Health Executive Council and the recently established Health Architecture Review Board. Nevertheless, DOD and VA have not yet fully developed a joint health Partially addressed ◐ architecture that includes a plan for transitioning from their current state to the next generation of electronic health record capabilities. Action 3 Action 3 progress The Secretaries of Defense and The Secretaries of DOD and VA have agreed to develop a process for Veterans Affairs should define and identifying and selecting joint IT investments; however, the departments have implement a process, including criteria not yet implemented this process. Specifically, both Secretaries have agreed to that considers costs, benefits, develop and implement the iEHR and they have approved a governance schedule, and risks, for identifying and structure that defines how they intend to accomplish this effort. This structure selecting joint IT investments to meet includes the departments themselves, which have responsibility for establishing the departments’ common health care their respective health care requirements; joint forums such as the Health business needs. Executive Council, which is to collaborate with the interagency program office to collect the requirements; and the program office itself, which is to identify the IT Partially addressed ◐ investments to meet the requirements. However, the departments have not yet implemented this process. For more information, contact Valerie C. Melvin at (202) 512-6304 or email@example.com. See GAO-11-318SP Actions Needed Page 34 GAO-12-453SP Follow-up on 2011 Report Health Overall assessment 19. VA and DOD need to control drug costs and increase ◐ joint contracting wherever it is cost-effective Action 1 Action 1 progress The Department of Veterans Affairs Neither DOD nor VA indicated that either agency intended to analyze whether it (VA) and the Department of Defense would be cost-effective to resume joint contracting for brand name drugs. (DOD) should analyze whether greater However, in January 2012, the agencies indicated that they are coordinating on cost savings could be achieved joint contracting opportunities for brand name drugs through the Contracting through joint contracting for brand Subcommittee of the VA Federal Pharmacy Executive Steering Committee, name drugs than are currently whose purpose is to coordinate federal pharmacy activities across federal achieved through their independent agencies. For example, in November 2011, VA and DOD entered into a joint strategies, and determine whether it contract for a brand name drug, and VA reported that it would continue its would be cost-effective to take steps to practice of coordinating with DOD on opportunities for contracts for brand name resume joint contracting for brand drugs. However, according to DOD officials, there was evidence from VA and name drugs. DOD’s joint contracting experience that joint contracting does not necessarily result in lower prices for either or both agencies. DOD cited past experiences in ◐ which the agencies did not receive a single bid in response to some large joint Partially addressed generic drug contract solicitations. DOD also noted that differences in the design of VA’s and DOD’s pharmacy benefits programs make cost-effective opportunities, as currently designed, for brand-name drug joint contracts less common than they were prior to DOD’s fiscal year 2005 implementation of its uniform formulary process. Action 2 Action 2 progress DOD should identify, implement, and DOD reported that a number of initiatives to control retail pharmacy costs had monitor efforts to control retail been identified and implemented, and that it continues to monitor its cost control pharmacy spending, an area for which efforts. drug spending is increasing and cannot As a result of applying federal pricing arrangements—which generally result be controlled through joint contracting in prices lower than retail prices—to drugs dispensed at retail pharmacies, efforts. DOD reported that as of July 31, 2011, DOD had received $2.7 billion in manufacturer refunds for fiscal years 2009, 2010, and 2011. ● DOD reported that its uniform formulary process has ensured use of the most clinically- and cost-effective agents at all three points of pharmacy Addressed service through the use of formulary management tools such as step therapy. For example, DOD reported that step therapy for cholesterol lowering agents implemented in May 2010 enabled DOD to save approximately $82.8 million in the first year after implementation. The 3-year cost avoidance projection for this class of drugs is $141.6 million. Also, in January 2010, DOD implemented an in-depth communications plan to promote the use of a less costly pharmacy option. DOD officials told GAO that this effort has resulted in higher use of the less-expensive TRICARE Mail Order Pharmacy venue and savings to the government, which they estimate to be over $30 million in 2010. Additionally, DOD reports that an adjustment to prescription drug copayments, effective October 1, 2011, will further encourage the use of the TRICARE Mail Order Pharmacy and should result in additional savings. Page 35 GAO-12-453SP Follow-up on 2011 Report Health 19. VA and DOD drug costs and joint contracting (continued) Action 3 Action 3 progress VA and DOD should continue their VA continues to collaborate with DOD to identify opportunities for joint efforts to jointly contract for generic contracting for generic drugs through the Federal Pharmacy Executive Steering drugs, and look for opportunities to Committee. Additionally, DOD noted in January 2012 that joint contracts had increase joint contracting efforts as been awarded for several generic drugs that had previously been “blockbuster” generic versions of existing brand brand name drugs, and additional joint contract negotiations were under way. name drugs become available. Addressed ● For more information, contact Randall B. Williamson at (202) 512-7114 or firstname.lastname@example.org. See GAO-11-318SP Actions Needed Page 36 GAO-12-453SP Follow-up on 2011 Report Health Overall assessment 20. HHS needs an overall strategy to better integrate ○ nationwide public health information systems Action 1 Action 1 progress The Secretary of Health and Human HHS has not finalized a strategic plan for establishing an electronic nationwide Services should develop and public health situational awareness network. HHS officials with the Office of the implement a strategic plan that defines Assistant Secretary for Preparedness and Response stated that they intend to goals, objectives, and priorities for release an Implementation Plan for the National Health Security Strategy. This establishing an electronic public health plan is to incorporate a strategy for integrating the goals and objectives of the situational awareness network. Such a various offices’ disparate plans to implement information systems in support of plan should include performance the nationwide public health situational awareness network capabilities required measures for evaluating capabilities of by section 202 of the Pandemic and All-Hazards Preparedness Act.16 Although existing and planned information HHS intended to release the Implementation Plan in early 2011, it has not yet systems. The strategic plan should done so. Department officials stated that they now expect to release the plan in integrate related strategies and early 2012. information technology initiatives within the Department of Health and Human Services (HHS) for sharing information among federal, state, local, and tribal entities. Not addressed ￮ For more information, contact Valerie C. Melvin at (202) 512-6304 or 16 email@example.com. 42 U.S.C. § 247d–4(d). The act requires that a strategic plan be submitted to congressional committees no later than June 18, 2007, and that the electronic nationwide See GAO-11-318SP Actions Needed public health situational awareness network be established no later than December 19, 2008. Page 37 GAO-12-453SP Follow-up on 2011 Report Overall assessment Homeland Security / Law Enforcement 21. Strategic oversight mechanisms could help integrate ◐ fragmented interagency efforts to defend against biological threats Action 1 Action 1 progress The Homeland Security Council should In August 2011, the National Security Staff (NSS), which supports the Homeland consider establishing a focal point to Security Council, stated that two of its directorates serve as focal points to coordinate federal biodefense coordinate federal biodefense activities, as suggested in GAO’s March 2011 activities, including biosurveillance. report. However, the NSS did not provide any details about how these directorates will provide the strategic and integrated oversight of the entire ◐ biodefense enterprise, which GAO reported was lacking. Partially addressed Action 2 Action 2 progress The overarching biodefense enterprise NSS officials stated that they are overseeing the development of a national would benefit from strategic oversight strategy for biosurveillance, but that strategy has not yet been developed and mechanisms, including a national does not cover the full biodefense enterprise. In August 2011, the NSS indicated strategy, to ensure efficient, effective, that two of its directorates are overseeing the development of the strategy. and accountable results. However, the NSS did not provide a timeline for completing these actions. The strategy also would not address the overarching biodefense enterprise, as GAO ￮ previously recommended. Not addressed For more information, contact William O. Jenkins, Jr., at (202) 512-8777 or firstname.lastname@example.org. See GAO-11-318SP Actions Needed Page 38 GAO-12-453SP Follow-up on 2011 Report Homeland Security / Law Enforcement Overall assessment 22. DHS oversight could help eliminate potential ○ duplicating efforts of interagency forums in securing the northern border Action 1 Action 1 progress The Department of Homeland Security No executive branch action has been taken. (DHS) should provide guidance and oversight for interagency forums— Draft legislation has been introduced in Congress that would require DHS to which include both Integrated Border consider whether the establishment of a new interagency forum would duplicate Enforcement Team (IBET) and Border an existing forum’s effort; the bill, however, has yet to be enacted and does not Enforcement Security Task Force address duplication among existing interagency forums. On March 3, 2011, the (BEST) interagency forums—to help Jaime Zapata Border Enforcement Security Task Force Act was introduced in prevent duplication of effort and help Congress.17 This draft bill would provide authorization of appropriations to efficiently utilize personnel resources establish and operate a BEST program in areas designated by the Secretary of to strengthen DHS’s coordination Homeland Security. The House Homeland Security Committee approved the efforts along the northern border. bill, as amended, by voice vote on September 21, 2011, and the bill was officially reported out of committee on November 4, 2011. The bill, as amended, requires the Secretary to consider whether an IBET already exists in an area under Not addressed ￮ consideration for establishment of a BEST unit. However, the bill does not specifically discuss addressing areas of overlap or duplication among existing IBETs and BEST units. Action 2 Action 2 progress As DHS establishes a mechanism for No executive action taken. determining the benefits of participating in the IBET and BEST interagency forums, DHS could lead efforts to develop a framework for identifying the costs incurred by all partners participating in each forum. Not addressed ￮ For more information, contact Rebecca Gambler at (202) 512-6912 or GamblerR@gao.gov. 17 H.R. 915, 112th Cong. (as reported by H.R. Comm. on Homeland Security, Nov. 4, See GAO-11-318SP Actions Needed 2011). Page 39 GAO-12-453SP Follow-up on 2011 Report Homeland Security / Law Enforcement Overall assessment 23. The Department of Justice plans actions to reduce ● overlap in explosives investigations, but monitoring is needed to ensure successful implementation Action 1 Action 1 progress Continually monitoring the actions Executive branch action has been taken in each of the four identified areas planned by the Department of Justice where duplication and redundant efforts needed to be addressed. (Justice); the Bureau of Alcohol, Tobacco, Firearms, and Explosives Jurisdiction: To address jurisdictional disputes in explosives investigations, as of (ATF); and the Federal Bureau of May 2011, Justice created a National Explosives Task Force where ATF and Investigation (FBI) in four areas of FBI are collocated in headquarters. This task force monitors explosives explosives investigations—including investigations, may determine the lead agency in investigations when there is jurisdiction, explosives training, shared uncertainty among field agents, and ensures that ATF and FBI are coordinating. explosives databases, and Training: To address fragmentation in the explosives training provided by ATF laboratories—could help Justice and FBI, the two agencies created a joint curriculum for their post-blast training ensure the successful implementation as of May 2011. According to ATF and FBI, the new curriculum has resulted in of those actions to reduce duplication both agencies providing consistent information to the agents and state and local and overlap and to improve bomb squads whom they train. They are also considering creating other joint coordination. curricula in areas such as homemade explosives. ● Explosive database: To ensure that both agencies are aware of explosives incidents, ATF released a more user friendly version of the Bomb and Arson Addressed Tracking System—an explosives incident reporting system—in May 2011. Both ATF and FBI have issued new protocols requiring agents to enter explosives incidents into the Bomb and Arson Tracking System. In addition, both the ATF and FBI are requiring that all explosives incidents be reported to their respective Strategic Information Operation Centers (SIOC). The SIOCs will notify each other when an incident is reported. In addition, explosives incidents are also reported to the National Explosives Task Force. According to ATF and FBI, these multiple reporting mechanisms ensure that both ATF and FBI are aware of all explosives incidents and that the incidents are entered in the Bomb and Arson Tracking System. Explosive laboratories: To better leverage their explosives forensic capabilities, according to officials, ATF and FBI laboratories meet on a regular basis to discuss options where coordination can be increased. According to ATF and FBI officials, both laboratories are at capacity, but they have agreed to utilize a joint lab information management system and joint training of laboratory staff. DOJ plans to lay out implementation steps during fiscal year 2012. Additionally, according to ATF and FBI officials, the Office of the Deputy Attorney General meets regularly with ATF and FBI to monitor their progress and address any potential concerns. This coordination is important to help ensure that the above improvements are sustained. For more information, contact Eileen Larence at (202) 512-6510 or LarenceE@gao.gov . See GAO-11-318SP Actions Needed Page 40 GAO-12-453SP Follow-up on 2011 Report Homeland Security / Law Enforcement Overall assessment 24. TSA’s security assessments on commercial trucking ◐ companies overlap with those of another agency, but efforts are under way to address the overlap Action 1 Action 1 progress The Transportation Security In August 2011, TSA reported that the agency had discontinued conducting Administration (TSA) and the Federal security reviews on trucking companies that are covered by the FMCSA Motor Carrier Safety Administration program. Discontinuing such reviews should eliminate the short-term overlap (FMCSA) could improve interagency between TSA and FMCSA’s reviews of hazardous material trucking companies. coordination by sharing each other’s schedules for conducting future security reviews, and avoid scheduling reviews on hazardous material trucking companies that have recently received, or are scheduled to receive, a review from the other agency. TSA could also discontinue conducting voluntary security reviews on hazardous material trucking companies, thereby enabling TSA to increase its security efforts in other areas. Addressed ● Action 2 Action 2 progress TSA could request that the full results No executive action taken. In January 2012, TSA reported that due, in part, to of past FMCSA security reviews of data subscription costs, the agency had decided to discontinue access to trucking companies be provided FMCSA’s data for hazardous material trucking companies until TSA has full through an existing Department of regulatory oversight in this area. TSA officials had previously reported that the Transportation (DOT) Web portal. agency would have little use for FMCSA data until TSA assumes such regulatory Doing so would require cooperation responsibility, and said the data are limited to FMCSA-related regulations and do from FMCSA. not provide information about a carrier’s overall security preparedness. TSA officials also reported that they are confident that FMCSA would provide TSA Not addressed ￮ with security review results for individual motor carriers if security conditions warrant such a request. However, GAO continues to believe that utilization of FMCSA’s security information in the DOT Web portal could benefit TSA because a considerable amount of the data in FMCSA’s review is the same or similar to the data TSA was previously collecting. In addition, FMCSA conducts approximately 1,800 security reviews per year. TSA officials said that they were not in a position to estimate when the regulations will be issued and thus did not know when TSA would assume full regulatory responsibility from FMCSA. Action 3 Action 3 progress TSA and FMCSA should continue In October 2011, TSA reported that the agency had drafted proposed efforts toward the long-term goal of regulations for hazardous material trucking security, which would give TSA TSA assuming full regulatory regulatory responsibility for this area, and that the proposed regulations were responsibility from FMCSA for undergoing TSA review. TSA officials did not have an estimate for when the commercial trucking security, thereby regulations would be issued and thus did not know when TSA would assume full reducing fragmentation. regulatory responsibility from FMCSA. Partially addressed ◐ For more information, contact Steve Lord at (202) 512-4379 or email@example.com. See GAO-11-318SP Actions Needed Page 41 GAO-12-453SP Follow-up on 2011 Report Homeland Security / Law Enforcement Overall assessment 25. DHS could streamline mechanisms for sharing ◐ security-related information with public transit agencies to help address overlapping information Action 1 Action 1 progress The Department of Homeland Security TSA helped launch a new report that streamlines and shares security-related (DHS) and Transportation Security information among public transit agencies, but security-related information has Administration (TSA) could identify and yet to be fully incorporated from all three mechanisms that GAO identified as implement ways to more efficiently potentially duplicative. In February 2011, TSA, in coordination with federal and share security-related information by industry stakeholders through an information-sharing working group, launched assessing the various mechanisms the Transit and Rail Intelligence Awareness Daily (TRIAD) Report. The overall available to public transit agencies— intent of the TRIAD is to streamline the analysis, share, and exchange including DHS’s information network, intelligence and security information, and help public transit stakeholders more TSA’s portal on the network, and the efficiently share information by reducing the number of e-mails that stakeholders public transit analysis center—as well receive, and the number of persons sending those e-mails. However, the as the information they provide, and TRIAD does not yet reference specific information from the DHS information identify opportunities to streamline network or TSA’s portal on the network, although the working group has these mechanisms. discussed doing so. Partially addressed ◐ TSA officials reported that maintaining different information-sharing mechanisms is necessary at this time to ensure that the diversity of information is covered. However, GAO continues to believe that maintaining separate systems to provide similar information to similar user groups is not efficient and that this potential overlap could overwhelm public transit agencies with similar information. Until the information-sharing working group completes its efforts to filter security-related information obtained from all three mechanisms through the TRIAD, public transit agencies will continue to receive information from multiple sources, making it difficult for them to discern relevant security-related information. Action 2 Action 2 progress DHS could develop and track verifiable No executive action taken. cost data specific to each of its information-sharing mechanisms, as part of TSA’s streamlining and financial management efforts. Developing such baseline cost data could assist TSA in identifying potential cost savings resulting from the consolidation of these mechanisms and provide opportunities for the agency to better allocate its information-sharing resources. Not addressed ￮ For more information, contact Steve Lord at (202) 512-4379 or LordS@gao.gov. See GAO-11-318SP Actions Needed Page 42 GAO-12-453SP Follow-up on 2011 Report Homeland Security / Law Enforcement Overall assessment 26. FEMA needs to improve its oversight of grants and ◐ establish a framework for assessing capabilities to identify gaps and prioritize investments Action 1 Action 1 progress The Federal Emergency Management The Department of Homeland Security (DHS) has sought to consolidate several Agency (FEMA) could benefit from of FEMA’s smaller grant programs within larger grant programs, but FEMA has examining its grant programs and not coordinated application reviews of grant projects across four of the largest coordinating its application process to preparedness grant programs, which have similar goals, fund similar types of eliminate or reduce redundancy among projects, and are awarded in many of the same urban areas. DHS’s fiscal year grant recipients and program 2012 budget request, similar to its 2011 request, proposed the elimination of six purposes. stove-piped and duplicative stand-alone grant programs, consolidating them into broader grants awarded to states and localities based on risk. This approach would provide greater flexibility for state and local officials to fill critical homeland Partially addressed ◐ security capability gaps and would significantly streamline the application process. Specifically, the President’s fiscal year 2012 budget proposed to incorporate some of the smaller grant programs as allowable expenses within the larger programs. For instance, investments previously funded under the Driver’s License Security Grant Program, the Citizen Corps Grant Program, and the former Interoperable Emergency Communications Grant Program would be treated as allowable expenses under the State Homeland Security Grant Program. The consolidated appropriations act for fiscal year 2012 appropriated a lump sum of $1.35 billion for FEMA preparedness grant programs, allowing DHS 18 to determine the distribution among the various grant programs. However, four of the largest preparedness grant programs, which have similar allowable costs, are being reviewed by two separate divisions, and FEMA has not yet developed a mechanism to coordinate the review of grant project applications internally to identify unwarranted overlap and mitigate the potential for unnecessary duplication across grant applications. According to FEMA officials, the agency plans to phase in a new grants management system, which is scheduled for completion by fiscal year 2014, to help, among other things, eliminate redundancies in its grants programs. However, it is not clear to what extent this new system will provide FEMA with the means to coordinate application reviews of its grant programs. Additionally, The Amateur Radio Emergency Communications Enhancement Act of 2011, as reported out by the Senate Committee on Homeland Security and Governmental Affairs in June 2011, would require the DHS Inspector General to determine whether and to what degree FEMA grant programs provide duplicative or overlapping assistance, and make recommendations for the consolidation and elimination of grant programs to reduce duplication of assistance.19 18 H.R. Rep. No. 112-331, at 175-77 (2011) (Conf. Rep.). 19 S. 191, 112th Cong. (2011). Page 43 GAO-12-453SP Follow-up on 2011 Report Homeland Security / Law Enforcement 26. FEMA grants (continued) Action 2 Action 2 progress Congress may wish to consider limiting In the continuing appropriations act for fiscal year 2011, Congress appropriated preparedness grant funding to $875 million less for FEMA preparedness grants than the amount requested in maintaining existing capabilities (as the President’s fiscal year 2011 budget.20 Similarly, the consolidated determined by FEMA) until FEMA appropriations act for fiscal year 2012 appropriated $1.7 billion for FEMA completes a national preparedness preparedness grants, $1.28 billion less than requested.21 The Senate Committee assessment of capability gaps at each report accompanying the DHS appropriations bill for fiscal year 2012 directs level based on tiered, capability- FEMA to develop guidance for grantees on best practices to manage current specific performance objectives to funding to ensure the most necessary capabilities are sustained. The report enable prioritization of grant funding. encourages FEMA to provide flexibility in grant expenditures to ensure the least amount of degradation to current capabilities occurs and directs the agency to brief the Committee quarterly on the specific processes being put in place to manage the grant programs in a way that promotes sustainability of current Partially Addressed ◐ capacity.22 In December 2011, DHS officials said that they had not yet completed the development and implementation of the preparedness system (additional discussion of this issue is included below). However, in the interim, FEMA officials stated that FEMA has clarified grant guidance and reporting to support maintenance needed to sustain current capabilities in response to grantee concerns regarding allowable uses of grant funds. Action 3 Action 3 progress FEMA should complete a national DHS has announced plans to develop and implement a national preparedness preparedness assessment of capability system that would enable it to assess these capability gaps, but the system gaps at each level based on tiered, remains under development. Therefore, actions on the assessment of capability capability-specific performance gaps have not yet begun. In its May 2011, Implementation Plan for Presidential objectives to enable prioritization of Policy Directive 8: National Preparedness, DHS announced plans to develop grant funding, and FEMA could identify and implement a national preparedness system to provide an integrated the potential costs for establishing and approach to preparedness that can be implemented and measured at all levels maintaining those capabilities at each of government to link together programs and requirements into a comprehensive level and determine what capabilities system, driving rational decision making and allowing for a direct and defensible federal agencies should provide. assessment of progress against clearly defined objectives. According to the plan, the national preparedness system will be based on a consistent . methodology for assessing the threats and hazards that drive planning, including resource requirements, existing capabilities and capability gaps, and Not addressed ￮ investments to close those gaps. FEMA officials described efforts they have underway, which are aimed at assessing state-level capabilities, that they said would provide a new baseline to meet or exceed several aspects of this action. However, FEMA has not yet begun to develop and implement a system to assess capability gaps on a national level. 20 Pub. L. No. 112-10, § 1632 (2011). 21 This total includes all grant programs in the state and local programs account and the Emergency Management Performance Grant program but does not include funding appropriated for firefighter assistance grant programs. 22 S. Rep. No. 112-74, at 124 (2011). Page 44 GAO-12-453SP Follow-up on 2011 Report Homeland Security / Law Enforcement 26. FEMA grants (continued) Action 4 Action 4 progress Once FEMA has completed its Because FEMA has not yet completed its assessment, this suggested action assessment, Congress may wish to cannot yet be considered by Congress. consider limiting the use of federal preparedness grant programs to fund only projects that support the development of identified, validated, and documented capability gaps that may (or may not) include maintaining existing capabilities developed. Not addressed ￮ For more information, contact William O. Jenkins, Jr. at (202) 512-8757 or firstname.lastname@example.org. See GAO-11-318SP Actions Needed Page 45 GAO-12-453SP Follow-up on 2011 Report International Affairs Overall assessment 27. Lack of information sharing could create the potential ◐ for duplication of efforts between U.S. agencies involved in development efforts in Afghanistan Action 1 Action 1 progress The U.S. Agency for International The Afghan Info database has been designated as the centralized database for Development (USAID), in consultation U.S. development efforts in Afghanistan, but it does not readily capture relevant with the Department of Defense (DOD) DOD data. On October 2, 2011, the Deputy Ambassador, U.S. Embassy Kabul, and other relevant U.S. agencies, signed a memo requiring that all Embassy agencies and sections utilizing should consider designating Afghan foreign assistance funds report information on their programs and projects into Info or some other database as the Afghan Info. Additionally, a November 2011 U.S. Status Report: Afghanistan and centralized U.S. government database Pakistan Civilian Engagement issued by the Office of the Special Representative for U.S. development efforts in for Afghanistan and Pakistan and signed by the Secretary of State noted that Afghanistan. This database should, Embassy Kabul is taking steps to utilize the Afghan Info database to capture all among other things, ensure that the foreign assistance activities being implemented by U.S. government agencies. information in the database (1) However, DOD’s Commander’s Emergency Response Program data is still not captures all agency development in the Afghan Info database. USAID has started discussions with DOD about efforts and (2) is accessible to all U.S. how to get Commander’s Emergency Response Program data into the database government agencies involved in U.S.- because, according to USAID, the Ambassador only has direct authority over funded development projects in Chief of Mission offices and agencies. USAID officials said that Afghan Info is in Afghanistan. the process of being transitioned, by late February 2012, to an internet-based system that will allow all agencies access. Partially addressed ◐ For more information, contact Charles Johnson at (202) 512-7331 or email@example.com. See GAO-11-318SP Actions Needed Page 46 GAO-12-453SP Follow-up on 2011 Report International Affairs Overall assessment 28. Despite restructuring, overlapping roles and functions ● still exist at State’s Arms Control and Nonproliferation Bureaus Action 1 Action 1 progress The Department of State (State) State updated the FAM in February and April 2011 to formally delineate the roles should implement GAO’s of the Bureau of Arms Control, Verification and Compliance and the Bureau of recommendations to formally delineate International Security and Nonproliferation. By making these improvements, in the Foreign Affairs Manual (FAM) State could reduce personnel and other overhead costs by helping address the the roles of the two new bureaus. multiple mission redundancies identified among the offices and functions of the new International Security and Nonproliferation and Arms Control, Verification, Addressed ● and Compliance bureaus. Action 2 Action 2 progress State should implement GAO’s State updated the FAM in May 2011 to direct that, to the extent practicable, recommendations to direct that key major reorganizations of bureaus or offices at State should follow GAO’s key transformation practices and steps be transformation practices. Such key practices include ensuring that top leadership incorporated into the FAM. drives the transformation and establishing a coherent mission and integrated strategic goals to guide the transformation. Addressed ● . For more information, contact Thomas Melito at (202) 512-9601 or firstname.lastname@example.org. See GAO-11-318SP Actions Needed Page 47 GAO-12-453SP Follow-up on 2011 Report Social Services Overall assessment 29. Actions needed to reduce administrative overlap ○ among domestic food assistance programs Action 1 Action 1 progress The U.S. Department of Agriculture No executive action taken. (USDA) should identify and develop methods for addressing potential inefficiencies and reducing unnecessary overlap among its smaller food assistance programs while ensuring that those who are eligible receive the assistance they need. These methods could include conducting a study as a first step; convening a group of experts; identifying which of the lesser-studied programs need further research and taking steps to fill the research gap; or identifying and piloting proposed changes. Not addressed ￮ Action 2 Action 2 progress USDA could broaden its efforts to No executive action taken. simplify, streamline, or better align eligibility procedures and criteria across programs to the extent that it is permitted by law. Options such as consolidating or eliminating overlapping programs also have the potential to reduce administrative costs but may not reduce spending on benefits unless fewer individuals are served as a result. Not addressed ￮ For more information, contact Kay E. Brown at (202) 512-7215 or email@example.com. See GAO-11-318SP Actions Needed Page 48 GAO-12-453SP Follow-up on 2011 Report Social Services Overall assessment 30. Better coordination of federal homelessness ◐ programs may minimize fragmentation and overlap Action 1 Action 1 progress It will be important for the federal While not all members of the U.S. Interagency Council on Homelessness agencies that have adopted the (USICH) are expected to do so, the three key member agencies—the Federal Strategic Plan to Prevent and Departments of Health and Human Services (HHS), Housing and Urban End Homelessness (the Federal Development (HUD), and Veterans Affairs (VA)—have either adopted or aligned Strategic Plan) to develop their strategic plans with the Federal Strategic Plan, which was developed in implementation plans that include but 2010. GAO has ongoing audit work to determine the extent to which council are not limited to a project schedule, member agencies have implementation plans in place and the extent to which resource allocation, outreach those plans incorporate the recommended elements. measures, and a performance measurement strategy to evaluate their progress. Partially addressed ◐ Action 2 Action 2 progress Agencies need to improve Better collaboration is part of the mission of the USICH and one of the objectives collaborative efforts as outlined in the of the Federal Strategic Plan. Collaborative steps have been taken by some U.S. Interagency Council on agencies as they address the issue of homelessness, but not all agencies are as Homelessness’s (USICH) Federal far along in the process. For example, HHS and VA have been working with Strategic Plan. HUD to better coordinate collection, analysis, and reporting of homelessness data within those three agencies. In addition, during fiscal year 2012, the USICH Partially addressed ◐ is facilitating discussions among and between agencies about the feasibility of creating a common data standard regarding housing stability across relevant federal programs. If adopted, such a common data standard would also allow for greater collaboration among agencies. Agencies have also stated that increased collaboration has occurred between both targeted and mainstream federal homelessness programs. For instance, Department of Agriculture officials stated that as a result of their involvement with USICH, they have begun to plan strategies with another agency to increase access to mainstream programs. However, providers GAO spoke with stated that greater collaboration of homelessness efforts is still needed among agencies, especially those that provide housing and health services. Providers acknowledged that coordination can be difficult because agencies are not set up to work together and coordination efforts take time and resources to be successfully implemented. Therefore, while agency actions to improve collaboration are in process, additional collaboration is still needed to further coordinate the federal response to homelessness. GAO is currently assessing agency efforts to improve collaboration and will report on this later this year. For more information, contact Alicia Puente Cackley at (202) 512-8678 or firstname.lastname@example.org See GAO-11-318SP Actions Needed Page 49 GAO-12-453SP Follow-up on 2011 Report Social Services Overall assessment 31. Further steps needed to improve cost-effectiveness ◐ and enhance services for transportation-disadvantaged persons Action 1 Action 1 progress Federal departments on the The Department of Transportation, which is the head of the Coordinating Interagency Transportation Council, maintains a comprehensive inventory of its programs, but most Coordinating Council on Access and participating federal departments do not have an inventory of existing programs Mobility (Coordinating Council), or related expenditure information for transportation services and have not been including the Departments of actively working with other departments to identify potential opportunities for Agriculture, Education, Health and additional coordination. One of seven Coordinating Council working groups in Human Services, Housing and Urban fiscal year 2011, however, has identified a new opportunity to coordinate certain Development, Interior, Labor, services for a targeted group of transportation-disadvantaged persons. As part Transportation, and Veterans Affairs, of the Coordinating Council’s Veteran’s Affairs working group, the Departments should identify and assess their of Health and Human Services, Labor, Transportation, and Veterans Affairs transportation programs and related recently worked together to develop a Veteran’s Transportation & Community expenditures and work with other Living Initiative, launched in July 2011. Through this initiative, the Federal departments to identify potential Transit Administration has made over $34 million in Bus and Bus Facilities grant opportunities for additional funding available to local governmental agencies to finance the capital costs of coordination. The Coordinating implementing, expanding, or increasing access to local One-Call/One-Click Council should develop the means for Transportation Resource Centers. In addition, a Web site exists (the collecting and sharing this information Coordinating Council’s United We Ride Web site) to collect and share program by establishing agency roles and information, but the information provided does not comprehensively address all responsibilities and developing a relevant transportation programs for transportation-disadvantaged persons. strategy to reinforce cooperation. Partially addressed ◐ Action 2 Action 2 progress Federal departments on the Most federal departments on the Coordinating Council have not disseminated Coordinating Council should develop policies and grantee guidance for coordinating transportation services since and disseminate policies and grantee March 2011. One of eight federal departments we reviewed, however, recently guidance for coordinating disseminated guidance for their grantees for coordinating transportation transportation services. services. The Department of Labor’s Employment and Training Administration and Office of Disability Employment Policy jointly issued a Training and Employment Notice on January 3, 2012 for the public workforce system on Partially addressed ◐ meeting employment-related transportation needs of businesses and job seekers. This guidance provides strategies for connecting individuals, including those with disabilities and other challenges, to employment with transportation to jobs and training. For more information, contact David Wise at (202) 512-2834 or WiseD@gao.gov. See GAO-11-318SP Actions Needed Page 50 GAO-12-453SP Follow-up on 2011 Report Overall assessment Training, Employment, and Education 32. Multiple employment and training programs: ◐ providing information on collocating services and consolidating administrative structures could promote efficiencies Action 1 Action 1 progress The Secretaries of Labor and Health According to department officials, the Departments of Labor (Labor) and Health and Human Services should work and Human Services (HHS) are collaboratively pursuing efforts which may together to develop and disseminate increase administrative efficiencies. These efforts include testing innovative information that could inform efforts by strategies, developing technical assistance, and conducting joint evaluation states and localities in increasing activities. Department officials cited the following: administrative efficiencies in Labor will be awarding competitive grants intended to improve services employment and training programs, and job seeker and employer outcomes and lower costs or reduce including initiatives to consolidate program overlap and administrative cost; program administrative structures and HHS and Labor have jointly developed and disseminated information collocate new partners at one-stop through technical assistance to cross-agency teams to support the centers. improvement of employment, training, and education outcomes for low- skilled adults; and HHS is collaborating with Labor to conduct an evaluation to better Partially addressed ◐ understand policies, practices, and service delivery strategies that lead to better alignment of the Workforce Investment Act and Temporary Assistance for Needy Families (TANF), including promising state and local practices for successful coordination between these programs. As part of its proposed changes to the Workforce Investment Act, the President’s fiscal year 2012 budget request proposed consolidating the Vocational Rehabilitation (VR) States Grants program, Supported Employment State Grants, Projects with Industry, Migrant and Seasonal Farmworkers, and the in-service training portion of VR Training program. The administration also proposed consolidating Education’s Career and Technical Education-Basic Grants to States and Tech Prep Education programs, at the same time reducing program funding. According to an official at the Department of Education, the 23 fiscal year 2012 appropriations did not consolidate these programs. However, the fiscal year 2012 appropriation provided no funds for the Projects with Industry; provided funds to pay only the continuation costs of the Migrant and Seasonal Farmworkers program’s current projects; and the fiscal year 2011 appropriation eliminated funding for Tech Prep, according to the official. In addition, the administration proposed transferring the Senior Community Service Employment Program from Labor to HHS, while reducing the program’s funding. According to a Labor official, the fiscal year 2012 appropriation did not transfer the program to HHS. There was a small reduction in funding relative to the fiscal year 2011 appropriation. 23 Pub. L. No. 112-74 (2011). Page 51 GAO-12-453SP Follow-up on 2011 Report Training, Employment, and Education 32. Employment and training programs (continued) Action 2 Action 2 progress Labor and HHS should examine the Labor reported that it will be awarding competitive grants to encourage states to incentives for states and localities to (1) achieve outcomes for lower cost; (2) reduce program overlap and undertake initiatives in increasing administrative costs; and (3) strengthen coordination and alignment across administrative efficiencies in programs and funding streams. Part of this grant money will be made available employment and training programs through a pilot program that pays for services only after defined outcomes are and, as warranted, identify options for achieved through effective, promising strategies, according to department increasing such incentives. officials. In addition, officials reported that Labor and HHS, along with other federal agencies, have been meeting to identify opportunities for promoting joint ◐ strategic planning across programs. Officials said the departments will be Partially addressed examining incentives for states and localities to undertake strategic planning across programs as a way to increase administrative efficiencies and alignment of core public workforce, as well as partner programs such as Temporary Assistance for Needy Families. For more information, contact Andrew Sherrill at (202) 512-7252 or email@example.com. See GAO-11-318SP Actions Needed Page 52 GAO-12-453SP Follow-up on 2011 Report Training, Employment, and Education Overall assessment 33. Teacher quality: proliferation of programs ◐ complicates federal efforts to invest dollars effectively Action 1 Action 1 progress The Secretary of Education should No executive action taken. The Department of Education noted barriers to work with other agencies as program alignment, such as programs with differing definitions for similar appropriate to develop a coordinated populations of grantees, which create an impediment to coordination. approach for routinely and systematically sharing information that can assist federal programs, states, and local providers in achieving efficient service delivery. Not addressed ￮ Action 2 Action 2 progress Congress could help eliminate some of Two proposed bills currently pending before Congress would, in part, repeal the barriers to program alignment provisions of the ESEA, as amended. The Setting New Priorities in Education through legislation, particularly through Spending Act was introduced in the House on May 13, 2011, with the intended the pending reauthorization of the purpose of repealing ineffective or unnecessary education programs.24 Elementary and Secondary Education According to the committee reporting the bill, it would repeal the authorization for Act of 1965 (ESEA) and other key more than 40 education programs, some of which are related to teacher quality. education bills. Specifically, Congress may choose either to eliminate In addition, the Senate Committee on Health, Education, Labor and Pensions programs that are too small to evaluate reported an original bill, the Elementary and Secondary Education cost-effectively or combine programs Reauthorization Act of 2011, on October 20, 2011, which would also repeal serving similar target groups into a various ESEA provisions that may impact teacher quality programs.25 larger program. Partially addressed ◐ Action 3 Action 3 progress Congress might also include legislative No legislative action identified. provisions to help the Department of Education reduce fragmentation, such as by giving broader discretion to the agency to move resources away from certain programs. Congress could provide the department guidelines for selecting these programs. To the extent that overlapping programs continue to be authorized, they could be better aligned with each other in a way that allows for comparison and evaluation to ensure they are complementary rather than duplicative. Not addressed ￮ 24 25 H.R. 1891, 112th Cong. (2011). Although this original bill has been reported out of the committee, as of January 27, For more information, contact George A. Scott 2012, it had not yet been introduced in the Senate and therefore does not have a bill at (202) 512-7215 or scottG@gao.gov. number. For the text of the original bill, refer to http://www.help.senate.gov/hearings/hearing/?id=b4d24a56-5056-9502-5d73- See GAO-11-318SP Actions Needed a45a120b096b. Page 53 GAO-12-453SP Follow-up on 2011 Report Economic Development Overall assessment 34. Fragmentation of financial literacy efforts makes ◐ coordination essential Action 1 Action 1 progress The Financial Literacy and Education If implemented, the Financial Literacy and Education Commission’s 2011 Commission should enhance its efforts National Strategy will address GAO’s suggestion to strengthen the to coordinate federal activities, such as Commission’s coordination and clearinghouse efforts. The strategy identifies by exploring further opportunities to coordination as one of five action areas and sets a goal of establishing a strengthen its role as a central clearinghouse of federal research, best practices, and other information related clearinghouse for federal financial to financial literacy. According to Commission staff, their goal is to initiate the literacy resources. clearinghouse in early 2012. Partially addressed ◐ Action 2 Action 2 progress The Office of Financial Education, As the new Bureau of Consumer Financial Protection has been hiring staff and within the Bureau of Consumer planning its financial education activities, it has been in regular communication Financial Protection, and the Office of with the Department of the Treasury. Department officials told us that the two Financial Education and Financial agencies meet about once a month in an effort to coordinate their respective Access, within the Department of the roles and activities. These coordination efforts are ongoing and not enough time Treasury, will need to coordinate their has passed to assess their results. roles and activities closely to avoid unnecessary overlap and make the most productive use of their respective resources. Partially addressed ◐ Action 3 Action 3 progress The Financial Literacy and Education The Financial Literacy and Education Commission’s 2011 National Strategy and Commission should build on progress accompanying implementation plan discuss strategies for involving and working it has made in recent years in with nonfederal entities in achieving the commission’s goals, but not enough promoting partnerships among the time has passed to assess the execution of the National Strategy. federal, state, local, nonprofit, and private sectors. Partially addressed ◐ Page 54 GAO-12-453SP Follow-up on 2011 Report Economic Development 34. Financial literacy (continued) Action 4 Action 4 progress Federal agencies should measure the The 2011 National Strategy for Financial Literacy sets goals for encouraging outcomes of their financial literacy evidence-based research and outcome-based program evaluation, although efforts and federal financial literacy evaluation tools have yet to be completed and disseminated to federal agencies. resources should be focused on those The Financial Literacy and Education Commission’s 2011 implementation plan agencies and programs with the most includes developing a federal action plan for these goals and the Departments of expertise and best track records. The the Treasury and Education have plans to share lessons learned from existing Financial Literacy and Education research with other federal agencies. However, the National Strategy does not Commission and the Bureau of make recommendations for allocating federal resources accordingly. Consumer Financial Protection could potentially play a role in developing or disseminating a standard set of evaluation tools or benchmarks that would help assess which federal initiatives have the most effective outcomes. Partially addressed ◐ For more information, contact Alicia Puente Cackley at (202) 512-8678 or firstname.lastname@example.org. See GAO-11-318SP Actions Needed Page 55 GAO-12-453SP Follow-up on 2011 Report Agriculture Overall assessment 35. Reducing some farm program payments could result ○ in savings from $800 million over 10 years to up to $5 billion annually Action 1 Action 1 progress Congress may wish to consider No legislative action identified. reducing or eliminating fixed annual payments to farmers, called direct payments, by (1) lowering payment or income eligibility limits; (2) reducing the portion of a farm’s acres eligible for the payments; or (3) terminating or phasing out direct payments. Not addressed ￮ For more information, contact Lisa Shames at (202) 512-3841or email@example.com. See GAO-11-318SP Actions Needed Page 56 GAO-12-453SP Follow-up on 2011 Report Defense Overall assessment 36. DOD should assess costs and benefits of overseas ◐ military presence options before committing to costly personnel realignments and construction plans, thereby possibly saving billions of dollars Action 1 Action 1 progress The Department of Defense (DOD) DOD has taken some steps that would facilitate such a reassessment, but has should conduct a comprehensive not completed a comprehensive reassessment of its overseas presence that reassessment of its overseas includes the costs and benefits of alternatives. For example, DOD has instituted presence, including the costs and a global posture prioritization panel wherein the combatant commands, the benefits of various alternatives. services, the Office of the Secretary of Defense, and other relevant DOD organizations prioritize global posture initiatives collectively and do so in time for those initiatives that are selected to be included in each service’s budget plan. In Partially addressed ◐ addition, DOD has issued guidance that requires combatant commands to report costs associated with planned projects in their respective posture plans but has not finalized the instruction that would implement this guidance. Additionally, in the report accompanying the Senate bill for the National Defense Authorization Act for Fiscal Year 2012, the Senate Armed Services Committee discussed the importance of using an objective and transparent methodology to capture the full current cost and estimate the future cost of military overseas 26 presence. For example, the committee directed DOD to provide an update on its plans to implement GAO recommendations to more accurately and comprehensively account for costs related to overseas posture plans. Action 2 Action 2 progress To address specific regional issues in In January 2012, the administration announced that the Army will remove two Europe, DOD should reassess plans in brigade combat teams from Europe, but did not specify when this would occur. Europe, including the costs and Also, DOD is considering increasing its naval presence overseas to meet benefits of keeping Army brigades in ballistic missile defense requirements for the region. At present, DOD is Germany and the appropriateness of assessing the cost and benefits of stationing naval forces in Spain to meet the building a new Army headquarters requirement. According to DOD officials, the Department will provide an given the potential changes in force overview of planned changes to posture in Europe in its annual report to structure. Congress on global defense posture in spring 2012. Partially addressed ◐ Action 3 Action 3 progress To address specific regional issues in DOD is taking steps to determine the future task force’s presence in Djibouti and Africa, DOD should reassess missions how it will be funded and sustained, but has not yet developed specific plans of the combined joint task force in and funding estimates. DOD officials told GAO that U.S. Africa Command has Djibouti as well as identifying the assessed the need for the task force and determined the task force to be integral projected costs for the task force and, to the U.S. presence in East Africa through at least 2017, and that final decisions in concert with DOD or the Navy, about specific needs will be made later in 2012 as part of the department’s developing a realistic funding plan for review of worldwide posture plans. the task force’s sustainability. In a committee report, the Senate Appropriations Committee directed the Secretary of the Navy to submit a master plan that would include information on Partially addressed ◐ the planned facilities for Camp Lemonier in Djibouti. An annual update to the master plan is to be submitted to the defense committees with the budget 27 submission, which usually occurs in February each year. According to DOD officials, the Navy is currently conducting a facilities-planning effort and the department will submit the master plan to Congress in August 2012. For more information, contact John Pendleton at (202) 512-3489 or firstname.lastname@example.org. 26 See S. Rep. No. 112-26, at 191 (2011). See GAO-11-318SP Actions Needed 27 See S. Rep. No. 112-29, at 12-13 (2011). Page 57 GAO-12-453SP Follow-up on 2011 Report Defense Overall assessment 37. Total compensation approach is needed to manage ◐ significant growth in military personnel costs Action 1 Action 1 progress The Department of Defense (DOD) DOD has taken some steps to determine the effectiveness of select special and could recognize long-term cost incentive pays. For example, DOD employed a contractor to help develop a avoidance by addressing in a compensation analysis model for selected officer communities and anticipates compensation strategy what types of using it, once completed, to help set effective compensation for those officer compensation are effective, and not communities. In August 2011, DOD hired the RAND Corporation to develop and incurring costs for compensation that apply a model to analyze the effect of special and incentive pays on the staff of may not be effective, in helping the selected officer communities to ensure that staffing goals of the officer department achieve its recruiting and community can be met and that compensation is efficient. DOD officials retention goals. anticipate that this analysis will be used to help the department and the services more efficiently use and set rates for special and incentive pay compensation to ◐ influence a member’s retention decision. The study, entitled Officer Special and Partially addressed Incentive Pay Analysis, is ongoing and expected to be completed in August 2012. To achieve additional progress on this action, DOD should continue analyzing special and incentive pays to determine the most efficient amount to offer to meet staffing goals, including expanding this study to include the enlisted servicemember population. While DOD’s efforts to assess officers’ special and incentive pays shows progress, special and incentive pays are one of many compensation tools that DOD uses to recruit and retain its active duty personnel. Further, special and incentive pays represented less than 5 percent of DOD’s compensation costs for active duty personnel. To completely address GAO’s action needed, DOD should assess the extent its other pays and benefits contribute to its recruiting and retention goals, and use this information to formulate a clear compensation strategy that includes performance measures. For more information, contact Brenda S. Farrell at (202) 512-3604 or email@example.com. See GAO-11-318SP Actions Needed Page 58 GAO-12-453SP Follow-up on 2011 Report Overall assessment Defense 38. Employing best management practices could help DOD ◐ save money on its weapon systems acquisition programs Action 1 Action 1 progress The Department of Defense (DOD) DOD has made some progress in implementing several best practices on could achieve significant cost savings weapon system acquisition programs, but not all best practices are being by employing best management applied by all acquisition programs and more consistent implementation is practices at all phases of its weapon needed. For example, in March 2011, GAO reported that almost all of the 14 system acquisition process—including planned major defense acquisition programs reviewed intended to conduct early early systems engineering, analyzing systems engineering reviews before starting development, but fewer are taking alternatives, managing changes in other actions, such as developing early prototypes, that could improve their system requirements, and more chances of success.28 GAO also reported in July 2011 that the military prototyping early in programs departments held configuration steering board meetings—a key mechanism for development testing. managing changes in system requirements—for 74 of 96 major defense acquisition programs they managed in 2010.29 GAO made several ◐ recommendations to ensure that DOD holds configuration steering boards for all Partially addressed programs, and the department is planning to take action to address them. Action 2 Action 2 progress DOD has started the process of DOD has started to address the affordability of its weapon programs on an reviewing the potential cost of individual basis, but not as a whole. DOD has started to implement its individual weapon system programs to September 2010 guidance that requires “should cost” estimates and affordability meet warfighters’ most pressing needs, targets be set for each new weapon system acquisition program.30 However, in but the department must still address June 2011, GAO reported that DOD’s process for validating new weapon system the overall affordability of its major requirements still does not take into account a requirement’s affordability or set weapon system investment portfolio. priorities in a way that can be used to help manage DOD’s overall weapon system investments.31 In January 2012, DOD revised its requirements process ◐ to include joint prioritization, which should be a useful input for balancing Partially addressed weapon system investments. Action 3 Action 3 progress DOD needs to do a better job planning DOD has made some progress in implementing, but has not yet fully adhered to, and executing programs on a day-to- knowledge-based acquisition approaches. In March 2011, GAO reported that day basis to achieve better outcomes. newer weapon programs are demonstrating higher levels of knowledge at key Critical to achieving successful decision points, but most are still not fully adhering to a knowledge-based outcomes is establishing and acquisition approach.32 sustaining knowledge-based, realistic program baselines. Partially addressed ◐ 28 GAO, Defense Acquisitions: Assessments of Selected Weapon Programs, GAO-11-233SP (Washington, D.C.; Mar. 29, 2011). 29 GAO, Defense Acquisitions: DOD Can Improve Its Management of Configuration Steering Boards, GAO-11-640 (Washington, D.C.: July 7, 2011). 30 “Should-cost” estimates are based on bottoms-up assessments of what programs should cost, if reasonable efficiency and productivity enhancements are undertaken. For more information, contact Michael J. They can be used as a basis for contract negotiation and incentives. Sullivan at (202) 512-4841 or 31 firstname.lastname@example.org. GAO, DOD Weapon Systems: Missed Trade-off Opportunities During Requirements Reviews, GAO-11-502 (Washington, D.C.: June 16, 2011). 32 See GAO-11-318SP Actions Needed GAO, Defense Acquisitions: Assessments of Selected Weapon Programs, GAO-11-233SP (Washington, D.C.; Mar. 29, 2011). Page 59 GAO-12-453SP Follow-up on 2011 Report Defense Overall assessment 39. More efficient management could limit future costs of ◐ DOD’s spare parts inventory Action 1 Action 1 progress The Department of Defense (DOD) DOD is in the process of implementing its November 2010 Comprehensive could limit future costs by focusing its Inventory Management Improvement Plan (the Plan). In 2011, GAO found that efforts on better managing on-order DOD’s Plan, which was required by the National Defense Authorization Act for inventory. Specifically, DOD should Fiscal Year 2010 (Pub. L. No. 111-84, § 328), provides a comprehensive plan focus on reducing on-order inventory for improving inventory management systems of the military departments and levels that are not needed for current the Defense Logistics Agency.33 One of two goals in the Plan is to reduce the needs or projected demand. amount of on-order excess inventory34 from 8.5 percent of on-order dollars above the approved acquisition objective across DOD for fiscal year 2009 to ◐ 6 percent in fiscal year 2014 and 4 percent in fiscal year 2016. Additionally, DOD Partially addressed and its components are in the process of reviewing and strengthening its approval and reporting procedures for on-order excess, which may result in needed updates to DOD and component policy and regulations. Implementation of the Plan is ongoing, and DOD does not expect to complete the related action items until fiscal year 2015. In May 2012, GAO will report on its assessment of DOD’s implementation of the Plan. Action 2 Action 2 progress DOD should address systemic DOD continues to implement its November 2010 Plan, which is, in part, focused weaknesses in demand forecasting, on improving demand forecasting practices and tracking the efficiency of revise management practices to inventory processes. One of the Plan’s nine subplans directly addresses incorporate flexibility needed to demand forecasting weaknesses, including (1) identifying improved methods minimize the impact of demand and techniques for demand forecasting, (2) identifying and implementing fluctuations, and track the cost standard metrics to assess forecasting accuracy and bias, (3) expanding and efficiency of its inventory management refining a departmentwide structure for collaborative forecasting, (4) modifying processes. approaches to setting of inventory levels for low-demand items, and (5) examining how investment risk for new consumable items can be reduced Partially addressed ◐ between the Defense Logistics Agency and the military departments. Efforts to address these weaknesses are scheduled to occur into fiscal year 2015; therefore, it is too early to assess DOD’s progress in improving demand forecasting. Additionally, the Plan includes an action to establish departmentwide metrics to track and monitor the efficiency of DOD inventory operations; however, these efforts are ongoing and have not been finalized. 33 GAO, DOD’s 2010 Comprehensive Inventory Management Improvement Plan For more information, contact Zina Merritt at Addressed Statutory Requirements, But Faces Implementation Challenges, (202) 512-4300 or email@example.com. GAO-11-240R (Washington, D.C.: Jan. 7, 2011). 34 Inventory that is not in DOD’s possession but for which a contract has been awarded or See GAO-11-318SP Actions Needed funds have been obligated is considered to be on-order. Page 60 GAO-12-453SP Follow-up on 2011 Report Overall assessment Defense 40. More comprehensive and complete cost data can help ◐ DOD improve the cost-effectiveness of sustaining weapon systems Action 1 Action 1 progress The Department of Defense (DOD) According to DOD officials, DOD is revising its acquisition and cost-estimating should revise guidance to specifically policies to include this requirement. These policies are expected to be issued in require the retention of life-cycle 2012. operating and support (O&S) cost Additionally, the National Defense Authorization Act for Fiscal Year 2012 estimates for major weapon systems, requires the Secretary of Defense to issue guidance regarding O&S costs for as well as the supporting major weapon systems, including requiring the military departments to retain documentation used to develop these each estimate of O&S costs that is developed at any time during the life-cycle of estimates. a major weapon system, together with supporting documentation used to develop the estimate.35 The guidance was due not later than 180 days after the Partially addressed ◐ date of the enactment of the act, which was on December 31, 2011. As of February 10, 2012, the guidance had not been issued. Action 2 Action 2 progress DOD should identify the cost elements According to DOD officials, DOD has studied potential improvements to the needed to track and assess actual services’ O&S cost visibility data systems and is in the process of revising O&S costs for effective cost analysis guidance. and program management for major weapon systems, and require the The Secretary of Defense was also required under the above act to issue collection of these elements in the guidance to establish standard requirements for the collection of data on O&S services’ O&S cost visibility data costs for major weapon systems and require the military departments to revise systems. their cost visibility data systems to ensure that they collect complete and accurate data and make such data available in a timely manner.36 This guidance has not yet been issued. Partially addressed ◐ Action 3 Action 3 progress DOD should require the services to According to DOD officials, DOD is revising its acquisition policy to include this periodically update life-cycle O&S cost requirement. The revised acquisition policy is expected to be issued in 2012. estimates for major weapon systems The Secretary of Defense was also required under the act to issue guidance to after these systems are acquired, require the military departments to update estimates of O&S costs periodically which would enhance DOD’s ability to throughout the life-cycle of a major weapon system, to determine whether compare actual performance to preliminary information and assumptions remain relevant and accurate, and to planned or expected results. identify and record reasons for variances.37 Guidance in this area has not yet been issued. Partially addressed ◐ 35 See Pub. L. No. 112-81, § 832(a), (b)(2) (2011). 36 See § 832(b)(4). 37 See § 832(b)(3). Page 61 GAO-12-453SP Follow-up on 2011 Report Defense 40. Sustaining weapon systems (continued) Action 4 Action 4 progress DOD should require program offices to DOD has been evaluating alternatives to improve contractor cost reporting. On collect and report detailed support cost the basis of their evaluation, DOD officials expect to make policy revisions in data for their performance-based 2012. logistics arrangements. Additionally, the National Defense Authorization Act for Fiscal Year 2012 requires the Secretary of Defense to issue guidance to establish standard Partially addressed ◐ requirements for the collection and reporting of data on O&S costs for major weapon systems by contractors performing weapon system sustainment functions in an appropriate format, and develop contract clauses to ensure that contractors comply with such requirements.38 As noted above, guidance has not yet been issued. Action 5 Action 5 progress DOD should revise guidance to require According to DOD officials, DOD is in the process of revising its acquisition the development of performance- policy to include this requirement. Further, an interim directive, valid through based logistics business case analyses December 2012, was issued that requires the periodic revalidation of business to better support the decision-making case analyses for major defense acquisition programs and major weapon process on the use of these system programs. However, DOD has not yet formally revised its acquisition arrangements. policy. Partially addressed ◐ Action 6 Action 6 progress DOD should define the elements to be In April 2011, DOD issued a Product Support Business Case Analysis included in these performance-based Guidebook that provides additional details regarding the elements of a business logistics business case analyses so case analysis. The updated guidebook also indicates that program offices will they are comprehensive and sound. revalidate the previous product support strategy business case analysis every 5 years or prior to a change in the weapon system’s product support strategy, as Addressed ● required of product support managers by a provision in the National Defense Authorization Act for Fiscal Year 2010.39 For more information, contact Cary B. Russell at (404) 679-1808 or firstname.lastname@example.org. 38 See § 832(b)(5). See GAO-11-318SP Actions Needed 39 See Pub. L. No. 111-84, § 805(b)(2)(F) (2009). Page 62 GAO-12-453SP Follow-up on 2011 Report Overall assessment Defense 41. Improved corrosion prevention and control practices ◐ could help DOD avoid billions in unnecessary costs over time Action 1 Action 1 progress If the Corrosion Office wishes to According to DOD officials, DOD has begun to validate the return on convince the Department of Defense investments on corrosion projects that have been completed to demonstrate the (DOD) and congressional decision costs and benefits of the projects. DOD’s Corrosion Prevention and Mitigation makers that more fully funding its Strategic Plan suggests that for corrosion projects that have completed research corrosion prevention programs could and development, transitioned to service use, and been in use for 2 years, a provide significant return on project review will be done to validate the overall impact and return on investment, the Corrosion Office needs investment.40 According to DOD officials, the department has completed to complete the validation of return on validating returns on investment on 33 out of 112 projects that were identified in investment estimates in order to fiscal years 2005 through 2008. However, DOD needs to effectively implement demonstrate the costs and benefits of the ongoing process to validate projects’ return on investments. According to its corrosion prevention and control DOD officials, the department plans to validate all the completed projects. projects. Partially addressed ◐ For more information, contact Zina Merritt at (202) 512-4300 or email@example.com. 40 Department of Defense, Corrosion Policy and Oversight Office, Corrosion Prevention See GAO-11-318SP Actions Needed and Mitigation Strategic Plan, (February 2011). Page 63 GAO-12-453SP Follow-up on 2011 Report Overall assessment Economic Development 42. Revising the Essential Air Service program could ◐ improve efficiency Action 1 Action 1 progress Congress may wish to consider As of February 6, 2012, the House and Senate had adopted a conference report updating eligibility criteria and targeting on the FAA Modernization and Reform Act of 2012, but the legislation had not service, including terminating service been signed by the President at the time our work was completed on February at airports that are less remote from 10, 2012. medium- or large-hub airports as well The conference report updates eligibility criteria and limits program eligibility, as changing other program criteria to including the following changes: consolidate subsidized air service. Only locations that have at least 10 enplanements per day during the Addressed ● most recent fiscal year beginning after September 30, 2012, except for locations beyond 175 miles of a large- or medium-hub airport, are considered eligible under the Essential Air Service (EAS) program, but the Secretary of Transportation is allowed to restore eligibility if certain conditions are met. Alaska and Hawaii are exempted from this change. For communities in the 48 contiguous United States, eligibility is limited to communities that, at any time between September 30, 2010 and September 30, 2011 (1) received Essential Air Service, or (2) received a 90-day notice of intent to terminate air service from an air carrier and the Secretary of Transportation required the air carrier to continue service.41 Action 2 Action 2 progress Congress may wish to consider The Consolidated and Further Continuing Appropriations Act, 2012 eliminated revising the program’s operating the requirement that aircraft providing service under the program have a requirements for providing air service minimum 15-seat passenger capacity for fiscal year 2012.42 However, changes to communities to improve efficiency to other operating requirements, such as flexibility in the number of flights and to better match capacity with provided or regionalization of air service, are possible. community use. Partially addressed ◐ Action 3 Action 3 progress Congress may wish to consider No legislative action identified. assessing multimodal solutions, such as more cost-effective bus service to hub airports or air taxi service, to provide communities alternatives to Essential Air Service. Not addressed ￮ 41 H.R. Rep. 112-381, accompanying the FAA Modernization and Reform Act of 2012, H.R. 658, 112th Cong. (2012), as reported out on Feb. 1, 2012. 42 Pub L. No. 112-55 (2011). Page 64 GAO-12-453SP Follow-up on 2011 Report Economic Development 42. Essential Air Service (continued) Action 4 Action 4 progress The Department of Transportation may In responding to this report, Department of Transportation officials stated that wish to consider assessing multimodal the department is prepared to consider multimodal or surface solutions should solutions, such as more cost-effective communities choose to apply to participate in the “Alternative EAS” program bus service to hub airports or air taxi authorized by the Vision 100—Century of Aviation Reauthorization. service, to provide communities alternatives to Essential Air Service. Addressed ● For more information, contact Gerald Dillingham at (202) 512-2834 or firstname.lastname@example.org. See GAO-11-318SP Actions Needed Page 65 GAO-12-453SP Follow-up on 2011 Report Economic Development Overall assessment 43. Improved design and management of the universal ◐ service fund as it expands to support broadband could help avoid cost increases for consumers Action 1 Action 1 progress The Federal Communications FCC has taken action to reform two of the four Universal Service Fund Commission (FCC) needs to undertake programs. FCC adopted an order in October 2011 to comprehensively reform a broader rethinking of the vision, size, and modernize the Universal Service Fund high-cost support mechanisms.43 structure, and goals of the Universal This was a significant step by FCC to restructure the high-cost program—the Service Fund. largest of the four Universal Service Fund programs. The design of the restructured program is intended to better target funding to bring broadband ◐ services to unserved areas. In June 2011, FCC adopted changes to the low- Partially addressed income program to detect and prevent duplicative claims from the same consumer44 and, on January 31, 2012, adopted an order containing additional low-income program reforms.45 According to FCC, these reforms will modernize the program and further reduce waste, fraud, and abuse by program participants. However, FCC is still considering some proposed changes to the rural health care program and has not undertaken any comprehensive reforms of the E-rate program. Action 2 Action 2 progress FCC needs to improve its management FCC has taken action to address some of GAO’s recommendations for the four of the Universal Service Fund Universal Service Fund programs. FCC adopted an order in October 2011 to programs to address a number of GAO comprehensively reform and modernize the Universal Service Fund high-cost recommendations, including that FCC support mechanisms. The order adopts some goals and performance measures establish clear performance goals and for the restructured high-cost program, establishes a budget—although not a measures for the programs. price cap—for the program, and reforms some of the accountability and oversight procedures governing the companies that participate in the program. ◐ FCC also established some goals and performance measures for the low- Partially addressed income program in its January 2012 order. In addition, FCC has taken action to improve internal controls over the Universal Service Fund programs, including conducting risk assessments of the E-rate and low income programs. FCC will still need to conduct performance evaluations to determine if its reforms are working and should conduct needs assessments to inform changes to and the establishment of goals and performance measures for the E-rate and rural health care programs. 43 Connect America Fund et al., FCC 11-161, Report and Order and Further Notice of Proposed Rulemaking (rel. Nov. 18, 2011). For more information, contact Mark Goldstein 44 Lifeline and Link Up Reform and Modernization et al., FCC 11-97, Report and Order, 26 at (202) 512-2834 or email@example.com. FCC Rcd 9022 (rel. June 21, 2011). 45 Lifeline and Link Up Reform and Modernization et al., FCC 12-11, Report and Order See GAO-11-318SP Actions Needed and Further Notice of Proposed Rulemaking (rel. Feb. 6, 2012). Page 66 GAO-12-453SP Follow-up on 2011 Report Economic Development Overall assessment 44. The Corps of Engineers should provide Congress ◐ with project-level information on unobligated balances Action 1 Action 1 progress The U.S. Army Corps of Engineers (the According to the Corps, it has taken action to compile information on project- Corps) should provide Congress with level unobligated balances and plans to include this information in its fiscal year information on estimated project-level 2013 budget presentation, which should be released in mid-February 2012. unobligated balances as a supplement to its budget presentation. Partially addressed ◐ For more information, contact Anu K. Mittal at (202) 512-3841, firstname.lastname@example.org or Melissa Emrey-Arras at (202) 512-6806, email@example.com. See GAO-11-318SP Actions Needed Page 67 GAO-12-453SP Follow-up on 2011 Report Energy Overall assessment 45. Improved management of federal oil and gas ◐ 46 resources could result in approximately $1.8 billion over 10 years Action 1 Action 1 progress The Department of the Interior Nonfederal oil and gas resource owners are employing a range of policies to (Interior) should take steps to increase encourage diligent development of oil and gas leases, including increasing rental the diligent development of federal rates, offering shorter lease terms, and escalating royalty rates.47 Interior is, to lands and waters leased for oil and gas some extent, taking similar steps. Specifically, for a recent lease sale Interior exploration and production. increased the base rental rate from $6.25/acre to $7.00/acre in water depths of less than 200 meters and from $9.50/acre to $11/acre for leases in 200 meters ◐ or deeper. Interior estimates the additional nominal rental revenue received by Partially addressed the federal government over the life of leases issued from this sale is $27 million over the term of the leases. Additionally, to encourage diligent development of federal oil and gas leases, both onshore and offshore, Interior sought authority to charge a $4.00/acre annual fee on nonproducing federal oil and gas leases in the fiscal year 2011 and 2012 budget requests, which would become effective upon congressional action. However, the fiscal year 2012 appropriations bill for Interior did not provide the department with such authority. Action 2 Action 2 progress Congress may need to take action to No legislative action identified. authorize or encourage Interior to revise its rental fee structure in ways that are beyond what is specifically authorized to increase rental payments for nonproducing leases. Not addressed ￮ Action 3 Action 3 progress Interior should complete its study In order to examine whether current U.S. royalty rates produce a fair return for examining how other oil and gas the government overall, Interior contracted for a study to examine the total resource owners select fiscal federal revenues that result from development of oil and gas resources on parameters for leasing and adjusting federal lands and waters. The study was completed in late 2011 and released oil and gas royalty rates and use that publicly in 2012. Interior officials have not indicated how the information will information to adjust, as appropriate, affect royalty or other policies. its royalty rates to a level that ensures In addition, Interior has taken steps to examine royalty rates for onshore leases. the government a fair return. In doing Interior’s Bureau of Land Management (BLM) has completed benefit-cost and so, it should ensure opportunities for economic impact analyses on adjusting onshore royalty rates. According to substantive, two-way communication BLM, it is now in the process of finalizing a proposed rule to adjust royalty rates. with program stakeholders. The proposed rule is under review by Interior officials, after which it will go to OMB for review. BLM expects to publish the proposed rule in the Federal Partially addressed ◐ Register in early 2012. 46 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. 47 GAO, Oil and Gas Leasing: Interior Could Do More To Encourage Diligent Development, GAO-09-74 (Washington, D.C.: October 3, 2008). Page 68 GAO-12-453SP Follow-up on 2011 Report Energy 45. Oil and gas resources (continued) Action 4 Action 4 progress Depending on the results of the study, No legislative action identified. Congress may wish to provide additional guidance or take additional actions to enable Interior to change how it oversees federal lands and waters and the revenues derived from production of oil and gas there. Not addressed ￮ Action 5 Action 5 progress Interior should implement GAO’s GAO has documented that Interior has taken action to implement 5 of the 19 recommendations from prior reports recommendations GAO made in its March 2010 report to improve oversight of oil addressing a variety of oil and gas and gas measurement and improve confidence that the federal government is measurement factors. receiving its fair share of oil and gas produced from federal lands. 48 However, 14 recommendations remain open. Partially addressed ◐ For more information, contact Frank Rusco at (202) 512-3841 or firstname.lastname@example.org. 48 GAO, Oil and Gas Management: Interior’s Oil and Gas Production Verification Efforts See GAO-11-318SP Actions Needed Do Not Provide Reasonable Assurance of Accurate Measurement of Production Volumes, GAO-10-313 (Washington, D.C.: Mar. 15, 2010). Page 69 GAO-12-453SP Follow-up on 2011 Report General Government Overall assessment 46. Efforts to address governmentwide improper ◐ payments could result in significant cost savings Action 1 Action 1 progress Until the federal government has Federal entities reported estimates of improper payment amounts that totaled implemented effective processes to $115.3 billion in fiscal year 2011, a decrease from the prior year revised determine the full extent to which estimate of $120.6 billion. Included were improper payment estimates for nine improper payments occur and to additional programs in fiscal year 2011 that did not report an estimate in fiscal reasonably assure that appropriate year 2010, with the Department of Health and Human Services (HHS) Medicare actions are taken across entities and Part D program having the highest estimate of the additional reporting programs. programs to effectively recover and Nevertheless, the federal government continues to face challenges in reduce improper payments, the federal determining the full extent of improper payments. For example, another three government will not have reasonable programs providing estimates for the first time were not included in the assurance that the use of taxpayer governmentwide totals because those programs were still developing their funds is adequately safeguarded. estimating methodologies. Also, three federal entities did not report fiscal year 2011 estimated improper payment amounts for four risk-susceptible programs, ◐ including HHS’s Children’s Health Insurance Program and Temporary Partially addressed Assistance for Needy Families. Audits of federal agencies also continue to identify internal control deficiencies over financial reporting, such as financial system limitations and information system control weaknesses, which significantly increase the risk that improper payments may occur and then may not be detected promptly. Action 2 Action 2 progress The level of importance the agencies In April 2011, the Office of Management and Budget (OMB) issued guidance on and the administration place on the agency implementation of IPERA requirements for, among other things, efforts to implement the requirements reporting recovery auditing results, which are conducted to identify and reclaim established by the Improper Payments overpayments. Accordingly, agencies reported recoveries of contractor and Elimination and Recovery Act of 2010 vendor overpayments of $1.2 billion during fiscal year 2011. Implementation of (IPERA); Executive Order 13520, IPERA requirements is a step in the right direction toward providing additional Reducing Improper Payments; and transparency and helping to improve oversight and accountability, but continued other guidance will be a key factor in agency top management attention is needed to further reduce the federal determining their overall effectiveness government’s vulnerability to improper payments. Under OMB implementation in reducing improper payments and guidance for Executive Order 13520, fiscal year 2011 was the first year that ensuring that federal funds are used agencies were required to identify and report their improper payments in three efficiently and for their intended distinct error categories. This additional information should be useful in purposes. identifying the causes of improper payments and developing corrective actions, and could assist in OMB’s plans to enhance agencies’ deployment of forensic ◐ technologies to help prevent fraud and error. Partially addressed Additionally, the Senate Committee on Appropriations increased oversight of Department of Veterans Affairs’ improper payments by directing the department to report to the Committees on Appropriations of both chambers of Congress on what steps have been taken to adopt recovery audits as a means of reducing 49 and recovering improper payments. For more information, contact Susan Ragland at (202) 512-9500 or email@example.com. See GAO-11-318SP Actions Needed 49 S. Rep. No. 112-29 (2011). Page 70 GAO-12-453SP Follow-up on 2011 Report General Government Overall assessment 47. Promoting competition for the over $500 billion in ◐ federal contracts could potentially save billions of dollars over time Action 1 Action 1 progress The Office of Management and Budget OMB has made progress in promoting competition, but needs to continue this (OMB) needs to continue to focus on effort. Specifically, OMB has called for agencies to reduce obligations under reducing obligations under high-risk new, high-risk contract actions, including contracts awarded noncompetitively, contracts, including those awarded by 10 percent in fiscal year 2010, but the extent to which agencies met this goal noncompetitively. is unclear. In November 2011, GAO made a number of recommendations, including that OMB continue to focus on its savings initiative and clarify how it ◐ aligns with other new initiatives, clarify guidance on how agencies’ initiatives are Partially addressed defined and reported, and expand the initiative to include all high-risk actions.50 GAO also recommended that OMB report on the results of the initiative through fiscal year 2011. The agency agreed to adopt, where appropriate, GAO’s recommendations regarding methodological and data concerns. Action 2 Action 2 progress Program and contracting officials need The largest federal contracting agency, the Department of Defense (DOD), has to actively promote competition. taken some actions to promote competition, specifically focusing on maximizing competition in situations where only one offer is received in a procurement utilizing competitive procedures. An April 2011 memorandum directs that if a Partially addressed ◐ solicitation was advertised for less than 30 days and only one offer is received, the contracting officer shall cancel and re-solicit for an additional 30 days, unless an exception or waiver is granted. Other guidance further directs that if the solicitation was open for at least 30 days, or has been re-advertised and still only one offer is received, the contracting officer shall conduct negotiations with the offeror, unless a waiver is granted, but in no event should the negotiated price exceed the price originally offered. If this guidance is implemented effectively, DOD should realize the benefits of enhanced competition. We will continue to monitor progress in promoting competition by DOD and by civilian agencies as well. For more information, contact John P. Hutton at (202) 512-4841 or firstname.lastname@example.org. 50 GAO, Federal Contracting: OMB's Acquisition Savings Initiative Had Results, See GAO-11-318SP Actions Needed but Improvements Needed, GAO-12-57 (Washington, D.C.: Nov. 15, 2011). Page 71 GAO-12-453SP Follow-up on 2011 Report General Government Overall assessment 48. Applying strategic sourcing best practices ◐ throughout the federal procurement system could save billions of dollars annually Action 1 Action 1 progress Acquisition leaders across the Federal agencies made progress using strategic sourcing approaches to government need to more fully achieve cost savings and other efficiencies, but some agencies, such as the embrace the strategic sourcing Department of Defense (DOD), have not fully collected information on the use of initiative, beginning with collecting, strategic sourcing. In November 2011, GAO reported that almost all of the 24 maintaining, and analyzing data on largest federal agencies reported some savings in fiscal year 2010 associated current procurement spending. Then, with the use of strategic sourcing.51 For example, after conducting a spend agencies have to conduct analysis of its air ambulatory services, the Bureau of Prisons reported savings of assessments of acquisition and supply 30 percent, or about $1.5 million, from negotiating a nationwide agreement chain functions to initiate rather than relying on locally competed contracts. The Department of Homeland enterprisewide transformations. Security (DHS) established a departmentwide strategic sourcing program office, which reported saving about $347 million in fiscal year 2010 through a portfolio Partially addressed ◐ of more than 300 departmentwide contracts and by participating in the General Service Administration’s Federal Strategic Sourcing Initiative. The office reported that DHS components leveraged their buying power to save more than $60 million by using volume software license agreements, $1.3 million on purchases of body armor, and about $2.8 million on office supplies. Several governmentwide federal strategic sourcing initiatives are in place and, according to officials from the Office of Management and Budget (OMB), have produced savings in areas such as domestic delivery services and wireless telecommunications. For example, OMB officials estimated the savings for fiscal year 2011 from governmentwide Federal Strategic Sourcing Initiatives for domestic delivery services to be approximately $31 million, and approximately $5.3 million on wireless telecommunications expense management services. GAO has not independently verified these estimates. In addition, GAO reported in December 2011 that one of these initiatives for office supplies produced an 52 estimated savings of $16 million from June 2010 through August 2011. However, further efforts are needed to more fully embrace strategic sourcing initiatives. For example, DOD, the government’s largest purchaser, has not fully collected and assessed cost savings and other information from strategic sourcing initiatives. For more information, contact Cristina Chaplain at (202) 512-4841 or 51 email@example.com. GAO, Federal Contracting: OMB’s Acquisition Savings Initiative Had Results, but Improvements Needed, GAO-12-57 (Washington D.C.: Nov. 15, 2011). 52 See GAO-11-318SP Actions Needed GAO, Strategic Sourcing: Office Supplies Study Had Limitations, but New Initiative Shows Potential for Savings, GAO-12-178 (Washington D.C.: Dec. 20, 2011). Page 72 GAO-12-453SP Follow-up on 2011 Report General Government Overall assessment 49. Adherence to new guidance on award fee contracts ◐ could improve agencies’ use of award fees and produce savings Action 1 Action 1 progress Sustained progress in the use of award The five contracting agencies GAO reviewed in 2009 are working to develop and fees will require that contracting refine ways to implement and manage the use of award fees in accordance with agencies adhere to the recent changes the Federal Acquisition Regulation; however, it is too soon to determine the full to the Federal Acquisition Regulation, impact of these actions. From August 2009 to February 2011, the National which in 2009 prohibited the practices Aeronautics and Space Administration and the Departments of Defense, Energy, of rollover of unearned award fees and Homeland Security, and Health and Human Services, which comprised more awarding fees to contractors that have than 95 percent of spending using award fees in 2008, took action by issuing performed unsatisfactorily.53 Further policy guidance or updating agency regulation or guidance to be more consistent efforts are needed by agencies to with the Federal Acquisition Regulation or in response to GAO's identify methods to evaluate the recommendations. These actions were aimed at improving award fee effectiveness of award fees as a tool contracting, such as ensuring that all award fee plans include criteria related to for improving contractor performance. cost, schedule, and performance and that award fees are only earned for successful outcomes. Improving agency guidance, while an important step, will Partially addressed ◐ need to be consistently implemented over time to achieve the desired effect of motivating excellent contractor performance. GAO will be evaluating the agencies’ implementation of this action. For more information, contact John P. Hutton at (202) 512-4841 or firstname.lastname@example.org. 53 Rollover of unearned award fee is where unearned award fees are transferred from one evaluation period to a subsequent period, thus allowing contractors additional See GAO-11-318SP Actions Needed opportunities to earn previously unearned fees. Page 73 GAO-12-453SP Follow-up on 2011 Report General Government Overall assessment 50. Agencies aim to save at least $3 billion by continued ◐ disposal of unneeded federal real property Action 1 Action 1 progress The Office of Management and Budget OMB did not develop the recommended action plan. However, OMB is (OMB) could assist agencies in coordinating with federal agencies to finalize the governmentwide cost savings meeting a June 2010 Presidential plans that it projects will exceed the $3 billion target by half a billion dollars, Memorandum target of $3 billion in according to OMB officials. Further, OMB officials reported that as of the end of savings related to property disposals 2011, agencies have achieved in total $1.5 billion dollars of the $3 billion goal. and other methods by developing an GAO has not independently verified these estimates. In addition, the Civilian action plan to address key problems Real Property Realignment Act (CPRA), included in the President’s fiscal year associated with disposing of unneeded 2012 budget proposal, would streamline the real property disposal process by real property, including reducing the establishing an independent board to assist agencies in identifying unneeded effect of competing stakeholder real property. The proposed independent board partially responds to the interests on real property decisions. challenges GAO has identified. It could address stakeholder influences by recommending federal properties for disposal or consolidation after receiving Partially addressed ◐ recommendations from civilian landholding agencies and independently reviewing the agencies’ recommendations. CPRA would also establish an Asset Proceeds and Space Management Fund that could be used to reimburse agencies for necessary disposal costs. A version of CPRA similar to the President’s proposal was introduced in the 54 House on May 4, 2011. The bill was reported out of the House Transportation and Infrastructure Committee and passed the House of Representatives on February 7, 2012. In the Senate, CPRA was introduced on August 2, 2011.55 For more information, contact David Wise at (202) 512-2834 or email@example.com. 54 H.R. 1734, 112th Cong. (2011). See GAO-11-318SP Actions Needed 55 S. 1503, 112th Cong. (2011). Page 74 GAO-12-453SP Follow-up on 2011 Report Overall assessment General Government ◐ 51. Improved cost analyses used for making federal facility ownership and leasing decisions could save millions of dollars Action 1 Action 1 progress The Office of Management and Budget OMB has not directly addressed leasing issues by developing the recommended (OMB) should develop a strategy to strategy. OMB, however, indicated that lease savings will account for some of reduce agencies’ reliance on costly the targeted $3 billion savings from property disposals and other methods. The leasing where ownership would result Civilian Real Property Realignment Act (CPRA), included in the President’s in long-term savings. Such a strategy fiscal year 2012 budget proposal, did not explicitly address the government’s could identify the conditions under overreliance on leasing, but could help do so by facilitating consolidated which leasing is an acceptable operations where appropriate. alternative, include an analysis of real A similar legislative version of CPRA was introduced on May 4, 2011, which property budget scoring issues, and stated that one of the purposes of the act was to “reduce the reliance on costly provide an assessment of viable leased space.”56 The bill was reported out of the House Transportation and alternatives. Infrastructure Committee and passed the House of Representatives on February 7, 2012. In the Senate, CPRA was introduced on August 2, 2011, and also Partially addressed ◐ stated that one of its purposes was to “reduce the reliance on costly leased space.”57 For more information, contact David Wise at (202) 512-2834 or firstname.lastname@example.org. 56 H.R. 1734, 112th Cong. (2011). See GAO-11-318SP Actions Needed 57 S. 1503, 112th Cong. (2011). Page 75 GAO-12-453SP Follow-up on 2011 Report Overall assessment General Government 52. The Office of Management and Budget’s IT Dashboard ◐ reportedly has already resulted in savings and can further help identify opportunities to invest more efficiently in information technology Action 1 Action 1 progress Office of Management and Budget OMB has begun implementing its planned improvements to its IT Dashboard. (OMB) should complete planned For example, in September 2011, OMB officials stated that work is under way to improvements to its IT Dashboard, as change the Dashboard’s cost and schedule ratings calculations to improve well as implementation of GAO’s insight into current performance. Specifically, officials said that the new recommendations. calculations will emphasize ongoing work and reflect only development efforts, not operations and maintenance activities. In addition, in July 2011, OMB issued ◐ guidance requiring agencies to report investment work activities in increments of Partially addressed 6 months or less. OMB officials stated that this revised reporting process and the updated rating calculations will be reflected in a new version of the Dashboard, which is to be publicly deployed upon release of the President's Budget for fiscal year 2013. Once fully implemented by OMB, these changes could be significant steps toward improving insight into current investment performance on the Dashboard. GAO plans to evaluate the new version of the Dashboard once it is publicly available in 2012. Action 2 Action 2 progress Additional opportunities for potential In 2011, congressional committees requested that GAO further review the cost savings exist with the continued accuracy of the data on the IT Dashboard and inform Congress on the costs and use of the Dashboard by congressional schedule performance of IT investments to help improve congressional oversight committees to support critical oversight efforts. A congressional committee also recently asked GAO to utilize the efforts. Dashboard to conduct performance trend analyses of agencies' IT investments to determine if they are improving over time, and to report to Congress on the Addressed ● results of the review. For more information, contact David A. Powner at (202) 512-9286 or email@example.com. See GAO-11-318SP Actions Needed Page 76 GAO-12-453SP Follow-up on 2011 Report General Government Overall assessment 53. Increasing electronic filing of individual income tax ◐ returns could reduce IRS’s processing costs and increase revenues by hundreds of millions of dollars Action 1 Action 1 progress If the Internal Revenue Service (IRS) IRS updated its publication to require all tax preparation software firms to print an were to collect more information via identifier on paper returns created with their tax preparation software. expanded software identification numbers on tax returns, such information could support research into how software affects electronic filing. Addressed ● Action 2 Action 2 progress IRS needs to develop a tax return IRS developed a reject prevention strategy that engaged stakeholders and has reject prevention strategy, include helped provide clearer reject descriptions. external stakeholders in its reject working group, develop an action plan for that group, and provide clearer descriptions of why returns are being rejected. Addressed ● Action 3 Action 3 progress IRS should determine actions needed IRS’s 2012 revenue proposals included a legislative proposal that would require to require software vendors to include all taxpayers who prepare their returns electronically but print and file them on bar codes on printed individual income paper to print the returns with a 2-D barcode. There has been no action on this tax returns and the cost of those legislative proposal. actions. GAO continues to believe that bar coding of printed returns has the potential to reduce processing costs, facilitate access to taxpayer information, and improve compliance. Partially addressed ◐ Action 4 Action 4 progress IRS should develop an overall strategy No executive action taken. IRS updated its Advanced E-file report in December for increasing electronic filing. 2010, which identified options to increase electronic filing, but it has yet to define an overall strategy. Not addressed ￮ For more information, contact James R. White at (202) 512-9110 or firstname.lastname@example.org. See GAO-11-318SP Actions Needed Page 77 GAO-12-453SP Follow-up on 2011 Report General Government Overall assessment 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 58 revenues by $3.8 billion Action 1 Action 1 progress The Internal Revenue Service (IRS) While IRS officials have reported that ROI is one of many useful management should continue to increase its use of tools, IRS has not moved to extend ROI to existing enforcement programs. return on investment (ROI) information. This will require additional research to identify the impacts of specific programs, including the effect on voluntary compliance by taxpayers. Not addressed ￮ Action 2 Action 2 progress Once actual ROI statistics are IRS has developed a preliminary means of determining actual revenue collected developed for programs, and from enforcement initiatives proposed in the fiscal year 2009 budget justification. supplemented with compliance cost However, actual cost information, particularly a process for determining indirect information, IRS could compare costs, is still under development. IRS cannot make comparisons without actual ROI. - results across programs and - actual ROI to projected ROI to determine if anticipated results were actually achieved. Partially addressed ◐ Action 3 Action 3 progress IRS should coordinate with the For its fiscal year 2012 budget justification, IRS worked with the Department of Department of the Treasury to provide the Treasury to determine which legislative proposals would be included in the Congress with preliminary cost budget, and then IRS provided aggregate cost information for all legislative estimates or descriptions of resource proposals formulated in time to develop a cost estimate. As a result, Congress needs for legislative proposals in future and other stakeholders obtained preliminary cost information to use when budget justifications. weighing the proposals. Addressed ● 58 For more information, contact James R. White The net tax gap was updated in 2012 and estimated to be $385 billion for the 2006 tax at (202) 512-9110 or email@example.com. year. Thus, a 1 percent reduction would increase tax revenues by $3.8 billion. See GAO-11-318SP Actions Needed Page 78 GAO-12-453SP Follow-up on 2011 Report General Government Overall assessment 55. Better management of tax debt collection may ◐ resolve cases faster with lower IRS costs and increase debt collected Action 1 Action 1 progress The Internal Revenue Service (IRS) IRS established objectives and performance measures for the notice phase—the needs to establish objectives and first phase of IRS’s three-phase process for resolving individuals’ unpaid tax performance measures for the notice debts—in February 2011. In addition, IRS has tasked the Office of Taxpayer phase of its collection process for Correspondence with responsibility for overseeing improvements to IRS individual taxpayers as well as correspondence, including collection notices. Although IRS has planned for its management responsibility for Collection Governance Council to be responsible for an annual management reviewing the performance of the review of how well the notice phase of the collection process performed, IRS has notice phase. not yet completed the needed review. Partially addressed ◐ Action 2 Action 2 progress IRS needs to better document the IRS better documented the business rules and their rationales by preparing business rules and their rationales, and notice effectiveness reports for the three highest-volume collection notices, periodically evaluate how well they are including detailed descriptions of the notices and rationales for business rules. working. IRS also planned an annual evaluation of the business rules. However, IRS has not yet fully implemented the plan or completed the first annual evaluation. IRS ◐ officials expect to finalize the evaluation by April 2012. Partially addressed For more information, contact Michael Brostek at (202) 512-9110 or firstname.lastname@example.org. See GAO-11-318SP Actions Needed Page 79 GAO-12-453SP Follow-up on 2011 Report General Government Overall assessment 56. Broadening IRS’s authority to correct simple tax ○ return errors could facilitate correct tax payments and help IRS avoid costly, burdensome audits Action 1 Action 1 progress Congress many want to consider No legislative action identified. granting the Internal Revenue Service (IRS) broader math error authority, with appropriate safeguards against misuse of that authority, to correct errors during tax return processing. Not addressed ￮ For more information, contact Michael Brostek or James R. White at (202) 512-9110 or email@example.com or firstname.lastname@example.org. See GAO-11-318SP Actions Needed Page 80 GAO-12-453SP Follow-up on 2011 Report General Government Overall assessment 57. Enhancing mortgage interest information reporting ○ could improve tax compliance Action 1 Action 1 progress The Internal Revenue Service (IRS) IRS indicated that its research staff would study changing Form 1098 to include should revise Form 1098, the additional information but does not have sufficient data on the volume and Mortgage Interest Statement, to magnitude of noncompliance to make any changes yet. include information on the address of a property securing a mortgage, mortgage balances, and an indicator of whether the mortgage is for a current year refinancing. Not addressed ￮ Action 2 Action 2 progress IRS should require mortgage-secured IRS disagreed with this recommendation after performing a benefits and impact property addresses to be reported on analysis on making the change, and said that its existing enforcement programs other forms to help IRS detect identify and address noncompliance. IRS officials also said that the incremental taxpayers who fail to pay taxes on benefits of the recommendation are outweighed by the additional burden that certain forgiven mortgage debt. would be imposed on third-party records. GAO maintains that adding address information would be helpful for achieving greater compliance. Not addressed ￮ For more information, contact James R. White at (202) 512-9110 or email@example.com. See GAO-11-318SP Actions Needed Page 81 GAO-12-453SP Follow-up on 2011 Report General Government Overall assessment 58. More information on the types and uses of canceled ◐ debt could help IRS limit revenue losses of forgiven mortgage debt Action 1 Action 1 progress The Internal Revenue Service (IRS) IRS agreed that third-party data would be useful in identifying whether the debt could determine how much additional being excluded is for a principal residence, and IRS began using these data revenue could be gained by refocusing sources in the examination process. mortgage debt enforcement efforts by IRS also agreed to consider modifying some, but not all, of the forms associated taking some relatively low-cost steps, with forgiven mortgage debts. Some of the modifications will enable IRS to including revising the associated collect more information from lenders about the types of debt being forgiven. forms, collecting more information from However, the IRS has not yet implemented all of these form changes. taxpayers and lenders, and using third- party data to determine whether taxpayers are correctly excluding mortgage debt from taxable income. Partially addressed ◐ For more information, contact James R. White at (202) 512-9110 or firstname.lastname@example.org. See GAO-11-318SP Actions Needed Page 82 GAO-12-453SP Follow-up on 2011 Report General Government Overall assessment 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 Action 1 Action 1 progress To improve the Internal Revenue No executive action taken. Service (IRS) examinations of the real estate tax deduction, examination guidance needs to clarify the type of evidence for verifying deductibility and to require examiners to ask taxpayers to substantiate deductions that appear to include nondeductible charges that are large, unusual, or questionable. Not addressed ￮ Action 2 Action 2 progress IRS needs to develop a cost-effective IRS took steps to develop a cost-effective means of identifying local means of identifying local governments governments with potentially large nondeductible charges on their real estate tax with potentially large nondeductible bills, but determined that no cost-effective means was available. As a result, IRS charges on their real estate tax bills, has not been able to use such information to perform targeted outreach to which will support targeted efforts to improve compliance as GAO recommended. However, to meet the spirit of improve compliance. IRS then should GAO’s recommendation, IRS in 2010 distributed guidance to local jurisdictions work with these local governments to that provided examples of what is and is not deductible and suggested that local identify charges that are nondeductible governments consider modifying their tax bills to alert taxpayers that certain and work with the localities and other items are not allowable as deductions on their federal income tax returns. third parties to help taxpayers correctly claim the deduction by clarifying for them what they can and cannot deduct. IRS should also use the information to target examinations covering the real estate tax deduction. Addressed ● For more information, contact Michael Brostek at (202) 512-9110 or email@example.com. See GAO-11-318SP Actions Needed Page 83 GAO-12-453SP Follow-up on 2011 Report General Government Overall assessment 60. Revisions to content and use of Form 1098-T could ◐ help IRS enforce higher education requirements and increase revenues Action 1 Action 1 progress The Internal Revenue Service (IRS) IRS is evaluating the feasibility of using current information reported on the Form should determine the feasibility of 1098-T, which educational institutions use to report information about qualifying using current information reported on education expenses to taxpayers and IRS, in its compliance programs. For Form 1098-T in its compliance example, IRS has begun testing compliance initiatives that involve making better computer matching systems. use of Form 1098-T information. Partially addressed ◐ Action 2 Action 2 progress IRS should revise Form 1098-T to IRS is taking steps to address possible changes to the Form 1098-T. However, improve the usefulness of information before making changes to the form, IRS plans to address issues identified with on qualifying education expenses. the accuracy of data on Form 1098-T through outreach efforts to educational institutions. Partially addressed ◐ For more information, contact James R. White at (202) 512-9110 or firstname.lastname@example.org. See GAO-11-318SP Actions Needed Page 84 GAO-12-453SP Follow-up on 2011 Report General Government Overall assessment 61. Many options could improve the tax compliance of ○ sole proprietors and begin to reduce their $68 billion portion of the tax gap Action 1 Action 1 progress The Department of the Treasury’s tax No executive action taken. gap strategy should cover sole proprietor compliance in detail while coordinating it with broader tax gap reduction efforts. Such a strategy could include a mix of numerous options. Not addressed ￮ Action 2 Action 2 progress The Internal Revenue Service (IRS) IRS has made minimal progress, as much is left to be done to better understand should use its ongoing research efforts sole proprietor noncompliance, such as the improper claiming of losses. IRS to develop a better understanding of has started to collect some nongeneralizable data on certain types of claimed the nature of sole proprietor losses during examinations of sole proprietor tax returns. IRS also is planning a noncompliance, including sole research effort on tax noncompliance that is to include sole proprietors, but that proprietors improperly claiming research will not start until 2015. business losses. Not addressed ￮ For more information, contact James R. White at (202) 512-9110 or email@example.com. See GAO-11-318SP Actions Needed Page 85 GAO-12-453SP Follow-up on 2011 Report General Government Overall assessment 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 Action 1 Action 1 progress The Internal Revenue Service (IRS) IRS does not plan to develop a partial estimate of the business nonfiler rate, and should develop at least a partial funding to do so using operational data would likely not be available. IRS estimate for the business nonfiler rate believes its existing operational data on business nonfilers are sufficient. based on its existing inventory of However, a more comprehensive estimate could give IRS information that would cases. be useful in its strategic planning and determining what priority it should place on this type of noncompliance. Not addressed ￮ Action 2 Action 2 progress IRS should set a deadline for IRS has determined that it does not have the necessary data that could be used developing performance data on its to measure its business nonfiler efforts across IRS. IRS believes that business nonfiler efforts. developing such data would be prohibitively costly and plans to continue to use data at the operating division level. Not addressed ￮ Action 3 Action 3 progress IRS should develop a plan for IRS has identified ways to monitor and evaluate its codes for selecting nonfiler evaluating its new initiative, including cases on a regular basis, but does not yet have a formal evaluation plan to guide codes for selecting nonfiler cases to this effort. pursue. Partially addressed ◐ Action 4 Action 4 progress IRS should better use income data and IRS has disseminated training material on using selection codes to verify selection codes in verifying taxpayer taxpayer statements. IRS has updated the Internal Revenue Manual on the statements about their filing codes’ use for some collections staff. requirements. Addressed ● Action 5 Action 5 progress IRS should study the feasibility and IRS has requested additional unpublished data from GAO’s analysis to help it cost-effectiveness of using non-IRS, explore the feasibility of third-party data use. In addition, IRS is seeking access private data to verify taxpayer to the Central Contractor Registry file, which contains self-reported revenue and statements. employment data on businesses that register annually to be awarded federal contracts. Collecting these data is an initial step in studying the use of the data. Partially addressed ◐ For more information, contact James R. White at (202) 512-9110 or firstname.lastname@example.org. See GAO-11-318SP Actions Needed Page 86 GAO-12-453SP Follow-up on 2011 Report General Government Overall assessment 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 Action 1 Action 1 progress Congress could require S corporations No legislative action identified. to use information already available to them to calculate shareholders’ basis as completely as possible and report it to shareholders and the Internal Revenue Service (IRS). Not addressed ￮ Action 2 Action 2 progress IRS should evaluate options for IRS has an ongoing project to identify potential preparer noncompliance of flow- improving paid tax return preparer through returns. performance, send additional guidance IRS plans to work on guidance on S corporation requirements, such as on-basis on S corporation requirements such as calculations, during 2013. on basis calculations and adequate wage determinations to new S IRS updated its guidance to S Corporations on adequate shareholder corporations, and provide more compensation about 6 months before GAO issued its December 2009 report on guidance to shareholders and tax noncompliance with S Corporation tax rules,59 but has not issued more guidance preparers on determining adequate since then and has no scheduled date for issuing more guidance. shareholder compensation. Partially addressed ◐ For more information, contact Michael Brostek at (202) 512-9110 or email@example.com. 59 GAO, Tax Gap: Actions Needed to Address Noncompliance with S Corporation Tax See GAO-11-318SP Actions Needed Rules, GAO-10-195 (Washington, D.C.: Dec. 15, 2009). Page 87 GAO-12-453SP Follow-up on 2011 Report General Government Overall assessment 64. IRS needs an agencywide approach for addressing tax ◐ evasion among the at least 1 million networks of businesses and related entities Action 1 Action 1 progress The Internal Revenue Service (IRS) IRS has not yet created a documented, agencywide strategy to manage network should create an agencywide strategy noncompliance efforts; however, it has elements of the strategy. For example, it with goals to coordinate and plan its continues to focus on making iterative improvements to its network analysis enforcement efforts on network tax tools. Although these improvements are not contained within an IRS-wide evasion. The strategy should include strategy, they touch on assessing effectiveness. For example, IRS has taken (1) assessing the effectiveness of steps to assess its most predominantly used network analysis tool. As part of an network analysis tools to ensure that annual survey, IRS asked users of this tool about its effectiveness and to resources are being devoted to those suggest improvements. IRS also certified the tool as conforming to agency that provide the largest return on guidelines and requirements for usefulness. The agency continues to develop investment; (2) determining whether to other data and tools to address network-related noncompliance but not on a increase access to IRS data or collect specific time schedule. IRS also had plans to create a research center that new data for network analysis; (3) would focus on the detection of tax schemes and other abusive transactions. developing network analysis tools on a IRS envisioned that the proposed center would promote collaboration across specific time schedule; and (4) IRS, help develop and use a suite of tools for addressing abusive transactions, deciding how to manage network and centralize datasets into a cohesive data-sharing strategy. However, the efforts across IRS. program was not funded in IRS’s fiscal year 2011 budget. To fulfill the recommendation, IRS would at least need to create a specific approach on ◐ managing network compliance efforts across IRS that includes time frames for Partially addressed network analysis tool development. Action 2 Action 2 progress IRS should ensure that its staff IRS completed an annual survey of staff using yK-1, a network analysis tool. understand the network tools and Results from the survey were used to enhance staff knowledge about yK-1. For establish formal ways for users to example, IRS added an index to an existing yK-1 users' manual. Agency officials interact with tool programmers and also reported adding updated information to training programs for new staff analysts to ensure that the network using yK-1. As part of the survey process, IRS held feedback sessions between tools are easy to use and achieve programmers and users of the tool. During these discussions, participants goals. discussed ways to make the yK-1 tool more effective. Officials representing the Large Business and International Division, which is a user of yK-1, said they Addressed ● were satisfied with the way the feedback loop operated. For more information, contact James R. White at (202) 512-9110 or firstname.lastname@example.org. See GAO-11-318SP Actions Needed Page 88 GAO-12-453SP Follow-up on 2011 Report General Government Overall assessment 65. Opportunities exist to improve the targeting of the $6 ○ billion research tax credit and reduce forgone revenue Action 1 Action 1 progress Congress could eliminate the regular No legislative action identified. credit and add a minimum base The Department of the Treasury issued a report on March 25, 2011, that amount (equal to 50 percent of a acknowledged problems with the “regular” method for computing the credit. taxpayer’s current spending) to the Despite those problems, the Department of the Treasury’s report recommended method for computing the alternative making both the regular credit and the ASC permanent so as not to “disrupt” simplified credit (ASC). taxpayers. Not addressed ￮ For more information, contact James R. White at (202) 512-9110 or email@example.com. See GAO-11-318SP Actions Needed Page 89 GAO-12-453SP Follow-up on 2011 Report General Government Overall assessment 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 Action 1 Action 1 progress Congress should consider offering No legislative action identified. grants in lieu of credits to Community Development Entities (CDE) if it extends the program again. If it does so, Congress should require the Department of the Treasury to gather appropriate data to assess whether and to what extent the grant program increases the amount of federal subsidy provided to low-income community businesses compared to the New Markets Tax Credit; how costs for administering the program incurred by the Community Development Financial Institutions Fund, CDEs, and investors would change; and whether the grant program otherwise affects the success of efforts to assist low-income communities. One option would be for Congress to set aside a portion of funds to be used as grants and a portion to be used as tax credit allocation authority under the current structure of the program to facilitate comparison of the two program structures. Not addressed ￮ For more information, contact Michael Brostek at (202) 512-9110 or firstname.lastname@example.org. See GAO-11-318SP Actions Needed Page 90 GAO-12-453SP Follow-up on 2011 Report General Government Overall assessment 67. Limiting the tax-exempt status of certain ○ governmental bonds could yield revenue Action 1 Action 1 progress Congress should consider whether No legislative action identified. facilities, including hotels and golf courses, that are privately used should be financed with tax-exempt governmental bonds. Not addressed ￮ For more information, contact Michael Brostek at (202) 512-9110 or email@example.com. See GAO-11-318SP Actions Needed Page 91 GAO-12-453SP Follow-up on 2011 Report General Government Overall assessment 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 Action 1 Action 1 progress Congress may want to consider In October 2011, Congress enacted the United States-Korea Free Trade requiring the Internal Revenue Service Agreement Implementation Act, which included a provision increasing from $100 (IRS) to periodically adjust for inflation, to $500 the penalty imposed on paid tax preparers who fail to comply with and round appropriately, the fixed- earned income tax credit due diligence requirements.60 dollar amounts of civil tax penalties to No legislation has been identified that would require periodic inflation account for the decrease in real value adjustments for all fixed penalties. over time and so that penalties for the same infraction are consistent over time. Partially addressed ◐ For more information, contact Michael Brostek or James R. White at (202) 512-9110 or firstname.lastname@example.org or email@example.com. See GAO-11-318SP Actions Needed 60 Pub. L. No. 112-41, § 501(a) (2011). Page 92 GAO-12-453SP Follow-up on 2011 Report General Government Overall assessment 69. IRS may be able to systematically identify ● nonresident aliens reporting unallowed tax deductions or credits Action 1 Action 1 progress The Internal Revenue Service (IRS) Using various data sources, IRS studied ways to systematically identify should determine if creating an nonresident aliens who may have improperly filed Form 1040 instead of Form automated program to identify 1040NR. IRS determined that establishing an automated program to identify this nonresident aliens who may have type of noncompliance is not cost effective at this time. improperly filed Form 1040 instead of Form 1040NR would be a cost- effective means to improve compliance. Addressed ● For more information, contact Michael Brostek at (202) 512-9110 or firstname.lastname@example.org. See GAO-11-318SP Actions Needed Page 93 GAO-12-453SP Follow-up on 2011 Report General Government Overall assessment 70. Tracking undisbursed balances in expired grant ○ accounts could facilitate the reallocation of scarce resources or the return of funding to the Treasury Action 1 Action 1 progress The Office of Management and Budget OMB issued guidance in 2010 and 2011 only to certain federal departments and (OMB) should instruct all executive entities covered by the Commerce, Justice, Science, and Related Agencies departments and independent Appropriations Act. OMB’s guidance directed them to track and report in their agencies to track undisbursed respective PARs or Agency Financial Reports on undisbursed balances in grant balances in expired grant accounts and accounts. However, its guidance included grant accounts that were still available report on the resolution of this funding for disbursement and was not limited only to those grant accounts eligible for in their annual performance plan and closeout, as described in GAO’s 2008 report. Funds in these accounts should no Performance and Accountability longer be disbursed to grantees because the period of availability to the grantee Reports (PAR). has expired. In 2008, GAO recommended that OMB’s guidance be governmentwide, not just Not addressed ￮ limited to certain agencies. Because OMB’s guidance included grant accounts with funds still available for disbursement, agencies have reported balances in active grant accounts, not just those eligible for closeout. Later this year, GAO plans to issue a report on the actions OMB and agencies have taken to track undisbursed balances in grant accounts that are eligible for closeout. For more information, contact Stanley L. Czerwinski at (202) 512-6806 or email@example.com. See GAO-11-318SP Actions Needed Page 94 GAO-12-453SP Follow-up on 2011 Report Health Overall assessment 71. Preventing billions in Medicaid improper payments ◐ requires sustained attention and action by CMS Action 1 Action 1 progress The Centers for Medicare & Medicaid Between December 2010 and June 2011, CMS took a number of steps to help Services (CMS) should issue guidance prevent improper payments, including payments for controlled substances. to states to implement processes that Actions included the following: better prevent payment of improper issuing a final rule to help ensure that payments are not made to providers claims for controlled substances in and pharmacies debarred or excluded from Medicaid; Medicaid. issuing guidance to states to acquire and use the Drug Enforcement Addressed ● Administration Controlled Substance Registration File; and issuing guidance to states to help them prevent making payments to dead beneficiaries. While GAO assessed this action as addressed, improper payments are a continuing concern. This area will require continued diligence by the agency to prevent such payments. Action 2 Action 2 progress CMS should improve its oversight of CMS has not yet established a means by which the agency can routinely identify projects developed by consultants on a states’ contingency-fee projects to maximize federal Medicaid reimbursements. contingency-fee basis, in part, by CMS officials told GAO that they do not have the authority to require states to routinely requesting information on regularly report this information, and they were unsuccessful in their attempt to these projects and associated claims. obtain such authority from Congress in 2005. In 2008, CMS stated that it was working to develop a method to regularly determine states use of contingency- Not addressed ￮ fee consultants to guide its oversight efforts, but as of 2011, the agency had not done so. In addition, in response to a congressional inquiry CMS surveyed its regional offices in 2008 to identify the extent of states’ use of contingency-fee consultants for federal revenue maximization projects. CMS officials told GAO in July 2011 that no plans exist to conduct another such survey. Without a means to routinely identify states’ use of contingency-fee consultants, GAO remains concerned about CMS’s oversight of federal revenue maximization projects. For more information, contact Katherine Iritani at (202) 512-7114 or firstname.lastname@example.org. See GAO-11-318SP Actions Needed Page 95 GAO-12-453SP Follow-up on 2011 Report Health Overall assessment 72. Federal oversight over Medicaid supplemental ○ payments needs improvement, which could lead to substantial cost savings Action 1 Action 1 progress The Centers for Medicare & Medicaid No executive action taken. In 2011, CMS officials stated that they have not Services (CMS) should established the recommended standard guidance, that legislation would be needed to give CMS the authority to require facility specific reporting, and that - establish uniform guidance for they have not developed a strategy to ensure that all existing supplemental states that set acceptable methods payment arrangements have been reviewed. for calculating non- Disproportionate Share Hospital payment amounts, - require facility specific reporting of non-Disproportionate Share Hospital supplemental payments, - and - develop a strategy to ensure that all state supplemental payment arrangements have been reviewed by CMS. Not addressed ￮ For more information, contact Katherine Iritani at (202) 512-7114 or email@example.com. See GAO-11-318SP Actions Needed Page 96 GAO-12-453SP Follow-up on 2011 Report Health Overall assessment 73. Better targeting of Medicare’s claims review could ◐ reduce improper payments Action 1 Action 1 progress The Centers for Medicare & Medicaid CMS took action to improve Medicare payment accuracy by introducing predictive Services (CMS) should require its analytics to help identify patterns of potentially improper claims, but has not begun to contractors to develop thresholds for use predictive analytics or other methods to implement this specific recommendation. unexplained increases in billing and The Small Business Jobs Act of 2010 requires CMS to use predictive modeling and use them to develop automated other analytic techniques—known as predictive analytic technologies—to identify prepayment controls. improper claims and to prevent improper payments under the Medicare fee-for-service program.61 CMS officials told GAO that the agency issued a contract to implement ◐ predictive modeling, and its contractors began analyzing claims before payment to Partially addressed identify potential fraud in June 2011. The predictive modeling system assigns risk scores to groups of claims. CMS’s contractors have begun to investigate whether the highest risk-scored groups of claims are fraudulent, but it is too early to determine the full impact that this may have on reducing improper payments. However, CMS has not begun to use predictive analytics or other methods to implement this specific recommendation, which is to have automated prepayment controls based on particular thresholds related to unexplained increases in billing and has not indicated that it plans to do so. Action 2 Action 2 progress CMS should conduct postpayment CMS has indicated that its contractors conduct postpayment medical reviews for reviews on claims submitted by home agencies with high rates of home health services billing, as their resources health agencies with high rates of permit. However, CMS has not reported any specific efforts to routinely conduct improper billing identified through postpayment reviews on home health agencies with high rates of improper prepayment review. billing identified through prepayment review. Not addressed ￮ Action 3 progress Action 3 CMS should require that physicians CMS has indicated that this recommendation could be costly and difficult to receive a statement of home health implement and has not reported any efforts to implement it. However, CMS has services that beneficiaries received not provided any information about cost or feasibility, or tried to implement this based on the physicians’ certification. recommendation as a demonstration in high-fraud areas to determine its cost- effectiveness as a strategy. Not addressed ￮ Action 4 Action 4 progress CMS should direct contractors to focus Because funding for medical review by the claims administration contractors is on services where recovery audit limited, starting in April 2011, CMS required each claims administration contractors (RACs) are not expected to contractor to develop plans on how they would collaborate with the RACs on focus their reviews, and where medical reviews. CMS required each claims administration contractor’s plan to improper payments are known to be cover the types of claims best reviewed by the claims administration contractor high, specifically home health services. versus the RAC, issues that the RACs could potentially review or known Such direction could make other improper payment vulnerabilities that the RAC could help address, and providers contractors’ postpayment review that could be referred to the RACs for review. CMS also required and has activities more valuable. received regular reporting on the results of this collaboration. The claims administration contractors are now reporting to CMS when they have referred to Addressed ● the RACs, or plan to refer as appropriate, specific issues or providers of certain services whose claims warrant further review to identify improper payments. For more information, contact Kathleen King at (202) 512-7114 or firstname.lastname@example.org. See GAO-11-318SP Actions Needed 61 Pub. L. No. 111-240 (2010). Page 97 GAO-12-453SP Follow-up on 2011 Report Health Overall assessment 74. Potential savings in Medicare’s payment for health ◐ care Action 1 Action 1 progress The Centers for Medicare & Medicaid CMS continues its phased implementation of the Medicare Physician Feedback Services (CMS) should develop a Program, which it developed to, among other things, identify physicians with profiling system to identify individual inefficient practice patterns and help those physicians reduce their service costs. physicians with inefficient practice CMS established the program in 2008 and is distributing feedback reports to an patterns and use the results to improve increasing number of physicians. These reports can help control costs in several the efficiency of care financed by ways, such as providing information to physicians on how their resource use Medicare. compares to their peers’ and helping them develop strategies for reducing costs in their practices. In September 2011, CMS provided reports to 35 physician ◐ groups and plans to provide reports to over 20,000 individual physicians in early Partially addressed 2012 and to over 100,000 physicians later in 2012. CMS plans to do further testing of the reports with the goal of providing feedback reports to all applicable physicians by 2017. However, in previous testing of the reports, CMS found that physicians did not generally access those reports. Action 2 Action 2 progress CMS would likely have to seek CMS has not sought such legislative changes, but it is planning to publicly report legislative changes to maximize the measures of physician quality and patient experience on its Web site beginning usefulness of a physician profiling January 1, 2013. The law62 provides for confidential reporting of measures of system—for example, changes that resource use to physicians. Consequently, these measures, which are used in would allow CMS to incentivize combination with quality measures to determine efficiency, will not be publicly beneficiaries to select efficient reported. providers. Not addressed ￮ Action 3 Action 3 progress CMS should examine the feasibility of CMS has not implemented safeguards such as prior authorization. addressing rapid growth in Medicare However, CMS has taken steps to discourage excess utilization by expanding its spending on imaging services by use of the multiple procedure payment reduction for imaging services when a expanding payment safeguard physician furnishes two or more services to a patient in the same session on the mechanisms such as prior same day. It had previously applied the multiple procedure payment reduction authorization for imaging services. to the technical component of certain imaging services. In 2012, CMS also applied the reduction to the professional component of the same services. Not addressed ￮ Action 4 Action 4 progress Congress could consider reducing Congress did not restructure home oxygen payment rates. However, under Medicare home oxygen payment rates existing provisions of law, competitive bidding for home oxygen was extended to to align them more closely with the 91 additional geographic areas. The rates from competitive bidding will likely be costs of supplying home oxygen. lower than rates currently paid by Medicare in those areas. Competitive bidding is currently underway and the resulting contracts and payment rates are Not addressed ￮ scheduled to take effpect July 1, 2013. 62 Pub. L. No. 111-148 (2010); Pub. L. No. 110-275 (2008). Page 98 GAO-12-453SP Follow-up on 2011 Report Health 74. Medicare’s payment for health care (continued) Action 5 Action 5 progress CMS should address the issue of In its 2012 Final Rule with Comment covering Payment Policies Under the paying for overlapping services that Physician Fee Schedule and Other Revisions to Part B for CY 2012, CMS are furnished together by reported its analysis of advanced imaging services. For 2012, CMS is adopting systematically reviewing such services an MPPR that applies a 25 percent reduction to the professional (physician’s and implementing a multiple procedure work) component of certain advanced imaging services furnished together. payment reduction (MPPR) to capture However, a budget neutrality provision applies. Therefore, these “savings” are efficiencies, where appropriate, by redistributed to increase payments for other services and do not accrue to the reducing payments to reflect the Medicare program. The budget neutrality provision is law; therefore, Congress efficiencies. CMS should focus on would have to remove that provision as it applies to the MPPR as it has done in those services that have the greatest certain specified cases so that savings accrue to the program. impact on Medicare spending. Partially addressed ◐ Action 6 Action 6 progress CMS should expand the scope of its CMS has not taken executive action to expand the scope of the MPPR to MPPR for services furnished together nonsurgical and nonimaging services. However, in its 2012 physician fee by applying it to nonsurgical and schedule proposed rule, CMS asked for comment on two proposals for nonimaging services and applying the expanding the MPPR in the future: applying the MPPR to the technical portion of MPPR to the part of the payment that the payment for all imaging procedures; and applying the MPPR to the physician covers a physician’s work. work portion of the payment for all imaging services as well as applying it to the technical portion of the payment to all diagnostic tests, such as cardiology and ￮ audiology. CMS may propose changes in future rulemaking. Not addressed Action 7 Action 7 progress Congress could exempt from the Congress has exempted certain imaging services from the budget neutrality budget neutrality requirement savings provision. However, other imaging services remain subject to budget neutrality; attributable to policies that reflect “savings” from these services are redistributed to other services and do not efficiencies occurring when services accrue to the Medicare program. are furnished together. Partially addressed ◐ For more information, contact James Cosgrove at (202) 512-7029 or email@example.com. See GAO-11-318SP Actions Needed Page 99 GAO-12-453SP Follow-up on 2011 Report Homeland Security / Law Enforcement Overall assessment 75. DHS’s management of acquisitions could be ◐ strengthened to reduce cost overruns and schedule and performance shortfalls Action 1 Action 1 progress The Department of Homeland Security DHS has developed plans to address management of acquisitions, including (DHS) should ensure that requirements ensuring that requirements and cost estimates are well defined, and has begun and cost estimates are well defined up to take actions to implement those plans. Specifically, to strengthen its overall front. acquisition management efforts, DHS reported that it planned to implement an integrated investment life cycle model (IILCM) to establish a decision-making process for investments’ life cycles and that, as of December 2011, the Partially addressed ◐ department had chosen three portfolios to pilot this process. Further, in December 2011, DHS reported that it plans to examine lessons learned from the pilot and develop, among other things, an IILCM schedule and risk management plan, while conducting executive steering committee meetings over the next 6 months with a goal of beginning IILCM operations in the fourth quarter of 2012. As part of this model and its other planned acquisition management reforms, DHS reported that it increased its staff during fiscal year 2011 for developing and validating life cycle cost estimates and began to develop independent cost estimates to strengthen the accuracy and credibility of program costs. To date, DHS has completed 4 validated cost estimates and is currently working to complete others. In December 2011, DHS reported that it developed a cost estimating Center of Excellence to assist components in developing reliable cost estimates and has set goals to complete baseline cost estimates for every major program and validate life-cycle cost estimates for 75 percent, or 34, of the Level 63 1 programs. DHS also reported that the percentage of major programs with a validated cost estimate will be a key measure of its progress toward achieving these goals. DHS also plans to establish various oversight structures and processes, such as a capabilities and requirements council to validate investment strategies and approve analyses of alternatives and operational requirements documents up front. DHS reported in June 2011 that the department planned to form the capabilities and requirements council early in the fourth quarter of 2011. However, as of December 2011, the council has not yet met. These actions are positive steps that should help strengthen DHS’s acquisition management processes to improve the department’s ability to deliver major acquisition programs that meet critical mission needs on time and within budget. However, as GAO reported in July 2011, DHS is in the early stages of implementing these actions, thus it is too soon to assess their impact on reducing acquisition cost overruns and schedule and performance shortfalls at this time.64 63 Major programs consist of Level 1 and Level 2 acquisitions. Level 1 acquisitions have life-cycle costs of $1 billion dollars or more. Level 2 acquisitions have life-cycle costs of $300 million or more, but less than $1 billion. In 2011, DHS identified 82 major acquisition programs, 45 of which were Level 1. 64 GAO, Homeland Security: DHS Could Strengthen Acquisitions and Development of New Technologies, GAO-11-829T, (Washington, D.C.; July 15, 2011). Page 100 GAO-12-453SP Follow-up on 2011 Report Homeland Security / Law Enforcement 75. DHS’s management of acquisitions (continued) Action 2 Action 2 progress DHS should establish and measure As part of its IILCM, DHS is developing a decision support tool to track performance against department- programs’ cost, schedule, and performance indicators. DHS reported in approved baselines and indicators for December 2011 that it planned to develop training and a communications plan major acquisition programs. for institutionalizing the decision support tool and fully implement the tool by the fourth quarter of 2012. According to DHS, this tool is intended to monitor Partially addressed ◐ acquisition activities for all of its programs. Action 3 Action 3 progress DHS should ensure that its investment Among other things, DHS reported in December 2011, that it plans to have its decisions are transparent and Investment Review Board, once established, meet regularly to approve major documented; budget decisions are program initiation decisions and assign programs to appropriate executive informed by the results of acquisition steering committees, which are to provide better governance to the department’s reviews, including acquisition highest-risk programs. DHS also reported in December 2011 that it plans to information and cost estimates; establish a program review board to allocate funds to prioritized programs and sufficient management resources are set implementation goals and timelines. identified and aligned, such as DHS reported in June 2011 that it conducted a survey of its major acquisition acquisition staff, to implement programs and acquisition oversight offices to identify gaps in its acquisition oversight reviews in a timely manner; workforce. In addition, DHS reported in June 2011 that its first cohort of 10 and acquisition program requirements contracting professionals graduated in February 2011 from a 3-year are reviewed and validated. development program it established to recruit individuals into acquisition career fields, such as program management and cost estimating. In December 2011, Partially addressed ◐ DHS reported that 14 additional staff graduated from this program. Further, as of December 2011, DHS reported that it is developing a procurement staffing model and has completed 90 percent of the model. DHS plans to complete the model by the end of the second quarter of fiscal year 2012. For more information, contact David C. Maurer at (202) 512-9627 or firstname.lastname@example.org. See GAO-11-318SP Actions Needed Page 101 GAO-12-453SP Follow-up on 2011 Report Homeland Security / Law Enforcement Overall assessment 76. Improvements in managing research and ◐ development could help reduce inefficiencies and costs for homeland security Action 1 Action 1 progress The Department of Homeland Security In June and December 2011, DHS reported that it planned to establish a new (DHS) could take further actions to model for managing departmentwide investments across their life cycles and improve its management of research that the Science and Technology Directorate (S&T) has become an integral part and development (R&D) efforts and of DHS’s acquisition review process. In July 2011, GAO reported that under this reduce costs in procuring and plan, S&T was to be involved in each phase of the investment life cycle and deploying programs that have not been participate in new councils and boards that DHS was planning to create to help fully tested, including rigorously testing ensure that test and evaluation methods are appropriately considered as part of devices using actual agency DHS’s overall R&D investment strategies.65 GAO further reported that the new operational tactics before making councils and boards DHS was planning to establish were to be responsible for decisions on acquisitions. overseeing key acquisition decisions for major programs, including ensuring that testing and evaluation (T&E) is completed. DHS plans to complete the design, testing, and roll out this new approach, including the establishment of new Partially addressed ◐ councils and boards, by the end of fiscal year 2012 and has taken steps to do so. For example, since its June 2011 update, DHS established a new Executive Steering Council to test this new approach for enhancing oversight. In June 2011, GAO reported that S&T was meeting some of its T&E oversight requirements, but additional steps were needed to ensure that all requirements were met.66 GAO also reported that S&T’s T&E Council was working with component program managers to strengthen R&D and T&E processes, such as developing program requirements and ensuring the appropriate T&E is complete before implementation. In addition, GAO reported in November 2011 that S&T recently reorganized and established an office to provide operations analysis, systems engineering, test and evaluation, and standards development support to DHS component program offices.67 While DHS has made some progress in these areas, it will be important for the agency to follow through on the establishment of these new processes and councils. 65 GAO, Homeland Security: DHS Could Strengthen Acquisitions and Development of New Technologies, GAO-11-829T (Washington, D.C.: July 15, 2011). 66 GAO, DHS Science and Technology: Additional Steps Needed to Ensure Test and Evaluation Requirements Are Met, GAO-11-596 (Washington, D.C.: June 15, 2011). 67 GAO, DHS Research and Development: Science and Technology Directorate’s Test and Evaluation and Reorganization Efforts, GAO-12-239T (Washington, D.C.: Nov. 17, 2011). Page 102 GAO-12-453SP Follow-up on 2011 Report Homeland Security / Law Enforcement 76. Managing research and development (continued) Action 2 Action 2 progress DHS should conduct cost-benefit DHS reported in December 2011 that it is working with its components to analyses as part of research, improve the quality and accuracy of cost estimates and has increased its staff development, and testing efforts, which during fiscal year 2011 to develop independent cost estimates, a GAO best would help DHS and congressional practice, to ensure the accuracy and credibility of program costs. However, in decision makers better assess and June 2011, DHS also reported that it was unable to hire the staff needed to fully prioritize investment decisions, implement its plans due to lack of resources. GAO reported in June 2011 that including assessing possible program such cost estimates are important first steps for agencies in allowing them to alternatives that could be more cost- conduct cost-benefit analyses and analyses of alternatives.68 To date, DHS has effective. completed 4 validated cost estimates out of 135 major programs over the last year and is currently working to complete others. In December 2011, DHS reported that it developed a cost estimating Center of Excellence to assist Partially addressed ◐ components in developing reliable cost estimates and has set a goal to complete cost estimates for all major programs. DHS also reported that the percentage of major programs with a validated cost estimate will now be a key goal. DHS also plans to establish various structures and processes to oversee program research, development, and testing, including the Capabilities and Requirements Council, which is to validate investment strategies and approve program analyses of alternatives and operational requirements documents up front. DHS reported in June 2011 that the department planned to form the Capabilities and Requirements Council early in the fourth quarter of 2011; however, as of December 2011 the council has not yet met. In addition, GAO reported in June and November 2011 that S&T reviewed and approved key T&E documents and plans for major investments as required by DHS’s T&E directive, 69 such as documents outlining a program requirements and capabilities. However, GAO reported that S&T could better document its review of component acquisition documents and recommended that they develop a mechanism to do so. While DHS has made some progress in the areas of assessing costs and program alternatives and benefits, it will be important for the agency to follow through on its new processes and councils. For more information, contact David C. Maurer 68 at (202) 512-9627 or email@example.com. GAO, DOD Weapon Systems: Missed Trade-off Opportunities During Requirements Reviews, GAO-11-502 (Washington, D.C.: June 16, 2011). See GAO-11-318SP Actions Needed 69 GAO-11-596 and GAO-12-239T. Page 103 GAO-12-453SP Follow-up on 2011 Report Homeland Security / Law Enforcement Overall assessment 77. Validation of TSA’s behavior-based screening ◐ program is needed to justify funding or expansion Action 1 Action 1 progress The Department of Homeland Security In April 2011, DHS completed an initial validation study. However, this study’s (DHS) should use an independent methodology was not sufficiently comprehensive to validate the program and panel of experts to assess the determine the extent to which behavior-based screening can be used for methodology of its initial validation counterterrorism purposes in the aviation environment. Instead, the study was study of the Transportation Security designed to determine the extent to which SPOT was more effective than Administration’s (TSA) behavior random screening at identifying security threats and how the program’s detection program to provide DHS with behaviors correlate to identifying high-risk travelers. DHS’s study made additional assurance regarding recommendations related to the need for further validation efforts, comparing whether the study’s methodology is SPOT with other screening programs, and broader program evaluation issues, sufficiently comprehensive to validate some of which echoed previous GAO recommendations. These the Screening of Passengers by recommendations are intended to help the program conduct a more Observation Techniques (SPOT) comprehensive validation of whether the science can be used for program. counterterrorism purposes in the aviation environment. Given the broad scope of the additional work and related resources identified by DHS for addressing the Partially addressed ◐ recommendations, it could take several years to complete. According to TSA, the program is undertaking actions to address some of DHS’s recommendations, such as conducting additional analysis of the program’s behaviors and associated SPOT scoring system in coordination with DHS’s Science and Technology Directorate. According to TSA, a refined list of the behaviors and appearances used in the SPOT program to identify high-risk passengers will be completed by mid-2012. TSA is taking actions to refine the program, but questions related to the program’s validity will remain until TSA demonstrates that using behavior detection techniques can help secure the aviation system against terrorist threats. Action 2 Action 2 progress DHS could conduct additional research TSA completed an annual training analysis to identify gaps in its training to provide additional information on the curricula related to SPOT and as a result, was developing a training plan as of extent to which SPOT can be November 2011. According to TSA, this plan will identify new training courses, effectively implemented in airports and additional recurrent training, and required updates to the current training to help determine the need for periodic curricula. TSA expects to complete this plan by early 2012 and revise it annually. refresher training. TSA has begun to provide refresher training to all SPOT airports and plans to complete this effort by the end of 2012. Partially addressed ◐ Action 3 Action 3 progress Congress may wish to consider limiting Program funds were frozen at fiscal year 2010 levels for fiscal year 2011. The program funding pending receipt of an conference report accompanying the consolidated appropriations act for fiscal independent assessment of TSA’s year 2012 stated that funding was included for 145 additional behavior detection SPOT program. Specifically, Congress officers.70 This increase is less than half of TSA’s fiscal year 2012 request for could consider freezing appropriation 350 full-time behavior detection officers. The conference report also directed levels for the SPOT program at the TSA to brief congressional committees no later than 90 days after the enactment 2010 level until the validation effort is of the act on its plans and actions to implement recommendations from the DHS completed. validation study and GAO’s May 2010 report.71 Addressed ● 70 H.R. Rep. No. 112-331, at 971 (2011) (Conf. Rep.). 71 See GAO, Aviation Security: Efforts to Validate TSA’s Passenger Screening Behavior Detection Program Underway, but Opportunities Exist to Strengthen Validation and Address Operational Challenges, GAO-10-763 (Washington, D.C.: May 20, 2010). Page 104 GAO-12-453SP Follow-up on 2011 Report Homeland Security / Law Enforcement 77. TSA’s behavior-based screening program (continued) Action 4 Action 4 progress Upon completion of the validation In July 2011, GAO reported to Congress on the initial validation study’s results.72 effort, Congress may also wish to As noted above, fiscal year 2011 SPOT program funds were frozen at fiscal year consider the study’s results—including 2010 levels. According to TSA officials, as of January 2012, TSA continues to the program’s effectiveness in using conduct research, develop additional training, assess additional concepts of behavior-based screening techniques operation for the program, and develop outcome-based performance measures. to detect terrorists in the aviation However, given the broad scope of the additional work remaining to validate the environment—in making future funding science for using behavior detection techniques for counterterrorism purposes in decisions regarding the program. an airport environment, additional information on these efforts could help Congress make future funding decisions regarding the SPOT program. Partially addressed ◐ For more information, contact Stephen M. Lord at (202) 512-4379 or firstname.lastname@example.org. 72 See GAO, Aviation Security: TSA Has Taken Actions to Improve Security, but See GAO-11-318SP Actions Needed Additional Efforts Remain, GAO-11-807T (Washington, D.C.: July 13, 2011). Page 105 GAO-12-453SP Follow-up on 2011 Report Overall assessment Homeland Security / Law Enforcement 78. More efficient baggage screening systems could ◐ result in about $470 million in reduced TSA personnel costs over the next 5 years Action 1 Action 1 progress The Transportation Security In 2011, GAO reported that TSA could achieve up to $470 million in net savings Administration (TSA) might achieve based on reduced TSA staffing costs through the replacement or modification of savings in screening personnel costs existing checked baggage screening systems with more efficient solutions over by continuing to replace or modify the next 5 years. TSA agreed that the deployment of more efficient systems older checked baggage screening offers potential personnel cost savings to the federal government. systems with more efficient solutions, Since the issuance of GAO’s 2011 report, TSA has replaced 60 stand-alone including in-line screening systems. checked baggage screening machines with more efficient in-line screening systems. The Full-Year Continuing Appropriations Act, 2011, required the Partially addressed ◐ Secretary of Homeland Security to submit a detailed report to the Committees on Appropriations of the Senate and House of Representatives on, among other things, labor savings it achieves from the deployment of improved technologies for passengers and checked baggage screening and how those savings are being used to offset security costs or reinvested to address security vulnerabilities by August 15, 2011.73 In January 2012, TSA stated that this report is currently under internal review and could not provide a date by which it expects to submit the labor savings to the committees. However, as of August 2011, TSA anticipates that over the next 5 years it will support fewer projects to install more efficient systems than in the past due to TSA’s shift in strategic focus from completion of optimal airport systems to replacement and upgrade of the aging explosive detection system fleet. As a result, the assumptions that GAO used to calculate projected potential savings of $470 million are now outdated. Under its new plan, however, TSA continues to deploy in-line baggage screening systems to airports with facilities capable of accommodating them, and will support projects to facilitate the installation of in- line systems if TSA determines that such systems are an optimal and cost- effective solution for a particular airport. Because TSA has changed its plan to focus on replacement of the aging fleet, it is unclear when the agency will be capable of completing the installation of more efficient solutions, including in-line screening systems, at all airports where such solutions are warranted. While TSA’s plans to replace and upgrade its aging explosive detection system fleet are understandable, we believe that TSA should continue to pursue the installation of more efficient screening solutions to the extent possible. For more information, contact Stephen M. Lord at (202) 512-4379 or email@example.com. See GAO-11-318SP Actions Needed 73 Pub. L. No. 112-10, Div. B, § 1616 (2011). Page 106 GAO-12-453SP Follow-up on 2011 Report General Government Overall assessment 79. Clarifying availability of certain customs fee ◐ collections could produce a one-time savings of $640 million Action 1 Action 1 progress Congress could clarify the purposes for The House Report accompanying the 2012 Department of Homeland Security which the $639.4 million in unobligated Appropriations bill74 directed the Office of the Chief Financial Officer and CBP to balances are available. The report on the appropriate application of these funds no later than 30 days after unobligated balances have remained in the date of enactment of the 2012 Appropriations Act (i.e., January 23, 2012.) U.S. Customs and Border Protection’s On January 27, 2012, officials from the Department of Homeland Security stated (CBP) Customs User Fee Account for that the department is working with CBP and the Appropriations Committees to more than 10 years. schedule a briefing on this issue. Partially addressed ◐ For more information, contact Susan Irving at (202) 512-6806 or firstname.lastname@example.org. See GAO-11-318SP Actions Needed 74 H.R. Rep. No. 112-91, at 27 (2011). Page 107 GAO-12-453SP Follow-up on 2011 Report Income Security Overall assessment 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 Action 1 Action 1 progress Congress could consider giving the No legislative action identified. Internal Revenue Service (IRS) the authority to collect the information that the Social Security Administration needs on government pension income to administer the Government Pension Offset and the Windfall Elimination Provision accurately and fairly. Not addressed ￮ For more information, contact Charles A. Jeszeck at (202) 512-7036 or jeszeckC@gao.gov. See GAO-11-318SP Actions Needed Page 108 GAO-12-453SP Follow-up on 2011 Report International Affairs Overall assessment 81. Congress could pursue several options to improve ○ collection of antidumping and countervailing duties Action 1 Action 1 progress Congress could eliminate the No legislative action identified. retrospective component of the U.S. antidumping and countervailing duty system and, instead, treat the antidumping and countervailing duties assessed at the time the product enters the country as final. Not addressed ￮ Action 2 Action 2 progress Congress could choose to provide the No legislative action identified. Department of Commerce the discretion to require companies applying for a new shipper review to have a greater volume of imports before establishing an individual antidumping and countervailing duty rate. Not addressed ￮ For more information, contact Alfredo Gomez at (202) 512-4101 or email@example.com See GAO-11-318SP Actions Needed Page 109 GAO-12-453SP Follow-up on 2011 Report Enclosure III: Scope and Methodology In March 2011, GAO issued its first annual report to the Congress on potential duplication, overlap, and fragmentation in the federal government.1 The report also identified opportunities to achieve cost savings and enhance revenues. We identified 81 areas—which span a wide range of government missions2—with a total of 176 actions3 that the Congress and the executive branch could take to reduce or eliminate unnecessary duplication, overlap, and fragmentation or achieve other potential financial benefits. We also presented areas where programs may be able to achieve greater efficiencies or become more effective in providing government services. In many areas, we suggested actions— identifying some new options, as well as underscoring numerous existing GAO recommendations—that policymakers could consider. To examine the extent to which the legislative and executive branches have made progress in implementing actions in the 81 areas, we reviewed relevant legislation and documents such as budgets, policies, strategic and implementation plans, guidance, and other information related to the 176 actions included in our report. We also analyzed, to the extent possible, whether or not financial or other benefits have been attained, and included this information as appropriate. In addition, we discussed the implementation status of the areas with officials at the relevant agencies. To assess the progress of the legislative and executive branches in implementing the 176 actions, we developed and used the following scales: 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). This report was issued in response to a new statutory requirement that GAO identify federal programs, agencies, offices, and initiatives, either within departments or governmentwide, which have duplicative goals or activities. Congress asked GAO to conduct this work and to report annually on our findings. See Pub. L. No. 111-139, §21, 124 Stat. 29 (2010), 31 U.S.C. § 712 Note. 2 Agriculture, defense, economic development, energy, general government, health, homeland security, international affairs, and social services were among the government missions included in the March 2011 report. 3 These actions were identified in the “Actions Needed” section for each respective issue area. Page 110 GAO-12-453SP Follow-up on 2011 Report For legislative branch actions “addressed,” means relevant legislation was enacted and addresses all aspects of the action needed;4 “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; “not addressed,” means the administration and/or agencies have made minimal or no progress toward implementing the action needed. Using the legislation and documentation collected from agencies, GAO analysts and specialists working on defense, domestic, and international areas assessed progress for each of the 176 actions within their areas of expertise. A core group of GAO staff examined all 176 assessments to ensure consistent and systematic application of the criteria, and made adjustments as appropriate. After GAO analysts completed their assessments of the 176 actions, we made an overall assessment for each of the 81 areas using the following scale: “addressed” if all actions needed in that area were addressed; “partially addressed” if at least one action needed in that area showed some progress toward implementation, but not all actions were addressed; and “not addressed” if none of the actions needed in that area were addressed. 4 In situations where our action needed suggested that Congress should let a provision expire, we classified it as “addressed” if Congress permitted such expiration to happen. Page 111 GAO-12-453SP Follow-up on 2011 Report Finally, GAO provided the draft to the agencies involved and the Office of Management and Budget for their comments and incorporated comments as appropriate. To prepare this report, we conducted our work from July 2011 through February 2012 in accordance with all sections of GAO’s Quality Assurance Framework that are relevant to our objectives. The framework requires that we plan and perform the engagement to meet our stated objectives and to discuss any limitations in our work. We believe that the information and data obtained, and the analysis conducted, provide a reasonable basis for any findings and conclusions in this product. The information in this report is current as of February 10, 2012 and does not reflect any actions that might have been taken after that date. Page 112 GAO-12-453SP Follow-up on 2011 Report GAO’s Mission The Government Accountability Office, the audit, evaluation, and investigative arm of Congress, exists to support Congress in meeting its constitutional responsibilities and to help improve the performance and accountability of the federal government for the American people. GAO examines the use of public funds; evaluates federal programs and policies; and provides analyses, recommendations, and other assistance to help Congress make informed oversight, policy, and funding decisions. GAO’s commitment to good government is reflected in its core values of accountability, integrity, and reliability. The fastest and easiest way to obtain copies of GAO documents at no Obtaining Copies of cost is through GAO’s website (www.gao.gov). Each weekday afternoon, GAO Reports and GAO posts on its website newly released reports, testimony, and correspondence. To have GAO e-mail you a list of newly posted products, Testimony go to www.gao.gov and select “E-mail Updates.” Order by Phone The price of each GAO publication reflects GAO’s actual cost of production and distribution and depends on the number of pages in the publication and whether the publication is printed in color or black and white. Pricing and ordering information is posted on GAO’s website, http://www.gao.gov/ordering.htm. Place orders by calling (202) 512-6000, toll free (866) 801-7077, or TDD (202) 512-2537. Orders may be paid for using American Express, Discover Card, MasterCard, Visa, check, or money order. Call for additional information. Connect with GAO on Facebook, Flickr, Twitter, and YouTube. Connect with GAO Subscribe to our RSS Feeds or E-mail Updates. Listen to our Podcasts. Visit GAO on the web at www.gao.gov. Contact: To Report Fraud, Waste, and Abuse in Website: www.gao.gov/fraudnet/fraudnet.htm E-mail: firstname.lastname@example.org Federal Programs Automated answering system: (800) 424-5454 or (202) 512-7470 Katherine Siggerud, Managing Director, email@example.com, Congressional (202) 512-4400, U.S. Government Accountability Office, 441 G Street Relations NW, Room 7125, Washington, DC 20548 Chuck Young, Managing Director, firstname.lastname@example.org, (202) 512-4800 Public Affairs U.S. Government Accountability Office, 441 G Street NW, Room 7149 Washington, DC 20548 Please Print on Recycled Paper.
Follow-up on 2011 Report: Status of Actions Taken to Reduce Duplication, Overlap, and Fragmentation, Save Tax Dollars, 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)