oversight

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)

                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 stlaurentj@gao.gov and Zina Merritt,
Director, Defense Capabilities and Management, who may be reached at
(202) 512-4300 or merrittz@gao.gov.




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 shamesl@gao.gov.

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 russellc@gao.gov.

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 russellc@gao.gov.

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 leporeb@gao.gov.

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 martinb@gao.gov.

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 russellc@gao.gov.

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,
melvinv@gao.gov.                           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 shearw@gao.gov.

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
trimbled@gao.gov.                          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 flemings@gao.gov.

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 ruscof@gao.gov

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
pownerd@gao.gov.

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 pownerd@gao.gov.

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 brostekm@gao.gov.

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
melvinv@gao.gov.

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
williamsonr@gao.gov.

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
melvinv@gao.gov.                              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
jenkinswo@gao.gov.

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 lords@gao.gov.

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
jenkinswo@gao.gov.

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
johnsoncm@gao.gov.

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 melitot@gao.gov.



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 brownke@gao.gov.

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
cackleya@gao.gov

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 sherrilla@gao.gov.

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
cackleya@gao.gov.

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 shamesl@gao.gov.

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 pendletonj@gao.gov.
                                               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 farrellb@gao.gov.

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
sullivanm@gao.gov.                            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 merrittz@gao.gov.
                                                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 russellc@gao.gov.
                                                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 merrittz@gao.gov.
                                                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
dillinghamg@gao.gov.

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 goldsteinm@gao.gov.       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, mittala@gao.gov or Melissa
Emrey-Arras at (202) 512-6806,
emreyarrasm@gao.gov.

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 ruscof@gao.gov.              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 raglands@gao.gov.

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 huttonj@gao.gov.
                                               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
chaplainc@gao.gov.                         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 huttonj@gao.gov.          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 wised@gao.gov.
                                              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 wised@gao.gov.
                                              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
pownerd@gao.gov.

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 whitej@gao.gov.

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 whitej@gao.gov.           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 brostekm@gao.gov.

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
brostekm@gao.gov or whitej@gao.gov.

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 whitej@gao.gov.

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 whitej@gao.gov.

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 brostekm@gao.gov.

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 whitej@gao.gov.

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 whitej@gao.gov.

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 whitej@gao.gov.

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 brostekm@gao.gov.
                                                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 whitej@gao.gov.

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 whitej@gao.gov.

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 brostekm@gao.gov.

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 brostekm@gao.gov.

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
brostekm@gao.gov or whitej@gao.gov.

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 brostekm@gao.gov.

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
czerwinskis@gao.gov.

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 iritanik@gao.gov.

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 iritanik@gao.gov.

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 kingk@gao.gov.

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
cosgrovej@gao.gov.

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 maurerd@gao.gov.

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 maurerd@gao.gov.             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 lords@gao.gov.
                                           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 lords@gao.gov.

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 irvings@gao.gov.

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 gomezj@gao.gov


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: fraudnet@gao.gov
Federal Programs      Automated answering system: (800) 424-5454 or (202) 512-7470

                      Katherine Siggerud, Managing Director, siggerudk@gao.gov,
Congressional         (202) 512-4400, U.S. Government Accountability Office, 441 G Street
Relations             NW, Room 7125, Washington, DC 20548

                      Chuck Young, Managing Director, youngc1@gao.gov, (202) 512-4800
Public Affairs        U.S. Government Accountability Office, 441 G Street NW, Room 7149
                      Washington, DC 20548




                        Please Print on Recycled Paper.