2016 Annual Report

Additional Opportunities to Reduce Fragmentation, Overlap, and Duplication and Achieve Other Financial Benefits

GAO-16-375SP: Published: Apr 13, 2016. Publicly Released: Apr 13, 2016.

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Improving Efficiency and Effectiveness

GAO's 2016 Annual Report identified 12 new areas of fragmentation, overlap, and duplication in federal programs and activities. GAO also identified 59 new opportunities for cost savings and revenue enhancement. Related work and GAO's Action Tracker—a tool that tracks progress on GAO's specific suggestions for improvement—are available here.

 

What GAO Found

In its 2016 report, GAO presents 92 actions that the executive branch or Congress could take to improve efficiency and effectiveness across 37 areas that span a broad range of government missions and functions.
  • GAO suggests 33 actions to address evidence of fragmentation, overlap, or duplication in 12 new areas across the government missions of defense, economic development, health, homeland security, and information technology.
  • GAO also presents 59 opportunities for executive branch agencies or Congress to take actions to reduce the cost of government operations or enhance revenue collections for the Treasury across 25 areas of government.

Defining Fragmentation, Overlap, and Duplication

Duplication and Overlap Definitions

Introduction

This sixth annual report for 2016 identifies 37 areas where agencies may be able to achieve greater efficiencies or effectiveness. Within these 37 areas, we identify 92 actions that the executive branch and Congress could take to reduce fragmentation, overlap, or duplication, as well as other cost savings or revenue enhancement opportunities.

Letter

April 13, 2016

Congressional Addressees

The federal government continues to face an unsustainable long-term fiscal path based on the imbalance between federal revenue and spending, primarily driven by changing demographics and rising health care costs.1 Addressing this imbalance will require long-term changes to both spending and revenue and difficult fiscal policy decisions. Significant action to mitigate this imbalance must be taken soon to minimize the disruption to individuals and the economy.

In the near term, however, Congress and executive branch agencies can act to improve the efficiency and effectiveness of government programs and activities. Opportunities to take action exist in areas where federal programs or activities are fragmented, overlapping, or duplicative. To call attention to these opportunities, Congress included a provision in statute for GAO to identify and report to Congress on federal programs, agencies, offices, and initiatives—either within departments or government-wide—that have duplicative goals or activities.2 As part of this work, we also identify additional opportunities to achieve greater efficiency and effectiveness that result in cost savings or enhanced revenue collection.

In our first five annual reports issued from 2011 through 2015, we presented over 200 areas and 544 actions for Congress or executive branch agencies to reduce, eliminate, or better manage fragmentation, overlap or duplication; achieve cost savings; or enhance revenue.3 Figure 1 outlines the definitions we use for fragmentation, overlap, and duplication for this work.

Figure 1: Definitions of Fragmentation, Overlap, and Duplication

Definitions of Fragmentation,

This report is our sixth in the series, and it identifies an additional 37 areas where a broad range of federal agencies may be able to achieve greater efficiency or effectiveness. For each area, we suggest actions that Congress or executive branch agencies could take to reduce, eliminate, or better manage fragmentation, overlap, or duplication, or achieve other financial benefits. In addition to identifying new areas, we have continued to monitor the progress Congress and executive branch agencies have made in addressing the areas we previously identified.

In 2013, we launched GAO’s Action Tracker, a publicly accessible website that allows Congress, executive branch agencies, and the public to track the progress the government is making in addressing the issues we have identified. We plan to continue to add areas and suggested actions identified in future reports to GAO’s Action Tracker and periodically update the status of all identified actions. With the release of this report, we are concurrently releasing the latest updates to GAO’s Action Tracker

There are three main sections of this report.

  • Section I is the Report at a Glance, which provides an overall summary of the 37 new areas in which we identified opportunities to improve efficiency and effectiveness or achieve financial benefits.

  • Section II presents 12 new areas in which we found evidence that fragmentation, overlap, or duplication exists among federal programs or activities. Although it may be appropriate for multiple agencies or entities to be involved in the same programmatic or policy area due to the nature or magnitude of the federal effort, the instances of fragmentation, overlap, or duplication we describe in Section II occur in areas where multiple programs and activities may be creating inefficiencies.

  • Section III describes new areas where the federal government may achieve cost savings or enhance revenue collections.

This report is based upon work we previously conducted in accordance with generally accepted government auditing standards or our quality assurance framework. See appendix II for more information on our scope and methodology.4

New Opportunities Exist to Improve Efficiency and Effectiveness across the Federal Government

In this report, we present 92 new actions that Congress or executive branch agencies could take to improve the government’s efficiency and effectiveness or achieve financial benefits across 37 areas that span a broad range of government missions and functions. Of these, we suggest 33 actions to address 12 areas in which we found evidence of fragmentation, overlap, or duplication in government missions such as defense, economic development, health, homeland security, and information technology. In addition, we present 59 opportunities for Congress or executive branch agencies to take action to reduce the cost of government operations or enhance revenue collections for the U.S. Treasury across 25 areas of government.

33 New Actions to Address New Evidence of Fragmentation, Overlap, or Duplication in 12 Areas

We consider programs or activities to be fragmented when more than one federal agency (or more than one organization within an agency) is involved in the same broad area of national need and there may be opportunities to improve how the government delivers these services, including the following examples:

  • Department of Defense (DOD) Commercial Satellite Communication Procurements: Enforcing existing acquisition policy and identifying opportunities to centralize DOD’s procurement of commercial satellite communications (SATCOM) services could create opportunities to potentially save tens of millions of dollars annually.

DOD depends on commercial SATCOM to support critical mission needs, from unmanned aerial vehicles and intelligence to voice and data services for military personnel. DOD spent over $1 billion leasing commercial SATCOM in fiscal year 2012, the most recent information available at the time of our July 2015 report. Guidance from the Chairman of the Joint Chiefs of Staff requires the Defense Information Systems Agency (DISA) to procure all of DOD's commercial SATCOM.

However, we found that the combatant commands and military services independently procured commercial SATCOM to meet their individual needs. For example, in the most recent commercial SATCOM usage report, DOD reported that—contrary to the Joint Chiefs' requirement—approximately 34 percent (about $290 million) of its fixed satellite commercial SATCOM services was procured outside of DISA in 2012. The usage report also indicated that these services acquired though DISA result in an approximate 15 percent cost savings versus those not acquired through DISA. Utilizing a central point of contact could better position DOD to not only meet mission needs, but also to maximize cost savings by consolidating commercial SATCOM purchases. In addition, although DOD has initiatives underway to improve SATCOM procurements, it has not performed an analysis to identify inefficiencies and opportunities to consolidate purchases.

We recommended that DOD enforce current policy requiring DISA to acquire all commercial SATCOM and conduct a spend analysis that identifies procurement inefficiencies and opportunities to consolidate purchases. In response, DOD agreed that enforcing its current policy makes the best use of taxpayer dollars. It also agreed that a spend analysis could help DOD understand military and commercial SATCOM spending, but DOD has yet to fully address either recommendation, as of March 2016.

  • Department of Homeland Security’s (DHS) Human Resources Systems: DHS’s human resources administrative environment includes fragmented systems, duplicative and paper-based processes, and little uniformity in its data management practices. According to DHS, these issues compromise its ability to effectively carry out its mission. In 2003, DHS initiated the Human Resources Information Technology (HRIT) investment to consolidate, integrate, and modernize the human resources information technology infrastructure of the department and its eight components.5 As part of the HRIT effort, DHS determined that it had 422 human resources systems and applications.

We found in a February 2016 report that DHS had made only limited progress in implementing HRIT, in part due to a lack of involvement of the HRIT executive steering committee. Moreover, HRIT’s strategy may not reflect DHS’s current priorities, in part because the department had not updated the HRIT strategic planning document since 2011.

In addition, we reported that DHS established the Performance and Learning Management System (PALMS) program to provide a system that will consolidate DHS’s nine existing learning management systems into one system and enable comprehensive training reporting and analysis across the department, among other things. However, we found that selected PALMS capabilities had been deployed to headquarters and two components, but that full implementation at four components was not planned as of January 2016, leaving uncertainty about whether the PALMS system would be used enterprise-wide to accomplish these goals. Further, DHS did not fully implement effective acquisition management practices and therefore was limited in monitoring and overseeing the implementation of PALMS and ensuring that the department obtains a system that improves its learning management weaknesses, reduces duplication, and delivers within cost and schedule commitments.

We made a number of recommendations to DHS to, among other things, address HRIT’s poor progress and ineffective management. DHS concurred with our recommendations and identified initial actions that it had taken to evaluate HRIT and improve oversight of the investment. As of March 2016, our recommendations have not been fully addressed. Until DHS implements our recommendations, it may be missing opportunities to use human resources system investment dollars more efficiently and effectively.

Fragmentation can also be a harbinger for overlap or duplication. Overlap occurs when multiple agencies or programs have similar goals, engage in similar activities or strategies to achieve them, or target similar beneficiaries. We found overlap among federal programs or initiatives in a variety of areas, including the following examples:

  • Internal Revenue Service’s (IRS) Public Referral Programs: IRS could potentially collect billions of dollars in tax underpayments through its nine public referral programs and save resources by better managing fragmentation and overlap, improving communication, and streamlining processes.

Public referral programs enable individuals to submit information to IRS about tax noncompliance, and they are an important piece of IRS’s overall enforcement strategy and can help reduce the net $385 billion tax gap—the difference between taxes owed and those ultimately collected.6 We reported in February 2016 that IRS does not have a formal mechanism to facilitate information sharing across all nine referral programs, which causes both the public and IRS to spend resources unnecessarily. Additionally, the referral programs involve largely manual processes, which forces IRS to spend resources reading and routing the referrals. In an October 2015 report, we also identified key problems specific to the whistleblower program that are discouraging whistleblowers from coming forward, which, in turn, limits IRS’s ability to close the tax gap. For example, few large awards have been paid, claims take years to process, and communication with whistleblowers is limited.

We made several recommendations to IRS, including that it establish a coordination mechanism to communicate across the multiple referral programs, develop an online referral submission process, streamline the review process, and improve external communication. IRS agreed with our recommendations and plans to implement the whistleblower recommendations by October 2016. IRS has not yet provided an action plan or time frames for other referral program recommendations as of March 2016. Until IRS takes these actions, it may be missing opportunities to assist the public, collect billions in uncollected taxes owed, and leverage resources to streamline processes, which could help it to better coordinate and identify possible efficiencies, as well as better manage fragmentation and overlap.

  • Financial Regulatory Structure: The U.S. financial regulatory structure is complex, with responsibilities fragmented among multiple agencies with overlapping authorities (see fig. 2). As a result, regulatory processes are sometimes inefficient, regulators oversee similar types of institutions inconsistently, and consumers are afforded different levels of protection.

Figure 2: U.S. Financial Regulatory Structure

U.S. Financial Regulatory Structure

Notes: This figure depicts the primary regulators in the U.S. financial regulatory structure, as well as their primary oversight responsibilities. “Regulators” generally refers to entities that have rule-making, supervisory, and enforcement authorities over financial institutions or entities. There are additional agencies involved in regulating the financial markets, and there may be other possible regulatory connections than those depicted in this figure.

In 2009, we established a framework for evaluating regulatory reform proposals and noted that an effective regulatory system would need to address structural shortcomings created by fragmentation and overlap. While changes made by the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd Frank Act) were consistent with some of the characteristics identified in this framework, the existing regulatory structure does not always ensure (1) efficient and effective oversight, (2) consistent financial oversight, and (3) consistent consumer and investor protections. As a result, negative effects of fragmented and overlapping authorities persist throughout the system. For example, regulation of securities and derivatives markets by the Securities and Exchange Commission and the Commodity Futures Trading Commission, respectively, can create the potential for inefficiencies in the way markets are overseen because of differences in certain of the agencies’ rules related to similar products.

In a February 2016 report, we suggested that Congress consider whether additional changes to the financial regulatory structure are needed.7 Without congressional action, it is unlikely that remaining fragmentation and overlap in the U.S. financial regulatory system can be reduced or that more effective and efficient oversight of financial institutions can be achieved.

In other aspects of our work, we found evidence of duplication or risk of duplication, which occurs when two or more agencies or programs are engaged in the same activities or provide the same services to the same beneficiaries, including the following example:

  • Medicaid and Exchange Coordination: We found that there is risk of duplicative federal spending on health insurance coverage for individuals transitioning between Medicaid and federally subsidized health insurance purchased through the exchanges created under the Patient Protection and Affordable Care Act.8

If individuals have a change in income or are affected by other factors, their eligibility for Medicaid and for subsidized exchange coverage may also change. As many low-income individuals experience income volatility, transitions between the two coverage types are likely. Federal regulations require that state Medicaid agencies and exchanges coordinate to facilitate these transitions, including transferring individuals’ accounts to the appropriate form of coverage when eligibility changes occur.9

A limited amount of duplicate coverage may be expected—and is permitted under federal law—for individuals completing the transition from subsidized exchange to Medicaid coverage. However, we found in October 2015 that duplicate coverage was also occurring outside of this transitional period—for example, in cases where individuals did not end their subsidized exchange coverage after being determined eligible for Medicaid. While the Centers for Medicare & Medicaid Services (CMS)—within the Department of Health and Human Services (HHS)—has taken some steps to minimize the potential for duplicate coverage in states with federally facilitated exchanges, we found that its policies and procedures were not sufficient based on federal standards for internal control.

We recommended that CMS establish a schedule for regular checks for duplicate coverage in states with federally facilitated exchanges and develop a plan to routinely monitor the effectiveness of the checks and other planned procedures to minimize duplicate coverage. HHS agreed and acknowledged steps it has taken and plans to take to minimize the risk of duplicate coverage. For example, HHS stated that its first check for duplicate coverage was underway in August 2015, and that it plans to analyze the rate of duplicate coverage identified. HHS also stated that it plans to monitor the rate of duplicate coverage identified in periodic checks and that it is working to implement additional internal controls to reduce duplicate coverage. As of March 2016, HHS was in the process of refining these checks, but had not completed another check or established a schedule for doing so, which could ultimately help protect the federal government from unnecessary and duplicative expenditures.

59 New Actions to Reduce Costs or Enhance Revenues Identified in 25 Areas

We also identified actions in 25 areas for Congress or executive branch agencies to consider that could reduce the cost of government operations, better target resources, or enhance revenue collections for the Treasury, including the following examples:

  • Disability Insurance Overpayments: The Social Security Administration (SSA) may be losing billions of dollars through overpayments to beneficiaries of the Disability Insurance (DI) program and through improper waivers of overpayment debt.

In fiscal year 2014, about 11 million individuals with disabilities and their dependents received approximately $143 billion in DI benefits, $1.3 billion of which SSA identified as overpayments. Additionally, SSA permanently waived over $2.4 billion in overpayment debt over the past 10 years. In our October 2015 report, we found that SSA’s process for handling work reports by beneficiaries has internal control and other weaknesses that increase the risk of overpayments, even when DI beneficiaries follow program rules and report work and earnings. In addition, SSA’s process for handling requests to waive overpayments lacks sufficient controls to help ensure appropriate decisions are made.

We made several recommendations to improve SSA’s handling of overpayments, work reports, and waivers, including that SSA study automated reporting options and improve oversight of work reports and waivers. SSA agreed with all of these except the recommendation to improve oversight of work reports. We clarified that oversight should help to ensure that staff are following proper procedures. As of March 2016, SSA has not fully addressed these recommendations. Until SSA takes these actions, it will likely continue to overpay beneficiaries and improperly waive overpayment debt, costing the federal government billions of dollars.

  • Federal Mobile Telecommunications: According to a 2012 Office of Management and Budget (OMB) estimate, the federal government spent about $1.2 billion annually on about 1.5 million mobile devices and associated services. OMB also reported the federal government could have saved about $388 million in fiscal years 2013 through 2015 by consolidating or eliminating mobile device contracts. In May 2015, we reported on weaknesses in 15 selected agencies’ controls on mobile device spending. For example, only 5 of the 15 agencies had complete service and device inventories at either the enterprise level or at the components we reviewed. As a result, agencies have limited abilities to monitor device usage and determine if a device should be canceled or moved to a more cost-effective service plan. Furthermore, OMB does not measure progress toward its financial savings goal related to mobile devices and services, which limits its ability to assure an effective approach.

We recommended that the 15 agencies take actions to improve their inventories and control processes and that OMB measure and report progress in achieving mobile cost savings. OMB and 14 agencies generally agreed with the recommendations or had no comment. DOD commented that maintaining an inventory would come at a considerable expense and effort at the headquarters level. We disagreed with DOD’s assessment because the inventory can be generated by individual components. As of February 2016, these recommendations have not been fully addressed. Until agencies implement these recommendations, the federal government may be foregoing significant cost savings.

  • Medicare: In fiscal year 2015, Medicare served about 55 million beneficiaries at a cost of $634 billion. We found that the program could save billions of dollars annually if Congress were to equalize the rates Medicare pays for certain health care services, which often vary depending on where the service is performed.

For example, Medicare spending on hospital outpatient department services was over $40 billion in 2013 and is growing, in part because services that were typically performed in physician offices have shifted to more costly hospital settings. Following this shift, services once reimbursed at a lower total payment rate can be classified as hospital outpatient department services and reimbursed by Medicare at a higher rate, increasing program costs. We suggested in December 2015 that Congress equalize payment rates between physician offices and hospital outpatient departments for certain services. While the Bipartisan Budget Act of 2015 addresses this payment differential for some new providers, many providers will continue to be paid more than necessary for certain services, such as office visits.

  • Defense Excess Property Disposal: Federal civilian agencies could potentially achieve millions of dollars in cost savings if they were able to obtain more of DOD’s available excess personal property through the disposal process rather than purchasing similar property through a private sector supplier.

Each year the military services identify thousands of items of personal property—including military equipment and materiel—that they need to dispose of because the property is obsolete, not repairable, or excess to their requirements but still usable. Because this property was originally purchased with federal funds, the government seeks to promote its reuse by federal agencies to minimize new procurement costs. However, we found in a January 2016 report that DOD’s process for disposing of excess personal property gives some nonfederal entities that participate in special programs—such as state and local law enforcement agencies—priority for excess property over some federal civilian agencies that may have similar needs.10 Consequently, federal agencies are at risk of spending appropriated funds to acquire property that could potentially be obtained through DOD’s disposal process at a lower cost. For fiscal year 2014, DOD reported that excess and surplus personal property with a total original acquisition value of approximately $3.18 billion in nominal dollars was reutilized within DOD or provided to special programs, transferred to other federal agencies, or donated to eligible organizations such as state and local governments or nonprofit organizations.

DOD recently revised its policies and procedures for disposing of excess personal property so that DOD components are able to obtain its excess property before special programs. Still, special programs could obtain such property before most federal civilian agencies and nonfederal entities. As a result, we recommended that DOD further reassess its property disposal process to determine whether additional changes are needed in the priorities given to recipients within the process. DOD agreed, and stated that it plans to continue to review all aspects of the disposal process as part of its standard operating procedures. However, while we understand DOD already assesses its disposal process as part of normal operations, we maintain that DOD should separately assess the priorities in its disposal process to make more efficient use of federal funds.

  • Medicaid: We identified several opportunities to achieve cost savings within the Medicaid program, which in fiscal year 2015 covered approximately 69 million beneficiaries at an estimated cost of $529 billion. For example, we found in February 2016 that CMS had not clarified or broadly communicated guidance regarding the appropriate methods for distributing supplemental payments to hospitals. Without such guidance, states may be shifting costs to the federal government by distributing payments that are counter to agency policy, including by making payments that are not commensurate with providers’ provision of Medicaid services and that are based on the availability of provider and local government financing. We have also found that CMS’s oversight of Medicaid payments to institutional providers was limited, in part, by the lack of a policy and standard process for determining whether payments to individual providers are economical and efficient, as required by federal law. As a result, excessive payments states make to individual providers may not be identified or examined by CMS. For example, we found that some hospitals’ total Medicaid payments exceeded the hospitals’ total operating cost—that is, cost for all hospital services provided to all patients the hospital served. We made a number of recommendations related to Medicaid, and HHS concurred or partially concurred with all of them. Taking these actions should help CMS to achieve substantial cost savings and improve its oversight of the Medicaid program.

  • Treasury’s Foreclosure Prevention Efforts: As of October 2015, the Making Home Affordable (MHA) program—which the Department of the Treasury (Treasury) administers to help struggling homeowners avoid foreclosure—had a $7.7 billion available unexpended balance. In December 2015, Congress mandated that the MHA program be terminated on December 31, 2016, with an exemption for certain loan modification applications made before that date. We found that although Treasury monitors activity and aggregate expenditures under the MHA program, it has not systematically reviewed the extent to which it is likely to expend the full $7.7 billion available program balance. Although we recognize that no estimate of future participation and expenditures can be made with certainty, our prior work has concluded that reviewing unexpended balances, including those that have been obligated, can help agencies identify possible budgetary savings and financial benefits.

We recommended that Treasury review unexpended balances and deobligate excess funds, and we suggested that Congress consider permanently rescinding any funds that Treasury deobligates. Treasury agreed with our recommendations, and the President’s fiscal year 2017 budget submission indicates that Treasury is now estimating a $4.7 billion reduction in total outlays for the MHA program. Treasury deobligated $2 billion of the $4.7 billion reduction in estimated MHA outlays in February 2016. Given the uncertainties in estimating future participation and the associated expenditures, it will be important for Treasury to update its cost estimates as additional information becomes available and take timely action to deobligate likely excess funds.

  • DOD Excess Ammunition. DOD could potentially reduce its storage, demilitarization, and disposal costs by hundreds of thousands of dollars by transferring excess serviceable conventional ammunition, including small arms ammunition, to federal, state, and local government agencies.

When a military service determines that serviceable ammunition is beyond its requirements, that ammunition is offered to the other services. If that ammunition is not taken, it is transferred to the Army, which manages the stockpile of excess conventional ammunition and takes actions to demilitarize and dispose of it. In fiscal year 2015, DOD spent about $118 million to demilitarize and dispose of conventional ammunition. We reported in July 2015 that DOD had reduced some of its demilitarization and disposal costs by transferring some excess ammunition to other government agencies, as opposed to demilitarizing and disposing of it, but that DOD does not have a systematic means for communicating with these agencies about available excess ammunition. Communicating in a systematic manner with other government agencies on available excess ammunition could help reduce the stockpile and save DOD in storage, demilitarization, and disposal costs.

We recommended that DOD develop a systematic means to make information available to other government agencies on excess ammunition, and DOD agreed with this recommendation. However, in conducting follow-up work in March 2016, we found that DOD continues to transfer ammunition to other government agencies on an informal basis and no formal process has been implemented. Without establishing a formal means to communicate with and provide other government agencies with information on available excess serviceable ammunition, DOD could miss opportunities to reduce its overall storage, demilitarization, and disposal costs.

  • National Park Service Fees: The Federal Lands Recreation Enhancement Act (FLREA) does not give the National Park Service (Park Service) and other agencies that charge recreation fees the authority to adjust the price of a lifetime senior pass, which has been $10 since 1993.11 Without this authority, the Park Service is limited in its ability to increase revenue from this fee. In addition, the Park Service does not call for periodic reviews of recreation fees that the agency is able to adjust. Our guide on user fees states that federal agencies should regularly review fees and make changes if warranted.12

We suggested that Congress consider amending FLREA to give the agencies authority to adjust the price of a lifetime senior pass. A bill was introduced in September 2015 to increase the price of the senior pass to a one-time amount matching the price of the annual interagency pass, which is $80, as of November 2015.13 If passed, this could generate millions of dollars in revenue annually. We also made recommendations to improve the Park Service’s management of recreation fees. The Department of the Interior, which administers the Park Service, agreed with our recommendations and plans to begin addressing them in 2016. Improving the management of recreation fees could help the Park Service to better ensure that these fees are set at a reasonable level.

In addition to the new areas presented in this year’s annual report, we identified new actions from recently issued work that relate to issues presented in our 2011-2015 annual reports. See appendix III for more information.

Executive Branch Agencies and Congress Continue to Address Actions That Span the Federal Government

In addition to the new actions identified for this report, we have continued to monitor the progress that Congress and executive branch agencies have made to reduce, eliminate, or better manage fragmentation, overlap, or duplication or achieve other potential financial benefits. In response to our 2011-2015 annual reports, Congress and executive branch agencies have addressed a total of 224 actions, including 55 actions since April 2015.14 We found that these efforts have resulted in roughly $56 billion in financial benefits from fiscal years 2010 through 2015, with at least an additional $69 billion in estimated benefits projected to be accrued through 2025.15

Progress toward Addressing Actions

Congress and executive branch agencies have addressed a total of 55 actions since our last report. Of these 55 addressed actions, 44 were identified in our 2011-2014 annual reports, bringing the total number of addressed actions for the 2011-2014 annual reports to 213 actions—47 percent of the 458 actions identified over that period (see fig. 3).

Figure 3: Status of 2011-2014 Actions, as of 2015 and 2016

Status of 2011-2014 Actions, as of

Note: Actions categorized as “consolidated or other” are no longer assessed. In most cases, the actions were replaced or subsumed by new actions based on additional audit work or other relevant information. For example, actions categorized as “consolidated or other” may have been consolidated into other actions that we track based on subsequent audit work or significant changes in agency circumstances, or they may have been redirected from a congressional to an executive branch action, or vice versa.

In our 2015 annual report, we identified 86 new actions for congressional or executive branch agency attention.16 As of March 2, 2016, we found that 11 (13 percent) of the new 2015 actions had been addressed and 33 (38 percent) had been partially addressed.

In total, of the 544 total actions we identified in our 2011-2015 annual reports, we found that 224 (41 percent) were addressed, 185 (34 percent) were partially addressed, and 111 (20 percent) were not addressed.17 As figure 4 shows, many of the actions that have been addressed were identified in our 2013 or earlier reports—which suggests that it frequently takes multiple years for actions to be fully addressed. See appendix IV for a list of all areas and the status of related actions.

Figure 4: Progress in Addressing 2011-2015 Actions, as of 2015 and 2016

Progress in Addressing 2011-2015

Note: Actions categorized as “consolidated or other” are no longer assessed. In most cases, the actions were replaced or subsumed by new actions based on additional audit work or other relevant information. For example, actions categorized as “consolidated or other” may have been consolidated into other actions that we track based on subsequent audit work or significant changes in agency circumstances, or they may have been redirected from a congressional to an executive branch action, or vice versa. Additionally, actions identified in 2015 were not assessed in 2015 because that was the year that the actions were identified.

Financial Benefits Related to Actions Taken by Congress and Executive Branch Agencies

The progress Congress and executive branch agencies have made as of March 2, 2016, to address the actions we identified will result in approximately $125 billion in financial benefits from 2010 through 2025.18 Table 1 outlines examples of our addressed actions that have resulted in or are expected to result in cost savings or enhanced revenue.

Table 1: Examples of Addressed Actions with Associated Cost Savings and Revenue Enhancements, 2010-2025

Annual Report Area Identified
2011Domestic Ethanol Production (Area 13): Congress allowed the Volumetric Ethanol Excise Tax Credit to expire at the end of 2011, which eliminated duplicative federal efforts directed at increasing domestic ethanol production and reduced revenue losses by $29 billion in fiscal year 2012 to fiscal year 2016.
2011Farm Program Payments (Area 35): The Agricultural Act of 2014 eliminated direct payments to farmers and should save approximately $44 billion from fiscal year 2015 through fiscal year 2023, of which $5 billion has accrued and $39 billion is expected to accrue in fiscal year 2016 or later, according to the Congressional Budget Office.
2014Real Estate-Owned Properties (Area 18): GAO estimated that the Department of Housing and Urban Development saved as much as $2.8 billion from July 2013 through June 2015 by implementing improvements to its property custody approach including reducing the number of foreclosed properties that it acquires by using other means of resolving troubled mortgages.
2015Tax Policies and Enforcement (Area 17): Congress amended the audit procedures applicable to certain large partnerships to require that they pay audit adjustments at the partnership level. This should raise $9.3 billion from fiscal years 2019 to 2025, according to the Joint Committee on Taxation.
2013Combat Uniforms (Area 2): Consistent with our recommendation to avoid fragmentation, the Army chose not to introduce a new family of camouflage uniforms into its inventory, resulting in a cost avoidance of about $4.2 billion over 5 years, of which $1.7 billion has accrued since fiscal year 2014 and $2.5 billion is expected to accrue in fiscal year 2016 or later.
2011Federal Emergency Management Agency (FEMA) Grants (Area 26): GAO estimated savings of $2.55 billion from fiscal years 2011 through 2013 due to Congress limiting preparedness grant funding until FEMA completes a national preparedness assessment of capability gaps.
2012Overseas Defense Posture (Area 37): The United States Forces Korea conducted a series of consultations with the military services to evaluate the costs and benefits associated with tour normalization and decided not to move forward with the full tour normalization initiative because it was not affordable. The Department of Defense’s (DOD) decision to not move forward with this initiative saved an estimated $3.1 billion from fiscal years 2012 through 2016, of which $2.5 billion has accrued through fiscal year 2015 and $615 million is expected to accrue in fiscal year 2016.
2011Overseas Military Presence (Area 36): In January 2015, DOD estimated that it would save $1.2 billion annually by closing, consolidating, or realigning European installations after a comprehensive study of posture, as we had recommended.
2011Medicare Health Care Payments (Area 74): Congress and the Centers for Medicare & Medicaid Services took several actions to improve the efficiencies of some Medicare payments for health care services, resulting in significant savings.

Source: GAO analysis. | GAO-16-375SP

Note: The estimates in this report are from a range of sources, including GAO, executive branch agencies, the Congressional Budget Office, and the Joint Committee on Taxation. The Tax Policies and Enforcement action (area 17) is newly addressed since GAO’s 2015 report. Some estimates have been updated to reflect more recent analysis.

Congress also has taken a number of additional steps to address actions we have identified to achieve financial benefits or improve efficiency and effectiveness. For example, in our 2015 report we found the Department of Energy (DOE) could potentially realize savings by re-examining the appropriate size of the Strategic Petroleum Reserve (SPR)—which was valued at about $22 billion as of January 2016—and depending on the outcome of the analysis, selling crude oil from the reserve and using the proceeds to fund other national priorities. In 2015, Congress required DOE to complete a long-range strategic review of the SPR and also authorized the sale of 124 million barrels of SPR oil. The Congressional Budget Office estimated potential savings to be $8 billion from 2018 through 2025. In another example, in our 2011 annual report we found that a proliferation of programs to improve teacher quality complicated federal efforts to invest dollars effectively. We verified that legislation passed by Congress in December 2015 did not include authorization for 19 overlapping programs that were on our 2011 list of 82 distinct programs designed to improve teacher quality.19 Using Department of Education (Education) data, GAO estimated the decision to not reauthorize saved approximately $800 million based on fiscal year 2016 appropriations for these programs. In addition, Congress included language in appropriations acts that eliminated some barriers to educational program alignment and passed legislation to give Education broader discretion to realign program resources.

In other instances, Congress and executive branch agencies took steps to address issues that we identified during the course of our work that could also result in financial benefits. For example, in August 2014, we reported that the wage information that employers report on Form W-2 was not available to IRS until after it issued most refunds. We found that if IRS had access to W-2 data earlier, it could match such information to taxpayers’ returns and identify discrepancies before issuing billions of dollars of fraudulent refunds. The Consolidated Appropriations Act, 2016, enacted in December 2015, amended the tax code to accelerate W-2 filing deadlines to January 31.20 According to IRS, a program that would match W-2 data to tax returns before refunds are issued would save revenue by protecting a substantial part of the billions currently paid to fraudsters.

Also in August 2014, we reported that IRS had not fully assessed the costs and benefits of having available W-2 information for pre-refund matching, which could involve challenges such as a potential increase in W-2s that need to be corrected and required upgrades to IRS’s information technology systems, among others. In response to our recommendation, in September 2015, IRS provided us with a report discussing (1) adjustments to IRS systems and work processes needed to use accelerated W-2 information, (2) potential impacts on internal and external stakeholders, and (3) other changes needed to match Form W-2 data to tax returns prior to issuing refunds. This report should help IRS determine how best to implement pre-refund W-2 matching, given the new January 31 deadline for filing W-2s.

While not all actions taken by Congress and executive agencies result in financial benefits to taxpayers, all of our suggested actions, when implemented, can result in gains in government efficiencies or the elimination, reduction, or improved management of fragmented, overlapping or duplicative programs, among other benefits. For example, in our 2012 annual report, we stated that we had recommended that DHS implement a process for tracking agency use of cybersecurity training, gather feedback from agencies on the training’s value and on opportunities for improvement, and develop a process to coordinate training offered to minimize the production and distribution of duplicative products.21 In 2014 and 2015, DHS took steps to address our recommendations by, among other things, implementing quarterly data calls to shared service centers and emphasizing the need to coordinate training. DHS reported that DOD, for example, has released an improved version of its security awareness training in response to the results of the data calls.

Action in Several Remaining Areas Could Yield Significant Additional Benefits

While Congress and executive branch agencies have made progress toward addressing the actions we have identified, further steps are needed to fully address the remaining actions, as shown in table 2. More specifically, 53 percent of the actions (243 of 459) directed to executive branch agencies and 62 percent of the actions (53 of 85) directed to Congress that were identified in our 2011-2015 reports remain partially or not addressed. In addition, we identified 92 new actions in 2016. We estimate that tens of billions of additional dollars would be saved should Congress and executive branch agencies fully address our actions that currently are partially addressed or not addressed, including the new ones we identified in 2016.22

Table 2: Status of 2011-2015 Actions Directed to Congress and the Executive Branch, as of March 2, 2016

Executive BranchaCongressbGrand totals
StatusNumber of actionsPercentageNumber of actionsPercentageTotal number of actionsOverall percentagec
Addressed19743%2732%22441%
Partially addressed/not addressed24353536229654
Consolidated or other19456244
Total4591008510054499

Source: GAO. | GAO-16-375SP

Notes: This year, 4 actions were categorized as “consolidated or other” for a total of 24 actions in this category from 2011-2015. Actions categorized as “consolidated or other” are no longer assessed. In most cases, these actions were replaced or subsumed by new actions based on additional audit work or other relevant information. For example, actions categorized as “consolidated or other” may have been consolidated into other actions that we track based on subsequent audit work or significant changes in agency circumstances, or they may have been redirected from a congressional to an executive branch action, or vice versa.

aExecutive branch agencies took steps that addressed five actions directed to Congress.

bCongress took steps that fully addressed one action and partially addressed another action directed to executive branch agencies.

cNumbers do not add to 100 percent due to rounding.

Our suggested actions that remain open span the government.23 We have directed actions to all 15 cabinet-level executive departments and at least 17 other federal entities (see fig. 5). In particular, a substantial number of our actions are directed to three departments that made up 55 percent of federal obligations in fiscal year 2015—HHS, DOD, and Treasury.24 Specifically, we have directed a total of 82 actions to HHS, 152 actions to DOD, and 112 actions to Treasury since 2011. Given the amount of federal dollars represented and number of unaddressed actions in the health care, defense, and tax areas, significant opportunities for cost savings and revenue enhancement exist in these three areas.

Figure 5: Fiscal Year 2015 Obligations and Number of Not Addressed and Partially Addressed Actions since 2011, by Agency

Fiscal Year 2015 Obligations and

Notes: Individual actions are counted multiple times when they are directed to more than one federal department or agency. Actions directed to multiple agencies are not assessed as addressed until all agencies have made necessary progress. Percentages are rounded to the nearest whole percent for items greater than 1 percent.

aThis includes actions that are partially addressed and not addressed.

bTreasury’s percentage of fiscal year 2015 obligations includes interest on the national debt.

cU.S. Postal Service obligations are primarily funded by postal revenues, although the U.S. Postal Service receives minimal appropriations for overseas voting and mail for the blind. Additionally, the U.S. Postal Service has a maximum $15 billion in borrowing authority.

dThe judicial branch represented 0.2 percent of federal obligations in fiscal year 2015.

eActions have also been directed to agencies and other federal entities that each represented less than 0.2 percent of federal obligations in fiscal year 2015.

Improving the Efficiency of Heath Care Programs

According to the Congressional Budget Office (CBO), gross federal outlays for Medicare, Medicaid, and other major health care programs totaled $1 trillion in 2015, equaling 5.8 percent of the gross domestic product (GDP).25 CBO estimates that gross federal outlays for those programs will jump to $1.1 trillion, or 6.2 percent of GDP, in 2016.26 CBO further estimates that such spending will grow robustly, nearly doubling in dollar terms between 2016 and 2026, reaching $2.0 trillion, or 7.4 percent of GDP, by the end of that period. This level of spending contributes to the fiscal challenges facing the nation.

In our 2011-2015 annual reports, we directed 64 actions to HHS to improve the efficiency and effectiveness of health care programs, among other areas. In addition, we directed 18 new actions to HHS in this year’s annual report. Fifty-five of the 82 (67 percent) total actions we directed to HHS remain partially addressed or not addressed.27 Many of these actions are directed at the Medicare and Medicaid programs, which had a combined total of over $900 billion in federal outlays in 2015. Effectively implementing these actions would result in significant cost savings or revenue enhancement, including the examples shown in table 3.

Table 3: Examples of Health Care Areas in 2011-2016 Annual Reports with Actions Remaining to Be Addressed

Annual reportArea identified (Click area name for more information)
Medicare
2011/2013Program Integrity (Areas 73/25)To help prevent billions of dollars!**ENDEMP_b_** in improper payments, the Centers for Medicare & Medicaid Services (CMS) should better target its claims review by requiring its contractors to develop thresholds for unexplained increases in billing and use them to develop automated prepayment controls, and by requiring that physicians receive a statement of home health services that beneficiaries received based on the physicians’ certification.
2012Medicare Advantage Payments (Area 45):To help ensure appropriate payments to Medicare Advantage plans, CMS should take steps to improve the accuracy of the adjustment made for differences in diagnostic coding practices between Medicare Advantage plans and traditional Medicare providers. We previously reported that these shortcomings in CMS’s adjustment resulted in excess payments to Medicare Advantage plans totaling an estimated $3.2 billion to $5.1 billion over a 3-year period from 2010 through 2012.
2015Medicare Payments to Certain Cancer Hospitals (Area 19): To achieve almost $500 million per year in program savings, Congress should consider modifying how Medicare pays certain cancer hospitals.
2016Medicare Payments by Place of Service (Area 30): Medicare could save billions of dollars if Congress were to equalize the rates Medicare pays for certain health care services, which often vary depending on where the service is performed.
2016Eligibility of Medicare Providers and Suppliers (Area 26): CMS could use better information to help prevent ineligible providers and suppliers from enrolling in the Medicare program and improperly obtaining Medicare funds, potentially reducing the billions of dollars in improper payments that the program has paid out in recent years.
Medicaid
2013/2016Supplemental Payments (Areas 26/25): To save Medicaid hundreds of millions of dollars, (1) Congress should consider requiring CMS to take steps that would facilitate the agency’s ability to oversee these payments, including identifying payments that are not used for Medicaid purposes or are otherwise inconsistent with Medicaid payment principles, and (2) CMS should clarify its requirement that supplemental payments be linked to the provision of Medicaid-covered services, and that such payments not be made contingent on the availability of local funding for the nonfederal share.
2014/2016Demonstration Spending (Areas 21/27): To save billions of dollars, (1) Congress should consider requiring the Department of Health and Human Services (HHS) to improve the process for reviewing, approving, and making transparent the basis for approving spending limits, including ensuring that valid methods are used to demonstrate budget neutrality and (2) HHS should establish specific criteria for assessing whether demonstration spending furthers Medicaid objectives and take other steps to improve the transparency and accountability of the approval process.
2015State Sources of Funds (Area 20): To potentially save hundreds of millions of dollars, CMS should ensure that states report accurate and complete data on state Medicaid sources of funds so that it may better oversee states’ financing arrangements that can increase costs for the federal government.
2016Medicaid and Exchange Coordination (Area 7): CMS should take actions to minimize the risk of duplicative federal spending on health insurance coverage for individuals transitioning between Medicaid and exchange coverage.
2016Payments to Institutional Providers (Area 29): CMS should take steps to improve the oversight of state Medicaid payments to institutional providers and better ensure that the federal government does not provide funds for excessive state payments made to certain providers, which could result in savings of hundreds of millions of dollars.
2016Medicaid Eligibility Determinations (Area 28): CMS should assess the accuracy of federal Medicaid eligibility determinations to minimize the risk of improper payments.

Source: GAO analysis. | GAO-16-375SP

Note: The estimates in this report are from a range of sources, including GAO, executive branch agencies, the Congressional Budget Office, and the Joint Committee on Taxation. Some estimates have been updated to reflect more recent analysis.

More Effectively Targeting Defense Resources

Defense outlays represented about 17 percent of the government’s 2015 total outlays and was the largest component—almost half—of the federal government’s $1.2 trillion discretionary spending in that year.28 Avoiding fragmented, overlapping, and duplicative investments could help ensure more efficient and effective use of resources.

In our 2011-2015 annual reports, we directed 130 actions to DOD, and in this year’s annual report, we direct an additional 22 actions.29 Ninety-five of the 152 (63 percent) total actions we identified remain partially addressed or not addressed.30 Many of the actions fall within a few key areas, including acquisitions and contract management, support infrastructure, and headquarters management. Our work suggests that effectively implementing these actions, such as the examples in table 4, would yield significant financial benefits.

Table 4: Examples of Defense Areas in 2011-2016 Annual Reports with Actions Remaining to Be Addressed

Annual report Area identified (Click area name for more information)
2013Agencies’ Use of Strategic Sourcing (Area 23): The Department of Defense (DOD) and other selected agencies could better leverage their buying power and achieve additional savings by directing more procurement spending to existing strategically sourced contracts and further expanding strategic sourcing practices to their highest-spending procurement categories. GAO estimated that savings of 1 percent from selected agencies’ procurement spending alone would equate to over $4 billion.
2013Joint Basing (Area 20): DOD needs an implementation plan to guide joint bases to achieve $2.3 billion dollars in cost savings over a 20-year period and efficiencies anticipated from combining support services at 26 installations located close to one another.
2015Defense Facilities Consolidation and Disposal (Area 13): DOD should ensure that data on the utilization of DOD facilities—which were collectively valued at around $880 billion in fiscal year 2014—are complete and accurate in order to identify opportunities for saving costs by consolidating or disposing of unutilized or underutilized facilities.
2015DOD Headquarters Reductions (Area 14): DOD could potentially achieve hundreds of millions of dollars lin cost savings and help ensure that headquarters organizations are sized properly to meet their assigned mission by re-evaluating its headquarters reductions efforts and conducting periodic reassessments of workforce requirements.
2015Department of Defense US Family Health Plan (Area 6): To potentially save millions of dollars and eliminate duplication within DOD’s health care system, Congress should terminate the statutorily required US Family Health Plan because it offers military beneficiaries the same health care benefit offered by other DOD health care contractors. GAO estimates this action could save $189 million from fiscal years 2017 to 2022.
2016DOD Commercial Satellite Communication Procurement (Area 1): Enforcing existing acquisition policy and identifying opportunities to centralize DOD’s procurement of commercial satellite communications services could create opportunities to potentially save tens of millions of dollars annually.
2016DOD Excess Ammunition (Area 15): DOD could potentially reduce its storage, demilitarization, and disposal costs by hundreds of thousands of dollars by transferring excess serviceable conventional ammunition, including small arms ammunition, to federal, state, and local government agencies.
2016DOD Leases and Use of Underutilized Space at Military Installations (Area 16): DOD could potentially achieve millions of dollars in savings by identifying and implementing actions to increase use of underutilized facilities at its military installations, such as identifying opportunities to relocate some of its organizations currently in leased space to installations, communicating the availability of underutilized space to potential tenants, and seeking use by other federal agencies.
2016Defense Excess Property Disposal (Area 13): Federal civilian agencies could potentially achieve millions of dollars in cost savings if they were able to obtain more of DOD’s available excess personal property through the disposal process rather than purchasing similar property through a private sector supplier.
2016DOD’s Eligibility Determinations for Living Quarters Allowance (Area 14): DOD could potentially achieve cost savings by monitoring its components’ reviews of eligibility determinations for the over $500 million spent annually on living quarters allowance for civilian employees to better ensure that DOD components are not improperly providing this allowance.

Source: GAO analysis. | GAO-16-375SP

Note: The estimates in this report are from a range of sources, including GAO, executive branch agencies, the Congressional Budget Office, and the Joint Committee on Taxation. Some estimates have been updated to reflect more recent analysis.

Addressing Challenges in Collecting Tax Revenue and Reducing the Tax Gap

IRS collected $3.3 trillion in gross taxes, or 93 percent of federal receipts, in fiscal year 2015. Among the challenges IRS faces in collecting this money are combatting tax refund fraud associated with identity theft, addressing factors that contribute to the $385 billion net tax gap, and reducing the causes of Earned Income Tax Credit improper payments.31

In our 2011-2015 annual reports, we directed 99 actions to the Department of the Treasury, and we include 13 additional actions in this year’s report. Seventy of the 112 (63 percent) total actions we identified remain open.32 Effectively implementing our open recommendations, including the examples in table 5, would increase revenues or reduce costs.

Table 5: Examples of Tax Areas in 2011-2016 Annual Reports with Actions Remaining to Be Addressed

Annual reportArea identified (Click area name for more information)
2011Real Estate Tax Deductions (Area 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.
2011Simple Tax Return Errors (Area 56): Broadening the Internal Revenue Service’s (IRS) authority to correct simple tax return errors could facilitate correct tax payments and help IRS avoid costly, burdensome audits. The Joint Committee on Taxation estimated this action could raise $274 million from fiscal years 2018 through 2026.
2013/2015Tax Policy and Enforcement (Areas 22/17): By using more rigorous analyses to allocate enforcement resources and using data to improve management of enforcement programs such as large partnership and correspondence audits, among other things, IRS can increase revenue collections by billions of dollars.
2014Online Taxpayer Services (Area 17): IRS could potentially realize hundreds of millions of dollars in cost savings and increased revenues by enhancing its online services, which would improve service to taxpayers and encourage greater tax law compliance.
2016IRS’s Public Referral Programs (Area 6): IRS could potentially collect billions of dollars in tax underpayments through its nine public referral programs and save resources by better managing fragmentation and overlap, improving communication, and streamlining processes.
2016Identity Theft Refund Fraud (Area 22): IRS and Congress could potentially save billions of dollars in fraudulent refunds by improving the agency’s efforts to prevent refund fraud associated with identity theft.

Source: GAO analysis. | GAO-16-375SP

Note: The estimates in this report are from a range of sources, including GAO, executive branch agencies, the Congressional Budget Office, and the Joint Committee on Taxation. Some estimates have been updated to reflect more recent analysis.

Additional Areas with Significant Open Actions

In addition to the health care, defense, and tax areas, we have suggested a number of other actions that, if addressed, would result in significant cost savings or revenue enhancement across the government.33 Table 6 summarizes examples where additional leadership attention could promote progress.

Table 6: Examples of Areas in 2011-2016 Annual Reports with Actions Remaining to Be Addressed

Annual reportArea identified (Click area name for more information)
Energy and Agriculture
2011Oil and Gas Resources (Area 45): Improved management of federal oil and gas resources could result in $1.7 billion of additional revenue over 10 years, according to the Department of the Interior.
2012Excess Uranium Inventories (Area 40): Marketing the Department of Energy’s excess uranium could provide substantial revenue for the government. In 2014, GAO estimated that actions in this area could increase revenue by about $1 billion.
2013Crop Insurance (Area 19): To achieve up to $2 billion annually in cost savings in the crop insurance program, Congress could consider limiting the subsidy for premiums that are provided on behalf of individual farmers, reducing the subsidy, or some combination of limiting and reducing these subsidies.
2015U.S. Enrichment Corporation (USEC) Fund (Area 16): Congress may wish to permanently rescind the entire $1.6 billion balance of the USEC fund—a revolving fund in the U.S. Treasury—because its purposes have been fulfilled.
General Government
2016National Park Service Fees (Area 23): The National Park Service could potentially increase revenues from the recreation fees it collects by millions of dollars annually if Congress were to amend the authorizing legislation for this program and if the agency required park units to periodically review these fees.
2016Financing of Improvements to Federally Leased Space (Area 21): In order to achieve millions in potential cost savings, the General Services Administration should explore the benefits and risks of loaning unobligated Federal Buildings Fund balances to tenant agencies to cover the costs of improving newly leased space, which would otherwise be financed by private lessors at private-sector interest rates.
2016Unobligated Balances (Area 24): To help ensure effective use of federal funds, the Departments of Energy and State should develop and finalize strategies for reducing tens and hundreds of millions of dollars of excess unobligated balances, respectively, in two budget accounts.
Homeland Security/Law Enforcement
2012Immigration Inspection Fee (Area 49): The air passenger immigration inspection user fee should be reviewed and adjusted to fully recover the cost of the air passenger immigration inspection activities conducted by the Department of Homeland Security’s U.S. Immigration and Customs Enforcement and U.S. Customs and Border Protection rather than using general fund appropriations. GAO estimated this action could increase revenue by almost $175 million.
2013Checked Baggage Screening (Area 28): By reviewing the appropriateness of the federal cost share the Transportation Security Administration applies to agreements financing airport facility modification projects related to the installation of checked baggage screening systems, the Transportation Security Administration could, if a reduced cost share was deemed appropriate, achieve cost efficiencies and be positioned to install a greater number of optimal baggage screening systems than it currently anticipates. More efficient baggage screening systems could result in roughly $234 million in cost savings from 2015 through 2027, according to the Transportation Security Agency.
Income Security
2011Social Security Offsets (Area 80): Social Security needs data on pensions from noncovered earnings to better enforce offsets and ensure benefit fairness. This action could result in estimated savings of $2.4 billion to $7.9 billion over 10 years if enforced both retrospectively and prospectively, according to the Congressional Budget Office and the Social Security Administration. If Social Security only enforced the offsets prospectively, the overall savings would be less as it would not reduce benefits already received.
2014Veterans’ and Survivors’ Benefits (Area 23): The Department of Veterans Affairs’ direct spending could be reduced—by an average of about $4 million annually, according to the Congressional Budget Office—if new statutory provisions were enacted, namely, a look-back review and penalty period for claimants who transfer assets for less than fair market value before applying for pension benefits that are available to low-income wartime veterans who are at least 65 years old or have disabilities unrelated to their military service.
2014Disability and Unemployment Benefits (Area 8): Congress should consider passing legislation to prevent individuals from collecting both full Disability Insurance benefits and Unemployment Insurance benefits that cover the same period, which could save $1.9 billion from fiscal years 2016 through 2025, according to the Congressional Budget Office.
2015Children’s Disability Reviews (Area 21): To prevent an estimated $3.1 billion in potential overpayments over 5 years, the Social Security Administration needs to conduct timely disability reviews to better ensure that only eligible children receive cash benefits from the Supplemental Security Income program.
2016VA’s Individual Unemployability Benefit (Area 34): To potentially achieve cost savings, the Department of Veterans Affairs should develop a plan to study whether age should be considered when deciding if veterans are unemployable due to service-connected disabilities. By comparison, other benefit programs, such as Social Security Disability Insurance, consider retirement age a cause for ineligibility and convert benefits for those reaching their retirement age to a Social Security retirement benefit. If the department were to determine that Total Disability Individual Unemployability benefits should be provided only to veterans younger than their full Social Security retirement age, it could achieve an estimated $15 billion in savings from 2015 through 2023, according to the Congressional Budget Office.
2016Disability Insurance and Federal Workers’ Compensation (Area 31): The Social Security Administration should take steps to minimize overpayments from the Social Security Disability Insurance program to individuals who also received federal workers’ compensation, which could help to achieve potential cost savings associated with millions of dollars of overpayments from the Social Security Disability Insurance program.
2016Disability Insurance Overpayments (Area 32): To help prevent the loss of billions of dollars, the Social Security Administration should take steps to prevent overpayments to beneficiaries of the Disability Insurance program and improper waivers of beneficiaries’ overpayment debt.
2016Disability Reviews (Area 33): The Social Security Administration may increase federal savings realized as a result of disability reviews by further considering factors that affect individuals’ expected lifetime benefits when prioritizing its reviews of Disability Insurance and Supplemental Security Income cases.
Information Technology
2011Federal Data Centers (Area 15): Consolidating federal data centers would provide an opportunity to improve government efficiency. Action in this area could potentially achieve cost savings and avoidances of $8.2 billion through fiscal year 2019, of which $2.8 billion has accrued from actions already taken and $5.4 billion could potentially accrue if further action is taken, according to GAO’s analysis of data from 24 agencies involved in the Federal Data Center Consolidation Initiative.
2013Cloud Computing (Area 29): Better planning of cloud-based computing solutions provides an opportunity for potential savings of millions of dollars.
2013Information Technology Operations and Maintenance (Area 30): Strengthening oversight of key federal agencies’ major information technology investments in operations and maintenance would provide an opportunity for savings on billions in information technology investments.
2014Information Technology Investment Portfolio Management (Area 24): The Office of Management and Budget and multiple agencies could help the federal government realize billions of dollars in savings by taking steps to better implement PortfolioStat, a process to help agencies manage their information technology investments.
International Affairs
2016Cargo Preference for Food Aid (Area 36): A clearer definition of “geographic area” in legislation on cargo preference for food aid could allow the U.S. Department of Agriculture to achieve financial savings by more fully utilizing the flexibility Congress granted when it lowered the statutory cargo preference requirement.
Training, Employment, and Education
2016Post 9/11 GI Bill Overpayments (Area 37): The Department of Veterans Affairs could achieve substantial savings by developing guidance and controls to reduce the volume of annual Post-9/11 GI Bill overpayments—which amounted to over $400 million in fiscal year 2014—and to improve the collection of overpayment debts, of which $262 million was still outstanding as of November 2014.

Source: GAO analysis. | GAO-16-375SP

Note: The estimates in this report are from a range of sources, including GAO, executive branch agencies, the Congressional Budget Office, and the Joint Committee on Taxation. Some estimates have been updated to reflect more recent analysis.

This report was prepared under the coordination of Orice Williams Brown, Managing Director, Financial Markets and Community Investment, who may be reached at (202) 512-8678 or williamso@gao.gov; and A. Nicole Clowers, Managing Director, Health Care, who may be reached at (202) 512-8678 or clowersa@gao.gov. Specific questions about individual issues may be directed to the area contact listed at the end of each summary.

Gene L. Dodaro

Comptroller General of the United States

Section I: Report at a Glance

Table 1 summarizes the 12 areas in which we found evidence of fragmentation, overlap, or duplication among federal government programs, which we present in detail in Section II. Table 2 summarizes 25 additional opportunities for Congress or executive branch agencies to consider taking action that could either reduce the cost of government operations or enhance revenue collections for the Treasury, which we present in detail in Section III.

 

Fragmentation, Overlap, or Duplication Areas

Missions Areas Identified
Defense 1. DOD Commercial Satellite Communication Procurements Enforcing existing acquisition policy and identifying opportunities to centralize the Department of Defense's procurement of commercial satellite communications services could create opportunities to potentially save tens of millions of dollars annually.
Defense 2. DOD's Storage of Occupational and Environmental Health Surveillance Data Inconsistencies among the policies of the Department of Defense and the military services have contributed to fragmented and duplicative efforts to store occupational and environmental health surveillance data needed to track and assess service-related health conditions of returning servicemembers and veterans.
Defense 3. Weapon System Portfolio Management By using portfolio management more effectively, the Department of Defense could help ensure that the more than $100 billion it spends annually on weapon system acquisitions contributes to its strategic goals and could reduce the potential for overlapping and unnecessarily duplicative investments.
Economic Development 4. Manufacturing Loan Guarantees The Economic Development Administration could better ensure that the activities carried out under the Innovative Technologies in Manufacturing program do not duplicate the efforts of other federal loan guarantee programs by working with other agencies to identify and target capital access gaps not filled by other programs.
General Government 5. Financial Regulatory Structure To reduce or better manage fragmentation and overlap, Congress should consider changes to the financial regulatory structure, and the Board of Governors of the Federal Reserve System and the Office of Financial Research should take steps to improve collaboration in monitoring systemic risk.
General Government 6. IRS's Public Referral Programs The Internal Revenue Service could potentially collect billions of dollars in tax underpayments through its nine public referral programs and save resources by better managing fragmentation and overlap, improving communication, and streamlining processes.
Health 7. Medicaid and Exchange Coordination The Centers for Medicare & Medicaid Services should take actions to minimize the risk of duplicative federal spending on health insurance coverage for individuals transitioning between Medicaid and exchange coverage.
Homeland Security/Law Enforcement 8. Department of Homeland Security's Human Resources Systems To address issues related to fragmented systems and duplicative processes, the Department of Homeland Security should take steps to (1) ensure that its Human Resources Information Technology investment receives necessary oversight and attention from its steering committee and (2) evaluate and update the investment’s strategic planning document.
Homeland Security/Law Enforcement 9. Security of Federal Facilities The Federal Protective Service and General Services Administration need to improve collaboration in key areas to better manage fragmentation and enhance the agencies’ ability to protect federal facilities.
Information Technology 10. Tribal Internet Access Greater coordination among the Federal Communications Commission's Universal Service Fund subsidy programs and the U.S. Department of Agriculture's Rural Utilities Service grant programs could result in more efficient and effective support of Internet access for tribal communities.
International Affairs 11. U.S. Embassy Kabul Construction A strategic facilities plan for construction projects in Kabul, Afghanistan, could enhance the planning and coordination among Department of State bureaus and reduce the likelihood of fragmented construction efforts and duplicative facilities.
International Affairs 12. U.S.-Funded Development Innovation Programs The U.S. Agency for International Development should establish a joint approach to collaboration among its Development Innovation Ventures program and other similar U.S.-funded programs in India to better manage overlap.

Other Cost Savings or Revenue Enhancement Opportunities

Missions Areas Identified
Defense 13. Defense Excess Property Disposal Federal civilian agencies could potentially achieve millions of dollars in cost savings if they were able to obtain more of the Department of Defense’s available excess personal property through the disposal process rather than purchasing similar property through a private sector supplier.
Defense 14. DOD's Eligibility Determinations for Living Quarters Allowance The Department of Defense (DOD) could potentially achieve cost savings by monitoring its components’ reviews of eligibility determinations for the over $500 million spent annually on living quarters allowance for civilian employees to better ensure that DOD components are not improperly providing this allowance.
Defense 15. DOD Excess Ammunition The Department of Defense could potentially reduce its storage, demilitarization, and disposal costs by hundreds of thousands of dollars by transferring excess serviceable conventional ammunition, including small arms ammunition, to federal, state, and local government agencies.
Defense 16. DOD Leases and Use of Underutilized Space at Military Installations The Department of Defense could potentially achieve millions of dollars in savings by identifying and implementing actions to increase use of underutilized facilities at its military installations, such as identifying opportunities to relocate some of its organizations currently in leased space to installations, communicating the availability of underutilized space to potential tenants, and seeking use by other federal agencies.
Economic Development 17. Treasury's Foreclosure Prevention Efforts The Department of the Treasury could potentially achieve billions in financial benefits by reviewing the potential for unexpended balances for the Making Home Affordable Program and deobligating excess funds, which Congress could rescind and direct to other priorities.
General Government 18. Bridge Contracts When bridge contracts—which include extensions to existing contracts and short-term noncompetitive contracts to avoid a gap in service—are used frequently or for prolonged periods of time, the government is at risk of paying more than it should for goods and services.
General Government 19. Federal Supply Schedules Agencies are paying insufficient attention to prices when using the Federal Supply Schedules program and may be missing opportunities for cost savings.
General Government 20. Federally Leased Vehicles The General Services Administration and selected agencies could potentially reduce costs by improving the processes for justifying the use of vehicles in the federal fleet and taking actions for any vehicles that may be underutilized.
General Government 21. Financing of Improvements to Federally Leased Space In order to achieve millions in potential cost savings, the General Services Administration should explore the benefits and risks of loaning unobligated Federal Buildings Fund balances to tenant agencies to cover the costs of improving newly leased space, which would otherwise be financed by private lessors at private-sector interest rates.
General Government 22. Identity Theft Refund Fraud The Internal Revenue Service and Congress could potentially save billions of dollars in fraudulent refunds by improving the agency’s efforts to prevent refund fraud associated with identity theft.
General Government 23. National Park Service Fees The National Park Service could potentially increase revenues from the recreation fees it collects by millions of dollars annually if Congress were to amend the authorizing legislation for this program and if the agency required park units to periodically review these fees.
General Government 24. Unobligated Balances To help ensure effective use of federal funds, the Departments of Energy and State should develop and finalize strategies for reducing tens and hundreds of millions of dollars of excess unobligated balances, respectively, in two budget accounts.
Health 25. Distribution of Medicaid Supplemental Payments The Centers for Medicare & Medicaid Services should provide written guidance to state Medicaid programs clarifying its policies that the distribution of Medicaid supplemental payments be linked to the provision of Medicaid-covered services, and that such payments not be made contingent on the availability of local funding for the nonfederal share—actions that could result in substantial cost savings.
Health 26. Eligibility of Medicare Providers and Suppliers The Centers for Medicare & Medicaid Services could use better information to help prevent ineligible providers and suppliers from enrolling in the Medicare program and improperly obtaining Medicare funds, potentially reducing the billions of dollars in improper payments that the program has paid out in recent years.
Health 27. Medicaid Demonstration Approved Spending The Secretary of Health and Human Services could potentially curtail spending growth of Medicaid demonstrations, which have resulted in the authorization of billions of dollars in federal spending, by establishing specific criteria for assessing whether demonstration spending furthers Medicaid objectives and taking other steps to improve the transparency and accountability of the approval process.
Health 28. Medicaid Eligibility Determinations The Centers for Medicare & Medicaid Services should assess the accuracy of federal Medicaid eligibility determinations to minimize the risk of improper payments.
Health 29. Medicaid Payments to Institutional Providers The Centers for Medicare & Medicaid Services should take steps to improve the oversight of state Medicaid payments to institutional providers and better ensure that the federal government does not provide funds for excessive state payments made to certain providers, which could result in savings of hundreds of millions of dollars.
Health 30. Medicare Payments by Place of Service Medicare could save billions of dollars if Congress were to equalize the rates Medicare pays for certain health care services, which often vary depending on where the service is performed.
Income Security 31. Disability Insurance and Federal Workers' Compensation The Social Security Administration should take steps to minimize overpayments from the Social Security Disability Insurance program to individuals who also received federal workers’ compensation, which could help to achieve potential cost savings associated with millions of dollars of overpayments from the Social Security Disability Insurance program.
Income Security 32. Disablitiy Insurance Overpayments To help prevent the loss of billions of dollars, the Social Security Administration should take steps to prevent overpayments to beneficiaries of the Disability Insurance program and improper waivers of beneficiaries’ overpayment debt.
Income Security 33. Disability Reviews The Social Security Administration may increase federal savings realized as a result of disability reviews by further considering factors that affect individuals’ expected lifetime benefits when prioritizing its reviews of Disability Insurance and Supplemental Security Income cases.
Income Security 34. VA's Individual Unemployability Benefit To potentially achieve cost savings, the Department of Veterans Affairs should develop a plan to study whether age should be considered when deciding if veterans are unemployable due to service-connected disabilities. By comparison, other benefit programs, such as Social Security Disability Insurance, consider retirement age a cause for ineligibility and convert benefits for those reaching their retirement age to a Social Security retirement benefit. If the department were to determine that Total Disability Individual Unemployability benefits should be provided only to veterans younger than their full Social Security retirement age, it could achieve an estimated $15 billion in savings from 2015 through 2023, according to the Congressional Budget Office.
Information Technology 35. Federal Mobile Telecommunications In order to achieve substantial government-wide savings, federal agencies should establish better controls on mobile device spending, and the Office of Management and Budget should monitor progress in achieving these savings.
International Affairs 36. Cargo Preference for Food Aid A clearer definition of “geographic area” in legislation on cargo preference for food aid could allow the U.S. Department of Agriculture to achieve financial savings by more fully utilizing the flexibility Congress granted when it lowered the statutory cargo preference requirement.
Training, Employment, and Education 37. Post-9/11 GI Bill Overpayments The Department of Veterans Affairs could achieve substantial savings by developing guidance and controls to reduce the volume of annual Post-9/11 GI Bill overpayments—which amounted to over $400 million in fiscal year 2014—and to improve the collection of overpayment debts, of which $262 million was still outstanding as of November 2014.

Section II: Fragmentation, Overlap & Duplication

This section presents 11 areas in which we found evidence of fragmentation, overlap, or duplication among federal government programs.

Economic development

Information technology

Section III: Cost Savings & Revenue Enhancement

This section summarizes 15 additional opportunities for agencies or Congress to consider taking action that could either reduce the cost of government operations or enhance revenue collections for the Treasury.

Information technology

International affairs

Training, employment, and education

Objectives, Scope, and Methodology

Section 21 of Public Law 111-139, enacted in February 2010, requires GAO to conduct routine investigations to identify federal programs, agencies, offices, and initiatives with duplicative goals and activities within departments and government-wide. This provision also requires GAO to report annually to Congress on its findings, including the cost of such duplication, with recommendations for consolidation and elimination to reduce duplication and specific rescissions (legislation canceling previously enacted budget authority) that Congress may wish to consider. As agreed with the key congressional committees, our objectives in this report are to (1) identify what potentially significant areas of fragmentation, overlap, and duplication as well as opportunities for cost savings and enhanced revenues exist across the federal government; and (2) identify what options, if any, exist to address fragmentation, overlap, and duplication in these areas and take advantage of opportunities for cost savings and enhanced revenues.

For the purposes of our analysis, we used the term “fragmentation” to refer to those circumstances in which more than one federal agency (or more than one organization within an agency) is involved in the same broad area of national need and there may be opportunities to improve how the government delivers these services. We used the term “overlap” when multiple agencies or programs have similar goals, engage in similar activities or strategies to achieve them, or target similar beneficiaries. We considered “duplication” to occur when two or more agencies or programs are engaged in the same activities or provide the same services to the same beneficiaries.34 This report presents 12 areas of fragmentation, overlap, or duplication where greater efficiencies or effectiveness in providing government services may be achievable. We also highlighted 25 other opportunities for potential cost saving or revenue enhancements.

GAO’s Approach

Over the course of our 2011 through 2013 annual reports we conducted a systematic and practical examination across the federal government to provide reasonable coverage for areas of potential fragmentation, overlap, and duplication government-wide.35 Since then, we have considered a variety of factors to determine whether such potential instances or opportunities identified in our routine audit work warrant inclusion in this annual report. Such factors included, but were not limited to, the extent of potential cost savings, opportunities for enhanced program efficiency or effectiveness, the degree to which multiple programs may be fragmented, overlapping, or duplicative, whether issues had been identified by GAO or external sources, and the level of coordination among agency programs.36

Each issue area contained in Sections II and III of this report lists any respective GAO reports and publications upon which it is based. Those prior GAO reports contain more detailed information on our supporting work and methodologies. For issues that update prior GAO work, we provide additional information on the methodologies used in that update in the section entitled “How GAO Conducted Its Work” of each issue area.

Identifying Actions

To identify what actions, if any, exist to address fragmentation, overlap, and duplication and take advantage of opportunities for cost savings and enhanced revenues, we reviewed and updated prior GAO work and recommendations to identify what additional actions agencies may need to take and Congress may wish to consider. For example, we used a variety of prior GAO work identifying leading practices that could help agencies address challenges associated with interagency coordination and collaboration and evaluating performance and results achieving efficiencies.37

To identify the potential financial and other benefits that might result from actions addressing fragmentation, overlap, or duplication, we collected and analyzed data on costs and potential savings to the extent it was available. Estimating the benefits that could result from eliminating unnecessary fragmentation, overlap, or duplication was not possible in some cases because information about the extent of duplication among certain programs was not available. Further, the financial benefits that can be achieved from eliminating fragmentation, overlap or duplication were not always quantifiable in advance of congressional and executive branch decision making, and needed information was not readily available on, among other things, program performance, the level of funding devoted to overlapping programs, or the implementation costs and time frames that might be associated with program consolidations or terminations.

When possible, we also included tables in appendix V that provide a detailed listing of federally-funded program names and associated budgetary information. There is no standard definition for what constitutes a program; they may include grants, tax expenditures, centers, loans, funds, and other types of assistance. A wide variety of budgetary information may be used to convey the federal commitment to these programs, and we provided the most relevant and up to date information available. For example, when available, we collected obligations information for fiscal year 2015 for reporting across issue areas. In some instances, obligations data were not available, but we were able to report other budgetary information, such as appropriations. In other issue areas, we did not report any budgetary information, because such information was either not available or sufficiently reliable. For example, some agencies could not isolate budgetary information for some programs, because the data were aggregated at higher levels.

We assessed the reliability of any computer-processed data that materially affected our findings, including cost savings and revenue enhancement estimates. The steps that we take to assess the reliability of data vary but are chosen to accomplish the auditing requirement that the data be sufficiently reliable given the purposes for which it is used for in our products. GAO analysts review published documentation about the data system and Inspector General or other reviews of the data. We may interview agency or outside officials to better understand system controls and to assure ourselves that we understand how the data are produced and any limitations associated with the data. We may also electronically test the data to see if values in the data conform to agency testimony and documentation regarding valid values, or compare data to source documents. In addition to these steps we often compare data with other sources as a way to corroborate our findings. Per GAO policy, when data do not materially affect findings and are presented for background purposes only, we may not have assessed the reliability depending upon the context in which the data are presented.

Assessing Status of Actions

To examine the extent to which the Congress and executive branch agencies have made progress in implementing the 544 actions in the 213 areas we have reported on in previous annual reports on fragmentation, overlap, and duplication, we reviewed relevant legislation and agency documents such as budgets, policies, strategic and implementation plans, guidance, and other information.38 We also analyzed, to the extent possible, whether or not financial or other benefits have been attained, and included this information as appropriate. (See discussion below on the methodology we used to estimate financial benefits). In addition, we discussed the implementation status of the actions with officials at the relevant agencies.

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 544 actions within their areas of expertise. A core group of GAO staff examined all assessments to ensure consistent and systematic application of the criteria, and made adjustments, as appropriate.

We used the following criteria in assessing the status of actions.39

  • In assessing legislative branch actions, we applied the following criteria: “addressed” means relevant legislation is enacted and addresses all aspects of the action needed; “partially addressed” means a relevant bill has passed a committee, the House of Representatives, or the 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.
  • In assessing executive branch actions we applied the following criteria: “addressed” means implementation of the action needed has been completed; “partially addressed” means the action needed is in development, started but not yet completed; and “not addressed” means the administration, the agencies, or both have made minimal or no progress toward implementing the action needed.

We provided drafts of these assessments to the agencies involved for their technical comments and incorporated these comments, as appropriate. In providing the drafts to the agencies for review, we communicated that we would use an as of date of March 2, 2016, for all assessments. In addition to summarizing any comments received on our assessments, we incorporated a summary of comments on the prior GAO work upon which each issue area is based. Consistent with GAO policy, we are not reprinting copies of agencies’ comment letters with this report, as the work included is based predominantly on previously issued GAO reports. Copies of agency comment letters associated with previous reports can be found in those reports, if applicable.

Methodology for Generating Cost Savings Estimates

In order to calculate the total financial benefits resulting from actions already taken and potential financial benefits from actions that are not fully addressed, GAO analysts compiled available estimates for all of the actions from GAO’s Action Tracker, from 2011 through 2015, and from reports identified for inclusion in the 2016 annual report, and linked supporting documentation to those estimates. Each estimate was reviewed by a GAO technical specialist to ensure that estimates were based on reasonably sound methodologies. The savings estimates came from a variety of sources, including GAO analysis, Congressional Budget Office estimates, individual agencies, the Joint Committee on Taxation, and others. Due to differences in time frames, underlying assumptions, quality of data, and methodologies among these individual estimates, any attempt to generate a total will be associated with uncertainty that limits the precision of this calculation. As a result, our totals represent a rough estimate of financial benefits, rather than an exact total.

For actions that have already been taken, individual estimates of realized cost savings covered a range of time periods stretching from 2010 through 2025. In order to calculate the total amount of realized financial benefits that have already accrued, and those that are expected to accrue, we separated those that accrued from 2010 through 2015, and those expected to accrue between 2016 and 2025. For individual estimates that span both periods, we assumed that financial benefits were distributed evenly over the period of the estimate.40 For each category, we summed the individual estimates in order to generate a total. To account for uncertainty and imprecision resulting from the differences in individual estimates, we present these realized savings to the nearest billion dollars, rounded down.

Estimates of potential financial benefits that could accrue from actions not yet taken have a higher level of uncertainty, because these estimates are dependent on whether, how, and when agencies and Congress take our recommended actions. As a result, many estimates of potential savings are notionally stated using terms like million, tens of millions, or billions, to demonstrate a magnitude without providing a more precise estimate. Further, many of these estimates are not tied to specific time frames, for the same reason. In order to calculate a total for potential savings, with a conservative approach, we used the minimum number associated with each term.41 To account for the increased uncertainty of potential estimates and the imprecision resulting from differences among individual estimates, we calculated potential financial benefits to the nearest $10 billion, rounded down, and presented our results using a notional term.

This report is based upon work GAO previously conducted in accordance with generally accepted government auditing standards, or GAO’s quality assurance framework. Generally accepted government auditing standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives.

Abbreviations

APTC advance payments of the premium tax credit
BIA Bureau of Indian Affairs
BRAC Base Realignment and Closure
CAD conventional ammunition awaiting demilitarization and disposal
CBO Congressional Budget Office
CBPS Consular and Border Security Programs
CDR continuing disability review
CMRA Commercial Mail Receiving Agency
CMS Centers for Medicare & Medicaid Services
COLA cost of living adjustments
CPFA cargo preference for food aid
CROM Construction, Rehabilitation, Operation and Maintenance
D&CP Diplomatic and Consular Programs
DS Diplomatic Security
DCPAS Defense Civilian Personnel Advisory Service
DHS Department of Homeland Security
DI Disability Insurance
DISA Defense Information Systems Agency
DIV Development Innovation Ventures
DLA Defense Logistics Agency
DMEPOS durable medical equipment, prosthetics, orthotics, and supplies
DOD Department of Defense
DOE Department of Energy
DOEHRS Defense Occupational and Environmental Health Readiness System
DOJ Department of Justice
DOL Department of Labor
DOT Department of Transportation
DSSR Department of State Standardized Regulations
EDA Economic Development Administration
EESA Emergency Economic Stabilization Act of 2008
EITC Earned Income Tax Credit
EPA Environmental Protection Agency
FAR Federal Acquisition Regulation
FAS Foreign Agricultural Service
FBF Federal Buildings Fund
FBI Federal Bureau of Investigation
FCC Federal Communications Commission
FDA Food and Drug Administration
FECA Federal Employees’ Compensation Act
FEMA Federal Emergency Management Agency
FFE federally facilitated exchanges
FLREA Federal Lands Recreation Enhancement Act
FMAP Federal Medical Assistance Percentage
FPDS-NG Federal Procurement Data System-Next Generation
FPMR Federal Property Management Regulations
FPS Federal Protective Service
FSMB Federation of State Medical Boards
FSOC Financial Stability Oversight Council
FSS Fixed Satellite Service
FSS Federal Supply Schedules
GDP gross domestic product
GPRA Government Performance and Results Act
GSA General Services Administration
HAMP Home Affordable Modification Program
HCERA Health Care and Education Reconciliation Act of 2010
HHS Department of Health and Human Services
HRIT Human Resources Information Technology
HUD Department of Housing and Urban Development
IDT identity theft
IRS Internal Revenue Service
IT information technology
ITM Innovative Technologies in Manufacturing
LCM License Continuous Monitoring
LQA living quarters allowance
MAC Medicare Administrative Contractors
MARAD Maritime Administration
MESL Military Exposure Surveillance Library
MHA Making Home Affordable
MOA memorandum of agreement
MOU memorandum of understanding
MSIS Medicaid Statistical Information System
NASA National Aeronautics and Space Administration
NIH National Institutes of Health
NIST National Institute of Standards and Technology
NPS National Park Service
OBO Overseas Buildings Operations
OCC Office of the Comptroller of Currency
OCHCO Office of the Chief Human Capital Officer
OCIO Office of the Chief Information Officer
OEHS occupational and environmental health surveillance
OEP Occupant Emergency Plan
OFPP Office of Federal Procurement Policy
OIG Office of Inspector General
OMB Office of Management and Budget
OTSA Oklahoma Tribal Statistical Areas
PALMS Performance and Learning Management System
PECOS Provider Enrollment, Chain and Ownership System
PERM Payment Error Rate Measurement
PIN personal identification number
POMS Program Operations Manual System
PPACA Patient Protection and Affordable Care Act
ROAR Recovery of Overpayments, Accounting and Reporting
SATCOM satellite communications
SBA Small Business Administration
SCA Bureau of South and Central Asian Affairs
SMCA Single Manager for Conventional Ammunition
SRAP Special Representative for Afghanistan and Pakistan
SSA Social Security Administration
SSDI Social Security Disability Insurance
SSI Supplemental Security Income
TARP Troubled Asset Relief Program
TDIU Total Disability Individual Unemployability
TROR Treasury Report on Receivables
TSA Transportation Security Administration
UPL Upper Payment Limit
UPS United Parcel Service
USAID U.S. Agency for International Development
USDA Department of Agriculture
USPS United States Postal Service
VA Department of Veterans Affairs
VHA Veterans Health Administration
WAPA Western Area Power Administration

Footnotes

1) GAO’s analysis of the Federal Fiscal Outlook can be found at http://www.gao.gov/fiscal_outlook/federal_fiscal_outlook/overview. Also see, GAO, Financial Statement Audit: U.S. Government’s Fiscal Years 2015 and 2014 Consolidated Financial Statements, GAO-16-357R (Washington, D.C.: Feb. 25, 2016).

2) Pub. L. No. 111-139, § 21, 124 Stat. 29 (2010), 31 U.S.C. § 712 Note. See appendix I for the list of congressional addressees for this work.

3) GAO, Opportunities to Reduce Potential Duplication in Government Programs, Save Tax Dollars, and Enhance Revenue, GAO-11-318SP (Washington, D.C.: Mar. 1, 2011); 2012 Annual Report: Opportunities to Reduce Duplication, Overlap and Fragmentation, Achieve Savings, and Enhance Revenue, GAO-12-342SP (Washington, D.C.: Feb. 28, 2012); 2013 Annual Report: Actions Needed to Reduce Fragmentation, Overlap, and Duplication and Achieve Other Financial Benefits, GAO-13-279SP (Washington, D.C.: Apr. 9, 2013); 2014 Annual Report: Additional Opportunities to Reduce Fragmentation, Overlap, and Duplication and Achieve Other Financial Benefits, GAO-14-343SP (Washington, D.C.: Apr. 8, 2014); and 2015 Annual Report: Additional Opportunities to Reduce Fragmentation, Overlap, and Duplication and Achieve Other Financial Benefits, GAO-15-404SP (Washington, D.C.: Apr. 14, 2015).

4) Because this report is based on previously issued GAO products, in many cases we cite November 1999 internal control standards as criteria; see GAO, Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1 (Washington, D.C.: November 1999). When cited, these criteria were effective at the time of our review. However, new internal control standards for the federal government became effective beginning October 1, 2015; see GAO, Standards for Internal Control in the Federal Government, GAO-14-704G (Washington, D.C.: September 2014). Any corrective action that agencies plan to take should be in accordance with the new standards.

5) DHS’s eight components are the Federal Emergency Management Agency, the Federal Law Enforcement Training Center, the Transportation Security Administration, U.S. Citizenship and Immigration Services, U.S. Customs and Border Protection, the U.S. Coast Guard, U.S. Immigration and Customs Enforcement, and the U.S. Secret Service.

6) In 2012, IRS estimated the net tax gap to be $385 billion and the gross tax gap—the difference between taxes owed and taxes paid on time—to be $450 billion based on data from tax year 2006. IRS plans to release an updated tax gap estimate in 2016, which will be based on tax years 2008, 2009, and 2010.

7) While most regulators did not comment on this issue, the National Credit Union Administration stated that it believes the substance of our February 2016 report did not support the report’s conclusions or the report’s resulting suggestion that Congress consider whether additional changes are needed to the regulatory structure. However, our report documents several instances where the current structure produced inconsistent, inefficient, and ineffective oversight. The costs and benefits of any options for improving and modernizing the structure would have to be part of any consideration of additional changes to the regulatory structure but would not preclude considering other options as we suggested.

8) Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the Health Care and Education Reconciliation Act of 2010 (HCERA), Pub. L. No. 111-152, 124 Stat. 1029 (2010). For the purposes of this report section, references to the Patient Protection and Affordable Care Act include the amendments made by HCERA.

9) See generally 42 C.F.R. §§ 433.135 et seq.

10) There are 12 special programs that may screen and request DOD excess personal property during the first stage of the disposal process, including, for example, the 1033 program, which provides excess DOD property to state and local law enforcement agencies.

11) Pub. L. No. 108-447, div. J. tit. VIII, 118 Stat. 3377 (2004) (codified as amended at 16 U.S.C. §§ 6801-6814 (2015)).

12) GAO, Federal User Fees: A Design Guide, GAO-08-386SP (Washington, D.C.: May 29, 2008).

13) National Park Service Centennial Act, H.R. 3556, 114th Cong. § 602 (2015). The annual interagency pass covers entrance fees and certain amenity fees for all federal recreational lands. The amount of additional revenue generated by adjusting the price of the senior pass could be lower if the amount of the price increase deters seniors from purchasing the pass.

14) Actions were assessed as of March 2, 2016, the date we completed our audit work. In assessing actions suggested for Congress, we applied the following criteria: “addressed” means relevant legislation has been enacted and addresses all aspects of the action needed; “partially addressed” means a relevant bill has passed a committee, the House of Representatives, or the 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. In assessing actions suggested for the executive branch, we applied the following criteria: “addressed” means implementation of the action needed has been completed; “partially addressed” means the action needed is in development, or started but not yet completed; and “not addressed” means the administration, the agencies, or both have made minimal or no progress toward implementing the action needed.

15) In calculating these totals, we relied on individual estimates from a variety of sources, which considered different time periods and utilized different data sources, assumptions, and methodologies. They represent a rough estimate of financial benefits and have been rounded down to the nearest $1 billion.

16) In addition to the 66 actions identified in our 2015 annual report, we also added 19 new actions to existing areas that we previously identified in our 2011-2014 reports. During this year’s review, we also added 1 action that was inadvertently omitted from the 2015 total.

17) Percentages do not add to 100 due to rounding. In addition, this year, 4 actions were categorized as “consolidated or other” for a total of 24 actions (4 percent) in this category from 2011-2015. Actions categorized as “consolidated or other” are no longer assessed. In most cases, the actions were replaced or subsumed by new actions based on additional audit work or other relevant information. For example, actions categorized as “consolidated or other” may have been consolidated into other actions that we track based on subsequent audit work or significant changes in agency circumstances, or they may have been redirected from a congressional to an executive branch action, or vice versa.

18) In calculating these totals, we relied on individual estimates from a variety of sources, which considered different time periods and utilized different data sources, assumptions, and methodologies. These totals represent a rough estimate of financial benefits and have been rounded down to the nearest $1 billion.

19) Every Student Succeeds Act, Pub. L. No. 114-95 (Dec. 10, 2015).

20) Pub. L. No. 114-113, div. Q, § 201, 129 Stat. 2242 (Dec. 18, 2015). This change goes into effect for W-2s reporting payments made in 2016 and filed in 2017.

21) In our 2012 annual report, see Cybersecurity Human Capital (Area 12).

22) In calculating this estimate, we relied on individual estimates from a variety of sources, which considered different time periods, and utilized different data sources, assumptions, and methodologies. These individual estimates are subject to increased uncertainty, depending on whether, how, and when they are addressed. This amount represents a rough estimate of financial benefits.

23) In some cases, these actions may be included in areas that have other actions with no associated cost savings or revenue enhancements.

24) HHS includes Medicaid and Medicare. DOD includes the Office of the Secretary of Defense, military services, and defense agencies. Treasury consists of 10 bureaus, the largest of which is IRS.

25) Due to their size, complexity, and susceptibility to mismanagement and improper payments, we designated Medicare and Medicaid as high-risk programs in 1990 and 2003, respectively. See GAO, High-Risk Series: An Update, GAO-15-290 (Feb. 11, 2015).

26) Congressional Budget Office, The Budget and Economic Outlook: 2016 to 2026 (Washington, D.C.: January 2016).

27) This includes new actions identified in this report. In addition, actions directed to multiple agencies are not assessed as addressed until all agencies have made necessary progress.

28) Discretionary spending refers to outlays from budget authority that is provided in and controlled by appropriations acts. DOD program management has been on our High Risk List since 1990. See GAO-15-290

29) The 22 new actions include 19 actions in new defense-related areas and 3 actions added to an existing area from our 2013 annual report. See appendix III for more information on actions added to existing areas in 2016.

30) This includes new actions identified in this report. In addition, actions directed to multiple agencies are not assessed as addressed until all agencies have made necessary progress.

31) The tax gap does not include taxes due from illegally derived income or various forms of fraud. For example, in general, refund fraud related to identity theft would not be included in the tax gap estimate because it does not involve evading a tax liability.

32) This includes new actions identified in this report. Actions directed to multiple agencies are not assessed as addressed until all agencies have made necessary progress.

33) In some cases, these actions may be included in areas that have other actions with no associated cost savings or revenue enhancements.

34) We recognize that there could be instances where some degree of program fragmentation, overlap, or duplication, may be warranted due to the nature or magnitude of the federal effort.

35) See GAO-13-279SP

36) Because this report is based on previously issued GAO products, in many cases we cite November 1999 internal control standards as criteria (GAO, Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1 (Washington, D.C.: November 1999). When cited, these criteria were effective at the time of our review. However, new internal control standards for the federal government became effective beginning October 1, 2015 (GAO, Standards for Internal Control in the Federal Government, GAO-14-704G Washington, D.C. September 2014). Any corrective action that agencies plan to take should be in accordance with the new standards.

37) GAO, Results-Oriented Government: Practices That Can Help Enhance and Sustain Collaboration among Federal Agencies, GAO0615 (Washington, D.C.: Oct. 21, 2005) and Managing for Results: A Guide for Using the GPRA Modernization Act to Help Inform Congressional Decision Making, GAO12621SP (Washington, D.C.: June 15, 2012).

38) To provide a more accurate picture of the progress made in the identified areas, we are reporting the status of each action under each area (see appendix IV). New actions are assessed as pending. To identify relevant legislation, we requested that agencies inform us of legislation impacting the actions and we searched key legislation related to the actions.

39) This year, 4 actions were categorized as “consolidated or other” for a total of 24 actions in this category from 2011-2015. Actions categorized as “consolidated or other” are no longer assessed. In most cases, the actions were replaced or subsumed by new actions based on additional audit work or other relevant information. For example, actions categorized as “consolidated or other” may have been consolidated into other actions that we track based on subsequent audit work or significant changes in agency circumstances, or they may have been redirected from a congressional to an executive branch action, or vice versa. In addition, we added 6 new actions to areas on which we reported in 2011-2015; these newly added actions are listed in appendix III. The status of these new actions has not yet been assessed.

40) For example, if an individual estimate was for $10 billion dollars to accrue from 2014-2023, we assumed that $1 billion would be earned each year. As a result, $2 billion would be counted as “already accrued” through 2015, while the other $8 billion would be counted as “expected to accrue” from 2016 and later.

41) For example, if GAO had stated that an agency could potentially save “hundreds of millions,” we would use $100 million as part of our calculation of the total.

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