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United States Government Accountability Office: 
GAO: 

Report to Congressional Addressees: 

April 2013: 

2013 Annual Report: Actions Needed to Reduce Fragmentation, Overlap, 
and Duplication and Achieve Other Financial Benefits: 

GAO-13-279SP: 

United States Government Accountability Office: 
GAO: 

April 9, 2013: 

Congressional Addressees: 

As the fiscal pressures facing the nation continue, so too does the 
need for executive branch agencies and Congress to improve the 
efficiency and effectiveness of government programs and activities. 
Opportunities to take such action exist in areas where federal 
programs or activities are fragmented, overlapping, or duplicative. To 
highlight these challenges and to inform government decision makers on 
actions that could be taken to address them, GAO is statutorily 
required to identify and report annually to Congress on federal 
programs, agencies, offices, and initiatives, either within 
departments or government-wide, that have duplicative goals or 
activities.[Footnote 1] In light of today's challenging fiscal 
environment, we have also identified additional opportunities to 
achieve greater efficiency and effectiveness by means of cost savings 
or enhanced revenue collection. 

In March 2011, we issued our first annual report in this series, which 
presented 80 areas where opportunities existed for executive branch 
agencies or Congress to reduce fragmentation, overlap, or duplication; 
achieve cost savings; or enhance revenue.[Footnote 2] (Figure 1 
outlines the definitions we use for fragmentation, overlap, and 
duplication for this work). In February 2012, we issued our second 
annual report, which identified an additional 51 areas. In these two 
reports, we have identified a total of approximately 300 actions that 
executive branch agencies and Congress could take to improve the 
efficiency and effectiveness of government programs and activities. 

Figure 1: Definitions of Fragmentation, Overlap, and Duplication: 

[Refer to PDF for image: illustration] 

Fragmentation refers 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 opportunities 
exist to improve service delivery. 

Overlap occurs when multiple agencies or programs have similar goals, 
engage in similar activities or strategies to achieve them, or target 
similar beneficiaries. 

Duplication occurs when two or more agencies or programs are engaged 
in the same activities or provide the same services to the same 
beneficiaries. 

Source: GAO. 

[End of figure] 

This third annual report for 2013 identifies an additional 31 areas 
where agencies may be able to achieve greater efficiency or 
effectiveness. Within these 31 areas, we identify 81 actions that the 
executive branch or Congress could take to reduce fragmentation, 
overlap, or duplication, as well as other cost savings or revenue 
enhancement opportunities. In addition to identifying new areas, we 
have continued to monitor the progress executive branch agencies and 
Congress have made in addressing the areas we previously identified. 
With the release of this report, we are also concurrently launching 
GAO's Action Tracker, a publicly accessible website containing the 
status of actions suggested in our first three reports. The website 
will allow executive branch agencies, Congress, and the public to 
track the progress the government is making in addressing the issues 
we have identified. 

Section I of this report presents 17 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 I occur in areas where multiple programs and activities may be 
creating inefficiencies. Section II describes 14 new areas where the 
federal government may achieve cost savings or enhance revenue 
collections. This report is based upon work GAO previously conducted 
in accordance with generally accepted government auditing standards. 
See appendix II for more information on our scope and methodology. 

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

In this report, we first identify 17 areas in which we found evidence 
of fragmentation, overlap, or duplication among federal programs or 
activities. These areas cover a broad range of government missions and 
functions. Section I of this report discusses all of these areas in 
greater detail. 

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 opportunities may 
exist to improve how the government delivers services. We identified 
fragmentation in multiple programs we reviewed. For example, we found 
that the Department of Defense's (DOD) fragmented approach to 
developing and acquiring uniforms could be more efficient. Since 2002, 
the military services have shifted from using two camouflage patterns 
to seven service-specific camouflage uniforms with varying patterns 
and colors. Although DOD established a board to help ensure 
collaboration and DOD-wide integration of clothing and textile 
activities, we continue to identify inefficiencies in DOD's uniform 
acquisition approach. We have identified several actions DOD should 
take to realize potential efficiencies and up to $82 million in 
development and acquisition cost savings through increased 
collaboration among the military services. These actions include 
directing the Secretaries of the military departments to actively 
pursue partnerships for the joint development and use of uniforms, as 
well as identifying and implementing actions necessary to enable the 
board to develop and issue joint criteria for uniforms prior to the 
development or acquisition of any new camouflage uniform. 

Similarly, we found DOD obligated over $6.8 billion from fiscal years 
2008 through 2012 on contracts to acquire a range of foreign language 
services and products, such as translation and interpretation 
services. Although DOD has gained some efficiencies by centralizing 
contracting for certain services under an executive agent, it has not 
taken steps to comprehensively assess whether additional opportunities 
exist to gain efficiencies in fragmented contracts for foreign 
language support, which are estimated to cost more than $1 billion 
annually. Our prior work has found that agencies, including DOD, 
reported savings ranging between 5 and 20 percent by implementing more 
coordinated acquisition approaches rather than fragmented contracting. 
Given the department's level of obligations for foreign language 
support services, DOD could achieve significant cost savings by 
assessing and addressing the fragmentation in its current approach for 
managing these contracts. 

In some of the programs and activities where there was fragmentation, 
we also found instances of overlap. 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 such as joint veterans and defense health care services, export 
promotion activities, drug abuse prevention and treatment programs, 
and veterans' employment and training programs, among others. 

For example, within the Department of Homeland Security (DHS), we 
found six department components involved in research and development 
activities. We examined 50 research and development contracts awarded 
by these components and found 35 instances among 29 contracts in which 
the contracts overlapped with activities conducted elsewhere in the 
department. Taken together, these 29 contracts were worth about $66 
million. An example of the overlap we found: two DHS components 
awarded five separate contracts that each addressed detection of the 
same chemical. Moreover, DHS did not have the policies and mechanisms 
necessary to coordinate or track research and development activities 
across the department. Without adequate coordination, components may 
engage in overlapping research and development activities. To prevent 
such overlap of efforts, we suggested that DHS develop and implement 
policies and guidance for defining and overseeing research and 
development. 

In other instances we found evidence 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. Our 2013 report 
includes several areas where we identified potentially duplicative 
federal efforts, such as rural water infrastructure programs. 
Moreover, in some of these areas--including catfish inspection and 
geospatial investments--we identified financial benefits that may 
result if executive branch agencies or Congress took action to address 
the issues we discuss. 

For example, we identified duplication in the Medicaid Integrity 
Program, which provides federal support and oversight of state 
programs.[Footnote 3] Specifically, we identified duplication in two 
Medicaid Integrity program activities: (1) the National Medicaid Audit 
Program, which consists of audits of state Medicaid claims data to 
identify overpayments, and (2) state program integrity assessments, 
one of several tools through which the Centers for Medicare & Medicaid 
Services (CMS) collects data on state program integrity activities. To 
address this duplication, we suggested that CMS merge certain 
functions of the federal review and audit contractors and discontinue 
the annual state program integrity assessment to eliminate or avoid 
duplicative activities. 

In addition to these 17 areas of fragmentation, overlap, and 
duplication in federal efforts, we present 14 areas in which we 
identified opportunities for executive branch agencies or Congress to 
reduce the cost of government operations or enhance revenue 
collections for the Treasury. For example: 

* We report concerns about CMS's Medicare Advantage Quality Bonus 
Payment Demonstration, which will cost $8.35 billion over 10 years, 
most of which will be paid to plans with average performance. Medicare 
Advantage provides health care coverage through private health plans 
offered by organizations under contract with CMS. The agency's stated 
research goal for the demonstration is to test whether an alternative 
bonus structure leads to larger and faster annual quality improvement 
for Medicare Advantage plans. We found that the demonstration's design 
precludes a credible evaluation of its effectiveness because it lacks 
an appropriate comparison group needed to isolate the demonstration's 
effects, and because the demonstration's bonus payments are based 
largely on plan performance that predates the demonstration. Based on 
these concerns, we suggest that HHS cancel the Medicare Advantage 
Quality Bonus Payment Demonstration. In addition, the demonstration's 
design raises legal concerns about whether it falls within the 
Department of Health and Human Services' (HHS) demonstration 
authority. Although the demonstration is now in its second year, HHS 
still has an opportunity to achieve significant cost savings--about $2 
billion, based on GAO's analysis of CMS actuaries' estimates--if it 
cancels the demonstration for 2014. 

* Additional cost savings and increased revenue collections may be 
realized by improving the Internal Revenue Service's (IRS) enforcement 
of tax laws. IRS has estimated that the net tax gap--the difference 
between taxes owed and taxes paid on time or recovered--was $385 
billion for tax year 2006 (the most recent year for which data were 
available). To help reduce this gap, in fiscal year 2012, Congress 
appropriated $7.5 billion to IRS for its enforcement and taxpayer 
service activities. Notwithstanding IRS's enforcement and service 
programs, the net tax gap remains large. To help close this gap, we 
have identified several areas where IRS can improve its programs, 
reduce its costs, and facilitate voluntary compliance with existing 
tax laws. For example, we suggested that IRS should complete a broad 
strategy, including a timeline and performance measures, for how it 
intends to use information collected to improve tax compliance. These 
and other actions we have identified could help the federal government 
increase revenue collections by billions of dollars. 

* As we have previously reported, the net tax gap has been a 
persistent problem and reducing it will require applying multiple 
strategies over a sustained period of time.[Footnote 4] One such 
strategy is additional information reporting. Taxpayers are much more 
likely to report their income accurately when the income is also 
reported to IRS by a third party. By matching information received 
from third-party payers with what payees report on their tax returns, 
IRS can detect income underreporting, including the failure to file a 
tax return. Additionally, taxpayers who rent out real estate are 
required to report to IRS expense payments for certain services, such 
as payments for property repairs, only if their rental activity is 
considered a trade or business. Expanding third-party information 
reporting on rental real estate service payments and service payments 
to corporations could increase revenues by an estimated $5.9 billion 
over 10 years, according to the Joint Committee on Taxation. 

* Opportunities may also exist for the Department of Energy (Energy) 
to generate additional revenue by increasing the price for isotopes 
that it sells to commercial customers.[Footnote 5] Energy's Isotope 
Development and Production for Research and Applications program 
(Isotope Program) sells isotopes to commercial customers for a variety 
of uses, such as medical procedures and radiation detection equipment. 
To achieve its mission, the Isotope Program relies on annual 
appropriations and revenues from isotope sales. Although revenues from 
sales of isotopes alone totaled over $25 million in fiscal year 2012, 
we found that Energy may be forgoing revenue because it is not using 
thorough assessments to set prices for commercial isotopes. Thus, we 
suggested that Energy examine the prices it sets for commercial 
isotopes to determine if prices can be increased. 

Suggested Actions to Achieve Greater Efficiency or Effectiveness in 
Government: 

Within these 31 areas, we identified 81 actions that the executive 
branch and Congress could take to reduce or eliminate fragmentation, 
overlap, or duplication or achieve other financial benefits. Given 
that the areas identified extend across the government and that we 
found a range of conditions among these areas, we suggest a similarly 
wide range of actions for the executive branch and Congress to 
consider. For example, the actions we suggest in the report include, 
among many others, canceling a demonstration program, strengthening 
oversight of certain payments and investments, and limiting or 
reducing subsidies for a particular program. Although the actions vary 
depending on the conditions we found, several themes emerged among our 
suggested actions, including the following: 

* Improving planning: Given the crosscutting policy areas included in 
this report, planning is an important action in helping federal 
agencies address challenges, particularly those related to 
fragmentation, overlap, or duplication. Planning can help federal 
agencies manage their programs more effectively and guide progress in 
achieving desired results. For example, we report that a total of 31 
federal departments and agencies invest an estimated billions of 
dollars to collect, maintain, and use geospatial information--
information linked to specific geographic locations that supports many 
government functions, such as maintaining roads and responding to 
natural disasters. We found that federal agencies had not effectively 
implemented policies and procedures that would help them to identify 
and coordinate geospatial data acquisitions across the government. As 
a result, the agencies make duplicative investments and risk missing 
opportunities to jointly acquire data. Better planning and 
coordination among federal agencies could help reduce duplicative 
investments and provide the opportunity for potential savings of 
millions of dollars. 

* Measuring performance and results: Performance measurement, because 
of its ongoing nature, can serve as an early warning system to 
management and a vehicle for improving accountability to the public. 
To ensure that their performance information will be both useful and 
used by decision makers, agencies need to consider the differing 
information needs of various users--including those in Congress. As we 
have previously reported, agency performance information must meet 
Congress's needs for completeness, accuracy, validity, timeliness, and 
ease of use to be useful for congressional decision making.[Footnote 
6] Similarly, in this report, we find that better evaluation of 
performance and results is needed for multiple federal programs and 
activities to help inform decisions about how to address the 
fragmentation, overlap, or duplication identified. For example, 
federal agencies could achieve significant cost savings annually by 
expanding and improving their use of strategic sourcing--a contracting 
process that moves away from numerous individual procurement actions 
to a broader aggregated approach. We have reported that a reduction of 
1 percent from selected agencies' procurement spending would equate to 
over $4 billion in savings.[Footnote 7] However, a lack of clear 
guidance on metrics for measuring success has hindered the management 
of ongoing strategic sourcing efforts across the federal government. 
By establishing metrics to measure progress toward goals and 
identifying spending categories most suitable for strategic sourcing, 
the Office of Management and Budget (OMB) can help federal agencies 
better implement strategic sourcing practices and maximize their 
ability to realize billions of dollars in potential savings annually. 

* Improving management oversight: When issues span multiple 
organizations or multiple entities within an organization, improved 
management oversight is needed to avoid potential overlap and 
duplication. For example, although OMB guidance calls for agencies to 
analyze whether their information technology investments are 
continuing to meet business and customer needs and are contributing to 
meeting the agency's strategic goals, we found that agencies did not 
conduct such an analysis on 52 of the 75 major existing information 
technology investments we reviewed.[Footnote 8] As a result, there is 
increased potential for these information technology investments in 
operations and maintenance--totaling $37 billion in fiscal year 2011--
to result in waste and duplication. To avoid wasteful or duplicative 
investments in operations and maintenance, we suggest that agencies 
analyze all information technology investments annually and report the 
results of their analyses to OMB. These actions could help agencies 
achieve cost savings by strengthening the oversight of their existing 
information technology investments in operations and maintenance, 
resulting in the potential for billions of dollars in savings. 

Similarly, we found that many states are making Medicaid payments to 
many providers that are far in excess of those providers' costs of 
providing Medicaid services. Specifically, 39 states made payments to 
certain providers in excess of Medicaid costs by a total of about $2.7 
billion. To improve the transparency of and accountability for certain 
high-risk Medicaid payments, we suggest that Congress 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. Such action could lead to cost savings in the 
hundreds of millions, or even billions, of dollars. 

* Enhancing interagency coordination and collaboration: When executive 
branch agencies carry out activities in a fragmented and uncoordinated 
way, the resulting patchwork of programs can waste scarce funds, 
confuse and frustrate program customers, and limit the overall 
effectiveness of the federal effort. Our report includes several areas 
in which improved interagency coordination and collaboration could 
help agencies better leverage limited resources or identify 
opportunities to operate more efficiently. For example, the Department 
of Veterans Affairs (VA) and DOD operate two of the nation's largest 
health care systems, together providing health care to nearly 16 
million veterans, service members, military retirees, and other 
beneficiaries at estimated costs for fiscal year 2013 of about $53 
billion and $49 billion, respectively. As part of their health care 
efforts, the departments have established collaboration sites--
locations where the two departments share health care resources 
through hundreds of agreements and projects--to deliver care jointly 
with the aim of improving access, quality, and cost-effectiveness of 
care. However, we found that the departments do not have a fully 
developed and formalized process for systematically identifying all 
opportunities for new or enhanced collaboration, potentially missing 
opportunities to improve health care access, quality, and costs. 

* Considering legislative changes: Although executive branch agencies 
have authority to implement the majority of the suggested actions, 
this report includes several areas where legislative changes are 
needed. For example, we found that when the U.S. Department of 
Agriculture's (USDA) Food Safety and Inspection Service begins the 
catfish inspection program as mandated in the Food, Conservation, and 
Energy Act of 2008, the program will duplicate work already conducted 
by the Food and Drug Administration and by the National Marine 
Fisheries Service. To avoid this duplication, we suggest that Congress 
repeal the provisions of the act that assigned USDA responsibilities 
for examining and inspecting catfish and establishing a catfish 
inspection program. Taking this action could save taxpayers millions 
annually, according to Food Safety and Inspection Service estimates of 
the program's cost.[Footnote 9] 

As another example, we report that unlike many farm programs, the 
Federal Crop Insurance program, which provides subsidies to pay for 
part of a farmer's crop insurance premium, does not have statutory 
income and payment limits. Congress could achieve up to $1.2 billion 
per year in cost savings by limiting the subsidy for premiums that an 
individual farmer can receive each year, reducing the subsidy for all 
or high-income farmers participating in the program, or some 
combination of both. 

Congress could also consider taking action to help reduce the tens of 
billions of dollars spent each year developing and launching U.S. 
government satellite systems. To save money, several federal agencies 
are actively using or exploring nontraditional approaches to managing 
their space-based programs, such as developing public-private 
partnerships and hosting government capabilities on commercial 
spacecraft.[Footnote 10] While these approaches hold promise for 
providing lower-cost access to space in the future, there are also a 
variety of technical, cultural, logistical, legal, and policy 
challenges. For example, federal law and policy have limited the 
government's access to some hosted payload arrangements where 
government instruments are placed on commercial satellites, and ride 
sharing arrangements where multiple satellites share the same launch 
vehicle. We identify actions that Congress may wish to consider to 
address these legal challenges and better take advantage of 
nontraditional approaches. 

The Executive Branch and Congress Have Made Some Progress in 
Addressing the Areas That We Previously Identified: 

In addition to the new actions identified for this report, we have 
continued to monitor the progress that the executive branch agencies 
and Congress have made in addressing the issues we identified in our 
2011 and 2012 annual reports. In these reports, we identified 
approximately 300 actions that the executive branch and Congress could 
take to reduce or eliminate fragmentation, overlap, or duplication or 
achieve other potential financial benefits.[Footnote 11] 

We evaluated progress by determining an "overall assessment" rating 
for each area and an individual rating for each action within an area 
(see figure 2). We found that the executive branch agencies and 
Congress have made progress in addressing the 131 areas we identified 
in 2011 and 2012. As of March 6, 2013, the date we completed our audit 
work, 16 of the 131 areas were addressed; 87 were partially addressed; 
and 27 were not addressed.[Footnote 12] We also found that of the 
approximately 300 actions needed within these areas, 65 were 
addressed; 149 were partially addressed; and 85 were not addressed. 
[Footnote 13] 

Figure 2: Assessment of 2011 and 2012 Areas and Actions Needed, as of 
March 6, 2013: 

[Refer to PDF for image: 4 combined pie-chart and horizontal bar graph] 

Areas: 

2011: 
Addressed: 10; 
Partially addressed: 54; 
Not addressed: 15; 
Consolidated or other: 1; 
Total: 80. 

2012: 
Addressed: 3; 
Partially addressed: 36; 
Not addressed: 12; 
Consolidated or other: 0; 
Total: 51. 

Actions: 

2011: 
Addressed: 43; 
Partially addressed: 84; 
Not addressed: 47; 
Consolidated or other: 2; 
Total: 176. 

2012: 
Addressed: 17; 
Partially addressed: 64; 
Not addressed: 45; 
Consolidated or other: 6; 
Total: 132. 

Source: GAO. 

Note: In assessing overall progress for an area, we determined that an 
area was "addressed" if all actions in that area were addressed; 
"partially addressed" if at least one action needed in that area 
showed some progress toward implementation but not all actions were 
addressed; and "not addressed" if none of the actions needed in that 
area was addressed or partially addressed. 

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. 

Consolidated areas and actions were not assessed this year due to 
additional work or other information GAO considered. See appendix II 
for more information. 

[End of figure] 

An example of the progress made is DOD's efforts to implement our 
suggested action related to the area of overseas defense posture. 
Specifically, in our 2012 annual report, we suggested the Secretary of 
Defense should direct appropriate organizations within DOD to complete 
a business case analysis, including an evaluation of alternative 
courses of action, for the strategic objectives that have to this 
point driven the decision to implement tour normalization in South 
Korea--that is, a DOD initiative to transform its defense posture in 
South Korea. Based on the resulting business case analysis, DOD 
officials stated that United States Forces Korea determined that the 
tour normalization initiative was not affordable. This decision not to 
move forward with the tour normalization initiative resulted in cost 
avoidance of $3.1 billion from fiscal years 2012 through 2016. 

Congress has also taken steps to address some of our suggested 
actions. For example, in our 2011 annual report, we stated that 
Congress could reduce revenue losses by more than $5.7 billion 
annually by addressing duplicative federal efforts directed at 
increasing domestic ethanol production. To reduce these revenue 
losses, we suggested that Congress consider whether revisions to the 
ethanol tax credit were needed and we suggested options to consider, 
including allowing the volumetric ethanol excise tax credit to expire 
at the end of 2011. Congress allowed the tax credit to expire at the 
end of 2011, which ended the ethanol tax credit for fuel blenders that 
purchase and blend ethanol with gasoline. 

Although the executive branch and Congress have made some progress in 
addressing the issues that we have previously identified, additional 
steps are needed to address the remaining areas to achieve associated 
benefits. A number of the issues are difficult to address, and 
implementing many of the actions identified will take time and 
sustained leadership. Table 1 outlines selected actions that we 
reported in 2011 and 2012 that, when addressed, may result in or lead 
to cost savings or enhanced revenue. 

Table 1: Selected Areas with Associated Cost-Savings and Revenue-
Enhancement Opportunities in 2011 and 2012 Annual Reports: 

Annual report: 2011; 
Areas identified: Farm Program Payments (Area 35): Reducing farm 
program direct payments could result in savings from $800 million over 
10 years to up to $5 billion annually; 
Overall assessment of: 2011 - 2012 actions[A]: Not addressed. 

Annual report: 2011; 
Areas identified: Federal Data (Area 15): Consolidating federal data 
centers provides an opportunity to improve government efficiency; 
Overall assessment of: 2011 - 2012 actions[A]: Partially addressed. 

Annual report: 2011; 
Areas identified: Competition for Federal Contracts (Area 47): 
Promoting competition for the over $500 billion in federal contracts 
could potentially save billions of dollars over time; 
Overall assessment of: 2011 - 2012 actions[A]: Partially addressed. 

Annual report: 2012; 
Areas identified: Passenger Aviation Security Fees (Area 48): Options 
for adjusting the passenger aviation security fee could further offset 
billions of dollars in civil aviation security costs; 
Overall assessment of: 2011 - 2012 actions[A]: Not addressed. 

Annual report: 2011; 
Areas identified: Social Security Offsets (Area 80): Social Security 
needs data on pensions from noncovered earnings to better enforce 
offsets and ensure benefit fairness, which could result in an 
estimated $2.4 billion to $2.9 billion in savings over 10 years; 
Overall assessment of: 2011 - 2012 actions[A]: Not addressed. 

Annual report: 2011; 
Areas identified: Oil and Gas Resources (Area 45): Improved management 
of federal oil and gas resources could result in approximately $2 
billion in revenues over 10 years; 
Overall assessment of: 2011 - 2012 actions[A]: Partially addressed. 

Annual report: 2012; 
Areas identified: U.S. Currency (Area 42): Legislation replacing the 
$1 note with a $1 coin would provide a significant financial benefit 
to the government over time; 
Overall assessment of: 2011 - 2012 actions[A]: Not addressed. 

Annual report: 2011; 
Areas identified: Baggage Screening Systems (Area 78): More efficient 
baggage screening systems could result in about $470 million in 
reduced Transportation Security Administration personnel costs over 
the next 5 years; 
Overall assessment of: 2011 - 2012 actions[A]: Partially addressed. 

Annual report: 2011; 
Areas identified: Federal Facility Ownership and Leasing (Area 51): 
Improved cost analyses used for making federal facility ownership and 
leasing decisions could save millions of dollars; 
Overall assessment of: 2011 - 2012 actions[A]: Not addressed. 

Annual report: 2012; 
Areas identified: Immigration 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; 
Overall assessment of: 2011 - 2012 actions[A]: Partially addressed. 

Annual report: 2012; 
Areas identified: Auto Recovery Office (Area 39): Unless the Secretary 
of Labor can demonstrate how the Auto Recovery Office has uniquely 
assisted auto communities, Congress may wish to consider prohibiting 
the Department of Labor from spending any of its appropriations on the 
Auto Recovery Office and instead require that the department direct 
the funds to other federal programs that provide funding directly to 
affected communities; 
Overall assessment of: 2011 - 2012 actions[A]: Not addressed. 

Source: GAO. 

[A] As of March 6, 2013. 

Legend: 

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

Not addressed: meaning none of the actions needed in that area were 
addressed. 

[End of table] 

To help maintain attention on these issues, as mentioned earlier, we 
are concurrently releasing GAO's Action Tracker, a publicly 
accessible, online website of the 162 areas and approximately 380 
actions needed presented in our 2011, 2012, and 2013 reports. GAO's 
Action Tracker includes progress updates and assessments of 
legislative and executive branch actions needed. We will add areas and 
suggested actions identified and future reports to GAO's Action 
Tracker and periodically update the status of all identified areas and 
activities. 

Over 3 Years, GAO Has Identified 162 Areas Where Federal Programs 
Could Achieve Greater Efficiency or Increase Effectiveness: 

Our 2013 annual report completes our 3-year systematic examination 
across the federal government to identify major instances of 
fragmentation, overlap, or duplication. Through our three annual 
reports, we have identified a total of 162 areas with actions that the 
executive branch and Congress could take to address fragmentation, 
overlap, and duplication or achieve cost savings (see app. III). 
Collectively, these reports show that, if the actions are implemented, 
the government could potentially save tens of billions of dollars 
annually. 

These three reports touch on areas in virtually all major federal 
departments and agencies. Specifically, the reports collectively 
identify opportunities to reduce fragmentation, overlap, and 
duplication or achieve other financial benefits within all 15 cabinet-
level executive departments and at least 17 other federal entities. 
Figure 3 illustrates actions needed that we directed to federal 
departments and agencies in our three annual reports. As the figure 
shows, we have directed numerous actions to large federal departments 
and agencies that represent the majority of the federal obligations, 
including 90 actions directed to DOD, 51 to Treasury, and 44 to HHS, 
representing 56 percent of fiscal year 2011 obligations. 

Figure 3: Actions Needed Directed to Federal Departments and Agencies 
in 2011-2013 Annual Reports: 

[Refer to PDF for image: illustration] 

Department/Agency: HHS; 
Percentage of fiscal year 2011 obligations: 24%; 
Number of actions needed: 31+. 

Department/Agency: DOD; 
Percentage of fiscal year 2011 obligations: 20%; 
Number of actions needed: 31+. 

Department/Agency: SSA; 
Percentage of fiscal year 2011 obligations: 17%; 
Number of actions needed: 1-10. 

Department/Agency: Treasury[B]; 
Percentage of fiscal year 2011 obligations: 12%; 
Number of actions needed: 30+. 

Department/Agency: Labor; 
Percentage of fiscal year 2011 obligations: 4%; 
Number of actions needed: 11-20. 

Department/Agency: Independent Agencies; 
Percentage of fiscal year 2011 obligations: 3%; 
Number of actions needed: 11-20. 

Department/Agency: USDA; 
Percentage of fiscal year 2011 obligations: 3%; 
Number of actions needed: 21-30. 

Department/Agency: OPM; 
Percentage of fiscal year 2011 obligations: 3%; 
Number of actions needed: 1-10. 

Department/Agency: VA; 
Percentage of fiscal year 2011 obligations: 2%; 
Number of actions needed: 21-30. 

Department/Agency: Education; 
Percentage of fiscal year 2011 obligations: 2%; 
Number of actions needed: 1-10. 

Department/Agency: DOT; 
Percentage of fiscal year 2011 obligations: 2%; 
Number of actions needed: 0. 

Department/Agency: USPS[A]; 
Percentage of fiscal year 2011 obligations: 1%; 
Number of actions needed: 31+. 

Department/Agency: HUD; 
Percentage of fiscal year 2011 obligations: 1%; 
Number of actions needed: 11-20. 

Department/Agency: DOJ; 
Percentage of fiscal year 2011 obligations: 0.7%; 
Number of actions needed: 1-10. 

Department/Agency: State; 
Percentage of fiscal year 2011 obligations: 0.7%; 
Number of actions needed: 11-20. 

Department/Agency: Energy; 
Percentage of fiscal year 2011 obligations: 0.7%; 
Number of actions needed: 1-10. 

Department/Agency: Interior; 
Percentage of fiscal year 2011 obligations: 0.5%; 
Number of actions needed: 11-20; 

Department/Agency: GSA; 
Percentage of fiscal year 2011 obligations: 0.4%; 
Number of actions needed: 1-10. 

Department/Agency: NASA; 
Percentage of fiscal year 2011 obligations: 0.4%; 
Number of actions needed: 1-10. 

Department/Agency: Commerce; 
Percentage of fiscal year 2011 obligations: 0.2%; 
Number of actions needed: 11-20. 

Department/Agency: EAP; 
Percentage of fiscal year 2011 obligations: 0.2%; 
Number of actions needed: 11-20. 

Department/Agency: Judicial Branch; 
Percentage of fiscal year 2011 obligations: 0.16%; 
Number of actions needed: 0. 

Department/Agency: National Science Foundation; 
Percentage of fiscal year 2011 obligations: 0.14%; 
Number of actions needed: 1-10. 

Department/Agency: SBA; 
Percentage of fiscal year 2011 obligations: 0.13%; 
Number of actions needed: 11-20. 

Department/Agency: Legislative Branch; 
Percentage of fiscal year 2011 obligations: 0.11%; 
Number of actions needed: 31+. 

Department/Agency: Nuclear Regulatory Commission; 
Percentage of fiscal year 2011 obligations: 0.02%; 
Number of actions needed: 0. 

Department/Agency: Executive Office of the President; 
Percentage of fiscal year 2011 obligations: 0.01%; 
Number of actions needed: 31+. 

Source: GAO. 

[A] U.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. 

[B] Treasury's percentage of fiscal year 2011 obligations includes 
interest on the national debt. 

Note: Individual actions needed are counted multiple times, when they 
are directed to more than one federal department or agency. 

[End of figure] 

Our systematic examination required a multiphased approach. First, we 
reviewed the budget functions of the federal government representing 
nearly all of the overall federal funds obligated in fiscal year 
2010.[Footnote 14] Because federal budget functions classify budget 
resources by national need (such as National Defense, Energy, and 
Agriculture), instances in which multiple federal agencies obligate 
funds within a particular budget function may indicate potential 
duplication or cost savings opportunities (see fig. 4 for spending 
patterns by executive branch agency and budget function). Although 
this type of analysis cannot answer the question of whether overlap or 
fragmentation exists--nor indicate whether the overlap identified is 
duplicative--it can help in the selection of areas for further 
investigation. Using this information, we identified each instance in 
which an executive branch or independent agency obligated more than 
$10 million within these 18 budget functions for further consideration. 

Figure 4: Spending Patterns by Executive Branch Agency and Budget 
Function, Fiscal Year 2010: 

[Refer to PDF for image: illustrated table] 

Agency: Department of Agriculture; 
Budget Function[A]: 
National Defense (050): [Check]; 
International Affairs (150): [Empty]; 
General Science, Space, and Technology (250): [Check]; 
Energy (270): [Check]; 
Natural Resources and Environment (300): [Check]; 
Agriculture (300): [Check]; 
Commerce and Housing Credit (370): [Empty]; 
Transportation (400): [Check]; 
Community and Regional Development (450): [Empty]; 
Education, Training, Employment, and Social Services (500): [Check]; 
Health (550): [Empty]; 
Medicare (570): [Empty]; 
Income Security (600): [Check]; 
Social Security (650): [Empty]; 
Veterans Benefits and Services (700): [Empty]; 
Administration of Justice (750): [Empty]; 
General Government (800): [Check]; 
Net Interest (900): [Empty]; 
Number of functions charged by agency: 9. 

Agency: Department of Commerce; 
Budget Function[A]: 
National Defense (050): [Check]; 
International Affairs (150): [Empty]; 
General Science, Space, and Technology (250): [Empty]; 
Energy (270): [Empty]; 
Natural Resources and Environment (300): [Check]; 
Agriculture (300): [Empty]; 
Commerce and Housing Credit (370): [Check]; 
Transportation (400): [Check]; 
Community and Regional Development (450): [Check]; 
Education, Training, Employment, and Social Services (500): [Empty]; 
Health (550): [Empty]; 
Medicare (570): [Empty]; 
Income Security (600): [Empty]; 
Social Security (650): [Empty]; 
Veterans Benefits and Services (700): [Empty]; 
Administration of Justice (750): [Empty]; 
General Government (800): [Empty]; 
Net Interest (900): [Empty]; 
Number of functions charged by agency: 5. 

Agency: Department of Defense; 
Budget Function[A]: 
National Defense (050): [Check]; 
International Affairs (150): [Check]; 
General Science, Space, and Technology (250): [Empty]; 
Energy (270): [Empty]; 
Natural Resources and Environment (300): [Check]; 
Agriculture (300): [Empty]; 
Commerce and Housing Credit (370): [Empty]; 
Transportation (400): [Empty]; 
Community and Regional Development (450): [Empty]; 
Education, Training, , and Social Services (500): [Empty]; 
Health (550): [Check]; 
Medicare (570): [Empty]; 
Income Security (600): [Check]; 
Social Security (650): [Empty]; 
Veterans Benefits and Services (700): [Check]; 
Administration of Justice (750): [Empty]; 
General Government (800): [Check]; 
Net Interest (900): [Empty]; 
Number of functions charged by agency: 7. 

Agency: Department of Education; 
Budget Function[A]: 
National Defense (050): [Empty]; 
International Affairs (150): [Empty]; 
General Science, Space, and Technology (250): [Empty]; 
Energy (270): [Empty]; 
Natural Resources and Environment (300): [Empty]; 
Agriculture (300): [Empty]; 
Commerce and Housing Credit (370): [Empty]; 
Transportation (400): [Empty]; 
Community and Regional Development (450): [Empty]; 
Education, Training, Employment, and Social Services (500): [Check]; 
Health (550): [Empty]; 
Medicare (570): [Empty]; 
Income Security (600): [Empty]; 
Social Security (650): [Empty]; 
Veterans Benefits and Services (700): [Empty]; 
Administration of Justice (750): [Check]; 
General Government (800): [Empty]; 
Net Interest (900): [Empty]; 
Number of functions charged by agency: 2. 

Agency: Department of Energy; 
Budget Function[A]: 
National Defense (050): [Check]; 
International Affairs (150): [Empty]; 
General Science, Space, and Technology (250): [Check]; 
Energy (270): [Check]; 
Natural Resources and Environment (300): [Empty]; 
Agriculture (300): [Empty]; 
Commerce and Housing Credit (370): [Empty]; 
Transportation (400): [Empty]; 
Community and Regional Development (450): [Empty]; 
Education, Training, Employment, and Social Services (500): [Empty]; 
Health (550): [Empty]; 
Medicare (570): [Empty]; 
Income Security (600): [Empty]; 
Social Security (650): [Empty]; 
Veterans Benefits and Services (700): [Empty]; 
Administration of Justice (750): [Empty]; 
General Government (800): [Empty]; 
Net Interest (900): [Empty]; 
Number of functions charged by agency: 3. 

Agency: Department of Health and Human Services; 
Budget Function[A]: 
National Defense (050): [Check]; 
International Affairs (150): [Empty]; 
General Science, Space, and Technology (250): [Empty]; 
Energy (270): [Empty]; 
Natural Resources and Environment (300): [Empty]; 
Agriculture (300): [Empty]; 
Commerce and Housing Credit (370): [Empty]; 
Transportation (400): [Empty]; 
Community and Regional Development (450): [Empty]; 
Education, Training, Employment, and Social Services (500): [Check]; 
Health (550): [Check]; 
Medicare (570): [Check]; 
Income Security (600): [Check]; 
Social Security (650): [Empty]; 
Veterans Benefits and Services (700): [Empty]; 
Administration of Justice (750): [Check]; 
General Government (800): [Empty]; 
Net Interest (900): [Empty]; 
Number of functions charged by agency: 6. 

Agency: Department of Homeland Security; 
Budget Function[A]: [Empty]; 
National Defense (050): [Check]; 
International Affairs (150): [Empty]; 
General Science, Space, and Technology (250): [Check]; 
Energy (270): [Empty]; 
Natural Resources and Environment (300): [Check]; 
Agriculture (300): [Check]; 
Commerce and Housing Credit (370): [Check]; 
Transportation (400): [Check]; 
Community and Regional Development (450): [Check]; 
Education, Training, Employment, and Social Services (500): [Empty]; 
Health (550): [Empty]; 
Medicare (570): [Empty]; 
Income Security (600): [Check]; 
Social Security (650): [Empty]; 
Veterans Benefits and Services (700): [Empty]; 
Administration of Justice (750): [Check]; 
General Government (800): [Check]; 
Net Interest (900): [Empty]; 
Number of functions charged by agency: 10. 

Agency: Department of Housing and Urban Development; 
Budget Function[A]: 
National Defense (050): [Empty]; 
International Affairs (150): [Empty]; 
General Science, Space, and Technology (250): [Empty]; 
Energy (270): [Empty]; 
Natural Resources and Environment (300): [Empty]; 
Agriculture (300): [Empty]; 
Commerce and Housing Credit (370): [Check]; 
Transportation (400): [Empty]; 
Community and Regional Development (450): [Check]; 
Education, Training, Employment, and Social Services (500): [Empty]; 
Health (550): [Empty]; 
Medicare (570): [Empty]; 
Income Security (600): [Check]; 
Social Security (650): [Empty]; 
Veterans Benefits and Services (700): [Empty]; 
Administration of Justice (750): [Check]; 
General Government (800): [Empty]; 
Net Interest (900): [Empty]; 
Number of functions charged by agency: 4. 

Agency: Department of Justice; 
Budget Function[A]: 
National Defense (050): [Check]; 
International Affairs (150): [Check]; 
General Science, Space, and Technology (250): [Empty]; 
Energy (270): [Empty]; 
Natural Resources and Environment (300): [Empty]; 
Agriculture (300): [Empty]; 
Commerce and Housing Credit (370): [Empty]; 
Transportation (400): [Empty]; 
Community and Regional Development (450): [Empty]; 
Education, Training, Employment, and Social Services (500): [Empty]; 
Health (550): [Empty]; 
Medicare (570): [Empty]; 
Income Security (600): [Empty]; 
Social Security (650): [Empty]; 
Veterans Benefits and Services (700): [Empty]; 
Administration of Justice (750): [Check]; 
General Government (800): [Empty]; 
Net Interest (900): [Empty]; 
Number of functions charged by agency: 3. 

Agency: Department of Labor; 
Budget Function[A]: 
National Defense (050): [Check]; 
International Affairs (150): [Empty]; 
General Science, Space, and Technology (250): [Empty]; 
Energy (270): [Empty]; 
Natural Resources and Environment (300): [Empty]; 
Agriculture (300): [Empty]; 
Commerce and Housing Credit (370): [Empty]; 
Transportation (400): [Empty]; 
Community and Regional Development (450): [Empty]; 
Education, Training, Employment, and Social Services (500): [Check]; 
Health (550): [Check]; 
Medicare (570): [Empty]; 
Income Security (600): [Check]; 
Social Security (650): [Empty]; 
Veterans Benefits and Services (700): [Check]; 
Administration of Justice (750): [Empty]; 
General Government (800): [Empty]; 
Net Interest (900): [Empty]; 
Number of functions charged by agency: 5. 

Agency: Department of State; 
Budget Function[A]: 
National Defense (050): [Empty]; 
International Affairs (150): [Check]; 
General Science, Space, and Technology (250): [Empty]; 
Energy (270): [Empty]; 
Natural Resources and Environment (300): [Check]; 
Agriculture (300): [Empty]; 
Commerce and Housing Credit (370): [Empty]; 
Transportation (400): [Empty]; 
Community and Regional Development (450): [Empty]; 
Education, Training, Employment, and Social Services (500): [Empty]; 
Health (550): [Empty]; 
Medicare (570): [Empty]; 
Income Security (600): [Check]; 
Social Security (650): [Empty]; 
Veterans Benefits and Services (700): [Empty]; 
Administration of Justice (750): [Empty]; 
General Government (800): [Empty]; 
Net Interest (900): [Empty]; 
Number of functions charged by agency: 3. 

Agency: Department of Transportation; 
Budget Function[A]: 
National Defense (050): [Check]; 
International Affairs (150): [Empty]; 
General Science, Space, and Technology (250): [Empty]; 
Energy (270): [Empty]; 
Natural Resources and Environment (300): [Empty]; 
Agriculture (300): [Empty]; 
Commerce and Housing Credit (370): [Check]; 
Transportation (400): [Check]; 
Community and Regional Development (450): [Empty]; 
Education, Training, Employment, and Social Services (500): [Empty]; 
Health (550): [Empty]; 
Medicare (570): [Empty]; 
Income Security (600): [Empty]; 
Social Security (650): [Empty]; 
Veterans Benefits and Services (700): [Empty]; 
Administration of Justice (750): [Empty]; 
General Government (800): [Empty]; 
Net Interest (900): [Empty]; 
Number of functions charged by agency: 3. 

Agency: Department of Veterans Affairs; 
Budget Function[A]: [Empty]; 
National Defense (050): [Empty]; 
International Affairs (150): [Empty]; 
General Science, Space, and Technology (250): [Empty]; 
Energy (270): [Empty]; 
Natural Resources and Environment (300): [Empty]; 
Agriculture (300): [Empty]; 
Commerce and Housing Credit (370): [Empty]; 
Transportation (400): [Empty]; 
Community and Regional Development (450): [Empty]; 
Education, Training, Employment, and Social Services (500): [Empty]; 
Health (550): [Empty]; 
Medicare (570): [Empty]; 
Income Security (600): [Empty]; 
Social Security (650): [Empty]; 
Veterans Benefits and Services (700): [Check]; 
Administration of Justice (750): [Empty]; 
General Government (800): [Empty]; 
Net Interest (900): [Empty]; 
Number of functions charged by agency: 1. 

Agency: Department of the Interior; 
Budget Function[A]: 
National Defense (050): [Empty]; 
International Affairs (150): [Empty]; 
General Science, Space, and Technology (250): [Empty]; 
Energy (270): [Empty]; 
Natural Resources and Environment (300): [Check]; 
Agriculture (300): [Empty]; 
Commerce and Housing Credit (370): [Empty]; 
Transportation (400): [Check]; 
Community and Regional Development (450): [Check]; 
Education, Training, Employment, and Social Services (500): [Check]; 
Health (550): [Check]; 
Medicare (570): [Empty]; 
Income Security (600): [Empty]; 
Social Security (650): [Empty]; 
Veterans Benefits and Services (700): [Empty]; 
Administration of Justice (750): [Empty]; 
General Government (800): [Check]; 
Net Interest (900): [Empty]; 
Number of functions charged by agency: 6. 

Agency: Department of the Treasury; 
Budget Function[A]: 
National Defense (050): [Empty]; 
International Affairs (150): [Empty]; 
General Science, Space, and Technology (250): [Empty]; 
Energy (270): [Check]; 
Natural Resources and Environment (300): [Check]; 
Agriculture (300): [Empty]; 
Commerce and Housing Credit (370): [Check]; 
Transportation (400): [Empty]; 
Community and Regional Development (450): [Check]; 
Education, Training, Employment, and Social Services (500): [Check]; 
Health (550): [Check]; 
Medicare (570): [Empty]; 
Income Security (600): [Check]; 
Social Security (650): [Empty]; 
Veterans Benefits and Services (700): [Empty]; 
Administration of Justice (750): [Check]; 
General Government (800): [Check]; 
Net Interest (900): [Check]; 
Number of functions charged by agency: 10. 

Agency: Environmental Protection Agency; 
Budget Function[A]: 
National Defense (050): [Empty]; 
International Affairs (150): [Empty]; 
General Science, Space, and Technology (250): [Empty]; 
Energy (270): [Empty]; 
Natural Resources and Environment (300): [Check]; 
Agriculture (300): [Empty]; 
Commerce and Housing Credit (370): [Empty]; 
Transportation (400): [Empty]; 
Community and Regional Development (450): [Empty]; 
Education, Training, Employment, and Social Services (500): [Empty]; 
Health (550): [Empty]; 
Medicare (570): [Empty]; 
Income Security (600): [Empty]; 
Social Security (650): [Empty]; 
Veterans Benefits and Services (700): [Empty]; 
Administration of Justice (750): [Empty]; 
General Government (800): [Empty]; 
Net Interest (900): [Empty]; 
Number of functions charged by agency: 1. 

Agency: Executive Office of the President; 
Budget Function[A]: 
National Defense (050): [Empty]; 
International Affairs (150): [Empty]; 
General Science, Space, and Technology (250): [Empty]; 
Energy (270): [Empty]; 
Natural Resources and Environment (300): [Empty]; 
Agriculture (300): [Empty]; 
Commerce and Housing Credit (370): [Empty]; 
Transportation (400): [Empty]; 
Community and Regional Development (450): [Empty]; 
Education, Training, Employment, and Social Services (500): [Empty]; 
Health (550): [Empty]; 
Medicare (570): [Empty]; 
Income Security (600): [Empty]; 
Social Security (650): [Empty]; 
Veterans Benefits and Services (700): [Empty]; 
Administration of Justice (750): [Empty]; 
General Government (800): [Check]; 
Net Interest (900): [Empty]; 
Number of functions charged by agency: 1. 

Agency: General Services Administration; 
Budget Function[A]: 
National Defense (050): [Empty]; 
International Affairs (150): [Empty]; 
General Science, Space, and Technology (250): [Empty]; 
Energy (270): [Empty]; 
Natural Resources and Environment (300): [Empty]; 
Agriculture (300): [Empty]; 
Commerce and Housing Credit (370): [Check]; 
Transportation (400): [Empty]; 
Community and Regional Development (450): [Empty]; 
Education, Training, Employment, and Social Services (500): [Empty]; 
Health (550): [Empty]; 
Medicare (570): [Empty]; 
Income Security (600): [Empty]; 
Social Security (650): [Empty]; 
Veterans Benefits and Services (700): [Empty]; 
Administration of Justice (750): [Empty]; 
General Government (800): [Check]; 
Net Interest (900): [Empty]; 
Number of functions charged by agency: 2. 

Agency: Independent Agencies; 
Budget Function[A]: 
National Defense (050): [Check]; 
International Affairs (150): [Check]; 
General Science, Space, and Technology (250): [Empty]; 
Energy (270): [Check]; 
Natural Resources and Environment (300): [Check]; 
Agriculture (300): [Check]; 
Commerce and Housing Credit (370): [Check]; 
Transportation (400): [Check]; 
Community and Regional Development (450): [Check]; 
Education, Training, Employment, and Social Services (500): [Check]; 
Health (550): [Check]; 
Medicare (570): [Empty]; 
Income Security (600): [Check]; 
Social Security (650): [Empty]; 
Veterans Benefits and Services (700): [Check]; 
Administration of Justice (750): [Check]; 
General Government (800): [Check]; 
Net Interest (900): [Empty]; 
Number of functions charged by agency: 14. 

Agency: National Aeronautics and Space Administration; 
Budget Function[A]: 
National Defense (050): [Empty]; 
International Affairs (150): [Empty]; 
General Science, Space, and Technology (250): [Empty]; 
Energy (270): [Empty]; 
Natural Resources and Environment (300): [Check]; 
Agriculture (300): [Empty]; 
Commerce and Housing Credit (370): [Empty]; 
Transportation (400): [Check]; 
Community and Regional Development (450): 
Education, Training, Employment, and Social Services (500): [Check]; 
Health (550): [Empty]; 
Medicare (570): [Empty]; 
Income Security (600): [Empty]; 
Social Security (650): [Empty]; 
Veterans Benefits and Services (700): [Empty]; 
Administration of Justice (750): [Empty]; 
General Government (800): [Empty]; 
Net Interest (900): [Empty]; 
Number of functions charged by agency: 3. 

Agency: National Science Foundation; 
Budget Function[A]: 
National Defense (050): [Check]; 
International Affairs (150): [Empty]; 
General Science, Space, and Technology (250): [Check]; 
Energy (270): [Empty]; 
Natural Resources and Environment (300): [Empty]; 
Agriculture (300): [Empty]; 
Commerce and Housing Credit (370): [Empty]; 
Transportation (400): [Empty]; 
Community and Regional Development (450): [Empty]; 
Education, Training, Employment, and Social Services (500): [Empty]; 
Health (550): [Empty]; 
Medicare (570): [Empty]; 
Income Security (600): [Empty]; 
Social Security (650): [Empty]; 
Veterans Benefits and Services (700): [Empty]; 
Administration of Justice (750): [Empty]; 
General Government (800): [Empty]; 
Net Interest (900): [Empty]; 
Number of functions charged by agency: 2. 

Agency: Nuclear Regulatory Commission; 
Budget Function[A]: 
National Defense (050): [Empty]; 
International Affairs (150): [Empty]; 
General Science, Space, and Technology (250): [Empty]; 
Energy (270): [Check]; 
Natural Resources and Environment (300): [Empty]; 
Agriculture (300): [Empty]; 
Commerce and Housing Credit (370): [Empty]; 
Transportation (400): [Empty]; 
Community and Regional Development (450): [Empty]; 
Education, Training, Employment, and Social Services (500): [Empty]; 
Health (550): [Empty]; 
Medicare (570): [Empty]; 
Income Security (600): [Empty]; 
Social Security (650): [Empty]; 
Veterans Benefits and Services (700): [Empty]; 
Administration of Justice (750): [Empty]; 
General Government (800): [Empty]; 
Net Interest (900): [Empty]; 
Number of functions charged by agency: 1. 

Agency: Office of Personnel Management; 
Budget Function[A]: 
National Defense (050): [Empty]; 
International Affairs (150): [Empty]; 
General Science, Space, and Technology (250): [Empty]; 
Energy (270): [Empty]; 
Natural Resources and Environment (300): [Empty]; 
Agriculture (300): [Empty]; 
Commerce and Housing Credit (370): [Empty]; 
Transportation (400): [Empty]; 
Community and Regional Development (450): [Empty]; 
Education, Training, Employment, and Social Services (500): [Empty]; 
Health (550): [Check]; 
Medicare (570): [Empty]; 
Income Security (600): [Check]; 
Social Security (650): [Empty]; 
Veterans Benefits and Services (700): [Empty]; 
Administration of Justice (750): [Empty]; 
General Government (800): [Check]; 
Net Interest (900): [Empty]; 
Number of functions charged by agency: 3. 

Agency: Postal Service; 
Budget Function[A]: 
National Defense (050): [Empty]; 
International Affairs (150): [Empty]; 
General Science, Space, and Technology (250): [Empty]; 
Energy (270): [Empty]; 
Natural Resources and Environment (300): [Empty]; 
Agriculture (300): [Empty]; 
Commerce and Housing Credit (370): [Check]; 
Transportation (400): [Empty]; 
Community and Regional Development (450): [Empty]; 
Education, Training, Employment, and Social Services (500): [Empty]; 
Health (550): [Empty]; 
Medicare (570): [Empty]; 
Income Security (600): [Empty]; 
Social Security (650): [Empty]; 
Veterans Benefits and Services (700): [Empty]; 
Administration of Justice (750): [Empty]; 
General Government (800): [Empty]; 
Net Interest (900): [Empty]; 
Number of functions charged by agency: 1. 

Agency: Small Business Administration; 
Budget Function[A]: 
National Defense (050): [Empty]; 
International Affairs (150): [Empty]; 
General Science, Space, and Technology (250): [Empty]; 
Energy (270): [Empty]; 
Natural Resources and Environment (300): [Empty]; 
Agriculture (300): [Empty]; 
Commerce and Housing Credit (370): [Check]; 
Transportation (400): [Empty]; 
Community and Regional Development (450): [Check]; 
Education, Training, Employment, and Social Services (500): [Empty]; 
Health (550): [Empty]; 
Medicare (570): [Empty]; 
Income Security (600): [Empty]; 
Social Security (650): [Empty]; 
Veterans Benefits and Services (700): [Empty]; 
Administration of Justice (750): [Empty]; 
General Government (800): [Empty]; 
Net Interest (900): [Empty]; 
Number of functions charged by agency: 2. 

Agency: Social Security Administration; 
Budget Function[A]: 
National Defense (050): [Empty]; 
International Affairs (150): [Empty]; 
General Science, Space, and Technology (250): [Empty]; 
Energy (270): [Empty]; 
Natural Resources and Environment (300): [Empty]; 
Agriculture (300): [Empty]; 
Commerce and Housing Credit (370): [Empty]; 
Transportation (400): [Empty]; 
Community and Regional Development (450): [Empty]; 
Education, Training, Employment, and Social Services (500): [Empty]; 
Health (550): [Empty]; 
Medicare (570): [Check]; 
Income Security (600): [Check]; 
Social Security (650): [Check]; 
Veterans Benefits and Services (700): [Check]; 
Administration of Justice (750): [Empty]; 
General Government (800): [Empty]; 
Net Interest (900): [Empty]; 
Number of functions charged by agency: 4. 

Number of executive agencies charging this function: 
Budget Function[A]: 10; 
National Defense (050): 5; 
International Affairs (150): 4; 
General Science, Space, and Technology (250): 5; 
Energy (270): 9; 
Natural Resources and Environment (300): 3; 
Agriculture (300): 10; 
Commerce and Housing Credit (370): 5; 
Transportation (400): 8; 
Community and Regional Development (450): 8; 
Education, Training, Employment, and Social Services (500): 8; 
Health (550): 2; 
Medicare (570): 11; 
Income Security (600): 1; 
Social Security (650): 5; 
Veterans Benefits and Services (700): 5; 
Administration of Justice (750): 7; 
General Government (800): 9; 
Net Interest (900): 1. 

Source: GAO analysis. 

[A] Two budget functions are not shown above: Allowances, because 
there are no 2010 actual obligations, and Undistributed Offsetting 
Receipts, because no obligations are charged to agencies. 

[End of figure] 

Second, we reviewed key agency documents, such as strategic plans, 
performance and accountability reports, and budget justifications, as 
we have found that when multiple executive branch agencies have 
similar missions, goals, or programs, the potential for fragmentation, 
overlap, or duplication exists. Third, we reviewed key external 
published sources of information. In particular, we reviewed reports 
published by the Congressional Budget Office, Inspectors General, and 
the Congressional Research Service, as well as the President's 
budgets, to identify potential overlap and duplication among agency 
missions, goals, and programs.[Footnote 15] We relied on our previous 
work and professional judgment to target areas for further review by 
considering a variety of factors, including 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. 

Based on our multiphased approach, we have identified, to date, 162 
areas in which there are opportunities to reduce fragmentation, 
overlap, or duplication or to achieve cost savings or revenue 
enhancement. The areas included in our reports, however, do not 
represent the full extent of our systematic evaluation; we evaluated 
many additional areas but determined for various reasons that the 
available evidence did not support their inclusion at this time. The 
federal inmate reentry grant programs administered by the Departments 
of Justice, Labor, and Health and Human Services illustrate this 
point. Although the federal programs are fragmented, we found that 
overlap is minimal and the risk of duplication is low because the 
programs vary across eligible applicants, beneficiaries, and primary 
services. Moreover, the departments have taken steps to coordinate 
their reentry efforts to prevent duplication and share promising 
practices. 

As another example, we examined the extent to which functions or 
activities provided under DOD's civil augmentation programs--which are 
designed to help meet the military services' logistics requirements 
during operations--are potentially fragmented, overlapping, or 
duplicative. We found no instances of overlap or duplication in the 
implementation of these programs. Further, we examined the cost or 
savings implications of consolidating the planning, execution, and 
oversight of the civil augmentation programs and did not identify 
clear opportunities to improve the effectiveness or efficiency of the 
programs. 

In still other instances, agencies took steps to address issues we 
identified during the course of our audit work. For example, through 
our review of the federal government's aerostat and airship 
acquisition efforts, we identified two concurrent and potentially 
duplicative airship development efforts--one was being developed by 
the U.S. Army and the other by the U.S. Air Force. However, the 
potential duplication ended before we issued our report when the Air 
Force terminated its program due to technical problems experienced 
with the airframe and the need to avoid the effort's substantially 
increasing costs. We were not able to determine any cost savings that 
resulted from the program's termination because the Air Force had not 
budgeted for program costs beyond fiscal year 2012. In addition, in 
February 2013 the U.S. Army terminated its effort because of schedule 
delays and increasing costs. The U.S. Army had budgeted approximately 
$80 million between fiscal years 2013 and 2015 for this effort. 

Although our three annual reports provide extensive coverage across 
the federal government, the areas identified in our annual reports are 
not intended to represent every instance of fragmentation, overlap, or 
duplication within the federal government. As statutorily required, we 
will continue to identify new issues for executive branch agencies and 
Congress to consider. Likewise, we will continue to monitor 
developments in the areas we have already identified in this series. 

GPRA Modernization Act Can Help Address Challenges in Identifying and 
Addressing Fragmentation, Overlap, or Duplication: 

During the past two decades, our work on managing for results has 
suggested how effective implementation of the Government Performance 
and Results Act of 1993 (GPRA) could improve collaboration to achieve 
meaningful results. Congress used our work in crafting the GPRA 
Modernization Act of 2010 (GPRAMA), which updates GPRA to establish a 
framework aimed at taking a more crosscutting and integrated approach 
to focusing on results and improving government performance.[Footnote 
16] Effective implementation of GPRAMA could help clarify desired 
outcomes, address program performance spanning multiple organizations, 
and facilitate future actions to reduce fragmentation, overlap, and 
duplication. Moreover, effective implementation could help address 
challenges to identifying and addressing the areas of fragmentation, 
overlap, and duplication we highlight in this series. These challenges 
include the lack of a comprehensive list of federal programs and 
funding information and the need for improved and regular performance 
information. GPRAMA, if effectively implemented, could help address 
these challenges as well as improve information sharing and 
coordination among federal agencies--both of which are needed to help 
address issues of fragmentation, overlap, and duplication. 

First, this series highlights challenges associated with the lack of a 
comprehensive list of federal programs and funding information. A 
first step in identifying potential fragmentation, overlap, or 
duplication among federal programs or activities involves creating a 
comprehensive list of programs along with related funding information. 
Currently, no comprehensive list exists, nor is there a common 
definition for what constitutes a federal "program." The lack of a 
common definition of program makes it difficult to develop a 
comprehensive list of all federal programs. The lack of a list, in 
turn, makes it difficult to determine the scope of the federal 
government's involvement in particular areas and, therefore, where 
action is needed to avoid fragmentation, overlap, or duplication. We 
also found that federal budget information is often not available or 
sufficiently reliable to identify the level of funding provided to 
programs or activities. For example, agencies could not isolate 
budgetary information for some programs because the data were 
aggregated at higher levels. Without knowing the full range of 
programs involved or the cost of implementing them, gauging the 
magnitude of the federal commitment to a particular area of activity 
or the extent to which associated federal programs are duplicative is 
difficult.[Footnote 17] 

To help address these challenges, GPRAMA requires the Director of OMB 
to compile and make publicly available a comprehensive list of all 
federal programs, and to include the purposes of each program, how it 
contributes to the agency's mission, and recent funding information. 
According to OMB, agencies currently use the term "program" in 
different ways, and OMB plans to allow them to continue to define 
programs in ways that reflect their particular facts and circumstances 
within prescribed guidelines.[Footnote 18] OMB expects 24 large 
federal agencies to publish an initial inventory of federal programs 
by May 2013.[Footnote 19] In future years, this effort will be 
expanded to other agencies that will update their inventories annually 
to reflect the annual budget and appropriations process. OMB also 
expects to enhance the initial program inventory by collecting related 
information, such as financing and related agency strategic goals. 

Second, this series calls repeated attention to challenges associated 
with the need for improved and regular performance information. The 
regular collection and review of performance information, both within 
and among federal agencies, could help executive branch agencies and 
Congress determine whether some of the federal programs or initiatives 
included in this series are making progress toward addressing the 
identified issues and could determine the actions that need to be 
taken to improve results. However, as we previously noted, our annual 
reports highlight several instances in which executive branch agencies 
do not collect necessary performance data. For example, in our 2011 
annual report we noted that OMB has not used its budget and 
performance review processes to systematically review tax expenditures 
and promote integrated reviews of related tax and spending programs. 
Coordinated performance reviews of tax expenditures with related 
federal spending programs could help policymakers reduce overlap and 
inconsistencies and direct scarce resources to the most effective or 
least costly methods to deliver federal support. Similarly, we have 
previously reported that as Congress oversees federal programs and 
activities, it needs pertinent and reliable information to adequately 
assess agencies' progress, ensure accountability, and understand how 
individual programs and activities fit within a broader portfolio of 
federal efforts. The lack of reliable performance data also makes it 
difficult for decision makers to determine how to address identified 
fragmentation, overlap, or duplication. 

GPRAMA requires that federal agencies regularly collect performance 
information for federal programs and ensure that it is made publicly 
available. Specifically, agency leaders are required to conduct 
quarterly, data-driven reviews of their performance in achieving 
priority goals and identify strategies to improve performance where 
goals are not being met. In addition, OMB has directed agencies to 
take our work in this series into consideration when establishing 
their budget and management plans. As we recently reported, according 
to our survey of Performance Improvement Officers in 24 agencies, all 
24 agencies were conducting performance reviews at least quarterly as 
required by GPRAMA.[Footnote 20] While we found the reviews have shown 
promise in improving internal agency coordination and collaboration, 
few agency Performance Improvement Officers reported they are using 
the reviews to coordinate or collaborate with other agencies that have 
similar goals. We recommended that the Director of OMB identify and 
share promising practices for including other relevant entities that 
contribute to achieving their agency performance goals. OMB agreed 
with our recommendation. 

In addition, GPRAMA requires OMB to coordinate with executive branch 
agencies to establish crosscutting priority goals and to develop a 
federal government performance plan that defines the level of 
performance needed to achieve them.[Footnote 21] As we reported in May 
2012, the President's 2013 budget submission included the first list 
of 14 interim crosscutting priority goals.[Footnote 22] For each of 
the interim goals, as required by GPRAMA, OMB listed the agencies and 
programs that contribute to the goal in the federal government 
performance plan. However, based on our prior work, we identified 
additional agencies and programs that should be included. Accordingly, 
we recommended that OMB consider adding those additional contributors 
to the crosscutting priority goals. OMB concurred with this 
recommendation, and in its December 2012 update to the federal 
government performance plan, OMB added some of the additional agencies 
and programs that we identified. GPRAMA also requires agencies to 
describe how they are working with each other to achieve their 
strategic and performance goals, as well as any relevant crosscutting 
priority goals. Moreover, each agency, for each of its performance 
goals, has to identify the various federal organizations, programs, 
and activities--both within and external to the agency--that 
contribute to the goal. These new requirements provide additional 
opportunities for collaboration across executive branch agencies. We 
have previously identified key practices that can help federal 
agencies enhance and sustain their collaborative efforts along with 
key features to consider as they implement collaborative mechanisms. 
[Footnote 23] 

Furthermore, our work has identified strategies for addressing 
duplicative government functions and improving efficiency. Efficiency 
initiatives generally fell within two categories: (1) reexamining 
programs, structures, and functions to determine whether they 
effectively and efficiently achieved their mission; and (2) 
streamlining and consolidating operations to make them more cost 
effective. To help federal departments implement these initiatives we 
identified key practices, such as targeting both short-term and long-
term efficiency initiatives, that they could use to improve 
efficiency.[Footnote 24] In addition, we have identified key questions 
that agencies should consider when evaluating whether to consolidate 
physical infrastructure or management functions.[Footnote 25] 

In order for information from performance measurement initiatives to 
be useful to executive branch agencies and Congress in making 
decisions, garnering congressional support on what to measure and how 
to present this information is critical. Thus, GPRAMA significantly 
enhances requirements for agencies to consult with Congress. 
Specifically, at least once every two years, OMB is required to 
consult with relevant committees with broad jurisdiction on 
crosscutting priority goals, while agencies must consult with their 
relevant appropriations, authorization, and oversight committees when 
developing or making adjustments to their strategic plans and agency 
priority goals. We recently prepared a guide to help ensure that these 
consultations and the performance information produced by executive 
branch agencies are useful to Congress in carrying out its various 
decision-making responsibilities.[Footnote 26] 

Beyond providing input to OMB and agencies during the consultations to 
shape their goals, Congress can foster results-oriented cultures in 
the federal government by using performance information in carrying 
out its various legislative responsibilities and oversight activities. 
In addition, in two recent reports we highlighted several instances in 
which Congress has used performance information in its decision making 
to (1) identify issues that the federal government should address, (2) 
measure progress towards addressing those issues, and (3) identify 
better strategies to address the issues, when necessary.[Footnote 27] 

Congressional use of agency goals and measured results in its decision 
making will send an unmistakable message to agencies that Congress 
considers agency performance a priority. For example, in our 2011 
annual report, we noted that the federal government distributed 
surface transportation funding without regard to performance. However, 
in July 2012, the Moving Ahead for Progress in the 21st Century Act 
(MAP-21) was enacted, reauthorizing surface transportation programs 
through 2014.[Footnote 28] This law identified seven national 
performance goals for surface transportation and requires the 
Secretary of Transportation to establish performance measures for 
them. In addition, states must establish performance targets for those 
measures and report their progress in achieving them, thereby 
incorporating accountability for results. Moreover, MAP-21 links 
funding to performance by requiring states to use federal funds to 
improve interstate system pavement and bridge conditions to meet 
minimum standards. 

Realizing the intent of GPRAMA for improving government performance 
and accountability and reducing fragmentation, overlap, and 
duplication will require sustained oversight of implementation. To 
assist Congress with this oversight, GPRAMA includes provisions 
requiring us to review its implementation at several critical 
junctures. First, following a period of initial implementation, we are 
to report by June 2013 on implementation of GPRAMA's planning and 
reporting requirements, at both the government-wide and agency levels. 
Subsequently, following full implementation, we are to evaluate by 
September 2015 and 2017 whether performance management is being used 
by federal agencies to improve the efficiency and effectiveness of 
agency programs. Also in September 2015 and 2017--and every 4 years 
thereafter--we are to evaluate the implementation of the federal 
government priority goals and performance plans and related reporting 
required by GPRAMA. 

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, Director, Financial Markets and Community Investment, 
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. 

Signed by: 

Gene L. Dodaro: 
Comptroller General of the United States: 

[End of section] 

Abbreviations: 

AFF: Assets Forfeiture Fund APHIS Animal and Plant Health Inspection 
Service: 

BBG: Broadcasting Board of Governors: 

BRAC: Base Realignment and Closure: 

CBP: U.S. Customs and Border Protection: 

CHIPRA: Children’s Health Insurance Program Reauthorization Act of 
2009: 

CMS: Centers for Medicare & Medicaid Services: 

Commerce: Department of Commerce: 

DHS: Department of Homeland Security: 

DOD: Department of Defense: 

DOE: Department of Energy: 

DOJ: Department of Justice: 

DOT: Department of Transportation: 

DSH: disproportionate share hospital: 

EDS: explosives detection system: 

Education: Department of Education: 

Energy: Department of Energy: 

EPA: Environmental Protection Agency: 

ETD: explosives trace detection: 

FAA: Federal Aviation Administration: 

FAFSA: Free Application for Federal Student Aid: 

FBI: Federal Bureau of Investigation: 

FDA: Food and Drug Administration: 

FEMA: Federal Emergency Management Agency: 

FGDC: Federal Geographic Data Committee: 

FSIS: Food Safety and Inspection Service: 

FSSI: Federal Strategic Sourcing Initiative: 

GPRA: Government Performance and Results Act: 

GPRAMA: GPRA Modernization Act of 2010: 

GPS: Global Positioning System: 

GSA: General Services Administration: 

HHS: Department of Health and Human Services: 

HIDTA: High-Intensity Drug Trafficking Areas: 

Interior: Department of the Interior: 

IRS: Internal Revenue Service: 

IT: information technology: 

MA: Medicare Advantage: 

NASA: National Aeronautics and Space Administration: 

NOAA: National Oceanic and Atmospheric Administration: 

NSDI: National Spatial Data Infrastructure: 

NTIS: National Technical Information Service: 

OMB: Office of Management and Budget: 

ONDCP: Office of National Drug Control Policy: 

OPM: Office of Personnel Management: 

OSD: Office of the Secretary of Defense: 

PPACA: Patient Protection and Affordable Care Act: 

R&D: research and development: 

RMA: Risk Management Agency: 

ROI: return on investment: 

S&T: Science & Technology Directorate: 

SAMHSA: Substance Abuse and Mental Health Services Administration: 

SBA: Small Business Administration: 

SBDC: Small Business Development Centers: 

SOI: Statistics of Income: 

SRF: State Revolving Fund: 

SSA: Social Security Administration: 

State: Department of State: 

TFF: Treasury Forfeiture Fund: 

TPCC: Trade Promotion Coordinating Committee: 

Treasury: Department of the Treasury: 

TSA: Transportation Security Administration: 

USDA: U.S. Department of Agriculture USPS U.S. Postal Service: 

VA: Department of Veterans Affairs: 

[End of section] 

Footnotes: 

[1] 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. 

[2] In assessing progress on the 81 areas we identified in our 2011 
annual report for this year's report, we combined two areas related to 
the Department of Homeland Security's management of acquisitions 
(Areas 75 and 76) into one area. Therefore, we are evaluating progress 
for 80 areas identified in our 2011 annual report and 51 areas 
identified in our 2012 annual report. See appendix II for additional 
information on scope and methodology. 

[3] Medicaid is the joint federal-state health care financing program 
for certain low-income individuals and is one of the largest social 
programs in federal and state budgets. We have had long-standing 
concerns about Medicaid's program integrity because of problems with 
the sufficiency of federal and state oversight. For example, the 
Centers for Medicare & Medicaid Services estimated that in fiscal year 
2012, $19.2 billion (7.1 percent) of Medicaid's federal expenditures 
involved improper payments. 

[4] GAO, Tax Gap: IRS Could Significantly Increase Revenues by Better 
Targeting Enforcement Resources, [hyperlink, 
http://www.gao.gov/products/GAO-13-151] (Washington, D.C.: Dec. 5, 
2012). 

[5] Isotopes are varieties of a given chemical element with the same 
number of protons but different numbers of neutrons. For example, the 
helium-3 isotope, which is used in research and to detect neutrons in 
radiation detection equipment, has one less neutron than the helium-4 
isotope, which is the helium isotope commonly used in party balloons. 

[6] GAO, Managing for Results: A Guide for Using the GPRA 
Modernization Act to Help Inform Congressional Decision Making, 
[hyperlink, http://www.gao.gov/products/GAO-12-621SP] (Washington, 
D.C.: June 15, 2012). 

[7] These selected agencies include DOD, DHS, Energy, and the 
Department of Veterans Affairs, which accounted for 80 percent of the 
$537 billion in federal procurement spending in fiscal year 2011. 

[8] Our review included major information technology investments at 
DOD, HHS, DHS, Treasury, and VA. 

[9] To create this potential savings, Congress would need to repeal 
the provision in the Food, Conservation, and Energy Act of 2008, or 
direct in the Food Safety and Inspection Service's appropriation that 
no funds may be spent on the program. If Congress enacts a legislative 
restriction, there may be some opportunity to rescind appropriated 
amounts. Because the inspection program is funded from a lump sum 
appropriation to USDA, funds that would have been used for the program 
could be available for new obligations within the appropriations 
account. USDA could identify the amount of funds currently available 
for obligation that would have been used for the catfish inspection 
program and Congress could rescind those amounts. 

[10] Several federal agencies, including DOD, the National Aeronautics 
and Space Administration, the Federal Aviation Administration, the 
National Oceanic and Atmospheric Administration, and the U.S. Coast 
Guard, are actively using or beginning to look at these approaches in 
order to save costs. 

[11] An additional 9 actions reported in 2011 and 2012 were not 
assessed this year due to additional audit work or other information 
we considered. See appendix II for additional information on our scope 
and methodology for monitoring the progress of actions. 

[12] In assessing overall progress for an area, we determined that an 
area was "addressed" if all actions in that area were addressed; 
"partially addressed" if at least one action needed in that area 
showed some progress toward implementation but not all actions were 
addressed; and "not addressed" if none of the actions needed in that 
area were addressed or partially addressed. In addition, 1 area 
reported in 2011 was not assessed this year due to additional audit 
work or other information we considered. 

[13] 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. 

[14] Our examination did not include two budget functions: Allowances, 
because there were no actual obligations, and Undistributed Offsetting 
Receipts, because no obligations are charged to agencies. 

[15] Our examination did not include the fiscal year 2014 President's 
budget because of the timing of its release. 

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

[17] In addition, see appendix IV for a listing of federal programs or 
other activities related to areas in this report, along with budgetary 
information, if available. 

[18] OMB, Circular No. A-11, Preparation, Submission, and Execution of 
the Budget, Aug. 3, 2012. 

[19] These 24 agencies are the Departments of Agriculture, Commerce, 
Defense, Education, Energy, Health and Human Services, Homeland 
Security, Housing and Urban Development, the Interior, Justice, Labor, 
State, Transportation, the Treasury, and Veterans Affairs, as well as 
the Agency for International Development, Environmental Protection 
Agency, General Services Administration, National Aeronautics and 
Space Administration, National Science Foundation, Office of Personnel 
Management, Small Business Administration, Social Security 
Administration, and the U.S. Army Corps of Engineers Civil Works 
program. 

[20] These 24 agencies are those covered by the Chief Financial 
Officers Act of 1990, which are subject to GPRAMA's requirements. See 
GAO, Managing for Results: Data-Driven Performance Reviews Show 
Promise but Agencies Should Explore How to Involve Other Relevant 
Agencies, [hyperlink, http://www.gao.gov/products/GAO-13-228] 
(Washington, D.C.: Feb. 27, 2013). 

[21] 31 U.S.C. §§ 1120(a)(1),1115(a). See also GAO, Managing for 
Results: GAO's Work Related to the Interim Crosscutting Priority Goals 
under the GPRA Modernization Act, [hyperlink, 
http://www.gao.gov/products/GAO-12-620R] (Washington, D.C.: May 31, 
2012). 

[22] [hyperlink, http://www.gao.gov/products/GAO-12-620R]. 

[23] GAO, Results-Oriented Government: Practices That Can Help Enhance 
and Sustain Collaboration among Federal Agencies, [hyperlink, 
http://www.gao.gov/products/GAO-06-15] (Washington, D.C.: Oct. 21, 
2005) and Managing for Results: Key Considerations for Implementing 
Interagency Collaborative Mechanisms, [hyperlink, 
http://www.gao.gov/products/GAO-12-1022] (Washington, D.C.: Sept. 27, 
2012). 

[24] GAO, Streamlining Government: Key Practices from Select 
Efficiency Initiatives Should Be Shared Governmentwide, [hyperlink, 
http://www.gao.gov/products/GAO-11-908] (Washington, D.C.: Sept. 30, 
2011). 

[25] GAO, Streamlining Government: Questions to Consider When 
Evaluating Proposals to Consolidate Physical Infrastructure and 
Management Functions, [hyperlink, 
http://www.gao.gov/products/GAO-12-542] (Washington, D.C.: May 23, 
2012). 

[26] [hyperlink, http://www.gao.gov/products/GAO-12-621SP]. 

[27] [hyperlink, http://www.gao.gov/products/GAO-12-621SP] and GAO, 
Managing for Results: Opportunities for Congress to Address Government 
Performance Issues, [hyperlink, 
http://www.gao.gov/products/GAO-12-215R] (Washington, D.C.: Dec. 9, 
2011). For example, three case studies from our June 2012 report 
demonstrate how Congress has used performance information to inform 
its decision making. The case studies covered efforts to (1) transform 
the processing of immigration benefits, (2) coordinate U.S. efforts to 
address the global HIV/AIDS pandemic, and (3) identify and address 
improper payments made by federal programs. 

[28] Moving Ahead for Progress in the 21st Century Act, Pub. L. No. 
112-141, 126 Stat. 405 (2012). 

[End of section] 

Report at a Glance: 

Section I of this report presents 17 areas in which we found evidence of
fragmentation, overlap, or duplication among federal government
programs. 

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

Mission: Agriculture; 

Area Identified: 1. Catfish Inspection: Repealing provisions of the 
2008 Farm Bill that assigned U.S. Department of Agriculture’s Food 
Safety and Inspection Service responsibility for examining and 
inspecting catfish and for creating a catfish inspection program would 
avoid duplication of federal programs and could save taxpayers 
millions of dollars annually without affecting the safety of catfish 
intended for human consumption. 
Page: 34. 

Mission: Defense; 

Area Identified: 2. Combat Uniforms: The Department of Defense’s 
fragmented approach to developing and acquiring uniforms could be more 
efficient, better protect service members, and result in up to $82 
million in development and acquisition cost savings through increased 
collaboration among the military services.
Page: 37. 

Area Identified: 3. Defense Foreign Language Support Contracts: The 
Department of Defense should explore opportunities to gain additional 
efficiencies in contracts for foreign language support, which is 
estimated to cost more than $1 billion annually, by addressing 
fragmentation in the department’s acquisition approach. 
Page: 45. 

Mission: Energy; 

Area Identified: 4. Renewable Energy Initiatives: Federal support for 
wind and solar energy, biofuels, and other renewable energy sources, 
which has been estimated at several billion dollars per year, is 
fragmented because 23 agencies implemented hundreds of renewable 
energy initiatives in fiscal year 2010—the latest year for which GAO 
developed these original data. Further, the Departments of Energy and 
Agriculture could take additional actions—to the extent possible 
within their statutory authority—to help ensure effective use of 
financial support from several wind initiatives, which GAO
found provided duplicative support that may not have been needed in 
all cases for projects to be built.
Page: 51. 

Mission: Health; 

Area Identified: 5. Joint Veterans and Defense Health Care Services: 
The Departments of Veterans Affairs and Defense should enhance their 
collaboration to reduce costs, overlap, and potential duplication in 
the delivery of health care services.
Page: 60. 

Area Identified: 6. Medicaid Program Integrity: The Centers for 
Medicare & Medicaid Services needs to take steps to eliminate 
duplication and increase efficiency in two Medicaid Integrity Program 
activities—provider audits and the collection of state program 
integrity data.
Page: 66. 

Mission: Homeland security/law enforcement; 

Area Identified: 7. Department of Homeland Security Research and 
Development: Better policies and guidance for defining, overseeing, 
and coordinating research and development investments and activities 
would help the Department of Homeland Security address fragmentation, 
overlap, and potential unnecessary duplication.
Page: 71. 

Area Identified: 8. Field-Based Information Sharing: To help reduce 
inefficiencies resulting from overlap in analytical and investigative 
support activities, the Departments of Justice and Homeland Security 
and the Office of National Drug Control Policy could improve 
coordination among five types of field-based information sharing 
entities that may collect, process, analyze, or disseminate 
information in support of law enforcement and counterterrorism-related 
efforts—Joint Terrorism Task Forces, Field Intelligence Groups, 
Regional Information Sharing Systems centers, state and major urban 
area fusion centers, and High Intensity Drug Trafficking Areas 
Investigative Support Centers.
Page: 77. 

Area Identified: 9. Justice and Treasury Asset Forfeiture: Conducting 
a study to evaluate the feasibility of consolidating the Departments 
of Justice’s and Treasury’s multimillion dollar asset forfeiture 
activities could help the departments identify the extent to which 
consolidation of potentially duplicative activities would help 
increase the efficiency and effectiveness of the programs and
achieve cost savings.
Page: 90. 

Mission: Information technology; 

Area Identified: 10. Dissemination of Technical Research Reports: 
Congress may wish to consider whether the fee-based model under which 
the National Technical Information Service currently operates for 
disseminating technical information is still viable or appropriate, 
given that many of the reports overlap with similar information 
available from the issuing organizations or other sources for free. 
Page: 96. 

Area Identified: 11. Geospatial Investments: Better coordination among 
federal agencies that collect, maintain, and use geospatial 
information could help reduce duplication of geospatial investments 
and provide the opportunity for potential savings of millions of 
dollars.
Page: 103. 

Mission: International affairs; 

Area Identified: 12. Export Promotion: Enhanced collaboration between 
the Small Business Administration and two other agencies could help to 
limit overlapping export-related services for small businesses. 
Page: 111. 

Area Identified: 13. International Broadcasting: The Broadcasting 
Board of Governors-—with a budget of $752 million in fiscal year 2012-—
has recognized the need to reduce overlap and reallocate limited 
resources to broadcasts that will have the greatest impact, but the 
agency could do more to achieve this goal, such as systematically 
considering overlap of language services in its annual language 
services review.
Page: 117. 

Mission: Science and the environment; 

Area Identified: 14. Rural Water Infrastructure: Additional 
coordination by the Environmental Protection Agency and the Department 
of Agriculture could help three water and wastewater infrastructure 
programs with
combined funding of about $4.3 billion avoid potentially duplicative 
application requirements, as well as associated costs and time 
developing engineering reports and environmental analyses.
Page: 121. 

Mission: Social services; 

Area Identified: 15. Drug Abuse Prevention and Treatment Programs: 
More fully assessing the extent of overlap and potential duplication 
across the fragmented 76 federal drug abuse prevention and treatment 
programs and identifying opportunities for increased coordination, 
including those programs where no coordination has occurred, would 
better position the Office of National Drug Control Policy to better 
leverage resources and increase efficiencies.
Page: 128. 

Mission: Training, employment, and education; 

Area Identified: 16. Higher Education Assistance: Federal agencies 
providing assistance for higher education should better coordinate to 
improve program administration and help reduce fragmentation. 
Page: 138. 

Area Identified: 17. Veterans’ Employment and Training: The 
Departments of Labor, Veterans Affairs, and Defense need to better 
coordinate the employment services each provides to veterans, and 
Labor needs to better target the Disabled Veterans’ Outreach Program 
so that it does not overlap with other programs.
Page: 145. 

[End of table] 

Section II of this report summarizes 14 additional opportunities for
agencies or Congress to consider taking action that could either reduce
the cost of government operations or enhance revenue collections for the
Treasury. 

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

Mission: Agriculture; 

Area Identified: 18. Agricultural Quarantine Inspection Fees: The 
United States Department of Agriculture’s Animal and Plant Health 
Inspection Service could have achieved as much as $325 million in
savings (based on fiscal year 2011 data, as reported in GAO’s March 
2013 report) by more fully aligning fees with program costs; although 
the savings would be recurring, the amount would depend on the cost-
collections gap in a given fiscal year and would result in a reduced 
reliance on U.S. Customs and Border Protection’s annual Salaries and 
Expenses appropriations used for agricultural inspection services.
Page: 152. 

Area Identified: 19. Crop Insurance: To achieve up to $1.2 billion per 
year in cost savings in the Federal Crop Insurance program, Congress 
could consider limiting the subsidy for premiums that an individual 
farmer can receive each year, reducing the subsidy for all or high-
income farmers participating in the program, or some combination of 
limiting and reducing these subsidies. 
Page: 158. 

Mission: Defense; 

Area Identified: 20. Joint Basing: The Department of Defense needs an 
implementation plan to guide joint bases to achieve millions of 
dollars in cost savings and efficiencies anticipated from combining 
support services at 26 installations located close to one another.
Page: 163. 

Mission: Energy; 

Area Identified: 21. Department of Energy’s Isotope Program: Assessing 
the value of isotopes to customers, and other factors such as prices 
of alternatives, may show that the Department of Energy could increase 
prices for isotopes that it sells to commercial customers to create 
cost savings by generating additional revenue. 
Page: 170. 

Mission: General government; 

Area Identified: 22. Additional Opportunities to Improve Internal 
Revenue Service Enforcement of Tax Laws: The Internal Revenue Service 
can realize cost savings and increase revenue collections by billions 
of dollars by, among other things, using more rigorous analyses to 
better allocate enforcement and other resources.
Page: 174. 

Area Identified: 23. Agencies’ Use of Strategic Sourcing: 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-—
savings of one percent from selected agencies’ procurement spending 
alone would equate to over $4 billion.
Page: 181. 

Area Identified: 24. Opportunities to Help Reduce Government Satellite 
Program Costs: Government agencies could achieve considerable cost 
savings on some missions by leveraging commercial spacecraft through 
innovative mechanisms such as hosted payload arrangements and sharing 
launch vehicle costs. Selected agencies have reported saving hundreds 
of millions of dollars to date from using these innovative mechanisms. 
Page: 186. 

Mission: Health; 

Area Identified: 25. Medicare Prepayment Controls: More widespread use 
of prepayment edits could reduce improper payments and achieve other 
cost savings for the Medicare program, as well as provide more 
consistent coverage nationwide. 
Page: 195. 

Area Identified: 26. Medicaid Supplemental Payments: To improve the 
transparency of and accountability for certain high-risk Medicaid 
payments that annually total tens of billions of dollars, Congress 
should consider requiring the Centers for Medicare & Medicaid Services 
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, which could lead to cost savings. GAO’s analysis of 
providers for which data are available suggests that savings could be 
in the hundreds of millions, or billions, of dollars. 
Page: 200. 

Area Identified: 27. Medicare Advantage Quality Bonus Payment 
Demonstration: Rather than implementing the Medicare Advantage quality 
bonus payment program specifically established by law, the Centers for 
Medicare & Medicaid Services is testing an alternative bonus payment 
structure under a broad demonstration authority through a 3-year 
demonstration that has design flaws, raises legal concerns, and is 
estimated to cost over $8 billion; about $2 billion could be saved if 
it were canceled for its last year, 2014.
Page: 205. 

Mission: Homeland security/law enforcement; 

Area Identified: 28. Checked Baggage Screening: 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.
Page: 210. 

Mission: Information technology; 

Area Identified: 29. Cloud Computing: Better planning of cloud-based 
computing solutions provides an opportunity for potential savings of 
millions of dollars. 
Page: 217. 

Area Identified: 30. Information Technology Operations and 
Maintenance: Strengthening oversight of key federal agencies’ major 
information technology investments in operations and maintenance 
provides opportunity for savings on billions in information technology 
investments. 
Page: 222. 

Mission: International affairs; 

Area Identified: 31. Tobacco Taxes: Federal revenue losses were as 
much as $615 million to $1.1 billion between April 2009 and 2011 
because manufacturers and consumers substituted higher-taxed smoking 
tobacco products with similar lower-taxed products. To address future 
revenue losses, Congress should consider modifying tobacco tax rates 
to eliminate significant tax differentials between similar products.
Page: 227. 

[End of table] 

Table 3: Appendixes: 

Appendix I: List of Congressional Addressees; 
Page: 232. 

Appendix II: Objectives, Scope, and Methodology; 
Page: 233. 

Appendix III: Areas Identified in 2011-2013 Annual Reports, by 
Mission; Page: 239. 

Appendix IV: Lists of Programs Identified; 
Page: 251. 

[End of table] 

[End of section] 

Section I: Areas in Which GAO Has Identified Fragmentation, Overlap, 
or Duplication: 

This section presents 17 areas in which we found evidence of
fragmentation, overlap, or duplication among federal government
programs. 

Agriculture: 

1. Catfish Inspection: 

Repealing provisions of the 2008 Farm Bill that assigned U.S. 
Department of Agriculture's Food Safety and Inspection Service 
responsibility for examining and inspecting catfish and for creating a 
catfish inspection program would avoid duplication of federal programs 
and save taxpayers millions of dollars annually without affecting the 
safety of catfish intended for human consumption. 

Why This Area Is Important: 

The U.S. food safety system is characterized by inconsistent oversight, 
ineffective coordination, and inefficient use of resources; these 
characteristics have placed the system on GAO's high-risk list. 
Assigning responsibility for examining and inspecting domestic and 
imported catfish to the Food Safety and Inspection Service (FSIS) adds 
to the potential for the ineffective coordination and inefficient use 
of resources in food safety. Specifically, giving the U.S. Department 
of Agriculture (USDA) such authority would introduce duplication into 
the already fragmented U.S. food safety system. Historically, FSIS has 
been responsible for meat, poultry, and processed egg products, and the 
Department of Health and Human Service's Food and Drug Administration 
(FDA) is responsible for all other food, including seafood. Moreover, 
the National Oceanic and Atmospheric Administration's National Marine 
Fisheries Service, through its fee-for-service inspection program, 
assesses seafood processors' compliance with federal food safety 
regulations. 

What GAO Found: 

The Food, Conservation, and Energy Act of 2008 (the 2008 Farm Bill) 
assigned regulatory responsibility for catfish inspection to USDA once 
the agency issues final regulations for the catfish inspection program. 
As GAO reported in May 2012, should USDA begin the catfish inspection 
program as mandated in the 2008 Farm Bill, the program would duplicate 
work already being conducted by FDA, and by the National Marine 
Fisheries Service, which provides fee-for-service inspections of 
seafood for industry. 

Under FSIS's proposed program, processers would implement written 
sanitation and hazard control plans; FSIS would conduct continuous 
inspections of domestic catfish processing; and for imported catfish--
which equal about 3 percent of all seafood imports--foreign countries 
would need to demonstrate equivalence to U.S. standards. According to 
FSIS's estimate, the annual cost to the federal government to implement 
this program would be about $14 million dollars. We did not 
independently audit FSIS's estimate, but we observed some limitations 
with FSIS's cost data and assumptions that would affect the final 
accuracy of the agency's estimate. 

If FSIS's proposed program were implemented, GAO expects it would cause 
duplication and inefficient use of resources in several key areas. 
First, the program would require implementation of hazard analysis 
plans that are essentially the same as FDA's hazard analysis 
requirements. For example, both agencies' programs would require 
industry participants to identify hazards that are reasonably likely to 
occur; identify a point, step, or procedure in the production process 
where controls can be applied to deal with the hazard; establish 
corrective action plans; and establish record-keeping and documentation 
procedures, among other things. Second, if the program is implemented, 
as many as three agencies--FDA, FSIS, and the National Marine Fisheries 
Service--could inspect facilities that process both catfish and other 
types of seafood. Both FDA and National Marine Fisheries Service 
officials stated that continuous inspection will not improve catfish 
safety and, according to FDA officials, is counter to the use of FDA's 
hazard analysis requirements, in which systems are most efficiently 
monitored periodically rather than daily. Third, the FDA Food Safety 
Modernization Act, enacted in January 2011, gives FDA authority to 
establish a system to recognize accreditation bodies to accredit third-
party auditors, including foreign governments, to conduct food safety 
audits to determine compliance with the Federal Food, Drug, and 
Cosmetic Act, and to certify that foreign seafood processors and 
imported seafood meet FDA regulatory requirements. FDA officials stated 
that this new authority complements FDA's existing authority to obtain 
assurances about the safety of seafood exports from countries with food 
safety systems FDA determined are comparable to those of the United 
States. With its new authority under the FDA Food Safety Modernization 
Act, FDA has an opportunity to enhance the safety of all imported 
seafood--including catfish--and to avoid the duplication of effort and 
cost that would result from FSIS's implementation of its proposed 
program. 

Actions Needed and Potential Financial or Other Benefits: 

With FDA's new authority under the FDA Food Safety Modernization Act, 
the federal government has an opportunity to enhance the effectiveness 
of the food safety system of all imported seafood, including catfish, 
and avoid the duplication of effort and costs that would result from 
FSIS's implementation of its proposed catfish inspection program. GAO 
recommended in May 2012 that Congress may wish to consider: 

* repealing provisions of the 2008 Farm Bill assigning USDA 
responsibility for examining and inspecting catfish and for creating a 
catfish inspection program. 

Doing so could save U.S. taxpayers about $14 million dollars annually, 
according to FSIS estimates of the program's cost. 

Agency Comments and GAO's Evaluation: 

In commenting on the May 2012 report on which this analysis is based, 
USDA stated that it appreciated our work in planning, conducting, and 
issuing the report and added that it was committed to completing the 
rulemaking process on catfish inspection in a manner that was 
consistent with the 2008 Farm Bill provisions. 

GAO provided a draft of this report section to the Departments of 
Agriculture, Commerce, and Health and Human Services for review and 
comment. The Departments did not have any comments on this report 
section and the Department of Agriculture reiterated its commitment to 
completing the rulemaking process on catfish inspection. 

How GAO Conducted Its Work: 

The information contained in this analysis is based on findings from 
the product listed in the related GAO product section. To conduct this 
work, GAO reviewed FSIS's proposed catfish inspection program and 
related documents, including the risk assessment and impact analysis. 
In addition, GAO reviewed written public comments on the proposed 
regulations provided by industry and consumer groups. GAO interviewed 
officials from FSIS involved in the development of the proposed 
regulations and officials from FDA, the National Marine Fisheries 
Service, and other federal agencies, as well as representatives from 
industry and consumer advocacy groups. We reviewed the FDA Food Safety 
Modernization Act to identify the additional authorities to enhance the 
oversight of imported seafood this legislation granted FDA. We 
interviewed officials from FSIS, FDA, and the National Marine Fisheries 
Service to better understand FSIS's proposed program, its costs and 
benefits, and the similarities and differences between it and FDA and 
the National Marine Fisheries Service inspection programs. Table X in 
Appendix X lists the programs GAO identified that might have similar or 
overlapping objectives, provide similar services, or be fragmented 
across government missions. Overlap and fragmentation might not 
necessarily lead to actual duplication, and some degree of overlap and 
duplication may be justified. 

Related GAO Product: 

Seafood Safety: Responsibility for Inspecting Catfish Should Not Be 
Assigned to USDA. [hyperlink, http://www.gao.gov/products/GAO-12-411]. 
Washington, D.C.: May 10, 2012. 

Contact Information: 

For additional information about this area, contact J. Alfredo Gomez at 
(202) 512-3841 or gomezj@gao.gov. 

[End of Catfish Inspection] 

Defense: 

2. Combat Uniforms: 

The Department of Defense's fragmented approach to developing and 
acquiring uniforms could be more efficient, better protect service 
members, and result in up to $82 million in savings in development and 
acquisition cost savings through increased collaboration among the 
military services. 

Why This Area Is Important: 

Since 2002, the military services went from using two camouflage 
patterns--a four-color woodland pattern, known as the Battle Dress 
Uniform, developed in 1981, and a three-color desert pattern, known as 
the Desert Camouflage Uniform, developed in early 1990--to seven 
service-specific camouflage uniforms with varying patterns and colors. 
In recent years, the services spent about half of a billion dollars to 
procure camouflage uniforms. In addition, the Army is developing new 
combat uniform options and associated protective gear, such as 
camouflage body armor and helmets, which officials estimate may cost up 
to $4 billion to procure over 5 years. The following figure provides 
additional information on camouflage uniforms developed by the military 
services since 2002. 

Figure 1: Services' Camouflage Uniforms, Dates of Initiation and 
Fielding, and Development Costs, 2000 through 2012: 

[Refer to PDF for image: time line] 

Marine Corps Combat Utility Uniform (MCCUU): 
Marine Corps; 
* Initiated: April 2000; 
* Fielded: June 2002; 
* Development cost: $319,000. 

Army Combat Uniform (ACU): 
Army: 
* Initiated: January 2003; 
* Fielded: February 2005; 
* Development cost: $3.2 million. 

Airman Battle Uniform (ABU): 
Air Force: 
* Initiated: October 2002; 
* Fielded: January 2007; 
* Development cost: $3.1 million. 

Operation Enduring Freedom Camouflage Pattern (OCP); 
Army; 
* Initiated: September 2009; 
* Fielded: July 2010; 
* Development cost: $3.4 million. 

Army Camouflage Study: 
Army; 
* Initiated: February 2010; 
* Fielded: Currently under development; 
* Development cost through 2011: $2 million. 

Source: DOD. 

[End of figure] 

A provision in the National Defense Authorization Act for Fiscal Year 
2010 required the Secretaries of the military departments to establish 
joint criteria for future ground combat uniforms that ensure that new 
technologies, advanced materials, and other advances in ground combat 
uniform design may be shared between the military services and are not 
precluded from being adapted for use by any military service due to 
service-unique proprietary arrangements.[Footnote 1],[Footnote 2] The 
Secretaries of the military departments were to establish the joint 
criteria by February 22, 2011.[Footnote 3] Also, in June 2010, the 
Senate Committee on Armed Services directed the Secretary of Defense to 
report by August 2010 on the steps that the Department of Defense (DOD) 
had taken and planned to take to implement the requirement for joint 
criteria, including the steps the Secretaries of the military 
departments took or would take--in conjunction with the Joint Staff and 
combatant commands--to update their ground combat uniform standards and 
develop operational performance criteria for camouflage, among other 
information.[Footnote 4] 

DOD established the Joint Clothing and Textiles Governance Board (the 
Board) to ensure collaboration and DOD-wide integration of clothing and 
textile activities, such as uniforms.[Footnote 5] The Board is the 
forum the military departments are using to establish joint criteria 
for the performance of camouflage uniforms. The Board and its working 
group include representatives from the Office of the Secretary of 
Defense, the Joint Staff, and all of the military services. The 
Director of the Defense Logistics Agency is responsible for chairing 
the governance board. In addition, under DOD's instruction on clothing 
and textile management, the Under Secretary of Defense (Acquisition, 
Technology, and Logistics) is responsible for the development of DOD 
policy and implementing guidance on all matters relating to the 
clothing and textiles supply chain.[Footnote 6] 

What GAO Found: 

In a September 2012 report, GAO found that the military services employ 
a fragmented approach for acquiring combat uniforms. DOD and the 
services have not collaborated to establish joint criteria for ground 
combat uniforms. Further, DOD has not taken steps to ensure equivalent 
levels of uniform performance and protection for service members 
conducting joint military operations in different uniforms, potentially 
exposing them to increased risk on the battlefield.[Footnote 7] 
Moreover, the services have not pursued partnership opportunities to 
reduce uniform-related costs. As a result of DOD's fragmented approach, 
military personnel could be exposed to increased risk on the 
battlefield and DOD may lose opportunities to save millions of 
development and acquisition dollars. 

First, DOD has not yet established joint criteria for ground combat 
uniforms. DOD issued a report in February 2012, in response to the June 
2010 Senate Armed Services Committee direction, on the steps it planned 
to take to establish joint criteria for ground combat uniforms; 
[Footnote 8] however, DOD has not yet met the statutory requirement to 
establish such criteria. According to governance board officials, a 
working group of the Joint Clothing and Textiles Governance Board met 
in 2010 to begin discussions on the joint criteria. However, according 
to members of the governance board, the group's leadership did not 
meet the February 2011 deadline for issuing joint criteria because 
members of the working group were unable to obtain consensus and faced 
competing demands from logistics efficiency initiatives. During GAO's 
review, governance board officials said that they planned to convene a 
new working group and complete the joint criteria by December 2012. In 
its February 2012 report to congressional committees, DOD acknowledged 
that it could do more to promote and enhance interservice 
collaboration and coordination with the Defense Logistics Agency. As 
of December 2012, DOD estimates it will complete the development of 
the joint criteria by March 2013. Without joint criteria on the 
performance of uniforms, one or more services may develop uniforms 
without knowing whether they include the newest technology, the newest 
materials or designs, and meet an acceptable joint level of 
performance. 

Second, DOD does not have a policy to ensure that the services' 
fragmented uniform programs comply with statutory policy to provide 
service members equivalent levels of performance and protection 
commensurate with their respective assigned combat missions and 
minimize the risk to individuals operating in joint combat 
environments, to the maximum extent practicable.[Footnote 9] As a 
result, service members wearing uniforms consisting of different 
camouflage together in the same joint environment may be exposed to 
different levels of risk. For example, some Navy units, such as 
construction and intelligence units, were issued woodland uniforms to 
wear in desert environments, while other personnel in the same types of 
locations were dressed in desert camouflage. Although the Navy stated 
in a 2009 administrative message that its Type II desert and Type III 
woodland uniforms would increase the probability of mission success and 
survivability in combat and irregular warfare operations, the Navy 
indicated that only Naval Special Warfare personnel and sailors 
assigned to or directly supporting Naval Special Warfare units would be 
authorized to wear the Type II desert uniform, increasing the risk of 
some personnel standing out in the joint operating environment. 
[Footnote 10] Conversely, in September 2010, Air Force Central Command 
decided to enhance the level of protection for its personnel serving 
in Afghanistan by directing personnel to wear the Army's Operation 
Enduring Freedom Camouflage Pattern uniform, where available, rather 
than the Air Force's existing Airman Battle Uniform. Without a 
departmentwide policy to ensure that services develop and field 
uniforms with equivalent performance and protection, the services 
could fall short of offering equivalent protection for all service 
members. 

Finally, the services' fragmented approach to developing camouflage 
uniforms has resulted in numerous inventories of similar uniforms at 
increased cost to the supply chain, but the services have not taken 
advantage of opportunities to reduce costs through partnering on 
inventory management or by collaborating to achieve greater 
standardization among their various camouflage uniforms. Under DOD's 
supply chain regulation on materiel management, DOD components are 
encouraged, but not required, to standardize basic materials and 
accessories and to standardize uniforms and other clothing items when 
possible to reduce costs.[Footnote 11] When the military services 
introduce a new item, the Defense Logistics Agency imposes an initial 
inventory fee if the cost of the new item is 10 percent greater than 
the cost of the item being replaced and if the item is introduced into 
inventory by only one DOD component. However, to encourage the services 
to reduce costs by standardizing materials and eliminate fragmentation 
and potential duplication, according to officials, the Defense 
Logistics Agency will waive the initial inventory fee if two or more 
services agree to jointly introduce an item into their inventories. 
[Footnote 12] Although the Defense Logistics Agency could waive 
inventory fees for joint introductions of uniforms, according to 
Defense Logistics Agency officials, none of the services has partnered 
on combat uniforms since they began separately replacing the woodland 
Battle Dress Uniform and the Desert Camouflage Uniform in 2002. 

The military services have opportunities to potentially save tens of 
millions of dollars in initial inventory fees by partnering with 
another service in the introduction of new uniforms. First, the Army 
has estimated that it could avoid initial inventory fees of as much as 
$82 million by partnering with another service or services. Air Force 
officials stated that they are considering using the Army's new 
uniforms if they meet the Air Force's needs. However, GAO found that, 
as of January 2013, Air Force officials had not reached an agreement 
with the Army on the joint use of a single uniform. Second, the Navy, 
as part of its acquisition planning in the spring of 2011, estimated 
potential cost savings of about $6 million in initial inventory fees if 
it partnered with another service in the introduction of its Type II 
desert and Type III woodland uniforms. In March 2011, the Coast Guard 
requested approval from the Navy, Naval Special Warfare Command, and 
U.S. Special Operations Command to use the camouflage uniforms for 
maritime, counterterrorism, and security missions. However, Navy 
officials decided to introduce the uniform before establishing a formal 
partnership with the Coast Guard. As a result, the Navy incurred $6 
million in inventory fees, thereby increasing the overall cost of the 
uniforms. In the absence of DOD requirements that the services 
collaborate to standardize the development and introduction of 
camouflage uniforms, the services may continue to miss opportunities to 
increase efficiencies and forego millions of dollars in cost savings, 
in addition to possibly duplicating the uniform development efforts of 
other services. 

Actions Needed and Potential Financial or Other Benefits: 

GAO recommended in September 2012 that the Secretary of Defense should 
take the following three actions: 

* direct the Secretaries of the military departments to identify and 
implement actions necessary to enable the Joint Clothing and Textiles 
Governance Board to develop and issue joint criteria for uniforms prior 
to the development or acquisition of any new camouflage uniform; 

* direct the Under Secretary of Defense (Acquisition, Technology, and 
Logistics) to develop a policy to ensure that future service-specific 
uniforms provide equivalent levels of performance and protection and 
minimize risk to service members operating in the joint battle space; 
and: 

* direct the Secretaries of the military departments to actively pursue 
partnerships for the joint development and use of uniforms to minimize 
fragmentation in the development of uniforms and to seek to reduce 
inventory and overall procurement costs. 

By taking these three actions, the Office of the Secretary of Defense 
and the Secretaries of the military departments could facilitate the 
department's ability to meet the statutory requirement to develop and 
issue joint criteria for uniforms, facilitate DOD's actions to better 
ensure that service members operating in joint combat environments are 
not exposed to unnecessary risks, and take advantage of potential 
efficiencies and tens of millions of dollars in cost savings each time 
one of the services introduces a new uniform. 

Agency Comments and GAO's Evaluation: 

In commenting on the September 2012 report on which this analysis is 
based, DOD agreed with GAO's recommendations. DOD stated that draft 
joint criteria for camouflage uniforms have been developed and are 
going through the DOD approval process, which DOD estimated will be 
completed by March 2013. DOD also said that the Under Secretary of 
Defense (Acquisition, Technology, and Logistics) will disseminate 
policy guidance to the military departments that will include direction 
for using joint criteria and ensuring equivalent levels of performance 
and protection by the 3rd quarter of fiscal year 2013. Finally, DOD 
stated that it will use the Joint Clothing and Textiles Governance 
Board and the Cross-Service Warfighter Equipment Board to provide 
additional oversight and further pursue active partnerships for joint 
development and use of uniforms. 

GAO provided a draft of this report section to DOD for review and 
comment. In an email received on January 25, 2013, the Deputy Assistant 
Secretary of Defense for Supply Chain Integration reiterated the 
department's September 2012 comments. DOD plans to provide joint 
criteria and policy guidance for camouflage uniforms to the military 
departments by March 2013 and plans to use the Joint Clothing and 
Textiles Governance Board and Cross-Service Warfighter Equipment Board 
to provide additional oversight and further pursue active partnerships 
for joint development and use of uniforms. 

How GAO Conducted Its Work: 

The information contained in this analysis is based on findings from 
products listed in the related GAO products section. For that work, we 
analyzed requirements and policies found in DOD guidance and in the 
National Defense Authorization Act for Fiscal Year 2010. We also 
analyzed data on DOD's combat uniform development activities from 2010 
to 2012 and interviewed officials from the military services and 
members of the Joint Clothing and Textiles Governance Board to 
determine if the services had established criteria for camouflage 
uniforms using a joint approach and met the statutory policy permitting 
future uniforms to uniquely reflect the identity of the individual 
services, as long as they provide service members equivalent levels of 
performance and protection, among other benefits, to the maximum extent 
practicable. Finally, we reviewed guidance and interviewed officials 
with the Defense Logistics Agency, Troop Support Office, to assess how 
they encourage the services to jointly reduce development and 
acquisition costs. 

Related GAO Products: 

Warfighter Support: DOD Should Improve Development of Camouflage 
Uniforms and Enhance Collaboration Among the Services. [hyperlink, 
http://www.gao.gov/products/GAO-12-707]. Washington, D.C.: September 
28, 2012. 

Military Uniforms: Issues Related to the Supply of Flame Resistant 
Fibers for the Production of Military Uniforms. [hyperlink, 
http://www.gao.gov/products/GAO-11-682R]. Washington, D.C.: June 30, 
2011. 

Warfighter Support: Observations on DOD's Ground Combat Uniforms. 
[hyperlink, http://www.gao.gov/products/GAO-10-669R]. Washington, 
D.C.: May 28, 2010. 

Contact Information: 

For additional information about this area, contact Cary B. Russell at 
202-512-5431 or email russellc@gao.gov. 

Footnotes: 

[1] The military departments are the Department of the Air Force, 
Department of the Army, and the Department of the Navy. The military 
services are organized within the military departments: the Army within 
the Department of the Army, the Air Force within the Department of the 
Air Force, and the Navy and Marine Corps within the Department of the 
Navy. 

[2] See National Defense Authorization Act for Fiscal Year 2010, Pub. 
L. No. 111-84, § 352 (d), 123 Stat. 2190, 2263 (2009) (10 U.S.C. § 771 
note prec.). 

[3] See id. The provision required the establishment of joint criteria 
no later than 270 days from the date of our report on ground combat 
uniforms required by section 352(c). We fulfilled the requirement with 
a report submitted to the congressional defense committees on April 26, 
2010, but the report was published on May 28, 2010, as GAO-10-669R. 

[4] See S. Rep. No. 111-201, at 117 (2010) (accompanying S. 3454, a 
proposed bill for the National Defense Authorization Act for Fiscal 
Year 2011). 

[5] DOD directed the establishment of the Joint Clothing and Textiles 
Governance Board in 2008. See DOD Instruction 4140.63, Management of 
DOD Clothing and Textiles (Class II), encl. 2, para. 3(a) (Aug. 5, 
2008). 

[6] The DOD Supply Chain includes the government and private-sector 
organizations, processes, and systems that play a role in planning, 
acquiring, maintaining, and delivering materiel resources to the 
warfighter. 

[7] DOD and the Joint Staff have described the modern-day battlefield 
as a place with no clearly defined front lines or safer rear area where 
combat support operations are performed. 

[8] DOD, Report on Requirements for Standard Ground Combat Uniforms 
(Washington, D.C.: February 2012). 

[9] A provision in the National Defense Authorization Act for Fiscal 
Year 2010 established policy permitting the design and fielding of 
service-unique ground combat uniforms, as long as the uniforms, to the 
maximum extent practicable, provided these and other benefits. See Pub. 
L. No. 111-84, § 352(a), 123 Stat. at 2262-63. 

[10] See Chief of Naval Operations, NAVADMIN 374-09, Navy Working 
Uniform Type II and III (Dec. 29, 2009). This guidance was later 
updated to cover Coast Guard personnel assigned to or directly 
supporting Naval Special Warfare units. See Chief of Naval Operations, 
NAVADMIN 259-11, Navy Working Uniform Type I, II and III, Camouflage 
Utility Uniforms (Aug. 30, 2011). 

[11] See Department of Defense Regulation 4140.1-R, DOD Supply Chain 
Materiel Management Regulation, chapter 8 (May 23, 2003). 

[12] The inventory fee covers the cost of acquiring initial inventory, 
and according to Defense Logistics Agency officials it includes the 
first 4 months of inventory, a 3-month safety level, and the cost of 
the remaining uniforms in inventory being replaced. 

[End of Combat Uniforms area] 

3. Defense Foreign Language Support Contracts: 

The Department of Defense should explore opportunities to gain 
additional efficiencies in contracts for foreign language support, 
which is estimated to cost more than $1 billion annually, by 
addressing fragmentation in the department's acquisition approach. 

Why This Area Is Important: 

In recent years, the Department of Defense (DOD) has invested billions 
of dollars to provide foreign language support to U.S. military 
personnel.[Footnote 1] Specifically, DOD obligated over $6.8 billion 
from fiscal years 2008 through 2012 on contracts to acquire a variety 
of foreign language support needed to carry out diverse missions and 
operations both within and outside of the United States. These 
contracts provide services that allow U.S. military personnel to 
communicate and interact with multinational partners, security forces, 
and local indigenous populations. DOD has recognized these abilities 
are critical factors to mission success, particularly in light of 
recent operational experiences in Afghanistan and Iraq. Changes to the 
size and location of DOD's forward-stationed or deployed military 
forces and a renewed emphasis on developing partnerships, particularly 
in the Asia-Pacific region and Africa, indicate that DOD will likely 
continue its investments in foreign language support contracts for the 
foreseeable future.[Footnote 2] 

Since 2009, GAO has identified a number of management challenges that 
DOD faces in providing foreign language and cultural awareness 
training to U.S. military personnel. For example, in May 2011, GAO 
reported that DOD lacked an approach to integrate department-wide 
training efforts, which contributed to some fragmentation and 
inefficiency in identifying requirements for language and cultural 
awareness training for ongoing operations. Moreover, in February 2012, 
GAO identified overlapping and potentially duplicative foreign 
language and culture training products that were either developed or 
contracted for by the military services. DOD's considerable investment 
in contracts for foreign language support both now and in the future, 
as well as the challenges GAO identified in prior work, suggests that 
additional opportunities may exist for DOD to gain efficiencies in its 
contracting approach. 

What GAO Found: 

DOD contracts for a broad range of foreign language support and has 
taken some steps to centralize its contracting efforts to increase 
collaboration among the DOD components, gain efficiencies, and control 
spending; however, the scope of these efforts has been limited to only 
certain types of services, and DOD has not explored whether additional 
opportunities exist to gain efficiencies across a broader range of 
foreign language-related services and products. As a result, DOD's 
acquisition approach remains uncoordinated and fragmented. As GAO 
reported in February 2013, DOD sought to centralize and standardize 
contracting efforts for foreign language support across the department 
by designating the Army as an executive agent to manage contracting in 
this area. While the executive agent's responsibility generally 
extends to all foreign language support contracts, under certain 
circumstances, DOD components can contract independently for foreign 
language support. For example, under DOD policy, certain types of 
contracts are exempt, such as personal services contracts established 
by in-theater and intelligence organizations.[Footnote 3] In addition, 
exemptions for other types of contracts may be established by 
memorandum of agreement between the contracting entity and the 
executive agent.[Footnote 4] 

GAO found that the executive agent in performing its responsibilities 
has focused its efforts solely on arranging for contracts to acquire 
translation and interpretation services for contingency operations 
because of the rapidly increasing requirements for these 
services.[Footnote 5] For these types of services, DOD components 
submit their requirements to the executive agent, which then validates 
the need and oversees contracts for the desired services. From fiscal 
years 2008 through 2012, the Army, as executive agent, obligated about 
$5.2 billion on contracts to provide components with translation and 
interpretation services for contingency operations. During the same 
time period, GAO reported that multiple DOD components contracted for 
foreign language support outside of the executive agent's contracts, 
resulting in an uncoordinated and fragmented approach. Specifically, 
to support the needs of contingency operations, predeployment 
training, and day-to-day military activities, 159 contracting 
organizations in 10 different DOD components obligated approximately 
$1.2 billion on contracts for foreign language support outside of 
those managed by the executive agent for translation and 
interpretation services for contingency operations.[Footnote 6] These 
organizations can have contracts that involve either one or more of 
the following foreign language support services. For example, 

* 30 organizations obligated approximately $955 million on contracts 
for foreign language and culture-enabled role players, 

* 93 organizations obligated approximately $25.4 million on contracts 
for foreign language interpretation or translation services for 
missions and activities other than contingency operations, 

* 24 organizations obligated approximately $2.1 million on contracts 
to provide language training for military personnel, and: 

* 65 organizations obligated approximately $180.5 million on contracts 
that provided a combination of services. 

DOD's efforts to centralize contracting for certain foreign language 
support services under an executive agent has resulted in some 
efficiencies, but DOD has not taken steps to comprehensively assess 
whether additional opportunities exist to gain efficiencies and reduce 
fragmentation across a broader range of foreign language support 
services. For example, executive agent officials stated that by 
establishing a standardized process for department-wide contracts in 
the area of translation and interpretation services in support of 
contingency operations, the executive agent was able to build upon 
department-wide efforts to improve the security clearance process and 
reduce the amount of time it took to complete the security clearance 
vetting process for potential contract interpreter/translators from 
about 4 months to 6 weeks. However, DOD has not analyzed requirements 
and costs in foreign language support spending in other areas, such as 
foreign language-enabled role players, to determine whether any 
additional foreign language-related services warrant collaboration in 
joint rather than fragmented contracting. Best practices for service 
acquisition suggest that DOD's acquisition approach should provide for 
an agency-wide view of service contract spending and promote 
collaboration to leverage buying power across multiple organizations. 
Implementing such an approach requires an analysis of where an 
organization is spending its money, which should be the starting point 
for gaining knowledge that can assist agencies in determining what 
products and services warrant a more coordinated acquisition approach. 
[Footnote 7] Executive agent officials noted that their management 
efforts were focused on contracts specifically for foreign language 
translation and interpretation services associated with contingencies 
because of the escalating costs to provide these services for ongoing 
military operations. However, they agreed that a better understanding 
of the department's spending on contracts for a broader spectrum of 
foreign language support services could better inform areas where the 
executive agent could focus its management efforts. 

Actions Needed and Potential Financial or Other Benefits: 

DOD has taken steps to centralize contracting for foreign language 
translation and interpretation services for contingency operations to 
increase collaboration and gain efficiencies, but its acquisition 
approach for other types of foreign language support services remains 
fragmented across multiple DOD components. Without a more complete 
understanding of where the department is spending resources on foreign 
language support contracts, DOD has not had the information it needs 
to make informed decisions about the types of services that could be 
managed by the executive agent or provide reasonable assurance that it 
is fully leveraging its buying power for foreign language support 
services. As a result, GAO recommended in February 2013 that the 
Secretary of Defense should take the following action: 

* Direct the Under Secretary of Defense for Personnel and Readiness to 
conduct an assessment of its current approach for managing foreign 
language support contracts. At a minimum, such an assessment should 
include (1) an analysis of spending for other types of foreign 
language support services and products that have been acquired by the 
DOD components outside of the executive agent, and (2) based on the 
results of this analysis, a reevaluation of the scope of the executive 
agent's efforts to manage foreign language support contracts to 
determine if any adjustments are needed. 

Because multiple DOD components have contracted independently for 
other foreign language support outside of the executive agent's 
contracts in various ways and cost information is not collected in a 
centralized manner, determining definitive cost savings in this area 
is challenging. GAO was able to determine that DOD components have 
obligated at least a billion dollars since fiscal year 2008 to acquire 
foreign language support outside of the executive agent's contracts. 
GAO's prior work has found that agencies, including DOD, reported 
savings ranging between 5 and 20 percent when strategic sourcing 
contracts were used by implementing more coordinated acquisition 
approaches rather than fragmented contracting. Therefore, on the basis 
of the level of investment that DOD is making in foreign language 
support contracts, it appears that DOD has viable opportunities to 
achieve significant cost savings if it increases its visibility of 
spending across a broader spectrum of services and products by 
implementing the action outlined above. 

Agency Comments and GAO's Evaluation: 

In commenting on the February 2013 report on which this analysis is 
based, DOD agreed with our recommendation and stated that the Defense 
Language and National Security Education Office will lead the 
assessment for the Office of the Under Secretary of Defense for 
Personnel and Readiness. DOD stated the target date for completion of 
this effort is June 2015. 

DOD also stated that requirements for foreign language capability are 
in constant flux and that the department is challenged to meet ad hoc 
and surge requirements, primarily because it takes years to develop 
organic capacity for these capabilities. DOD noted that it turns to 
contractors to help meet these ad hoc and surge requirements. DOD 
stated that GAO's February 2013 report employed a broader definition 
of "foreign language support" than understood between the Office of 
the Secretary of Defense and the Army G-2 when establishing their 
contracts for foreign language support under the executive agent 
relationship. DOD noted that under its definition, language training, 
cultural training, cultural advisors, cultural subject matter experts, 
and cultural role players would not fall under the current contract 
foreign language support executive agent or be subject to the same 
foreign language support contracts. 

GAO agreed with DOD's characterization of the definition of the term 
"foreign language support" used in the report. As stated in the 
report, DOD had not defined foreign language support as a specific set 
of products and services. Therefore, GAO used a broader definition to 
reflect the range of services and products that were identified and 
considered by DOD officials to be foreign language support. The report 
also reflected DOD's point that the executive agent chose to focus its 
efforts solely on arranging for contracts to acquire translation and 
interpretation services for contingency operations because of the 
rapidly increasing requirements for these services. The report further 
noted that because there is a significant amount of spending for other 
types of foreign language-related services and products outside of the 
executive agent's contract, DOD may be able to gain additional 
efficiencies if it assesses its spending across a broader range of 
foreign language-related contracting activity. GAO also recognized 
that other foreign language-related services may involve other 
variables, such as different sets of skills, which DOD would need to 
take into account as it reassesses its current approach. 

GAO provided a draft of this report section to DOD for review and 
comment. DOD provided no additional comments. However, in light of the 
continued budgetary challenges facing DOD and the federal government, 
GAO urges DOD to consider taking action sooner than its stated target 
date of June 2015. DOD also provided technical comments, which were 
incorporated where appropriate. 

How GAO Conducted Its Work: 

The information in this analysis is based on findings from the 
products listed in the related GAO products section. GAO reviewed 
DOD's acquisition approach for foreign language support contracts, 
including all DOD organizations that had contracted for foreign 
language support from fiscal year 2008 through fiscal year 2012, and 
assessed the department's management effort to establish an executive 
agent for foreign language support. GAO obtained and estimated 
contract obligations on DOD contracts for foreign language-related 
services and products for fiscal years 2008 through 2012. In addition, 
GAO interviewed relevant DOD and military service officials. Table X 
in appendix X lists the contracting organizations GAO identified that 
might have similar or overlapping objectives, provide similar 
services, or be fragmented across government missions. Overlap and 
fragmentation might not necessarily lead to actual duplication, and 
some degree of overlap and duplication may be justified. 

Related GAO Products: 

Defense Contracting: Actions Needed to Explore Additional 
Opportunities to Gain Efficiencies in Acquiring Foreign Language 
Support. [hyperlink, http://www.gao.gov/products/GAO-13-251R]. 
Washington. D.C.: February 25, 2013. 

Annual Report: Opportunities to Reduce Duplication, Overlap and 
Fragmentation, Achieve Savings, and Enhance Revenue, [hyperlink, 
http://www.gao.gov/products/GAO-12-342SP]. Washington, D.C.: February 
28, 2012. 

Language and Culture Training: Opportunities Exist to Improve 
Visibility and Sustainment of Knowledge and Skills in Army and Marine 
Corps General Purpose Forces. [hyperlink, 
http://www.gao.gov/products/GAO-12-50]. Washington. D.C.: October 31, 
2011. 

Military Training: Actions Needed to Improve Planning and Coordination 
of Army and Marine Corps Language and Culture Training. [hyperlink, 
http://www.gao.gov/products/GAO-11-456]. Washington, D.C.: May 26, 
2011. 

Military Training: Continued Actions Needed to Guide DOD's Efforts to 
Improve Language Skills and Regional Proficiency. [hyperlink, 
http://www.gao.gov/products/GAO-10-879T]. Washington, D.C.: June 29, 
2010. 

Military Training: DOD Needs a Strategic Plan and Better Inventory and 
Requirements Data to Guide Development of Language Skills and Regional 
Proficiency. [hyperlink, http://www.gao.gov/products/GAO-09-568]. 
Washington, D.C.: June 19, 2009. 

Contact Information: 

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

Footnotes: 

[1] DOD has not defined "foreign language support" as a specific set 
of services or products; however, officials representing DOD 
components, which include the military services, combatant commands, 
and defense agencies, identified a range of services and products that 
they consider foreign language support, such as translation and 
interpretation services, the assistance of personnel who possess 
language skills and serve as role players, and foreign language 
instruction. Therefore, GAO uses "foreign language support" to refer 
to this range of services and products. 

[2] Department of Defense, Sustaining U.S. Global Leadership: 
Priorities For 21st Century Defense (Jan. 3, 2012). 

[3] A personal services contract is characterized by the employer-
employee relationship it creates between the government and the 
contractor's personnel. Federal Acquisition Regulation (FAR) § 37.104. 
These contracts, by their express terms or as administered, make the 
contractor personnel appear to be, in effect, government employees. 
FAR § 2.101. Personal services contracts are generally prohibited; 
however, personal services contracts that directly support the mission 
of a defense intelligence component, counterintelligence organization, 
or the Special Operations Command of DOD are authorized by statute. 10 
U.S.C § 129b(d). 

[4] Department of Defense Directive 5160.41E, Defense Language 
Program, (Oct. 21, 2005). 

[5] A contingency operation is a military operation that either (1) is 
designated by the Secretary of Defense as an operation in which 
members of the armed forces are or may become involved in military 
actions, operations, or hostilities against U.S. enemies or against an 
opposing military force or (2) results in the call or order to, or 
retention on, active duty of members of the uniformed services under 
certain statutory provisions or any other provision of law during a 
war or during a national emergency declared by the President or 
Congress. 10 U.S.C. § 101(a)(13). 

[6] The total obligation amount does not include $394 million in 
obligations for contracts that the executive agent considered exempted 
from its program. The number of contracting organizations does not add 
to 159 because several organizations had contracts for more than one 
type of foreign language support service as well as contracts to 
provide a combination of services. 

[7] GAO, Best Practices: Using Spend Analysis to Help Agencies Take a 
More Strategic Approach to Procurement, [hyperlink, 
http://www.gao.gov/products/GAO-04-870] (Washington, D.C.: Sept. 16, 
2004). 

[End of Defense Foreign Language Support Contracts area] 

Energy: 

4. Renewable Energy Initiatives: 

Federal support for wind and solar energy, biofuels, and other 
renewable energy sources, which has been estimated at several billion 
dollars per year, is fragmented because 23 agencies implemented 
hundreds of renewable energy initiatives in fiscal year 2010--the 
latest year for which GAO developed these original data. Further, the 
Departments of Energy and Agriculture could take additional actions--
to the extent possible within their statutory authority--to help 
ensure effective use of financial support from several wind 
initiatives, which GAO found provided duplicative support that may not 
have been needed in all cases for projects to be built. 

Why This Area Is Important: 

Americans' daily lives, as well as the economic productivity of the 
United States, depend on the availability of energy, the majority of 
which comes from fossil fuels, such as oil and coal. However, public 
concern over the nation's reliance on imported oil, volatile energy 
costs, and fossil fuels' emissions of greenhouse gases linked to 
global climate change have increased the focus on developing renewable 
energy resources to meet future energy needs. The Department of 
Energy's (DOE) Energy Information Administration projects that use of 
renewable energy to generate electricity and produce liquid fuels for 
transportation will continue to grow over the coming decades. One 
renewable energy source--wind energy--has been the fastest-growing 
source of U.S. electric power generation in recent years, increasing 
about 33 percent per year since 2001, according to the Energy 
Information Administration. In 2011, wind energy constituted 32 
percent of all new additions to U.S. electricity-generating capacity 
and contributed 3 percent of the nation's total electricity 
generation, the largest share of any renewable source other than 
hydroelectric power. 

Congress and some federal agencies have emphasized the importance of 
renewable energy as a means to address national concerns, including 
energy security, and have committed substantial federal resources to 
initiatives in this area. For example, the federal government 
subsidizes investment in certain types of renewable energy-related 
projects by providing tax credits or other types of favorable tax 
treatment (known as tax expenditures), to businesses and individuals 
for the production or consumption of renewable energy. The federal 
government is also uniquely positioned to affect the development of 
renewable energy resources through its land management and regulatory 
activities and as the single largest U.S. consumer of energy. 

Federal support for renewable energy increased significantly in recent 
years as a result of the provisions of the American Recovery and 
Reinvestment Act of 2009, as well as other factors, such as the 
priority placed on renewable energy by agencies' leadership or by the 
administration. There is no comprehensive database that tracks federal 
renewable energy spending across agencies for all types of activities. 
While available third-party estimates vary in the types of activities 
they include and the time periods they cover, these estimates indicate 
that the level of federal financial support for renewable energy has 
averaged several billion dollars per year over the past decade. For 
example, third-party estimates indicate that federal renewable energy 
spending over the 7-year period from 2002 through 2008 averaged about 
$4 billion per year and increased to almost $15 billion in fiscal year 
2010, in part because of additional spending through the American 
Recovery and Reinvestment Act of 2009. For wind energy specifically, 
the Energy Information Administration estimated that federal agencies 
provided nearly $5 billion in subsidies in fiscal year 2010 to support 
efforts to research, develop, and deploy wind energy technologies--
more than 75 percent of federal subsidies for all renewable sources of 
electricity. 

What GAO Found: 

GAO reported in February 2012 that 23 agencies and their 130 
subagencies implemented 679 renewable energy initiatives in fiscal 
year 2010.[Footnote 1] Four agencies--the Departments of Agriculture 
(USDA), Defense, Energy, and the Interior--implemented almost 60 
percent of the initiatives GAO identified, and the other 40 percent of 
initiatives were implemented by a wide array of agencies (see the 
figure below for more information on the agencies implementing 
renewable energy initiatives in fiscal year 2010). Federal support for 
renewable energy was fragmented across numerous initiatives 
implemented by a wide array of agencies in fiscal year 2010. While the 
extent to which this fragmentation is necessary remains unclear, the 
magnitude of federal renewable energy efforts may increase the 
likelihood that some of this fragmentation is, in fact, unnecessary. 

Figure 1: Number of Federal Renewable Energy-Related Initiatives by 
Agency, in Fiscal Year 2010: 

[Refer to PDF for image: vertical bar graph] 

Number of initiatives 

Agency: DOD; 
Number of initiatives: 116. 

Agency: USDA; 
Number of initiatives: 105. 

Agency: DOE; 
Number of initiatives: 92. 

Agency: Interior; 
Number of initiatives: 82. 

Agency: Commerce; 
Number of initiatives: 45. 

Agency: DOT; 
Number of initiatives: 36. 

Agency: Treasury; 
Number of initiatives: 31. 

Agency: USAID; 
Number of initiatives: 25. 

Agency: EPA; 
Number of initiatives: 22. 

Agency: State; 
Number of initiatives: 20. 

Agency: DHS; 
Number of initiatives: 18. 

Agency: Labor; 
Number of initiatives: 16. 

Agency: Justice; 
Number of initiatives: 14. 

Agency: HUD; 
Number of initiatives: 13. 

Agency: NASA; 
Number of initiatives: 12. 

Agency: GSA; 
Number of initiatives: 9. 

Agency: NSF; 
Number of initiatives: 9. 

Agency: FERC; 
Number of initiatives: 7. 

Agency: SBA; 
Number of initiatives: 7. 

Source: GAO analysis of agencies' data. 

Note: Data for the Department of Defense include data for five 
components--the Air Force, Army, Marine Corps, Navy, and other 
components that report to the Office of the Secretary of Defense. 

[End of figure] 

These initiatives supported a range of renewable energy sources--most 
commonly bioenergy, solar, and wind--and while many initiatives 
supported multiple sources and types of recipients, many others 
targeted support to one source or recipient type. Agencies' renewable 
energy efforts increased in recent years as a result of the provisions 
of the American Recovery and Reinvestment Act of 2009 and other 
factors. For example, GAO found that 157 initiatives--nearly 25 
percent of the renewable energy initiatives identified--were 
established, received additional funding, or were impacted in some 
other way by the American Recovery and Reinvestment Act of 2009. While 
the level of agencies' future renewable energy efforts is less certain 
with the expiration of these provisions, as well as the expiration of 
other authorities, in addition to depletion of available 
appropriations and continued budget constraints, agencies appear 
poised to continue to provide substantial support for renewable energy 
through those initiatives that are not scheduled to expire or whose 
funding has been renewed or is not tied to a specific appropriation. 
Although GAO examined characteristics, such as energy source and 
recipient type, for the nearly 700 renewable energy initiatives 
identified in its February 2012 report, GAO could not comprehensively 
assess the potential for overlap or duplication among the initiatives 
because existing agency information was not sufficiently complete to 
allow for such an assessment. 

In a March 2013 report on federal support for wind energy--the largest 
recipient of federal support for renewable sources of electricity--GAO 
found that nine agencies implemented 82 wind-related initiatives in 
fiscal year 2011. Of these 82 initiatives, GAO found that 20 percent 
supported wind energy alone or primarily, while 62 percent supported 
other renewable energy sources or other activities either primarily or 
equally with wind energy.[Footnote 2] The initiatives supported a 
range of wind issues, such as energy generation from land-based or 
offshore wind, or transmission of wind energy, as well as a variety of 
technology advancement activities from basic and applied research to 
deployment. Under these initiatives, agencies incurred obligations of 
about $2.9 billion and provided estimated tax subsidies totaling at 
least $1.1 billion for activities specifically related to wind in 
fiscal year 2011.[Footnote 3] 

GAO found that the 82 wind-related initiatives were fragmented across 
multiple agencies. Additionally, most of the 82 initiatives had 
overlapping characteristics, and several of them have provided 
duplicative financial support to deploy wind energy projects. 
Specifically, regarding fragmentation, nine agencies implemented 
initiatives that involved the same broad area of national need--
promoting or enabling wind energy development. Most initiatives, 68 of 
the 82 (83 percent), overlapped to some degree with at least 1 other 
initiative because, for example, they supported the same wind issues 
and technology advancement activities, and shared other key 
characteristics. Overlap did not necessarily lead to duplication of 
efforts because initiatives sometimes differed in meaningful ways--for 
instance, by targeting support to different types of recipients. 

In evaluating wind initiatives that provided financial support to 
deploy wind energy projects in fiscal year 2011, GAO identified seven 
initiatives that have provided duplicative support--financial support 
from multiple initiatives to the same recipient for a single project. 
[Footnote 4] These seven initiatives included tax expenditures, as 
well as grant, loan, and loan guarantee programs implemented by 
Treasury, DOE, or USDA.[Footnote 5] In many cases, wind project 
developers combined the support of more than one Treasury initiative 
and, in some cases, received additional support from smaller DOE or 
USDA grant or loan guarantee programs. For example, projects supported 
by Treasury's Section 1603 program also received support from DOE-or 
USDA-administered loan guarantees, as well as tax expenditure support. 
[Footnote 6] Wind projects may also receive financial support from 
state tax credits and grant and loan programs, as well as indirect 
support from state policies, most notably renewable portfolio 
standards.[Footnote 7] In addition, duplication of financial support 
among these initiatives may not be limited to wind projects because 
the initiatives also provided support to projects involving a range of 
other renewable energy sources.[Footnote 8] 

Although these initiatives have, in some cases, provided duplicative 
support, their support may address different needs of wind project 
developers or the communities their projects serve. For instance, 
according to DOE officials, in many cases, a DOE loan guarantee 
program provided financing for innovative projects that were seen as 
too risky to obtain affordable private financing. Without this 
support, developers might not have been able to advance these projects 
to the point, such as being placed in service or beginning to generate 
electricity, where they would be eligible to receive tax credits. In 
addition, there can be limits on the extent to which individual 
projects can receive support from multiple initiatives. For instance, 
provisions of the tax code prevent project developers from combining 
Treasury's Section 1603 program grants with Treasury's energy 
investment or energy production tax credits to support a specific wind 
project. In addition, for some grant, loan, and loan guarantee 
programs, USDA and DOE reduce the value of support provided or deny 
support altogether for applicants who receive funding from other 
initiatives. Despite these limits, the initiatives GAO identified that 
have provided duplicative support were combined in many cases to 
provide cumulative financial support worth about half of project costs 
for wind projects, according to financial professionals active in the 
wind energy industry. 

GAO also identified three other DOE or USDA initiatives that did not 
actually fund any wind projects in fiscal year 2011 but that could be 
combined with one or more other initiatives to provide duplicative 
support in the future based on the types of projects eligible for 
their support. For these initiatives, as well as those DOE or USDA 
initiatives that GAO found, in some cases, did provide duplicative 
support to wind projects in fiscal year 2011, GAO also found that DOE 
and USDA have discretion--to the extent allowed by their statutory 
authority--over the projects they support. This discretion allowed the 
agencies to allocate this support based on projects' ability to meet 
initiative goals, along with other criteria, such as financial and 
technical feasibility.[Footnote 9] For instance, DOE established 
initial screening criteria for projects under one of its loan 
guarantee programs, including that projects employ an innovative 
technology that is not commercially available and that projects be 
financially viable. To further evaluate projects that meet these 
initial screening criteria, DOE examines projects' potential 
contributions related to two program goals: expected reduction or 
avoidance of greenhouse gas emissions in relation to project costs, 
and support for clean energy jobs and manufacturing. Similarly, USDA 
allocates the support of its initiatives according to projects' 
ability to contribute to program goals, such as providing benefits for 
rural and other eligible communities, and other factors, such as 
technological feasibility and expected performance. 

DOE and USDA consider applicant need for their initiatives' support; 
however, the extent to which the agencies use assessments of 
applicants' need to determine the amount of support to provide under 
their initiatives is unclear because the agencies do not document such 
assessments. Specifically, according to agency officials and program 
guidance, DOE and USDA consider applicant need for the financial 
support of some initiatives. For example, the solicitation for 
applications under one of DOE's loan guarantee programs states that 
DOE will take an unfavorable view of projects that could be fully 
financed on a long-term basis by commercial banks or others without a 
federal loan guarantee. Similarly, USDA considers applicants' need for 
support from some of its initiatives, according to agency officials. 
While agency officials reported that they consider applicant need in 
some cases, the officials did not provide any documentation that 
indicated how information they collected or examined about applicant 
need influenced their decisions on whether to provide support, or how 
much support to provide, under their initiatives for specific 
projects. As a result, the extent to which applicant need influenced 
agency decisions is unclear. 

Moreover, whether initiatives' incremental support was always needed 
for wind projects to be built is also unclear.[Footnote 10] In 
particular, GAO's review of a briefing memorandum from White House 
staff, DOE documents, and other documentation related to two wind 
projects suggests that agencies' wind initiatives have, in some cases, 
supported projects that may have been built without their incremental 
support. In other cases, however, the incremental support provided by 
the initiatives may be necessary for wind projects to be built, 
according to agency officials and financial professionals active in 
the wind energy industry. Further, federal support in excess of what 
is needed to induce projects to be built could, instead, be used to 
induce other projects to be built or could simply be withheld, thereby 
reducing federal expenditures. 

Actions Needed and Potential Financial or Other Benefits: 

GAO recommended in its March 2013 report that, to support federal 
agencies' efforts to effectively allocate resources among wind 
projects, the Secretaries of Energy and Agriculture should take the 
following action: 

* to the extent possible within their statutory authority, formally 
assess and document whether the incremental financial support of their 
initiatives is needed in order for applicants' projects to be built, 
and take this information into account in determining whether, or how 
much, support to provide. In the event agencies lack discretion to 
consider this information in determining what financial support to 
provide, they may want to report this limitation to Congress. 

GAO could not estimate the potential financial benefits of preventing 
unnecessarily duplicative support for wind energy projects because the 
potential for unnecessary duplication is project-specific. Conducting 
the types of assessments GAO recommended could help identify the 
potential financial benefits of reducing unnecessarily duplicative 
support for projects or, at a minimum, provide greater assurance that 
unnecessarily duplicative support is not provided. 

Agency Comments and GAO's Evaluation: 

In commenting on the March 2013 report on which this analysis is 
based, DOE agreed with GAO's recommendation, while USDA generally 
concurred with the information in the report related to its 
initiatives. DOE stated that it will now formally document its 
evaluation of applicants' assertions regarding their inability to 
finance their projects without a federal loan guarantee, and will 
clarify how it considers the financial need of applicants when 
determining what amount of support to provide. DOE and USDA also 
provided technical and clarifying comments, which GAO incorporated as 
appropriate. 

GAO also provided a draft of this report section to DOE and USDA for 
review and comment. USDA provided comments via an email attachment in 
which it neither agreed nor disagreed with the information in the 
report section. However, USDA noted that, for certain initiatives, 
loan guarantee applicants are required to state their need for the 
guarantee on the loan application form. USDA further noted that, for 
one initiative, financial need is no longer taken into consideration 
when making awards because the requirement to do so was not included 
in the provisions of the Food, Conservation, and Energy Act of 2008 
and, therefore, USDA removed the requirement from program regulations. 
GAO believes that, while USDA may not be legally required to formally 
assess applicants' need for project support for this initiative, 
making that assessment could help allocate scarce resources. To the 
extent possible within its statutory authority, GAO recommends that 
USDA formally assess and document whether the incremental financial 
support of their initiatives is needed in order for applicants' 
projects to be built, and take this information into account in 
determining whether, or how much, support to provide. Furthermore, in 
response to this comment, GAO revised the submission to include 
language from the March 2013 report, where GAO recommended that in the 
event USDA or DOE lack discretion to consider this information in 
determining what financial support to provide, they may want to report 
this limitation to Congress. DOE provided technical comments, which 
GAO incorporated as appropriate. 

How GAO Conducted Its Work: 

The information contained in this analysis is based on findings from 
products listed in the related GAO products section. To identify 
federal renewable energy initiatives that were funded, planned, 
implemented, or authorized in fiscal year 2010, GAO reviewed budget 
documents and other information sources for the 24 agencies subject to 
the Chief Financial Officers Act of 1990.[Footnote 11] GAO then 
collected more detailed information on these initiatives using a 
structured data request and follow-up interviews with agency 
officials. GAO did not review the level of financial support provided 
by agencies' renewable energy-related initiatives because financial 
support for renewable energy is often not tracked separately from 
other activities. To examine federal wind energy initiatives, GAO 
focused on nine agencies' initiatives. GAO selected these nine 
agencies' initiatives because they promoted the research and 
development, commercialization, or deployment of wind energy 
technologies. GAO updated the data collected for its February 2012 
report to reflect the extent to which initiatives implemented by these 
nine agencies were still active or new in fiscal year 2011.[Footnote 
12] After determining that the nine agencies implemented 82 wind 
initiatives in fiscal year 2011, GAO used a questionnaire to collect 
additional data on these 82 initiatives, and analyzed the data to 
categorize initiatives' recipients and goals, and to determine the 
extent of potential fragmentation, overlap, and duplication. To 
further examine the initiatives that have or could have provided 
duplicative support, GAO interviewed agency officials, and financial 
professionals from several of the major financial institutions and 
legal firms active in wind energy project financing in recent years. 
For these initiatives, GAO also collected information from other 
sources, such as a briefing memorandum from White House staff, and DOE 
or other project documentation to assess the financial support 
provided for projects. 

Tables 3 and 4 in appendix IV list the wind energy initiatives GAO 
identified that might have similar or overlapping objectives, provide 
similar services, or be fragmented across government missions. Overlap 
and fragmentation might not necessarily lead to actual duplication, 
and some degree of overlap and duplication may be justified. 

Related GAO Products: 

Wind Energy: Additional Actions Could Help Ensure Effective Use of 
Federal Financial Support. [hyperlink, 
http://www.gao.gov/products/GAO-13-136]. Washington, D.C.: March 11, 
2013. 

Renewable Energy: Federal Agencies Implement Hundreds of Initiatives. 
[hyperlink, http://www.gao.gov/products/GAO-12-260]. Washington, D.C.: 
February 27, 2012. 

Renewable Energy: An Inventory of Fiscal Year 2010 Federal Initiatives 
[hyperlink, http://www.gao.gov/products/GAO-12-259SP], February 2012, 
an E-supplement to GAO-12-260. GAO-12-259SP. Washington, D.C.: 
February 27, 2012. 

Contact Information: 

For additional information about this area, contact Frank Rusco at 
(202) 512-3841 or ruscof@gao.gov. 

Footnotes: 

[1] GAO defined a renewable energy-related initiative as a program, 
tax expenditure, or group of activities serving a similar purpose or 
function that was related to renewable energy through a specific 
emphasis or focus, even if renewable energy was part of a broader 
effort. 

[2] For 18 percent of the initiatives, agency officials were not able 
to determine the extent to which the initiatives supported wind energy 
relative to other sources of renewable energy or other activities. In 
some instances, the officials were unable to make these determinations 
because of data limitations. For example, for several initiatives, 
agencies did not track program data separately for each energy source. 

[3] The federal obligations and tax subsidies for fiscal year 2011 
presented here cannot be compared with the Energy Information 
Administration's estimate of $5 billion in total federal subsidies for 
wind in fiscal year 2010 because of differences in the period covered 
and methods used in calculating these numbers. 

[4] All of these initiatives were specifically established by 
Congress, as opposed to agency-created initiatives. Four of the seven 
initiatives, including two tax expenditures, a grant program, and a 
loan guarantee program recently expired or are scheduled to expire for 
wind projects at the end of 2013. However, policymakers may decide to 
create similar initiatives as a means for supporting wind energy or 
other renewable energy sources in the future. 

[5] Of the seven initiatives, those implemented by Treasury--tax 
expenditures and a grant program--accounted for over 95 percent of the 
federal financial support for wind in fiscal year 2011, based on 
available estimates. 

[6] Approximately 94 percent of the $2.9 billion in fiscal year 2011 
wind-related obligations GAO identified--over $2.7 billion--was 
obligated under Treasury's Section 1603 grant program, which was 
established by the American Recovery and Reinvestment Act of 2009 and 
provided cash payments of up to 30 percent of the total eligible costs 
of wind and certain other renewable energy facilities in lieu of tax 
credits for energy investment or production. 

[7] Renewable portfolio standards do not provide direct financial 
support to particular wind projects; however, by requiring or 
encouraging that a percentage of the electricity consumed in a state 
be generated from renewable sources, they are designed to create 
market demand for electricity from sources such as wind. 

[8] The majority of the wind-related initiatives GAO identified 
supported a range of renewable energy sources in addition to wind, as 
well as other activities such as energy efficiency projects or rural 
development projects. 

[9] Treasury provides support to projects based on the eligibility 
criteria in the tax code. In contrast to DOE and USDA, Treasury 
generally does not have discretion in allocating support to projects 
and therefore does not assess applicant need for the support of its 
initiatives. 

[10] The term "incremental support" refers to the support an agency 
provides to an individual project under one of its wind energy 
initiatives that is in addition to support provided to that project by 
that agency or other agencies under different wind energy initiatives. 

[11] GAO identified renewable energy initiatives at 18 of these 
agencies but reported data for 23 agencies in its February 2012 report 
and e-supplement because GAO reported data separately for each of the 
military services within the Department of Defense and also for the 
Federal Energy Regulatory Commission--an independent agency listed 
under DOE in the federal budget. 

[12] Among other differences with the scope of the agencies and 
initiatives examined for GAO's February 2012 and March 2013 reports, 
GAO excluded certain agencies, such as the Departments of Defense, 
Homeland Security, and State, whose initiatives generally focused on 
development of wind energy and other technologies for use in a 
military, border security, or international aid setting, rather than 
for use in the domestic commercial energy market. 

[End of Renewable Energy Initiatives area] 

Health: 

5. Joint Veterans and Defense Health Care Services: 

The Departments of Veterans Affairs and Defense should enhance their 
collaboration to reduce costs, overlap, and potential duplication in 
the delivery of health care services. 

Why This Area Is Important: 

The Departments of Veterans Affairs (VA) and Defense (DOD) operate two 
of the nation's largest health care systems, together providing health 
care to nearly 16 million veterans, service members, military 
retirees, and other beneficiaries at estimated costs for fiscal year 
2013 of about $53 billion and $49 billion, respectively. VA's health 
care system includes a network of approximately 150 hospitals, 130 
nursing homes, and 800 community-based outpatient clinics, as well as 
other facilities to provide care to veterans. DOD's health care system 
includes approximately 60 military treatment facilities capable of 
providing diagnostic, therapeutic, and inpatient care, as well as 
hundreds of clinics, some of which are located in close proximity to 
VA medical facilities. Both VA and DOD also purchase care from private-
sector providers as needed to provide services for their beneficiaries. 

As part of their health care efforts, the departments have established 
collaboration sites--locations where the two departments share health 
care resources through hundreds of agreements and projects--to deliver 
care jointly with the aim of improving access, quality, and cost-
effectiveness of care. For example, in some locations, one department 
provides a certain type of specialty care to both VA and DOD 
beneficiaries, rather than both departments separately providing that 
care to their own beneficiaries. The departments also have 
collaborated on the joint construction of medical facilities to serve 
both departments' beneficiaries, which is another opportunity to 
reduce overlap and potential duplication in the provision of services 
locally. 

In March 2008, July 2011, and June 2012, GAO identified the need for 
improvement in the evaluation of current and potential VA/DOD 
collaboration efforts, as well as challenges VA and DOD face in their 
efforts to share health care resources. In addition, in March 2011 and 
February 2012, GAO identified opportunities for the departments, which 
have many common health care business needs (such as the need to 
record the patient care they provide and to reimburse private-sector 
providers for care they purchase) to jointly modernize their separate 
electronic health record systems that they rely on to create and 
manage patient health information.[Footnote 1] As GAO has reported for 
over a decade, VA and DOD lack information technology (IT) systems 
that permit the electronic exchange of comprehensive patient health 
information, a significant barrier in their collaboration efforts. 
[Footnote 2] While VA and DOD have worked for many years to improve 
the ability of their separate IT systems to share medical information, 
most recently the departments have focused their efforts on developing 
a common, integrated, electronic health record. However, those efforts 
have not yet led to a comprehensive solution. 

What GAO Found: 

Opportunities exist for VA and DOD to reduce overlap and potential 
duplication by enhancing their collaboration efforts. GAO's prior work 
has found that strategic direction is essential for collaboration. As 
such, defining roles and responsibilities and mechanisms for 
coordination can help agencies clarify who will lead or participate in 
which activities, organize their joint activities and individual 
efforts, and facilitate decision making. In addition, agencies can 
facilitate and enhance their collaboration efforts by establishing 
compatible ways of working together across agency boundaries.[Footnote 
3] However, in September 2012, GAO reported that VA and DOD do not 
have a fully developed and formalized process for systematically 
identifying all opportunities for new or enhanced collaboration, which 
may lead to missed opportunities to improve health care access, 
quality, and costs. 

Such opportunities for collaboration could, among other things, reduce 
overlap in their health care services. Instead, the identification of 
potential collaboration opportunities is largely left to local medical 
facility leadership. This occurs, in part, because local officials 
have more direct knowledge of their locations and are better 
positioned to determine which collaborations make the most sense, 
according to VA and DOD officials. While it is important to involve 
local officials in these efforts, relying solely on them rather than 
using a systematic process supported at the department level can be 
problematic for several reasons. For example, officials from both 
departments acknowledged that collaboration is dependent on local 
leaders' interest in and willingness to collaborate. Further, GAO 
found that local leaders may not have readily available access to 
information needed to examine what health care services might benefit 
from collaboration, such as when providing services through 
collaboration rather than by purchasing care from community providers 
might result in significant cost savings. For example, some local 
officials we spoke with said they encountered difficulties obtaining 
purchased care information from their collaboration partner, and in 
one case encountered some resistance internally regarding sharing such 
information with their partner. 

Although the departments do have a process for jointly identifying a 
select number of sites where there are opportunities for new or 
expanded collaboration, this process has limitations. For example, the 
process does not involve a systematic approach to reviewing and 
identifying all new or enhanced opportunities for collaboration across 
both health care systems. Further, it is not formalized in guidance, 
and there is no requirement that identified sites assign 
responsibilities for and move forward to explore or implement 
potential opportunities. Instead, the identification of collaboration 
opportunities is largely left to local medical facility leadership. 
Without a fully developed process to systematically identify and 
select additional collaboration opportunities, the departments may be 
unable to fully achieve their shared goals of improved health care 
access, quality, and costs, and reduce any overlap or potential 
duplication of services, such as by using additional resource-sharing 
agreements. GAO found that additional department-level actions are 
needed to address challenges faced by collaboration partners, which 
could incentivize local medical facility leadership to engage in new 
or enhanced collaboration.[Footnote 4] 

Finally, GAO has reported that interagency collaboration--which can 
help address duplication and overlap among agency programs--can be 
enhanced when agencies work toward a common goal, establish 
complementary strategies for achieving that goal, and use common 
performance measures when appropriate.[Footnote 5] GAO also has 
reported on the importance of developing and using performance 
measures for effective management and strategic planning, as well as 
for measuring the achievement of projected cost savings.[Footnote 6] 
Further, VA and DOD department-level officials said it is important to 
consider costs as a part of both departments' responsibilities to 
ensure their collaboration efforts are financially sound and improve 
care. Performance measures are important to show the extent of 
progress made in improving access and quality of care, in addition to 
cost savings achieved, if any, from collaboration. For example, 
although VA and DOD department-level officials believe that some 
savings occur when collaboration sites adopt sharing agreements in 
which partners pay each other less for care than they would otherwise 
pay community providers, the overall savings are unclear because sites 
are not required to develop performance measures to assess the extent 
of their savings. 

In September 2012, GAO reported that VA and DOD do not require that 
all of their collaboration sites develop and use performance measures 
to assess their effectiveness and efficiency, including any cost 
savings achieved from their collaborative efforts. Officials cited 
several reasons for this, including not wanting to overburden sites 
with measures and monitoring requirements. Although VA and DOD require 
some limited performance information--such as the return on investment 
for pilot projects--without comprehensive performance measures, they 
lack information that could help decision makers assess all 
collaboration sites' overall progress in meeting the departments' 
shared goals, identify areas for improvement, and make more informed 
decisions. For example, the lack of comprehensive performance measures 
hinders the departments' ability to identify and share lessons learned 
about how VA and DOD can best work together to achieve efficiencies. 
Further, the departments cannot quantify the overall cost 
effectiveness of their collaboration efforts, including the overall 
cost savings they may have achieved, because sites are not required to 
develop performance measures to assess the extent of their savings. In 
the absence of required performance measures for all collaboration 
sites, some sites have developed their own measures. Officials from 
one site, for example, told GAO that discounts for inpatient services 
that DOD provides to VA patients through a resource-sharing agreement 
had resulted in cost savings. While this type of information may 
assist local leaders to understand the progress and areas for 
improvement at their sites, individual sites' efforts to assess 
performance do not provide department-level decision makers with 
adequate information about the overall performance or results of VA 
and DOD collaboration, including the extent of any cost savings 
achieved. 

Actions Needed: 

GAO recommended in September 2012 that the Secretaries of Veterans 
Affairs and Defense take the following two actions: 

* further develop a systematic process for identifying and furthering 
collaboration opportunities, including reviewing the portfolios of the 
departments' health care facilities; ensuring information necessary to 
identify collaboration opportunities is available; identifying both 
new and expanded opportunities for collaboration; and assigning 
responsibility to ensure identified opportunities are explored and 
implemented as appropriate; and: 

* require collaboration sites to develop and implement a process for 
using performance measures to gauge their progress in achieving goals 
related to access, quality of care, and costs. 

The first action would help VA and DOD to fully identify potential 
opportunities to improve access to and quality of care and reduce 
costs, as well as reduce overlap and duplication between VA and DOD 
health care systems. Such department-level action would further 
support and could create incentives for local-level collaboration. The 
second action would help VA and DOD assess progress, identify areas 
for improvement, and make informed decisions about health care 
collaborations. Currently, the departments cannot quantify overall 
cost savings as a result of their collaboration efforts because they 
do not require collaboration sites to collect and report on that 
information. 

Agency Comments: 

In commenting on the September 2012 report on which this analysis is 
based, VA and DOD provided written comments and generally agreed with 
GAO's recommendations. 

GAO also provided a draft of this report section to VA and DOD for 
review and comment. In emails received on January 23, 2013, VA and DOD 
indicated they had no comments on the draft. 

How GAO Conducted Its Work: 

The information contained in this analysis is based on findings from 
the September 2012 report listed in the related GAO products section. 
GAO conducted site visits to two VA and DOD collaboration sites--which 
were selected because they represented a range of collaboration 
efforts as well as collaboration involving all three military services 
(the Army, the Air Force, and the Navy, which is responsible for 
providing health care to members of the Marine Corps and their 
beneficiaries)--and reviewed documents from those locations, including 
collaboration agreements and performance measures. GAO also reviewed 
departmental and joint VA/DOD guidance on collaboration options, 
approaches used to identify opportunities for collaboration, and to 
the extent that they existed, performance measures used by 
collaborating VA and DOD partners, and interviewed agency officials 
responsible for these areas. GAO assessed the status of these 
collaboration efforts against GAO's prior work on best practices for 
federal agency collaboration efforts and for establishing evaluation 
criteria to assess federal programs.[Footnote 7] 

Related GAO Products: 

VA and DOD Health Care: Department-Level Actions Needed to Assess 
Collaboration Performance, Address Barriers, and Identify 
Opportunities. [hyperlink, http://www.gao.gov/products/GAO-12-992]. 
Washington, D.C.: September 28, 2012. 

VA/DOD Federal Health Care Center: Costly Information Technology 
Delays Continue and Demonstration Evaluation Plan Lacking. [hyperlink, 
http://www.gao.gov/products/GAO-12-669]. Washington, D.C.: June 26, 
2012. 

VA and DOD Health Care: First Federal Health Care Center Established, 
but Implementation Concerns Need to Be Addressed. [hyperlink, 
http://www.gao.gov/products/GAO-11-570]. Washington, D.C.: July 19, 
2011. 

VA Health Care: Additional Efforts to Better Assess Joint Ventures 
Needed. [hyperlink, http://www.gao.gov/products/GAO-08-399]. 
Washington, D.C.: March 28, 2008. 

Contact Information: 

For additional information about this area, contact Debra A. Draper at 
(202) 512-7114, or draperd@gao.gov, or Brenda S. Farrell at (202) 512-
3604, or farrellb@gao.gov. 

Footnotes: 

[1] GAO, Opportunities to Reduce Potential Duplication in Government 
Programs, Save Tax Dollars, and Enhance Revenue, [hyperlink, 
http://www.gao.gov/products/GAO-11-318SP] (Washington, D.C.: Mar. 1, 
2011) and Follow-up on 2011 Report: Status of Actions Taken to Reduce 
Duplication, Overlap, and Fragmentation, Save Tax Dollars, and Enhance 
Revenue, [hyperlink, http://www.gao.gov/products/GAO-12-453SP] 
(Washington, D.C.: Feb. 28, 2012). 

[2] GAO has made recommendations to address these issues. See, for 
example, GAO, Electronic Health Records: DOD and VA Should Remove 
Barriers and Improve Efforts to Meet Their Common System Needs, 
[hyperlink, http://www.gao.gov/products/GAO-11-265] (Washington, D.C.: 
Feb. 2, 2011). 

[3] GAO, Results-Oriented Government: Practices That Can Help Enhance 
and Sustain Collaboration among Federal Agencies, [hyperlink, 
http://www.gao.gov/products/GAO-06-15] (Washington, D.C.: Oct. 21, 
2005). 

[4] In September 2012, GAO also reported that several barriers, such 
as misaligned construction planning processes, have hindered the 
departments' efforts to jointly plan construction of medical 
facilities to serve both departments' beneficiaries, which can lead to 
missed opportunities to collaborate on construction projects. VA and 
DOD have taken several steps that have the potential to help overcome 
barriers and improve joint planning, such as efforts to improve data 
sharing between the departments to better identify collaboration 
opportunities early in the construction planning process. 

[5] See for example, GAO, Interagency Collaboration: Key Issues for 
Congressional Oversight of National Security Strategies, 
Organizations, Workforce, and Information Sharing, [hyperlink, 
http://www.gao.gov/products/GAO-09-904SP] (Washington, D.C.: Sept. 25, 
2009); National Security: Key Challenges and Solutions to Strengthen 
Interagency Collaboration, [hyperlink, 
http://www.gao.gov/products/GAO-10-822T] (Washington, D.C.: June 9, 
2010); and 2012 Annual Report: Opportunities to Reduce Duplication, 
Overlap and Fragmentation, Achieve Savings, and Enhance Revenue, 
[hyperlink, http://www.gao.gov/products/GAO-12-342SP] (Washington, 
D.C.: Feb. 28, 2012). 

[6] See [hyperlink, http://www.gao.gov/products/GAO-06-15], 
[hyperlink, http://www.gao.gov/products/GAO-12-669, GAO, VA and DOD 
Health Care: Opportunities to Maximize Resource Sharing Remain, GAO-06-
315 (Washington, D.C.: Mar. 20, 2006), and VA Health Care: Additional 
Efforts to Better Assess Joint Ventures Needed, [hyperlink, 
http://www.gao.gov/products/GAO-08-399] (Washington, D.C.: Mar. 28, 
2008). 

[7] See [hyperlink, http://www.gao.gov/products/GAO-06-15]; GAO, 
Limitations in DOD's Evaluation Plan for EEO Complaint Pilot Program 
Hinder Determination of Pilot Results, [hyperlink, 
http://www.gao.gov/products/GAO-08-387R] (Washington, D.C.: Feb. 22, 
2008) and Tax Administration: IRS Needs to Strengthen Its Approach for 
Evaluating the SRFMI Data-Sharing Pilot Program, [hyperlink, 
http://www.gao.gov/products/GAO-09-45] (Washington, D.C.: Nov. 7, 
2008). 

[End of Joint Veterans and Defense Health Care Services area] 

6. Medicaid Program Integrity: 

The Centers for Medicare & Medicaid Services needs to take steps to 
eliminate duplication and increase efficiency in two Medicaid 
Integrity Program activities--provider audits and the collection of 
state program integrity data. 

Why This Area Is Important: 

GAO has had longstanding concerns about Medicaid's program integrity, 
and included Medicaid on its list of high-risk programs because of 
concerns about the sufficiency of federal and state oversight. 
[Footnote 1] The Centers for Medicare & Medicaid Services (CMS) 
estimated that in fiscal year 2012 $19.2 billion (7.1 percent) of 
Medicaid's federal expenditures involved improper payments--including 
payments made for treatments or services that were not covered by 
program rules, that were not medically necessary, or that were billed 
for but never provided.[Footnote 2] Federal Medicaid expenditures in 
fiscal year 2011 were $275 billion. Medicaid is the joint federal-
state health care financing program for certain low-income individuals 
and is one of the largest social programs in federal and state 
budgets. The size and diversity of Medicaid make it particularly 
vulnerable to improper payments. The Deficit Reduction Act of 2005 
created the Medicaid Integrity Program (integrity program) to provide 
federal support for and oversight of state Medicaid program integrity 
activities with an annual appropriation of approximately $75 million. 
[Footnote 3] The following year, CMS established the Medicaid 
Integrity Group (integrity group) to implement this program. 

What GAO Found: 

In November 2012, GAO reported that it had identified duplication in 
two of the integrity group's six integrity program activities--the 
National Medicaid Audit Program, which consists of audits of state 
Medicaid claims data to identify overpayments, and state program 
integrity assessments, one of several tools through which CMS collects 
data on state program integrity activities. 

National Medicaid Audit Program. The integrity group hired separate 
contractors for each state--one contractor to review states' paid 
claims data in order to identify potential aberrant claims or billing 
anomalies and another to audit such aberrant claims.[Footnote 4] This 
division of labor was inefficient and led to duplication in two key 
areas--understanding states' Medicaid policies and data analysis. The 
Deficit Reduction Act of 2005 required CMS to hire contractors to 
review and audit provider claims. According to integrity group 
officials, they initially believed that the act required the use of 
separate contractors but, in hindsight, concluded that these 
activities could have been performed by the same contractor.[Footnote 
5] 

The integrity group's decision to use separate contractors to review 
and audit provider claims meant that both entities had to master the 
details of numerous state Medicaid policies related to eligibility, 
benefits, and claims processing to appropriately assess whether 
payments were improper. For example, the two contractors responsible 
for reviewing provider claims to identify potential audit targets had 
to learn and correctly apply the policies of 22 and 28 states, 
respectively. Similarly, the three contractors hired to audit provider 
claims were required to master the policies of 8 to 24 states. 
Officials from one state commented that becoming fully knowledgeable 
about all the state policies affecting program integrity audits could 
take 2 to 3 years. According to several state officials, the lack of 
an in-depth knowledge of state policy contributed to unproductive 
provider audits. For example, according to one state official, the 
integrity group and its contractors had mistakenly identified 
overpayments for federally qualified health centers because they 
assumed that centers should receive reduced payments for an 
established patient on subsequent visits. The contractors were not 
aware that these types of centers are paid on an encounter basis, 
which uses the same payment rate for the first and follow-up visits. 

Moreover, the use of separate contractors to review and audit provider 
claims increased inefficiencies in data analysis, which also led to 
duplication of effort. The review contractors' primary function was to 
use algorithms to analyze extracts of states' Medicaid claims data to 
identify any potential improper payments.[Footnote 6] Audit 
contractors also analyzed the same data extracts to learn more about 
providers they were auditing and the services for which the providers 
billed. As a result, the audit contractors duplicated certain data 
analyses that had already been performed by the review contractors, 
such as verifying the completeness and accuracy of the data extracts. 
For example, one audit contractor reported that the presence of large 
numbers of duplicate claims in the data resulted in a significant 
commitment of the contractor's analytical and data management 
resources for 66 provider audits that were subsequently discontinued 
because of the poor quality of the data. 

The inefficiencies of having separate contractors both review and 
audit provider claims were exacerbated by the integrity group's 
communication policies. All communication, whether between review and 
audit contractors or between contractors and states, went through a 
multistep process that was controlled by the integrity group. As a 
result, the audit contractors could not easily communicate with the 
review contractors to verify specific details of the review 
contractors' data analyses. Two audit contractors' lessons learned 
reports recommended closer collaboration between audit and review 
contractors during the claims analysis process and the selection of 
audit targets to prevent duplicative data analysis. In addition, the 
inability to communicate freely with states inhibited the contractors 
from fully leveraging states' knowledge of their own Medicaid 
policies. The Department of Health and Human Services Office of the 
Inspector General reported a similar finding that the integrity 
group's communication policy contributed to a duplication of 
contractor functions.[Footnote 7] 

The integrity group has initiated changes to the National Medicaid 
Audit Program that may reduce, but will not eliminate, duplication. 
The integrity group has shifted to a more collaborative approach to 
National Medicaid Audit Program audits in which states can identify 
the audit targets. However, integrity group officials told GAO that in 
some cases the review contractors will continue to analyze extracts of 
states' Medicaid claims data to identify potential audit targets for 
audit contractors to pursue. According to integrity group officials, 
the review contractors conducted data analysis on 34 percent of the 
collaborative audits assigned to audit contractors from January 2010 
through December 2011.[Footnote 8] Thus, review and audit contractors 
continue to be involved in the shift to a more collaborative audit 
approach, resulting in continued duplication of effort. In fiscal year 
2011, integrity group expenditures for its review and audit 
contractors totaled about $33.7 million, about half of which covered 
the cost of the review contractors' activities. Merging the functions 
of the review and audit contractors has the potential to significantly 
reduce overall expenditures on National Medicaid Audit Program 
contractors. 

State Program Integrity Assessments. GAO also identified duplication 
in the information that the integrity group collects annually on state 
program integrity activities through its state program integrity 
assessments. For example, the number of Medicaid enrollees, managed 
care enrollment, the number of participating providers, the state 
program integrity organizational structure, the number of staff, use 
of contractors, and the number of state audits of claims are also 
collected during the triennial comprehensive reviews and are included 
in the published reports available on the integrity group's website. 
[Footnote 9] The state program integrity assessments also include 
state program integrity expenditures and recoveries--two key metrics 
for accountability and oversight--that are collected through required 
quarterly state reporting of Medicaid expenditures to CMS, which are 
subject to validation and audit. GAO found that the annual state 
program integrity assessments contained significant errors and were 
inconsistent with data in reports that covered the same year. 
Moreover, program integrity officials in several states also told GAO 
that state program integrity assessment reporting is not consistent or 
comparable across states. Correcting inconsistencies in the state 
program integrity assessment data would be of limited value. The 2-
year time lag in the state program integrity assessment data (e.g., 
fiscal year 2009 assessments contain data for state fiscal year 2007) 
undermines its usefulness in determining which states would benefit 
from technical assistance or developing measures to assess states' 
performance. Other sources, such as triennial comprehensive reviews, 
provide more timely and useful information. 

Actions Needed and Potential Financial or Other Benefits: 

In November 2012, to improve the efficiency and effectiveness of the 
Medicaid Integrity Program, GAO recommended that CMS take the 
following two actions: 

* merge the functions of the federal review and audit contractors 
within a state or geographic region to eliminate duplication and more 
effectively use audit resources, which has the potential to 
significantly reduce National Medicaid Audit Program expenditures; and: 

* discontinue the annual state program integrity assessments to avoid 
duplication and the reporting of inaccurate data. 

Agency Comments and GAO's Evaluation: 

In commenting on the November 2012 report on which this analysis is 
based, the Department of Health and Human Services agreed with GAO's 
recommendation to merge the functions of the federal review and audit 
contractors, indicating that it was evaluating options for 
consolidating the work of its contractors within current statutory and 
procurement requirements. The department partially concurred with 
GAO's recommendation to discontinue the state program integrity 
assessments but noted that its triennial comprehensive program 
integrity reviews alone might not provide adequate data to inform CMS 
oversight. It said, however, that it would suspend the assessments 
while taking steps to address the limitations GAO identified. For 
example, to address the reporting overlap between the assessments and 
comprehensive state program integrity reviews, it said CMS was now 
working to streamline the comprehensive review questionnaires to 
eliminate duplication. The department's comments did not articulate 
how it used the data collected through the assessments to inform its 
oversight or why the comprehensive review data are insufficient. As a 
result, GAO continues to believe that the assessments should be 
discontinued. 

GAO provided a draft of this report section to the Department of 
Health and Human Services for review and comment. The Department of 
Health and Human Services provided technical comments, which were 
incorporated as appropriate. 

How GAO Conducted Its Work: 

The information contained in this analysis is based on findings from 
the reports listed in the related GAO products section. For some of 
these reports, GAO analyzed the integrity group data on audit 
assignments as of February 29, 2012, and its contractors' lessons 
learned reports. GAO discussed the National Medicaid Audit Program 
with integrity group officials, representatives of its contractors 
responsible for conducting provider claims reviews and audits, and 
program integrity officials in 11 states. GAO selected these states to 
ensure geographic diversity and because they account for almost half 
of all Medicaid spending and beneficiaries. GAO also compared and 
contrasted the information collected through the integrity group's 
comprehensive reviews and state assessments. Table 5 in appendix IV 
lists the programs GAO identified that might have similar or 
overlapping objectives, provide similar services, or be fragmented 
across government missions. Overlap and fragmentation might not 
necessarily lead to actual duplication, and some degree of overlap and 
duplication may be justified. 

Related GAO Products: 

Medicaid Integrity Program: CMS Should Take Steps to Eliminate 
Duplication and Improve Efficiency. [hyperlink, 
http://www.gao.gov/products/GAO-13-50]. Washington, D.C.: November 13, 
2012. 

National Medicaid Audit Program: CMS Should Improve Reporting and 
Focus on Audit Collaboration with States. [hyperlink, 
http://www.gao.gov/products/GAO-12-627]. Washington, D.C.: June 14, 
2012. 

Medicaid Program Integrity: Expanded Federal Role Presents Challenges 
to and Opportunities for Assisting States. [hyperlink, 
http://www.gao.gov/products/GAO-12-288T]. Washington, D.C.: December 
7, 2011. 

Contact Information: 

For additional information about this area, contact Carolyn L. Yocom 
at (202) 512-7114 or yocomc@gao.gov. 

Footnotes: 

[1] See GAO, Major Management Challenges and Program Risks: Department 
of Health and Human Services, [hyperlink, 
http://www.gao.gov/products/GAO-03-101] (Washington, D.C.: January 
2003). 

[2] CMS is an agency within the Department of Health and Human 
Services. 

[3] Pub. L. No. 109-171, § 6034, 120 Stat. 4, 74-78 (2006) (codified 
at 42 U.S.C. § 1396u-6). For each fiscal year since 2010, the amount 
appropriated has been the previous year's appropriation adjusted for 
inflation According to HHS, the fiscal year 2013 appropriation is 
expected to be approximately $80 million. 

[4] As of July 2012, the integrity group had two review contractors 
and three separate audit contractors. One review and one audit 
contractor are assigned to each of five geographic areas. 

[5] Integrity group officials told GAO that they consulted CMS's 
Office of Acquisition and Grants Management before deciding to hire 
different contractors to review and audit provider claims. This office 
manages contracting activities and develops acquisition policy and 
procedures. 

[6] An algorithm is a specific set or logical rules or criteria used 
to analyze data. 

[7] HHS-OIG, Early Assessment of Audit Medicaid Integrity Contractors, 
OEI-05-1-00210 (March 2012). 

[8] Integrity group officials also told GAO that it planned to retain 
its existing two review contractors, but reduce their workload and 
realign their geographic areas of responsibility. 

[9] The integrity group performs comprehensive state program integrity 
reviews of each state's Medicaid program every 3 years. These reviews 
assess each state's Medicaid program integrity procedures and 
processes. Topics covered include program integrity organization and 
staffing, post-payment review and fraud identification, investigation, 
and referral. The objective of the reviews is to assess the 
effectiveness of states' program integrity activities and compliance 
with federal program integrity laws. 

[End of section] 

Homeland Security/Law Enforcement: 

7. Department of Homeland Security Research and Development: 

Better policies and guidance for defining, overseeing, and 
coordinating research and development investments and activities would 
help the Department of Homeland Security address fragmentation, 
overlap, and potential unnecessary duplication. 

Why This Area Is Important: 

Conducting research and development (R&D) on technologies for 
detecting, preventing, and mitigating terrorist threats is vital to 
enhancing the security of the nation. The Department of Homeland 
Security (DHS) conducts research, development, testing, and evaluation 
of new technologies that are intended to strengthen the United States' 
ability to prevent and respond to nuclear, biological, explosive, and 
other types of attacks within the United States. Since it began 
operations in 2003, DHS, through both its Science & Technology 
Directorate (S&T) and other components, has spent billions of dollars 
researching and developing technologies used to support a wide range 
of missions, including securing the border, detecting nuclear devices, 
and screening airline passengers and baggage for explosives. Managing 
and coordinating R&D across DHS represents one example of the cross-
cutting management challenges facing the department. GAO designated 
implementing and transforming DHS as high risk because it had to 
transform 22 agencies--several with major management challenges--into 
one department, and failure to effectively address DHS's management 
and mission risks could have serious consequences for U.S. national 
and economic security. 

What GAO Found: 

GAO reported in September 2012 that DHS does not have a departmentwide 
policy defining R&D or guidance directing components how to report R&D 
activities. As a result, the department does not know its total annual 
investment in R&D, which limits DHS's ability to oversee components' 
R&D efforts and align them with agencywide R&D goals and priorities. 
DHS officials recognized that spending in areas that cut across the 
department, like R&D, is difficult to manage and told GAO that DHS 
does not have visibility of R&D across the department. For example, in 
September 2012 GAO reported that budget data for DHS's R&D obligations 
that DHS submitted to the Office of Management and Budget were 
underreported because certain DHS components obligated money for R&D 
contracts that were not reported to the Office of Management and 
Budget as R&D. Specifically, for fiscal year 2011, GAO identified $255 
million in obligations for R&D that DHS did not report in the budget 
process as R&D contracts. DHS is taking some steps to address its lack 
of visibility over R&D across the department, including identifying 
R&D as a separate budget line in DHS's proposed unified account 
structure, which was submitted to Congress in the fiscal year 2013 
budget for approval. GAO further reported that establishing policies 
and guidance for defining R&D consistently across the department and 
outlining the processes and procedures for overseeing R&D would 
provide more oversight into the R&D investments across the department. 

GAO also reported in September 2012 that R&D at DHS was inherently 
fragmented because several components within DHS--S&T, the Coast 
Guard, and the Domestic Nuclear Detection Office--were each given R&D 
responsibilities in law, and other DHS components could pursue and 
conduct their own R&D efforts as long as those activities were 
coordinated through S&T. GAO further reported that fragmentation among 
R&D efforts at DHS may be advantageous if the department determined 
that it could gain better or faster results by having multiple 
components engage in R&D activities toward a similar goal; however, it 
could be disadvantageous if those activities are uncoordinated or 
unintentionally overlapping or duplicative. 

To illustrate overlap, GAO reviewed data on all 15,000 federal 
procurement contract actions coded as R&D taken by DHS components from 
fiscal years 2007 through 2012. Based on a keyword search of the 
15,000 procurement actions and review of the project descriptions, GAO 
selected 50 R&D contracts awarded by six DHS components--S&T, the 
Transportation Security Administration, the Federal Emergency 
Management Agency (FEMA), the Office of Health Affairs, the Coast 
Guard, and Customs and Border Protection--that appeared to have 
similar goals, strategies, or activities with another contract, and 
interviewed component officials about those R&D activities.[Footnote 
1] On the basis of that analysis and interviews with these components, 
GAO identified 35 instances among 29 contracts where DHS components 
awarded R&D contracts that overlapped with R&D activities conducted 
elsewhere in the department. Taken together, these contracts were 
worth about $66 million. For example: 

* S&T awarded four separate contracts to develop methods of detecting 
ammonium nitrate and urea nitrate for the counter-improvised explosive 
detection program. The Transportation Security Administration also 
awarded a separate contract to investigate the detection of ammonium 
nitrate and ammonium nitrate-based explosives. These contracts 
overlapped in that all of the S&T and Transportation Security 
Administration contracts addressed the detection of the same chemical. 

* S&T awarded four separate contracts to develop advanced algorithms 
for explosives detection while the Transportation Security 
Administration also awarded a contract to develop algorithms to 
evaluate images for explosives. We determined that these R&D contracts 
overlapped because both components were involved in developing 
algorithms for explosives detection. 

* S&T awarded a contract to a private vendor for support and analysis 
for seismic hazards while FEMA also awarded a contract to develop 
seismic guidelines for buildings in the event of an earthquake. These 
contracts overlapped because they were both similar in scope. 

GAO reviewed each statement of work for these 35 contracts and 
determined that while the scope and some goals were overlapping, they 
were not duplicative because they addressed different operational 
missions. GAO also discussed these contracts with component officials. 
Specifically, Transportation Security Administration officials stated 
that some of the contracts may have overlapped in the scope of work 
but were focused on different missions or modes of transportation, and 
thus were not duplicative. FEMA officials stated that FEMA research 
project contracts GAO identified were related specifically to 
earthquake hazards, rather than more broadly to multiple hazards like 
S&T's research contracts, and thus, the contracts did not duplicate 
one another. 

According to S&T officials during the time of GAO's review, a process 
did not exist at DHS or within S&T to prevent overlap or unnecessary 
duplication. However, the officials stated that relationships with 
components mitigated these risks. They also stated that S&T has 
improved interactions with components over time. For example, S&T 
officials stated that when Customs and Border Protection requested 
mobile radios to improve communication among its field staff, S&T knew 
that the Secret Service and Immigration and Customs Enforcement were 
already conducting R&D in that area. To address this technology need, 
S&T provided a senior official to lead the Tactical Communication Team 
to address communication among different operational components and 
better coordinate those efforts. 

Although GAO found that S&T had taken steps to coordinate R&D, GAO 
also reported in September 2012 that DHS and S&T did not have the 
policies and mechanisms necessary to coordinate R&D across the 
department and reduce the risk of unnecessary duplication. 
Specifically, DHS has not developed a policy defining who is 
responsible for coordinating R&D and what processes should be used to 
coordinate it. While S&T has R&D agreements with some components, S&T 
officials cited the Integrated Product Team process--comprised of S&T 
and component members--and personal relationships as the primary means 
to coordinate R&D activities with components and generally felt that 
they were coordinating effectively. However, other component officials 
GAO interviewed did not view S&T's coordination practices as 
positively. Specifically, GAO interviewed six DHS components to 
discuss the extent to which they coordinated with S&T on R&D 
activities. Four components stated that S&T did not have an 
established process that detailed how S&T would work with its 
customers or for coordinating all activities at DHS. Without an 
established coordination process, the risk for unnecessary duplication 
increases because components can engage in R&D activities without 
coordinating them through S&T. 

We also reported in September 2012 that S&T and DHS had not developed 
a mechanism to track all ongoing R&D projects conducted across DHS 
components. Specifically, neither DHS nor S&T tracked all ongoing R&D 
projects across the department, including DHS R&D activities 
contracted through the various Department of Energy National 
Laboratories. DHS officials agreed that such mechanisms to track R&D 
activities were necessary, and said they have faced similar challenges 
in managing other investments across the department. GAO reported that 
a policy that defines roles and responsibilities for coordinating R&D 
and coordination processes, as well as a mechanism that tracks all DHS 
R&D projects, could better position DHS to mitigate the risk of 
overlapping and unnecessarily duplicative R&D projects. GAO recognized 
that overlapping R&D activities across similar areas may not be 
problematic, but reported that DHS could increase oversight of R&D, 
and improve coordination of R&D activities to better ensure that any 
duplication in R&D activities is purposeful rather than unnecessary. 

Fragmentation, overlap, and the risk of unnecessary duplication occur 
throughout the government, as GAO reported in March 2011 and February 
2012, and are not isolated to DHS.[Footnote 2] However, when coupled 
with consistent programmatic coordination, the risk of unnecessary 
duplication can be diminished. A policy that defines roles and 
responsibilities for coordinating R&D and coordination processes, as 
well as a mechanism that tracks all DHS R&D projects, could better 
position DHS to mitigate the risk of overlapping and unnecessarily 
duplicative R&D projects. 

Actions Needed and Potential or Other Financial Benefits: 

GAO recommended in September 2012 that the Secretary of Homeland 
Security take the following action: 

* develop and implement policies and guidance for defining and 
overseeing R&D at the department to ensure that DHS effectively 
oversees its R&D investment and efforts and reduces fragmentation, 
overlap, and the risk of unnecessary duplication. Such policies and 
guidance could be included as an update to the department's existing 
acquisition directive and should include the following elements: a 
well-understood definition of R&D that provides reasonable assurance 
that reliable accounting and reporting of R&D resources and activities 
for internal and external use are achieved; a description of the 
department's process and roles and responsibilities for overseeing and 
coordinating R&D investments and efforts; and a mechanism to track 
existing R&D projects and their associated costs across the department. 

While the potential financial benefit of this action cannot be 
quantified, GAO's work illustrates that implementation of this 
recommendation could position DHS to better define and manage its R&D 
investments and activities, mitigate the risk of overlapping and 
unnecessarily duplicative R&D projects, and provide greater oversight 
of R&D across the department. 

Agency Comments and GAO's Evaluation: 

In commenting on the September 2012 report on which this analysis is 
based, DHS agreed with GAO's recommendation to develop and implement 
policies and guidance for defining and overseeing R&D at the 
department and described actions it planned to take to address the 
recommendation. Specifically, according to DHS, it planned to evaluate 
the most effective path forward to guide uniform treatment of R&D 
across the department in compliance with Office of Management and 
Budget rules and is considering a management directive, multi-
component steering committee, or new policy guidance to better oversee 
and coordinate R&D. DHS planned to complete these efforts by May 2013. 
In responding to DHS's comments, GAO noted that it would be important 
that DHS's planned actions include developing a definition of R&D, 
defining roles and responsibilities for oversight and coordination, 
and developing a mechanism to track existing R&D projects and 
investments. 

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

How GAO Conducted Its Work: 

The information contained in this analysis is based on findings from 
the product in the related GAO product section. GAO reviewed data on 
all 15,000 federal procurement contract actions coded as R&D in the 
Federal Procurement Data System Next Generation by DHS components from 
fiscal years 2007 through 2011 to identify contracts that were 
overlapping or duplicative of other contracts issued by different 
components. Based on a keyword search of the 15,000 procurement 
actions and review of the project descriptions, GAO selected 50 R&D 
contracts that appeared to contain overlap, reviewed the statements of 
work for these contracts, and interviewed officials from the six 
components that issued them to discuss the nature of those contracts. 
GAO used its past work on fragmentation, overlap, and duplication 
across the federal government,[Footnote 3] Standards for Internal 
Control in the Federal Government,[Footnote 4] and prior work related 
to federal collaboration to assess DHS's coordination of R&D across 
the department.[Footnote 5] GAO also interviewed S&T leadership, 
technical division directors, and DHS component officials to discuss 
S&T and DHS's R&D coordination processes. Table 6 in appendix IV lists 
the programs GAO identified that might have similar or overlapping 
objectives, provide similar services, or are fragmented across 
government missions. Overlap and fragmentation might not necessarily 
lead to actual duplication, and some degree of overlap and duplication 
may be justified. 

Related GAO Product: 

Department of Homeland Security: Oversight and Coordination of 
Research and Development Should Be Strengthened. [hyperlink, 
http://www.gao.gov/products/GAO-12-837]. Washington, D.C.: September 
12, 2012. 

Contact Information: 

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

Footnotes: 

[1] GAO obtained 47 of those 50 contracts and reviewed their 
statements of work. The Office of Health Affairs and DHS were unable 
to provide 3 contracts GAO requested. GAO also examined about 1,000 
task orders sent to the national laboratories by DHS components, but 
the data did not include sufficient detail to use for that analysis. 

[2] [hyperlink, http://www.gao.gov/products/GAO-11-318SP] and 
[hyperlink, http://www.gao.gov/products/GAO-12-342SP]. 

[3] GAO, 2012 Annual Report: Opportunities to Reduce Duplication, 
Overlap and Fragmentation, Achieve Savings, and Enhance Revenue, 
[hyperlink, http://www.gao.gov/products/GAO-12-342SP] (Washington, 
D.C.: Feb. 28, 2012); Follow-up on 2011 Report: Status of Actions 
Taken to Reduce Duplication, Overlap, and Fragmentation, Save Tax 
Dollars, and Enhance Revenue, [hyperlink, 
http://www.gao.gov/products/GAO-12-453SP] (Washington, D.C.: Feb. 28, 
2012); Employment for People with Disabilities: Little Is Known about 
the Effectiveness of Fragmented and Overlapping Programs, [hyperlink, 
http://www.gao.gov/products/GAO-12-667] (Washington, D.C.: June 29, 
2012); and Justice Grant Programs: DOJ Should Do More to Reduce the 
Risk of Unnecessary Duplication and Enhance Program Assessment, 
[hyperlink, http://www.gao.gov/products/GAO-12-517] (Washington, D.C.: 
June 12, 2012). 

[4] [hyperlink, http://www.gao.gov/products/GAO/AIMD-00-21.3.1]. 

[5] GAO, Results-Oriented Government: Practices That Can Help Enhance 
and Sustain Collaboration among Federal Agencies, [hyperlink, 
http://www.gao.gov/products/GAO-06-15] (Washington, D.C.: Oct. 21, 
2005); Cybersecurity: Key Challenges Need to Be Addressed to Improve 
Research and Development, [hyperlink, 
http://www.gao.gov/products/GAO-10-466] (Washington, D.C.: June 3, 
2010) and Homeland Security: DHS Needs a Strategy to Use DOE's 
Laboratories for Research on Nuclear, Biological, and Chemical 
Detection and Response Technologies, [hyperlink, 
http://www.gao.gov/products/GAO-04-653] (Washington, D.C.: May 24, 
2004). 

[End of Department of Homeland Security Research and Development area] 

8. Field-Based Information Sharing: 

To help reduce inefficiencies resulting from overlap in analytical and 
investigative support activities, the Departments of Justice and 
Homeland Security and the Office of National Drug Control Policy could 
improve coordination among five types of field-based information-
sharing entities that may collect, process, analyze, or disseminate 
information in support of law enforcement and counterterrorism-related 
efforts--Joint Terrorism Task Forces, Field Intelligence Groups, 
Regional Information Sharing Systems centers, state and major urban 
area fusion centers, and High Intensity Drug Trafficking Areas 
Investigative Support Centers. 

Why This Area Is Important: 

Sustaining a national information sharing capability to efficiently 
and effectively gather, analyze, and disseminate law enforcement, 
public safety, and terrorism-related information is critical to our 
nation's efforts to combat criminal and terrorist threats.[Footnote 1] 
Over the past 3 decades, federal agencies and state and local 
governments have established a number of entities (e.g., units, 
centers, and task forces) in the field to support this effort. The 
federal government--specifically, the Department of Justice (DOJ), the 
Department of Homeland Security (DHS), and the Office of National Drug 
Control Policy (ONDCP)--operates or, through grant funding or 
personnel, supports these five types of field-based information-
sharing entities. These five types of entities include: 

* Joint Terrorism Task Forces, which are funded and managed by DOJ's 
Federal Bureau of Investigation (FBI), aim to prevent, preempt, deter, 
and investigate terrorism and related activities affecting the United 
States as well as to apprehend terrorists; 

* Field Intelligence Groups, which are part of the FBI, support FBI 
investigations through the collection and analysis of intelligence 
that is used to create a variety of analytical products and share 
these products with the FBI's law enforcement and intelligence 
partners when applicable to those partners' missions; 

* Regional Information Sharing Systems centers, which are funded 
through grants administered by DOJ's Bureau of Justice Assistance, 
support regional law enforcement efforts to, among other things, 
combat major crimes and terrorist activity, and promote officer safety 
by linking federal, state, local, and tribal criminal justice agencies 
through secure communications and providing information-sharing 
resources and investigative support; 

* State and major urban area fusion centers (fusion centers), which 
are funded through a variety of federal and state sources, including 
in part through DHS and DOJ grants, are state and locally owned and 
operated to serve as intermediaries for sharing terrorism and other 
threat-related information between the federal government and state, 
local, tribal, territorial, and private sector homeland security 
partners;[Footnote 2] and: 

* High Intensity Drug Trafficking Areas (HIDTA) Investigative Support 
Centers, which are funded through grants administered by ONDCP, aim to 
support the disruption and dismantlement of drug-trafficking and money-
laundering organizations through the prevention or mitigation of 
associated criminal activity. HIDTA program resources may also be used 
to assist law enforcement agencies in investigations and activities 
related to terrorism and the prevention of terrorism. 

GAO reported in April 2013 that a total of 268 of these field-based 
entities were located throughout the United States (see figure below 
for locations), and DOJ, DHS, and ONDCP provided an estimated $129 
million to support three of the five types of entities--Regional 
Information Sharing System, fusion, and HIDTA Investigative Support 
centers--in fiscal year 2011.[Footnote 3] (Data on funding estimates 
for Joint Terrorism Task Forces and Field Intelligence Groups are 
classified.) 

Figure: Nationwide Locations of Five Types of Field-Based Information-
Sharing Entities in GAO's Review: 

[Refer to PDF for image: illustrated U.S. map] 

Depicted on the map are locations of: 

FBI Joint Terrorism Task Force (JTTF); 
FBI Field Intelligence Group (FIG); 
Regional Information Sharing System (RISS) center; 
Fusion center; 
High Intensity Drug Trafficing Area (HDTA) Investigative Support 
Center (ISC). 

Source: GAO analysis of DOJ, DHS, and ONDCP data. 

Note: Entities located in U.S. territories are not depicted in this 
figure. 

[End of figure] 

What GAO Found: 

Information obtained by law enforcement that relates to terrorism has 
no single source and is derived by gathering, fusing, analyzing, and 
evaluating relevant information from all levels of government. This 
information can be used by federal, state, local, and tribal 
government organizations for multiple purposes, including supporting 
activities to prevent terrorist attacks. Since it involves the efforts 
of several federal agencies, this information sharing is by definition 
fragmented and can produce unique perspectives when information from 
multiple sources is combined. However, this fragmentation can be 
disadvantageous if activities are uncoordinated, as well as if 
opportunities to leverage resources across entities are not fully 
exploited.[Footnote 4] 

In general, the five types of entities in GAO's review were 
established under different authorities and have distinct missions, 
roles, and responsibilities. For example, consistent with its mission 
to detect and investigate terrorists and terrorist groups and prevent 
them from carrying out terrorist acts directed against the United 
States, Joint Terrorism Task Forces are solely responsible for 
conducting counterterrorism investigations.[Footnote 5] However, each 
type of entity may engage in counterterrorism efforts and terrorism-
related information sharing. 

In addition, in carrying out their respective missions, roles, and 
responsibilities, entities in the eight urban areas in GAO's review 
conducted activities that overlap. That is, the entities can conduct 
similar activities in support of similar goals in the same mission 
areas (all-crimes, counterterrorism, and counternarcotics) for similar 
customers (federal, state, and local agencies).[Footnote 6] To assess 
the extent of overlap, GAO selected eight urban areas to review and 
compared the mission areas, activities, and customers of each entity 
within those urban areas to those of the other entities in the same 
urban area. While results from these eight urban areas are not 
generalizeable to all urban areas, the results provided insight into 
entities' activities and areas of overlap. GAO reported in April 2013 
that 34 of the 37 entities located across the eight urban areas 
conducted an analytical or investigative support activity that 
overlapped with another entity. Specifically, for analytical 
activities and services the entities conduct, GAO identified more 
instances of overlap in the: (1) mission areas of all-crimes and 
counterterrorism compared to the mission area of counternarcotics; (2) 
activities conducted by fusion centers and Field Intelligence Groups 
compared to the other three entities; and (3) dissemination of 
information compared to other activities and services. For example, in 
five of the eight urban areas, the fusion center and Field 
Intelligence Group produced all-crimes analytical products, such as 
reports on criminal organizations, for federal, state, and local 
customers including state and local police departments. The figure 
below shows instances of overlap in analytical activities and services 
in each of the eight urban areas in GAO's review. 

Figure: Analytical Activities and Services Conducted in the Same 
Mission Areas for Similar Customers in the Eight Urban Areas in Our 
Review: 

[Refer to PDF for image: illustrated table] 

Urban area 1: 

FIG: 
All crimes: 
Collection management[A]: F; 
Strategic analysis[B]: F; 
Analytical products[C]: F,S,L; 
Threat or risk assessment[D]: F,S,L; 
Criminal bulletins and publications[E]: F,S,L; 
Dissemination[F]: F,S,L; 
Counterterrorism: 
Collection management[A]: F; 
Strategic analysis[B]: F; 
Analytical products[C]: F,S,L; 
Threat or risk assessment[D]: F,S,L; 
Criminal bulletins and publications[E]: F,S,L; 
Dissemination[F]: F,S,L; 
Counternarcotics: 
Collection management: [Empty]; 
Strategic analysis: [Empty]; 
Analytical products: [Empty]; 
Threat or risk assessment: [Empty]; 
Criminal bulletins and publications: [Empty]; 
Dissemination: [Empty]. 

JTTF: 
All crimes: 
Collection management[A]: [Empty]; 
Strategic analysis[B]: [Empty]; 
Analytical products[C]: [Empty]; 
Threat or risk assessment[D]: [Empty]; 
Criminal bulletins and publications[E]: [Empty]; 
Dissemination[F]: [Empty]; 
Counterterrorism: [Empty]; 
Collection management: F; 
Strategic analysis: [Empty]; 
Analytical products: [Empty]; 
Threat or risk assessment: [Empty]; 
Criminal bulletins and publications: F,S,L; 
Dissemination: [Empty]; 
Counternarcotics: 
Collection management: [Empty]; 
Strategic analysis: [Empty]; 
Analytical products: [Empty]; 
Threat or risk assessment: [Empty]; 
Criminal bulletins and publications: [Empty]; 
Dissemination: [Empty]. 

Fusion center 1: 
All crimes: 
Collection management[A]: F,S,L; 
Strategic analysis[B]: F,L; 
Analytical products[C]: F,S,L; 
Threat or risk assessment[D]: [Empty]; 
Criminal bulletins and publications[E]: L; 
Dissemination[F]: F,S,L; 
Counterterrorism: 
Collection management: [Empty]; 
Strategic analysis: F,L; 
Analytical products: F,S,L; 
Threat or risk assessment: F,S,L; 
Criminal bulletins and publications: L; 
Dissemination: F,S,L; 
Counternarcotics: 
Collection management: [Empty]; 
Strategic analysis: [Empty]; 
Analytical products: [Empty]; 
Threat or risk assessment: [Empty]; 
Criminal bulletins and publications: [Empty]; 
Dissemination: [Empty]. 

Fusion center 2: 
All crimes: 
Collection management[A]: F,L; 
Strategic analysis[B]: F,S,L; 
Analytical products[C]: F,L; 
Threat or risk assessment[D]: L; 
Criminal bulletins and publications[E]: F,S,L; 
Dissemination[F]: F,S,L; 
Counterterrorism: 
Collection management: F,L**; 
Strategic analysis: F,S**,L; 
Analytical products: F,L; 
Threat or risk assessment: L; 
Criminal bulletins and publications: F,S,L; 
Dissemination: F,S,L; 
Counternarcotics: 
Collection management: F*,L*; 
Strategic analysis: F*,S*,L*; 
Analytical products: F,L; 
Threat or risk assessment: L; 
Criminal bulletins and publications: F,S,L; 
Dissemination: F,S,L. 

HIDTA ISC: 
All crimes: 
Collection management[A]: [Empty]; 
Strategic analysis[B]: [Empty]; 
Analytical products[C]: [Empty]; 
Threat or risk assessment[D]: [Empty]; 
Criminal bulletins and publications[E]: [Empty]; 
Dissemination[F]: [Empty]; 
Counterterrorism: 
Collection management: [Empty]; 
Strategic analysis: [Empty]; 
Analytical products: [Empty]; 
Threat or risk assessment: [Empty]; 
Criminal bulletins and publications: [Empty]; 
Dissemination: [Empty]; 
Counternarcotics: 
Collection management: [Empty]; 
Strategic analysis: [Empty]; 
Analytical products: F,S**,L; 
Threat or risk assessment: F**,S**,L; 
Criminal bulletins and publications: F,S,L; 
Dissemination: F,S,L; 
RISS: 
All crimes: 
Collection management[A]: F,S,L; 
Strategic analysis[B]: F,S,L; 
Analytical products[C]: F,S,L; 
Threat or risk assessment[D]: [Empty]; 
Criminal bulletins and publications[E]: F,S,L; 
Dissemination[F]: F,S,L; 
Counterterrorism: 
Collection management: [Empty]; 
Strategic analysis: [Empty]; 
Analytical products: [Empty]; 
Threat or risk assessment: [Empty]; 
Criminal bulletins and publications: [Empty]; 
Dissemination: [Empty]; 
Counternarcotics: 
Collection management: [Empty]; 
Strategic analysis: [Empty]; 
Analytical products: [Empty]; 
Threat or risk assessment: [Empty]; 
Criminal bulletins and publications: [Empty]; 
Dissemination: [Empty]. 

Urban area 2: 

FIG: 
All crimes: 
Collection management[A]: F*; 
Strategic analysis[B]: F; 
Analytical products[C]: F,S,L; 
Threat or risk assessment[D]: F,S,L; 
Criminal bulletins and publications[E]: F,S,L; 
Dissemination[F]: F,S,L; 
Counterterrorism: 
Collection management: F; 
Strategic analysis: F*; 
Analytical products: F,S,L; 
Threat or risk assessment: F,S,L; 
Criminal bulletins and publications: F,S,L; 
Dissemination: F,S,L; 
Counternarcotics: 
Collection management: [Empty]; 
Strategic analysis: [Empty]; 
Analytical products: [Empty]; 
Threat or risk assessment: [Empty]; 
Criminal bulletins and publications: [Empty]; 
Dissemination: [Empty]; 

JTTF: 
All crimes: 
Collection management[A]: [Empty]; 
Strategic analysis[B]: [Empty]; 
Analytical products[C]: [Empty]; 
Threat or risk assessment[D]: [Empty]; 
Criminal bulletins and publications[E]: [Empty]; 
Dissemination[F]: [Empty]; 
Counterterrorism: 
Collection management: F,S**,L**; 
Strategic analysis: [Empty]; 
Analytical products: [Empty]; 
Threat or risk assessment: [Empty]; 
Criminal bulletins and publications: [Empty]; 
Dissemination: [Empty]; 
Counternarcotics: 
Collection management: [Empty]; 
Strategic analysis: [Empty]; 
Analytical products: [Empty]; 
Threat or risk assessment: [Empty]; 
Criminal bulletins and publications: [Empty]; 
Dissemination: [Empty]; 

Fusion center: 
All crimes: 
Collection management[A]: [Empty]; 
Strategic analysis[B]: [Empty]; 
Analytical products[C]: F,S,L; 
Threat or risk assessment[D]: F,S,L; 
Criminal bulletins and publications[E]: F,S,L; 
Dissemination[F]: F,S,L; 
Counterterrorism: 
Collection management: [Empty]; 
Strategic analysis: [Empty]; 
Analytical products: F,S,L; 
Threat or risk assessment: F,S,L; 
Criminal bulletins and publications: F,S,L; 
Dissemination: F,S,L; 
Counternarcotics: 
Collection management: [Empty]; 
Strategic analysis: [Empty]; 
Analytical products: [Empty]; 
Threat or risk assessment: [Empty]; 
Criminal bulletins and publications: F,S,L; 
Dissemination: F,S,L; 

HIDTA ISC: 
All crimes: 
Collection management[A]: [Empty]; 
Strategic analysis[B]: [Empty]; 
Analytical products[C]: [Empty]; 
Threat or risk assessment[D]: [Empty]; 
Criminal bulletins and publications[E]: [Empty]; 
Dissemination[F]: [Empty]; 
Counterterrorism: 
Collection management: [Empty]; 
Strategic analysis: [Empty]; 
Analytical products: [Empty]; 
Threat or risk assessment: [Empty]; 
Criminal bulletins and publications: [Empty]; 
Dissemination: [Empty]; 
Counternarcotics: 
Collection management: F*,S*,L*; 
Strategic analysis: F*,S*,L*; 
Analytical products: F,S,L; 
Threat or risk assessment: F,S,L; 
Criminal bulletins and publications: F,S,L; 
Dissemination: F,S,L; 

RISS: 
All crimes: 
Collection management[A]: [Empty]; 
Strategic analysis[B]: F,S**,L**; 
Analytical products[C]: F,S,L; 
Threat or risk assessment[D]: F,S,L; 
Criminal bulletins and publications[E]: F,S,L; 
Dissemination[F]: F,S,L; 
Counterterrorism: 
Collection management: [Empty]; 
Strategic analysis: [Empty]; 
Analytical products: [Empty]; 
Threat or risk assessment: [Empty]; 
Criminal bulletins and publications: [Empty]; 
Dissemination: [Empty]; 
Counternarcotics: 
Collection management: [Empty]; 
Strategic analysis: [Empty]; 
Analytical products: [Empty]; 
Threat or risk assessment: [Empty]; 
Criminal bulletins and publications: [Empty]; 
Dissemination: [Empty]. 

Urban area 3: 

FIG: 
All crimes: 
Collection management[A]: F,S,L; 
Strategic analysis[B]: F,S,L; 
Analytical products[C]: F; 
Threat or risk assessment[D]: F,S,L; 
Criminal bulletins and publications[E]: S,L; 
Dissemination[F]: F,S,L; 
Counterterrorism: 
Collection management: F,S,L; 
Strategic analysis: F,S,L; 
Analytical products: F; 
Threat or risk assessment: F,S,L; 
Criminal bulletins and publications: S,L; 
Dissemination: F,S,L; 
Counternarcotics: 
Collection management: [Empty]; 
Strategic analysis: [Empty]; 
Analytical products: [Empty]; 
Threat or risk assessment: [Empty]; 
Criminal bulletins and publications: [Empty]; 
Dissemination: [Empty]; 

JTTF: 
All crimes: 
Collection management[A]: [Empty]; 
Strategic analysis[B]: [Empty]; 
Analytical products[C]: [Empty]; 
Threat or risk assessment[D]: [Empty]; 
Criminal bulletins and publications[E]: [Empty]; 
Dissemination[F]: [Empty]; 
Counterterrorism: 
Collection management: F,S,L; 
Strategic analysis: [Empty]; 
Analytical products: F,S,L; 
Threat or risk assessment: [Empty]; 
Criminal bulletins and publications: F,S,L; 
Dissemination: [Empty]; 
Counternarcotics: 
Collection management: [Empty]; 
Strategic analysis: [Empty]; 
Analytical products: [Empty]; 
Threat or risk assessment: [Empty]; 
Criminal bulletins and publications: [Empty]; 
Dissemination: [Empty]; 

Fusion center: 
All crimes: 
Collection management[A]: F,S,L; 
Strategic analysis[B]: F,S,L; 
Analytical products[C]: F,S,L; 
Threat or risk assessment[D]: F,S,L; 
Criminal bulletins and publications[E]: F,S,L; 
Dissemination[F]: F,S,L; 
Counterterrorism: 
Collection management: F,S,L; 
Strategic analysis: F,S,L; 
Analytical products: F,S,L; 
Threat or risk assessment: F,S,L; 
Criminal bulletins and publications: F,S,L; 
Dissemination: F,S,L; 
Counternarcotics: 
Collection management: [Empty]; 
Strategic analysis: [Empty]; 
Analytical products: [Empty]; 
Threat or risk assessment: [Empty]; 
Criminal bulletins and publications: [Empty]; 
Dissemination: [Empty]; 

HIDTA ISC: 
All crimes: 
Collection management[A]: [Empty]; 
Strategic analysis[B]: [Empty]; 
Analytical products[C]: [Empty]; 
Threat or risk assessment[D]: [Empty]; 
Criminal bulletins and publications[E]: [Empty]; 
Dissemination[F]: F,S,L; 
Counterterrorism: 
Collection management: [Empty]; 
Strategic analysis: [Empty]; 
Analytical products: [Empty]; 
Threat or risk assessment: [Empty]; 
Criminal bulletins and publications: [Empty]; 
Dissemination: [Empty]; 
Counternarcotics: 
Collection management: F*,S*,L*; 
Strategic analysis: F*,S*,L*; 
Analytical products: F*,S*,L*; 
Threat or risk assessment: F*,S*,L*; 
Criminal bulletins and publications: F*,S*,L*; 
Dissemination: F*,S*,L*; 

RISS: 
All crimes: 
Collection management[A]: [Empty]; 
Strategic analysis[B]: F,S,L; 
Analytical products[C]: F,S,L; 
Threat or risk assessment[D]: [Empty]; 
Criminal bulletins and publications[E]: F,S,L; 
Dissemination[F]: F,S,L; 
Counterterrorism: 
Collection management: [Empty]; 
Strategic analysis: [Empty]; 
Analytical products: [Empty]; 
Threat or risk assessment: [Empty]; 
Criminal bulletins and publications: [Empty]; 
Dissemination: [Empty]; 
Counternarcotics: 
Collection management: [Empty]; 
Strategic analysis: [Empty]; 
Analytical products: [Empty]; 
Threat or risk assessment: [Empty]; 
Criminal bulletins and publications: [Empty]; 
Dissemination: [Empty]. 

Urban area 4: 

FIG: 
All crimes: 
Collection management[A]: [Empty]; 
Strategic analysis[B]: [Empty]; 
Analytical products[C]: F,S,L; 
Threat or risk assessment[D]: [Empty]; 
Criminal bulletins and publications[E]: F,S,L; 
Dissemination[F]: F,S,L; 
Counterterrorism: 
Collection management: F**,S**,L; 
Strategic analysis: F**,S**,L; 
Analytical products: F,S,L; 
Threat or risk assessment: F,S,L; 
Criminal bulletins and publications: F,S,L; 
Dissemination: F,S,L; 
Counternarcotics: 
Collection management: [Empty]; 
Strategic analysis: [Empty]; 
Analytical products: [Empty]; 
Threat or risk assessment: [Empty]; 
Criminal bulletins and publications: [Empty]; 
Dissemination: [Empty]; 

JTTF: 
All crimes: 
Collection management[A]: [Empty]; 
Strategic analysis[B]: [Empty]; 
Analytical products[C]: [Empty]; 
Threat or risk assessment[D]: [Empty]; 
Criminal bulletins and publications[E]: [Empty]; 
Dissemination[F]: [Empty]; 
Counterterrorism: 
Collection management: [Empty]; 
Strategic analysis: [Empty]; 
Analytical products: [Empty]; 
Threat or risk assessment: [Empty]; 
Criminal bulletins and publications: [Empty]; 
Dissemination: [Empty]; 
Counternarcotics: 
Collection management: [Empty]; 
Strategic analysis: [Empty]; 
Analytical products: [Empty]; 
Threat or risk assessment: [Empty]; 
Criminal bulletins and publications: [Empty]; 
Dissemination: [Empty]; 

Fusion center: 
All crimes: 
Collection management[A]: S,L; 
Strategic analysis[B]: S,L; 
Analytical products[C]: F,S,L; 
Threat or risk assessment[D]: F*,S*,L*; 
Criminal bulletins and publications[E]: F,S,L; 
Dissemination[F]: F,S,L; 
Counterterrorism: 
Collection management: S,L; 
Strategic analysis: S,L; 
Analytical products: F,S,L; 
Threat or risk assessment: F,S,L; 
Criminal bulletins and publications: F,S,L; 
Dissemination: F,S,L; 
Counternarcotics: 
Collection management: [Empty]; 
Strategic analysis: S,L; 
Analytical products: F,S,L; 
Threat or risk assessment: F,S,L; 
Criminal bulletins and publications: F,S,L; 
Dissemination: F,S,L; 

HIDTA ISC: 
All crimes: 
Collection management[A]: [Empty]; 
Strategic analysis[B]: [Empty]; 
Analytical products[C]: [Empty]; 
Threat or risk assessment[D]: [Empty]; 
Criminal bulletins and publications[E]: [Empty]; 
Dissemination[F]: [Empty]; 
Counterterrorism: 
Collection management: [Empty]; 
Strategic analysis: [Empty]; 
Analytical products: [Empty]; 
Threat or risk assessment: [Empty]; 
Criminal bulletins and publications: F,S,L; 
Dissemination: [Empty]; 
Counternarcotics: 
Collection management: F**,S,L; 
Strategic analysis: F,S,L; 
Analytical products: F,S,L; 
Threat or risk assessment: F,S,L; 
Criminal bulletins and publications: F,S,L; 
Dissemination: F,S,L; 

RISS: 
All crimes: 
Collection management[A]: F**,S,L; 
Strategic analysis[B]: F**,S,L; 
Analytical products[C]: F,S,L; 
Threat or risk assessment[D]: [Empty]; 
Criminal bulletins and publications[E]: F,S,L; 
Dissemination[F]: F,S,L; 
Counterterrorism: 
Collection management: [Empty]; 
Strategic analysis: [Empty]; 
Analytical products: [Empty]; 
Threat or risk assessment: [Empty]; 
Criminal bulletins and publications: [Empty]; 
Dissemination: [Empty]; 
Counternarcotics: 
Collection management: [Empty]; 
Strategic analysis: [Empty]; 
Analytical products: [Empty]; 
Threat or risk assessment: [Empty]; 
Criminal bulletins and publications: [Empty]; 
Dissemination: [Empty]. 

Urban area 5: 

FIG: 
All crimes: 
Collection management[A]: [Empty]; 
Strategic analysis[B]: [Empty]; 
Analytical products[C]: [Empty]; 
Threat or risk assessment[D]: [Empty]; 
Criminal bulletins and publications[E]: [Empty]; 
Dissemination[F]: [Empty]; 
Counterterrorism: 
Collection management: [Empty]; 
Strategic analysis: [Empty]; 
Analytical products: [Empty]; 
Threat or risk assessment: [Empty]; 
Criminal bulletins and publications: [Empty]; 
Dissemination: [Empty]; 
Counternarcotics: 
Collection management: [Empty]; 
Strategic analysis: [Empty]; 
Analytical products: [Empty]; 
Threat or risk assessment: [Empty]; 
Criminal bulletins and publications: [Empty]; 
Dissemination: [Empty]; 

JTTF: 
All crimes: 
Collection management[A]: [Empty]; 
Strategic analysis[B]: [Empty]; 
Analytical products[C]: [Empty]; 
Threat or risk assessment[D]: [Empty]; 
Criminal bulletins and publications[E]: [Empty]; 
Dissemination[F]: [Empty]; 
Counterterrorism: 
Collection management: [Empty]; 
Strategic analysis: [Empty]; 
Analytical products: [Empty]; 
Threat or risk assessment: [Empty]; 
Criminal bulletins and publications: [Empty]; 
Dissemination: F; 
Counternarcotics: 
Collection management: [Empty]; 
Strategic analysis: [Empty]; 
Analytical products: [Empty]; 
Threat or risk assessment: [Empty]; 
Criminal bulletins and publications: [Empty]; 
Dissemination: [Empty]; 

Fusion center: 
All crimes: 
Collection management[A]: F,S,L; 
Strategic analysis[B]: F,S,L; 
Analytical products[C]: F,S,L; 
Threat or risk assessment[D]: [Empty]; 
Criminal bulletins and publications[E]: F,S,L; 
Dissemination[F]: F,S,L; 
Counterterrorism: 
Collection management: F*,S*; 
Strategic analysis: [Empty]; 
Analytical products: F*,S*,L*; 
Threat or risk assessment: F*,S*,L*; 
Criminal bulletins and publications: [Empty]; 
Dissemination: F*,S**,L**; 
Counternarcotics: 
Collection management: F,S; 
Strategic analysis: [Empty]; 
Analytical products: [Empty]; 
Threat or risk assessment: [Empty]; 
Criminal bulletins and publications: [Empty]; 
Dissemination: [Empty]; 

HIDTA ISC: 
All crimes: 
Collection management[A]: F,S,L; 
Strategic analysis[B]: F,S,L; 
Analytical products[C]: F,S,L; 
Threat or risk assessment[D]: F*,S*,L*; 
Criminal bulletins and publications[E]: F,S,L; 
Dissemination[F]: F,S,L; 
Counterterrorism: 
Collection management: [Empty]; 
Strategic analysis: [Empty]; 
Analytical products: [Empty]; 
Threat or risk assessment: [Empty]; 
Criminal bulletins and publications: [Empty]; 
Dissemination: [Empty]; 
Counternarcotics: 
Collection management: F,S,L**; 
Strategic analysis: F*,S*,L*; 
Analytical products: F*,S*,L*; 
Threat or risk assessment: F*,S*,L*; 
Criminal bulletins and publications: F*,S*,L*; 
Dissemination: F*,S*,L*; 

RISS: 
All crimes: 
Collection management[A]: F,S,L; 
Strategic analysis[B]: F,S,L; 
Analytical products[C]: F,S,L; 
Threat or risk assessment[D]: [Empty]; 
Criminal bulletins and publications[E]: F,S,L; 
Dissemination[F]: F,S,L; 
Counterterrorism: 
Collection management: [Empty]; 
Strategic analysis: [Empty]; 
Analytical products: [Empty]; 
Threat or risk assessment: [Empty]; 
Criminal bulletins and publications: [Empty]; 
Dissemination: [Empty]; 
Counternarcotics: 
Collection management: [Empty]; 
Strategic analysis: [Empty]; 
Analytical products: [Empty]; 
Threat or risk assessment: [Empty]; 
Criminal bulletins and publications: [Empty]; 
Dissemination: [Empty]; 

Urban area 6: 

FIG: 
All crimes: 
Collection management[A]: [Empty]; 
Strategic analysis[B]: [Empty]; 
Analytical products[C]: [Empty]; 
Threat or risk assessment[D]: [Empty]; 
Criminal bulletins and publications[E]: [Empty]; 
Dissemination[F]: [Empty]; 
Counterterrorism: 
Collection management: F**,S,L; 
Strategic analysis: F; 
Analytical products: F; 
Threat or risk assessment: F; 
Criminal bulletins and publications: S,L; 
Dissemination: F,S,L; 
Counternarcotics: 
Collection management: [Empty]; 
Strategic analysis: [Empty]; 
Analytical products: [Empty]; 
Threat or risk assessment: [Empty]; 
Criminal bulletins and publications: [Empty]; 
Dissemination: [Empty]; 

JTTF: 
All crimes: 
Collection management[A]: [Empty]; 
Strategic analysis[B]: [Empty]; 
Analytical products[C]: [Empty]; 
Threat or risk assessment[D]: [Empty]; 
Criminal bulletins and publications[E]: [Empty]; 
Dissemination[F]: [Empty]; 
Counterterrorism: 
Collection management: [Empty]; 
Strategic analysis: [Empty]; 
Analytical products: [Empty]; 
Threat or risk assessment: [Empty]; 
Criminal bulletins and publications: [Empty]; 
Dissemination: [Empty]; 
Counternarcotics: 
Collection management: [Empty]; 
Strategic analysis: [Empty]; 
Analytical products: [Empty]; 
Threat or risk assessment: [Empty]; 
Criminal bulletins and publications: [Empty]; 
Dissemination: [Empty]; 

Fusion center: 
All crimes: 
Collection management[A]: S*,L*; 
Strategic analysis[B]: S,L; 
Analytical products[C]: S,L; 
Threat or risk assessment[D]: S*,L*; 
Criminal bulletins and publications[E]: F,S,L; 
Dissemination[F]: F,S,L; 
Counterterrorism: 
Collection management: S,L; 
Strategic analysis: S*,L*; 
Analytical products: S*,L*; 
Threat or risk assessment: S*,L*; 
Criminal bulletins and publications: F**,S,L; 
Dissemination: F,S,L; 
Counternarcotics: 
Collection management: S,L; 
Strategic analysis: S,L; 
Analytical products: S,L; 
Threat or risk assessment: [Empty]; 
Criminal bulletins and publications: F,S,L; 
Dissemination: F,S,L; 

HIDTA ISC: 
All crimes: 
Collection management[A]: [Empty]; 
Strategic analysis[B]: [Empty]; 
Analytical products[C]: [Empty]; 
Threat or risk assessment[D]: [Empty]; 
Criminal bulletins and publications[E]: [Empty]; 
Dissemination[F]: F,S,L; 
Counterterrorism: 
Collection management: [Empty]; 
Strategic analysis: [Empty]; 
Analytical products: [Empty]; 
Threat or risk assessment: [Empty]; 
Criminal bulletins and publications: [Empty]; 
Dissemination: [Empty]; 
Counternarcotics: 
Collection management: F**,S,L; 
Strategic analysis: F**,S,L; 
Analytical products: F**,S,L; 
Threat or risk assessment: F*,S*,L*; 
Criminal bulletins and publications: F,S,L; 
Dissemination: F,S,L; 

RISS: 
All crimes: 
Collection management[A]: [Empty]; 
Strategic analysis[B]: F**,S,L; 
Analytical products[C]: F**,S,L; 
Threat or risk assessment[D]: [Empty]; 
Criminal bulletins and publications[E]: F,S,L; 
Dissemination[F]: F,S,L; 
Counterterrorism: 
Collection management: [Empty]; 
Strategic analysis: [Empty]; 
Analytical products: [Empty]; 
Threat or risk assessment: [Empty]; 
Criminal bulletins and publications: [Empty]; 
Dissemination: [Empty]; 
Counternarcotics: 
Collection management: [Empty]; 
Strategic analysis: [Empty]; 
Analytical products: [Empty]; 
Threat or risk assessment: [Empty]; 
Criminal bulletins and publications: [Empty]; 
Dissemination: [Empty]. 

Urban area 7: 

FIG: 
All crimes: 
Collection management[A]: F*; 
Strategic analysis[B]: F; 
Analytical products[C]: F,S,L; 
Threat or risk assessment[D]: F,S,L; 
Criminal bulletins and publications[E]: [Empty]; 
Dissemination[F]: F; 
Counterterrorism: 
Collection management: F; 
Strategic analysis: F*; 
Analytical products: F,S,L; 
Threat or risk assessment: F*,S*,L*; 
Criminal bulletins and publications: [Empty]; 
Dissemination: F; 
Counternarcotics: 
Collection management: [Empty]; 
Strategic analysis: [Empty]; 
Analytical products: [Empty]; 
Threat or risk assessment: [Empty]; 
Criminal bulletins and publications: [Empty]; 
Dissemination: [Empty]; 

JTTF: 
All crimes: 
Collection management[A]: [Empty]; 
Strategic analysis[B]: [Empty]; 
Analytical products[C]: [Empty]; 
Threat or risk assessment[D]: [Empty]; 
Criminal bulletins and publications[E]: [Empty]; 
Dissemination[F]: [Empty]; 
Counterterrorism: 
Collection management: F; 
Strategic analysis: [Empty]; 
Analytical products: [Empty]; 
Threat or risk assessment: [Empty]; 
Criminal bulletins and publications: [Empty]; 
Dissemination: F; 
Counternarcotics: 
Collection management: [Empty]; 
Strategic analysis: [Empty]; 
Analytical products: [Empty]; 
Threat or risk assessment: [Empty]; 
Criminal bulletins and publications: [Empty]; 
Dissemination: [Empty]; 

Fusion center 1: 
All crimes: 
Collection management[A]: [Empty]; 
Strategic analysis[B]: [Empty]; 
Analytical products[C]: F,S,L; 
Threat or risk assessment[D]: [Empty]; 
Criminal bulletins and publications[E]: F,S,L; 
Dissemination[F]: F,S,L; 
Counterterrorism: 
Collection management: [Empty]; 
Strategic analysis: [Empty]; 
Analytical products: F,S,L; 
Threat or risk assessment: [Empty]; 
Criminal bulletins and publications: S*,L*; 
Dissemination: F; 
Counternarcotics: 
Collection management: [Empty]; 
Strategic analysis: [Empty]; 
Analytical products: [Empty]; 
Threat or risk assessment: [Empty]; 
Criminal bulletins and publications: [Empty]; 
Dissemination: [Empty]; 

Fusion center 2: 
All crimes: 
Collection management[A]: [Empty]; 
Strategic analysis[B]: F,S,L; 
Analytical products[C]: F,S,L; 
Threat or risk assessment[D]: F,S,L; 
Criminal bulletins and publications[E]: F,S,L; 
Dissemination[F]: F,S,L; 
Counterterrorism: 
Collection management: [Empty]; 
Strategic analysis: [Empty]; 
Analytical products: [Empty]; 
Threat or risk assessment: [Empty]; 
Criminal bulletins and publications: [Empty]; 
Dissemination: 
Counternarcotics: 
Collection management: [Empty]; 
Strategic analysis: [Empty]; 
Analytical products: [Empty]; 
Threat or risk assessment: [Empty]; 
Criminal bulletins and publications: [Empty]; 
Dissemination: [Empty]; 

HIDTA ISC: 
All crimes: 
Collection management[A]: [Empty]; 
Strategic analysis[B]: [Empty]; 
Analytical products[C]: [Empty]; 
Threat or risk assessment[D]: [Empty]; 
Criminal bulletins and publications[E]: [Empty]; 
Dissemination[F]: [Empty]; 
Counterterrorism: 
Collection management: [Empty]; 
Strategic analysis: [Empty]; 
Analytical products: [Empty]; 
Threat or risk assessment: [Empty]; 
Criminal bulletins and publications: [Empty]; 
Dissemination: [Empty]; 
Counternarcotics: 
Collection management: F*,S*,L*; 
Strategic analysis: F*,S*,L*; 
Analytical products: F*,S*,L*; 
Threat or risk assessment: F*,S*,L*; 
Criminal bulletins and publications: F*,S*,L*; 
Dissemination: F*,S*,L*; 

RISS: 
All crimes: 
Collection management[A]: [Empty]; 
Strategic analysis[B]: F,S,L; 
Analytical products[C]: F,S,L; 
Threat or risk assessment[D]: [Empty]; 
Criminal bulletins and publications[E]: F,S,L; 
Dissemination[F]: F,S,L; 
Counterterrorism: 
Collection management: [Empty]; 
Strategic analysis: [Empty]; 
Analytical products: [Empty]; 
Threat or risk assessment: [Empty]; 
Criminal bulletins and publications: [Empty]; 
Dissemination: [Empty]; 
Counternarcotics: 
Collection management: [Empty]; 
Strategic analysis: [Empty]; 
Analytical products: [Empty]; 
Threat or risk assessment: [Empty]; 
Criminal bulletins and publications: [Empty]; 
Dissemination: [Empty]; 

Urban area 8: 

FIG: 
All crimes: 
Collection management[A]: [Empty]; 
Strategic analysis[B]: [Empty]; 
Analytical products[C]: F,S,L; 
Threat or risk assessment[D]: F; 
Criminal bulletins and publications[E]: [Empty]; 
Dissemination[F]: F,S,L; 
Counterterrorism: 
Collection management: [Empty]; 
Strategic analysis: [Empty]; 
Analytical products: F,S,L; 
Threat or risk assessment: F; 
Criminal bulletins and publications: [Empty]; 
Dissemination: F,S,L; 
Counternarcotics: 
Collection management: [Empty]; 
Strategic analysis: [Empty]; 
Analytical products: [Empty]; 
Threat or risk assessment: [Empty]; 
Criminal bulletins and publications: [Empty]; 
Dissemination: [Empty]; 

JTTF: 
All crimes: 
Collection management[A]: [Empty]; 
Strategic analysis[B]: [Empty]; 
Analytical products[C]: [Empty]; 
Threat or risk assessment[D]: [Empty]; 
Criminal bulletins and publications[E]: [Empty]; 
Dissemination[F]: [Empty]; 
Counterterrorism: 
Collection management: [Empty]; 
Strategic analysis: [Empty]; 
Analytical products: [Empty]; 
Threat or risk assessment: [Empty]; 
Criminal bulletins and publications: [Empty]; 
Dissemination: F,S,L; 
Counternarcotics: 
Collection management: [Empty]; 
Strategic analysis: [Empty]; 
Analytical products: [Empty]; 
Threat or risk assessment: [Empty]; 
Criminal bulletins and publications: [Empty]; 
Dissemination: [Empty]; 

Fusion center/HIDTA ISC: 
All crimes: 
Collection management[A]: F*,S*,L*; 
Strategic analysis[B]: F,S,L; 
Analytical products[C]: F,S,L; 
Threat or risk assessment[D]: F,S,L; 
Criminal bulletins and publications[E]: S**,L**; 
Dissemination[F]: F,S,L; 
Counterterrorism: 
Collection management: F*,S*,L*; 
Strategic analysis: F*,S*,L*; 
Analytical products: F,S,L; 
Threat or risk assessment: F,S**,L**; 
Criminal bulletins and publications: S*,L*; 
Dissemination: F,S,L; 
Counternarcotics: 
Collection management: F*,S*,L*; 
Strategic analysis: F*,S*,L*; 
Analytical products: F*,S*,L*; 
Threat or risk assessment: F*,S*,L*; 
Criminal bulletins and publications: F*,S*,L*; 
Dissemination: F*,S*,L*; 

RISS: 
All crimes: 
Collection management[A]: [Empty]; 
Strategic analysis[B]: F,S,L; 
Analytical products[C]: F,S,L; 
Threat or risk assessment[D]: [Empty]; 
Criminal bulletins and publications[E]: F,S**,L**; 
Dissemination[F]: F,S,L; 
Counterterrorism: 
Collection management: [Empty]; 
Strategic analysis: [Empty]; 
Analytical products: [Empty]; 
Threat or risk assessment: [Empty]; 
Criminal bulletins and publications: [Empty]; 
Dissemination: [Empty]; 
Counternarcotics: 
Collection management: [Empty]; 
Strategic analysis: [Empty]; 
Analytical products: [Empty]; 
Threat or risk assessment: [Empty]; 
Criminal bulletins and publications: [Empty]; 
Dissemination: [Empty]. 

Legend: 

No asterisk = Overlap in activity; 
One * = Activity conducted, but no overlap; 
Two ** = No overlap for a particular customer. 
F = Federal customer; 
S = State customer; 
L = Local customer; 
FIG = FBI Field Intelligence Group; 
JTTF = FBI Joint Terrorism Task Force; 
HIDTA ISC = High Intensity Drug Trafficking Area Investigative Support 
Area; 
RISS: Regional Information Sharing Systems center. 

Source: GAO. 

Notes: We focused our analysis on whether an entity conducted an 
activity for federal, state or local customers. Therefore, entities 
could also conduct these activities for other customers, such as for 
tribal agencies or to meet internal needs. In addition, entities did 
not report whether customers for whom an activity was conducted were 
considered to be primary or secondary customers. Accordingly, the 
figure indicates whether an activity was conducted, not the frequency 
or prevalence of that activity. For example, the amount of time and 
resources dedicated to each activity conducted by the entities may 
vary. For the purposes of this report, we defined six categories of 
analytical activities and other services that entities can perform: 
(1) collection management, (2) strategic analysis, (3) analytical 
products, (4) threat or risk assessments, (5) criminal bulletins and 
publications, and (6) dissemination. 

[A] Collection management is the identification, location, and 
recording or storing of information used to support analysis. 

[B] Strategic analysis is the analysis of crime patterns, crime 
trends, or criminal organizations for the purpose of planning, 
decision making, and resource allocation. 

[C] Analytical products involve the conversion of raw information into 
intelligence. 

[D] Threat or risk assessments are documents that analyze the 
propensity for threat or risk in a certain time or place. 

[E] Criminal bulletins and publications are bulletins or publications 
that highlight criminal activity. 

[F] Dissemination is the distribution of information to customers. 

[End of figure] 

For investigative support activities and services, GAO identified more 
instances of overlap in the: (1) mission area of all-crimes compared 
to the mission areas of counterterrorism and counternarcotics; (2) 
activities conducted by fusion centers and Regional Information 
Sharing Systems centers compared to the other three entities; and (3) 
tactical analysis, such as link analysis of relationships among 
suspects or telephone toll analysis, compared to other investigative 
support activities and services.[Footnote 7] Overlap in analytical 
activities and services can be beneficial, for example, if it 
validates information or allows for competing or complementary 
analysis; however, overlap can also lead to inefficiencies, for 
example, if it burdens customers with redundant information. Officials 
from seven state and local law enforcement customer agencies GAO 
interviewed had varying preferences about the frequency and amount of 
information they receive from entities.[Footnote 8] However, officials 
from four of these seven customer agencies stated that receiving 
redundant information is burdensome.[Footnote 9] For example, an 
official from one local law enforcement agency explained that entities 
forwarding original products, criminal bulletins, and publications 
without coordination due to time constraints leads to law enforcement 
leadership getting inundated with redundant information. 

Improving coordination could help the agencies reduce inefficiencies 
resulting from overlap, as it could allow agencies to identify 
overlapping and duplicative efforts, and more precisely determine 
agency roles and responsibilities. DOJ, DHS, and ONDCP have processes 
in place to collect and measure information on the capabilities or 
performance of the entities in information sharing. However, DOJ, DHS, 
and ONDCP do not specifically hold field-based entities accountable 
for coordinating with each other. As such, coordination is not a 
specific expectation in the entities' performance management systems, 
and agencies do not track or measure the extent to which entities in 
urban areas are coordinating to leverage resources, collaborate, and 
reduce overlap. GAO reported in March 2003 that high-performing 
organizations use their performance management systems to strengthen 
accountability for results, specifically by placing greater emphasis 
on fostering the necessary coordination both within and across 
organizational boundaries to achieve results.[Footnote 10] 

Officials from FBI, Bureau of Justice Assistance, DHS, and ONDCP each 
stated that coordination among the entities is essential in meeting 
individual missions. These officials further told us that they 
ultimately rely on the leadership of their respective field-based 
entities to ensure that successful coordination is occurring. However, 
officials at 22 of the 37 entities stated that successful coordination 
depends most on personal relationships and can be disrupted when new 
leadership takes over at an entity. Officials at 20 of 37 entities 
also stated that measuring and monitoring coordination could alleviate 
the process of starting over when new personnel take over at a partner 
entity and ensure that maintaining coordinated efforts is a priority. 
A mechanism, such as performance metrics related to coordination, that 
holds field-based entities accountable for coordinating with each 
other and enables agencies to monitor and evaluate these efforts could 
help DOJ, DHS, and ONDCP, working through the Information Sharing and 
Access Interagency Policy Committee, to provide agencies with 
information about the effective coordination taking place among field-
based entities and provide additional incentives for personnel in the 
field to strengthen coordination efforts. 

To improve interagency coordination, the agencies could consider 
practices and mechanisms that entity officials in the field reported 
as enhancing coordination. For example, officials in the eight urban 
areas in GAO's review identified participation on local governance 
boards, such as executive boards with responsibility for managing an 
entity and physical or virtual co-location of entities, as two 
practices that enhanced coordination, reduced overlap in activities 
they conducted, and leveraged resources. Officials stated that co-
locating, as well as creating shared information spaces in a virtual 
environment, allowed them to share information more efficiently, 
develop more sophisticated products, increase coordinated and 
collaborative efforts, and save resources. GAO reported in April 2013 
that such practices were consistent with guidance provided to the 
entities by DOJ, DHS, and ONDCP, as well as with practices that GAO 
had previously reported federal agencies have used to implement 
interagency collaborative efforts.[Footnote 11] 

However, GAO also reported in April 2013 that entities nationwide do 
not all use such practices, and DOJ, DHS, and ONDCP have not assessed 
the extent to which such practices entities identified to enhance 
coordination could be more comprehensively applied across the nation. 
For instance, GAO reported in April 2013 that 11 of 72 fusion centers 
did not have governance boards, and 16 fusion centers were colocated 
with Joint Terrorism Task Forces. Therefore, agencies may have 
additional opportunities to apply these types of practices. 

The federal government has begun to take some steps to enhance 
coordination. For example, the Information Sharing and Access 
Interagency Policy Committee--an interagency working group within the 
Executive Office of the White House with members from DOJ, DHS, and 
ONDCP, among others, that has responsibility for ensuring information 
sharing among the entities--brought the members of its Fusion Center 
Subcommittee together to discuss how to establish stronger 
partnerships between fusion centers and HIDTA Investigative Support 
Centers, and to further define the operational roles, 
responsibilities, and relationships among these entities.[Footnote 12] 
According to agency officials present at the meeting, the subcommittee 
did not explore the extent to which participation on boards, co-
location, or other coordination practices could benefit additional 
entities across the nation. Rather, the intent was to provide a forum 
to share practices and the subcommittee did not have a plan to 
implement or promote specific practices nor to further assess their 
greater applicability. 

An assessment of the feasibility of additional participation on 
governance boards and the co-location of these entities in certain 
geographic areas--as well as other practices that could enhance 
coordination and reduce unnecessary overlap--could help DOJ, DHS, and 
ONDCP in their roles on the Information Sharing and Access Interagency 
Policy Committee to be better informed on whether additional 
governance boards or co-located entities should be pursued. 

Actions Needed and Potential or Other Financial Benefits: 

GAO recommended in April 2013 that the Secretary of Homeland Security, 
the Attorney General, and the Director of ONDCP work through the 
Information Sharing and Access Interagency Policy Committee or 
otherwise collaborate to take the following two actions: 

* develop a mechanism that will allow them to hold field-based 
information-sharing entities accountable for coordinating with each 
other and monitor and evaluate the coordination results achieved; and: 

* identify characteristics of entities and assess specific geographic 
areas in which practices that could enhance coordination and reduce 
unnecessary overlap, such as cross-entity participation on governance 
boards and colocation of entities, could be further applied, and use 
the results to provide recommendations or guidance to the entities on 
implementing these practices. 

While the potential financial benefit of these actions cannot be 
known, in part, until an assessment is completed, GAO's work 
illustrates that the implementation of these recommendations could 
help DOJ, DHS, and ONDCP reduce inefficiencies resulting from overlap 
through enhanced coordination and leveraging of resources, and 
therefore, increase efficiencies and improve information sharing. 

Agency Comments and GAO's Evaluation: 

GAO provided a draft of this section, as well as the April 2013 report 
on which it is based, to DOJ, DHS, and ONDCP for review and comment. 
In an email dated March 7, 2013, DOJ stated that the Department 
generally agreed with the two recommendations in both the section and 
the report; however, in its letter, DOJ stated that it did not concur 
with the premises underlying the two recommendations, which is 
discussed in more detail below. DHS concurred with both 
recommendations and reported steps it was taking to address them. DHS 
also stated that it will work with GAO to define more specific and 
measurable outcomes, and document these decisions. ONDCP concurred 
with both recommendations via email, dated March 8, 2013. 

Specifically, in its letter DOJ stated that it generally agreed with 
the goal of the first recommendation but that it did not concur that 
the Department was not already actively promoting coordination. For 
example, officials stated that DOJ has participated in summits with 
other agencies, including DHS, in an ongoing dialogue on efficient and 
effective coordination of information sharing in the field. While 
these efforts are positive steps for sharing information and 
coordinating to improve sharing, the efforts do not fully address the 
recommendation to develop a mechanism for accountability and 
monitoring coordination across all five entities included in GAO's 
review. GAO maintains that such a mechanism that specifically and 
directly holds field based entities accountable for coordinating with 
one another could add valuable context to the type of dialogue DOJ 
describes, while encouraging entities to maintain working 
relationships when new leadership is assigned and engage in 
coordination activities, such as leveraging resources, to avoid 
unnecessary overlap. 

With respect to the second recommendation, in its letter DOJ stated 
that it agreed with the general intent of the recommendation, but does 
not concur with the premises that the Department does not already 
routinely seek to identify potential efficiency gains and that 
colocation is something that should be a goal in and of itself. DOJ 
stated that it does encourage entities to explore efficiencies that 
can be gained by, for example, cross-entity participation or 
colocation in circumstances where appropriate and efficient. However, 
DOJ stated that what is appropriate and efficient is highly dependent 
on local circumstances, and a one-size fits all approach will not work 
because of variation in the entities, regions, and laws under which 
they operate. GAO agrees and stated in the report that colocation 
should not be advocated as a universal approach because it may not be 
practical in all cases. GAO's recommendation calls for the agencies 
that operate or otherwise support these entities to collectively 
assess opportunities to enhance coordination through whatever 
effective means they identify. 

DOJ stated that a comparison of the Field Intelligence Groups and 
Joint Terrorism Task Forces with the other entities over-generalizes 
their activities since they are operational while the others are 
analytical. Similarly, DHS stated that the comparison of Field 
Intelligence Groups with fusion centers over-generalizes the unique 
nature of the entities' products and their intended recipients. In its 
report, GAO outlines the distinct missions, authorities, roles, and 
responsibilities of each of the entities, noting the Joint Terrorism 
Task Force's unique role in conducting counterterrorism 
investigations. Further, GAO acknowledges that entities serve as 
intermediaries to different customers while each has a broader role in 
sharing information with its partners as appropriate. DOJ's letter 
also commented on the generalizeability of GAO's analysis. GAO 
selected eight urban areas to explore activities conducted and 
coordination mechanisms across the five entities in its review. On the 
basis of GAO's analysis, GAO identified instances of reported overlap 
in activities and also examples of where coordination was working well 
across the entities. GAO stated in its report that the results from 
the eight urban areas are not generalizeable, and thus GAO made 
recommendations for agencies to assess practices GAO identified that 
were working well, as well as other coordination practices, to 
identify additional opportunities nationwide to coordinate and reduce 
any unnecessary overlap in entities' activities. 

DHS and DOJ also provided technical comments, which were incorporated 
as appropriate. 

How GAO Conducted Its Work: 

The information contained in this analysis is based on findings from 
the product in the related GAO product section. To assess 
fragmentation and overlap among field-based information-sharing 
entities, GAO compared the missions, activities, and customers 
reported by officials from each entity in eight urban areas that GAO 
selected to reflect a range of factors, including geographic 
dispersion to those of other entities in the same urban area. While 
results from these eight urban areas are not generalizeable to all 
urban areas, the results provided insight into entities' activities 
and areas of overlap. GAO applied criteria from its prior work on 
fragmentation, overlap, and duplication to assess if any activities 
were conducted in the same or similar mission area for the same or 
similar customers.[Footnote 13] GAO also interviewed officials from 
either a state or local law enforcement agency that received 
information from one or more of the entities in each of the eight 
urban areas (i.e., customer agencies). To identify efforts under way 
to improve coordination and information sharing among the agencies and 
the entities, GAO analyzed documentation and interviewed officials 
from FBI, Bureau of Justice Assistance, DHS, and ONDCP with 
responsibility for overseeing or providing support to the entities. To 
assess the extent to which the agencies hold the entities accountable 
for coordinating with each other, GAO analyzed the types of 
information the entities provide the agencies regarding coordination 
and interviewed officials who were responsible for overseeing the 
entities' information-sharing efforts. Table 7 in appendix IV lists 
the programs GAO identified that might have similar or overlapping 
objectives, provide similar services, or be fragmented across 
government missions. Overlap and fragmentation might not necessarily 
lead to actual duplication, and some degree of overlap and duplication 
may be justified. 

Related GAO Product: 

Information Sharing: Agencies Could Better Coordinate to Reduce 
Overlap in Field-Based Activities. [hyperlink, 
http://www.gao.gov/products/GAO-13-471]. Washington, D.C.: April 4, 
2013. 

Contact Information: 

For additional information about this area, contact Eileen Larence at 
(202) 512-8777 or larencee@gao.gov. 

[Footnotes: 

[1] For purposes of this report, terrorism-related information 
encompasses "terrorism information," which includes "weapons of mass 
destruction information" and "homeland security information," 
consistent with section 1016 of the Intelligence Reform and Terrorism 
Prevention Act of 2004, as amended, as well as law enforcement 
information relating to terrorism or the security of the homeland. See 
Pub. L. No. 108-458, § 1016(a), 118 Stat. 3638, 3664-65 (2004) 
(codified as amended at 6 U.S.C. § 485(a)). See also Pub. L. No. 107-
296, § 892(f), 116 Stat. 2135 (2002) (codified at 6 U.S.C. § 482(f)). 

[2] A fusion center is a collaborative effort of two or more agencies 
that combines resources, expertise, or information at the center with 
the goal of maximizing the ability of such agencies to detect, 
prevent, investigate, and respond to criminal and terrorist activity. 
See 6 U.S.C. § 124h(j)(1). 

[3] The National Fusion Center Association (NFCA) reported fusion 
center funding based on self-reported responses from 57 of 77 fusion 
centers. 

[4] According to the 2012 Information Sharing Environment (ISE) Annual 
Report to Congress, effective and responsible information sharing 
requires a strong commitment and participation from agencies. The 
Program Manager for ISE's mission includes promoting partnerships 
across federal, state, local, and tribal governments, and the private 
sector, as well as internationally. 

[5] The FBI is responsible for the coordination of all intelligence 
and investigatory activity involving federal crimes of terrorism, and 
carries out this responsibility through the Joint Terrorism Task 
Forces. As such, none of the other entities are responsible for 
conducting counterterrorism investigations. 

[6] For purposes of this report, "mission area" refers to the area of 
work in which an entity conducts an activity. The mission area of "all-
crimes" can include terrorism and other high-risk threats as well as 
other types of crimes. 

[7] Link analysis is the analysis of information that shows 
relationships among varied individuals suspected of being involved in 
criminal activity that may provide insight into the criminal operation 
and which investigative strategies to use. Telephone toll analysis is 
the analysis of incoming and outgoing telephone calls, which can help 
investigators to establish ties between suspects and pinpoint 
suspects' locations at certain times during the course of an 
investigation. 

[8] One of the eight customer agencies included in GAO's review did 
not provide comments on overlap in activities conducted by entities. 

[9] According to FBI officials, actions to ensure coordination for 
product dissemination are largely dependent on the relationship with 
each fusion center and there is a difference between FBI intelligence 
products and fusion center intelligence products; not all fusion 
center disseminations are sent to Field Intelligence Groups and Field 
Intelligence Group products are not always appropriate for 
dissemination to fusion centers. 

[10] GAO, Results-Oriented Cultures: Creating a Clear Linkage between 
Individual Performance and Organizational Success, [hyperlink, 
http://www.gao.gov/products/GAO-03-488] (Washington, D.C.: Mar. 14, 
2003). 

[11] GAO, Managing for Results: Key Considerations for Implementing 
Interagency Collaborative Mechanisms, [hyperlink, 
http://www.gao.gov/products/GAO-12-1022] (Washington, D.C.: Sept. 27, 
2012). 

[12] The Fusion Center Sub-Committee of the Information Sharing and 
Access Interagency Policy Committee is co-chaired by FBI and DHS, and 
includes members from, among others, Bureau of Justice Assistance, 
ONDCP, and the Criminal Intelligence Coordinating Council, which 
includes representatives of state and local fusion centers and law 
enforcement agencies. 

[13] GAO, 2012 Annual Report: Opportunities to Reduce Duplication, 
Overlap and Fragmentation, Achieve Savings, and Enhance Revenue, 
[hyperlink, http://www.gao.gov/products/GAO-12-342SP] (Washington, 
D.C.: Feb. 28, 2012); Follow-up on 2011 Report: Status of Actions 
Taken to Reduce Duplication, Overlap, and Fragmentation, Save Tax 
Dollars, and Enhance Revenue, [hyperlink, 
http://www.gao.gov/products/GAO-12-453SP](Washington, D.C.: Feb. 28, 
2012). 

[End of Field-Based Information Sharing area] 

9. Justice and Treasury Asset Forfeiture: 

Conducting a study to evaluate the feasibility of consolidating the 
Departments of Justice's and Treasury's multimillion dollar asset 
forfeiture activities could help the departments identify the extent 
to which consolidation of potentially duplicative activities would 
help increase the efficiency and effectiveness of the programs and 
achieve cost savings. 

Why This Area Is Important: 

Both the Department of Justice (Justice) and Department of the 
Treasury (Treasury) operate asset forfeiture programs that are 
designed to prevent and reduce crime through the seizure and 
forfeiture of assets that represent the proceeds of, or were used to 
facilitate, federal crimes.[Footnote 1] GAO reported in September 2012 
that participating agencies within Justice and Treasury annually seize 
millions of dollars in assets from their law enforcement activities. 
Seized assets include cash and financial instruments, as well as 
noncash items such as real estate and vehicles. 

In fiscal year 2011, the combined value of total assets in these two 
programs was about $9.4 billion, of which about $6.9 billion and $2.5 
billion were assets under Justice's and Treasury's management, 
respectively.[Footnote 2] Participating agencies of both programs also 
seize and hold illegal drugs, firearms, and counterfeit items that 
have no resale value to the government and are typically held by 
agencies until they are approved for destruction. Each department also 
maintains a separate forfeiture fund, where proceeds from forfeited 
assets are deposited. The Comprehensive Crime Control Act of 1984 
established Justice's Assets Forfeiture Fund[Footnote 3] and the 
Treasury Forfeiture Fund Act of 1992 established the Treasury 
Forfeiture Fund[Footnote 4] In addition, a series of laws have been 
enacted expanding forfeiture from drug offenses to money laundering, 
financial crimes, and terrorism-related offenses. These statutes 
authorize seizure and fund management activities, but do not prohibit 
coordination or consolidation of asset forfeiture property management 
activities. 

In January 1990, GAO identified both the Justice and Treasury 
forfeiture programs as high-risk areas due in part to the potential 
for cost reduction through administrative improvements and 
consolidation of the programs' management and disposition of noncash 
seized property.[Footnote 5] In 2003, GAO removed both programs from 
the high-risk list because Justice and Treasury had (1) made 
improvements in the management of and accountability for seized and 
forfeited property, and (2) demonstrated the commitment to communicate 
and coordinate where joint efforts could help reduce costs and 
eliminate potentially duplicative activities. For example, Justice and 
Treasury were moving toward better coordination of property management 
activities such as sharing website locations for Internet sales, 
sharing selected vehicle storage and warehouse facilities, and 
exploring opportunities to jointly contract for services in high-
volume areas. 

What GAO Found: 

In September 2012, GAO reported that since 2003, Justice and Treasury 
have taken some steps to explore coordinating forfeiture program 
efforts, including sharing a website for posting notifications and 
pursuing a contract for seizure efforts abroad. However, since 2003, 
Justice and Treasury have made limited progress in sharing storage 
facilities or contracts, and have not fully explored the possibility 
of coordinating the management of their assets that could be 
consolidated to achieve efficiencies, effectiveness, and cost savings. 
As a result, each department maintains separate information technology 
(IT) asset tracking systems, separate contracts for the management of 
real property and personal property, and separate storage facilities. 
[Footnote 6] 

Justice and Treasury maintain four separate IT asset tracking systems-
-one for Justice and three for Treasury--to support their respective 
asset forfeiture programs.[Footnote 7] GAO found that all systems 
perform similar functions that are duplicative across federal agencies 
overseeing asset forfeiture programs. Treasury had intended to use the 
Justice asset tracking system and participated for 2 years in the 
design, development, and implementation of the system, but then 
withdrew to develop its own IT asset tracking system. Treasury 
officials said their own system was necessary to satisfy federal 
financial requirements. However, GAO's prior work shows that 
technology solutions can be used to consolidate IT systems that are 
common and duplicative, but information is needed to help effectively 
evaluate consolidation proposals and activities.[Footnote 8] For 
example, from 2001 to 2009, the federal payroll consolidation 
initiative consolidated 26 payroll systems to four shared-service 
centers.[Footnote 9] The Office of Personnel Management (OPM) 
estimated this consolidation would save the federal government $1.1 
billion over 10 years. Further, in 1996, GAO reported that Treasury 
recognized that the Justice IT asset tracking system could be modified 
to meet the Treasury financial reporting requirements, but believed 
that developing a new system to meet the requirements was preferable. 
[Footnote 10] Justice and Treasury data show that the cost of 
developing, maintaining, and overseeing their four asset tracking 
systems in fiscal year 2011 totaled $16.2 million for the Justice 
asset tracking system and $10.4 million combined for the three 
Treasury asset tracking systems. While consolidation is beneficial in 
some situations, it is not in others. For example, consolidation 
initiatives can be complex, costly, and difficult to achieve. Thus, it 
is helpful to answer basic questions when considering consolidation. 
[Footnote 11] As a result, a case-by-case analysis is necessary--
evaluating the goals of the consolidation against the realistic 
possibility of the extent to which those goals would be achieved--to 
ensure effective stewardship of government resources in a constrained 
budget environment. 

Justice and Treasury have made limited progress in consolidating their 
contracts for the management of real property and personal property. 
For example, the U.S. Marshals Service (Marshals)--the primary 
custodian of Justice's seized assets--reported using one national 
contract for the management of real property in all but three Marshals 
districts in fiscal year 2011.[Footnote 12] Similarly, Treasury uses 
one national contract, which includes maintaining and eventually 
disposing of the real property. Marshals and Treasury use different 
national contractors for the management of their real property. 
Additionally, for the management of personal property, Marshals takes 
a decentralized approach involving multiple contracts, while Treasury 
uses a centralized approach to manage personal property. In fiscal 
year 2011, Marshals' multiple contracts for the management, storage, 
and disposal of personal and real property cost about $19 million, 
while the two nationwide contracts used by Treasury--one for the 
management of real property and one for the management of personal 
property--provided custodial services either directly or through 
subcontracts at a cost of about $49 million for fiscal year 2011. 
[Footnote 13] Marshals and Treasury have not evaluated the feasibility 
of consolidating these contracts and do not know if there could be 
improved effectiveness, efficiency gains, or cost savings realized 
because of economies of scale. 

Justice and Treasury continue to separately store assets seized under 
their respective programs. Officials from both departments stated that 
the volume and types of properties seized by the participating 
agencies of each department vary. However, both departments seize 
similar assets such as vehicles, vessels, and aircraft, and in some 
cases, store these assets in the same geographic area. GAO's analysis 
of contracted asset storage facilities--for the storage of vehicles, 
vessels, and aircraft--showed that about 23 to 40 percent of Marshals 
and Treasury's contracted facilities for these three categories are 
within 20 miles or less of one another. For example, 40 percent of 
Treasury contracted vehicle storage facilities are located 20 miles or 
less from a Marshals contracted vehicle storage facility. This 
includes 4 facilities, managed by the same vendor, which Treasury 
shares with Marshals under separate contracts. GAO's prior work has 
shown that physical infrastructure consolidations can be achieved 
between two different departments in order to achieve cost savings. 
[Footnote 14] For example, the Department of Veterans Affairs (VA) and 
the Department of Defense (DOD) Federal Health Care Center began 
integrating VA and DOD medical care into a joint facility, resulting 
in savings of $11.2 million during the first two phases of the 
initiative. 

Marshals and Treasury officials stated that they had not considered 
analyzing consolidation of their separate contracted storage 
facilities because of (1) the unique security requirements for their 
stored assets; (2) the variations in the types of assets that may 
create unique storage needs; (3) the different contracting rules and 
requirements for each agency; (4) the inability to accurately predict 
the combined storage needs of both agencies, which affects their 
ability to contract for these services; and (5) the overall lack of 
assurance that combining contracts will result in cost savings. 
However, as these officials said, the departments have not analyzed 
the similarities or differences in their security requirements, 
storage needs, or contracting rules. Thus, the extent to which 
variations in these factors actually hinder consolidation efforts is 
not known; and, as we have previously reported, agencies have 
benefited from studying the costs and benefits of consolidation. 
[Footnote 15] For example, when VA and DOD were determining whether to 
consolidate their facilities, they used a cost-benefit analysis to 
determine that the fully integrated facility would lead to an annual 
recurring savings of approximately $19.7 million. 

Actions Needed and Potential Financial or Other Benefits: 

In fiscal year 2011, Justice and Treasury were responsible for 
separately managing personal and real property valued at about $232 
million. The departments use different asset tracking systems and 
separate contracts for the management of real property and personal 
property, and maintain separate contracted storage facilities that are 
frequently within 20 miles of a similar facility. While the agencies 
have taken some steps to coordinate forfeiture program efforts, the 
current constrained fiscal environment and the millions of dollars of 
assets involved underscores the need for the departments to examine 
how consolidating operations might contribute to cost savings or 
effectiveness gains. By conducting a study that takes into account the 
costs, benefits, and key questions to consider when evaluating 
consolidation proposals, the departments could have critical 
information to better identify whether increased efficiencies, 
effectiveness, and cost savings can be realized. 

GAO recommended in its September 2012 report that the Attorney General 
and the Secretary of the Treasury should take the following action: 

* conduct a study to determine the feasibility of consolidating asset 
management activities including, but not limited to, the use of asset 
tracking systems and the sharing of vendor and contract resources. 
This study should include the likely costs and benefits of 
consolidation, as well as GAO's key questions to consider when 
evaluating consolidation proposals. 

While the potential for cost savings or efficiency gains in 
consolidating asset management activities cannot be known until a 
study is completed, GAO's prior work illustrates that consolidating 
physical infrastructure or management functions, such as IT services, 
could lead to cost savings and efficiency gains. 

Agency Comments and GAO's Evaluation: 

In commenting on the September 2012 report on which this analysis is 
based, Justice and Treasury both agreed with GAO's recommendation to 
conduct a study and stated that they will be taking actions to address 
it. Treasury also noted that the Department of Homeland Security (DHS) 
would need to be consulted as part of the study since DHS owns and 
operates two of the IT asset tracking systems used in the Treasury 
program. After the report was issued, Justice and Treasury formally 
notified Congress that they are actively working together and expect 
to conduct a joint study to assess the feasibility of consolidation in 
the areas of asset management and asset tracking systems. Justice and 
Treasury added that the study will take into account the costs, 
benefits, and key questions to consider in order to determine whether 
consolidation could result in increased efficiencies, effectiveness, 
and cost savings. 

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

How GAO Conducted Its Work: 

The information contained in this analysis is based on findings from 
the product in the related GAO product section. To determine the 
extent to which there may be areas of duplication between the 
programs, GAO reviewed the asset forfeiture process to determine the 
different activities undertaken within the programs. GAO focused on 
the postseizure activities of managing assets--in particular, the use 
of asset tracking systems and contracted storage facilities. With 
regard to IT asset tracking systems, GAO reviewed and analyzed 
technical information, observed a demonstration of each system, and 
interviewed agency officials responsible for operating each system. 
With regard to contracted storage facilities, GAO reviewed the total 
cost of department contracts for the management of real property and 
personal property. In addition, GAO analyzed data, as of June 2012, on 
contract vendors used by both Justice and Treasury to manage three 
categories of seized and forfeited personal property assets--vehicles, 
vessels, and aircraft--and analyzed the addresses of these vendors to 
determine the geographic proximity of the two agencies' facilities. 
Table 8 in appendix IV lists the programs GAO identified that might 
have similar or overlapping objectives, provide similar services, or 
be fragmented across government missions. Overlap and duplication 
might not necessarily lead to actual duplication, and some degree of 
overlap and duplication may be justified. 

Related GAO Product: 

Asset Forfeiture Programs: Justice and Treasury Should Determine Costs 
and Benefits of Potential Consolidation. GAO-12-972. Washington, D.C.: 
September 12, 2012. 

Contact Information: 

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

Footnotes: 

[1] Within the context of the Justice and Treasury asset forfeiture 
programs, asset forfeiture is the transfer of title in property to the 
federal government by execution of a legal process that can be 
administrative, civil judicial, or criminal forfeiture. In a broader 
context, forfeiture means the involuntary relinquishment of money or 
property without compensation as a consequence of a breach or 
nonperformance of some legal obligation or the commission of a crime. 

[2] Total assets include cash and noncash assets, net investments, and 
fund balances. 

[3] Pub. L. No. 98-473, tit. II, §§ 310, 2303 (codified as amended at 
28 U.S.C. § 524(c)). Monies deposited in the Assets Forfeiture Fund 
pay for the costs of operating the Justice Forfeiture Program. 

[4] Pub. L. No. 102-393, § 638 (codified as amended at 31 U.S.C. § 
9703). The Treasury Forfeiture Fund is a successor to what was then 
the Customs Forfeiture Fund. Monies deposited in the Treasury 
Forfeiture Fund pay for the costs of operating the Treasury Forfeiture 
Program. 

[5] In determining whether a government program is high risk, GAO 
considers whether it involves national significance or a management 
function that is key to performance and accountability. GAO considers 
whether the risk is an inherent or systemic problem and qualitative 
factors, such as public health or safety, or whether the risk results 
in significantly impaired service. In addition, GAO also considers the 
exposure to loss in monetary or other quantitative terms. 

[6] Real property includes single-family homes, multifamily homes, 
businesses, and land. 

[7] Two of the three IT asset tracking systems used in the Treasury 
Forfeiture Program are owned and operated by the Department of 
Homeland Security. 

[8] GAO, Streamlining Government: Questions to Consider When 
Evaluating Proposals to Consolidate Physical Infrastructure and 
Management Functions, [hyperlink, 
http://www.gao.gov/products/GAO-12-542] (Washington, D.C.: May 23, 
2012). 

[9] In consolidating 26 payroll systems to four shared-service 
centers, the federal payroll consolidation initiative standardized 
payroll policies and procedures, and resulted in achieving cost 
effectiveness through economies of scale and the elimination of 
duplicative systems. [hyperlink, 
http://www.gao.gov/products/GAO-12-542]. 

[10] GAO, Asset Forfeiture: Historical Perspective on Asset Forfeiture 
Issues, [hyperlink, http://www.gao.gov/products/GAO/T-GGD-96-40] 
(Washington, D.C.: Mar. 19, 1996). 

[11] In May 2012, we reported on nine key questions to consider when 
evaluating consolidation proposals. They are: (1) what are the goals 
of the consolidation; (2) what opportunities will be addressed through 
the consolidation and what problems, if any, will be created; (3) what 
will be the likely costs and benefits of the consolidation; (4) are 
sufficiently reliable data available to support a business-case 
analysis or cost-benefit analysis; (5) how can the up-front costs 
associated with the consolidation be funded; (6) who are the 
consolidation stakeholders, and how will they be affected; (7) how 
have the stakeholders been involved in the decision, and how have 
their views been considered; (8) do stakeholders understand the 
rationale for consolidation; and (9) to what extent do plans show that 
change management practices will be used to implement the 
consolidation? 

[12] There are 94 U.S. Marshals districts. According to Marshals 
officials, the 3 remaining districts used multiple vendors for the 
management of real property. Since 2011, Marshals began to 
decentralize the management of real property and as of January 2013 
had three national contracts in place. According to Marshals 
officials, the agency plans to procure additional regional property 
management contracts in fiscal year 2013. 

[13] According to Marshals, $19 million is the approximate amount paid 
to vendors between October 1, 2010, and September 30, 2011, that 
stored, maintained, or disposed of assets over the same period of 
time. The $19 million does not include salaries of Marshals staff that 
perform tasks associated with asset management; however, the $49 
million for the Treasury contracts includes the cost of contract 
personnel that perform asset management tasks. 

[14] [hyperlink, http://www.gao.gov/products/GAO-12-542]. 

[15] [hyperlink, http://www.gao.gov/products/GAO-12-542]. 

[End of Justice and Treasury Asset Forfeiture area] 

Information Technology: 

10. Dissemination of Technical Research Reports: 

Congress may wish to consider whether the fee-based model under which 
the National Technical Information Service currently operates for 
disseminating technical information is still viable or appropriate, 
given that many of the reports overlap with similar information 
available from the issuing organizations or other sources for free. 

Why This Area Is Important: 

The Department of Commerce's National Technical Information Service 
(NTIS) was established by statute in 1950 to collect scientific and 
technical research reports, maintain a bibliographic record and 
repository of these reports, and disseminate them to the public. Since 
then, NTIS has served as a permanent repository and disseminator of 
scientific, technical, engineering, and business-related information 
and is required by statute to be self-sustaining to the fullest extent 
feasible by charging fees for its products and services.[Footnote 1] 
NTIS acquires the information in its collection largely in the form of 
research reports--primarily from federal agencies and their 
contractors and grantees, as well as from other domestic and foreign 
sources. The agency estimates that it maintains in its central 
repository more than 2.5 million records covering 378 technical and 
business-related subject areas. In addition, NTIS performs various fee-
based information services for other federal agencies. For example, 
through a memorandum of understanding or interagency agreement, NTIS 
provides access to information collected from federal agencies, and in 
some instances it repackages the information with additional features. 
Further, NTIS performs various fee-based services for other federal 
agencies that are less directly related to its basic statutory 
function of collecting and disseminating scientific and technical 
information, including distribution and order fulfillment, web 
hosting, and e-training. The agency reported cumulative net revenues 
of $1.5 million as of September 30, 2011, which resulted primarily 
from services less directly related to its statutory function. 

In May 2001, GAO reported on NTIS's operations, noting, among other 
things, the availability of many of the reports maintained in its 
repository from other sources, such as the originating agencies' 
websites. GAO noted that NTIS was providing a variety of other fee-
based services for agencies and that, while demand for electronic 
products was on the rise, research reports and other scientific, 
technical, and engineering information maintained by NTIS were also 
becoming increasingly available on agency websites and through other 
public sources--often at no cost. GAO suggested that Congress look at 
how scientific, technical, and engineering information was defined; 
whether there was a need for a central repository of this information; 
and, if a central repository was maintained, whether all information 
should be retained permanently, and what business model should be used 
to manage it. 

In comments on a draft of the 2001 report, the Secretary of Commerce 
agreed with GAO's assessment and raised a fundamental question of 
whether there was a need for a central repository in view of the 
increasing availability of newer publications from sources other than 
NTIS. The Secretary also noted that the need for a central repository 
depended on whether the information would be permanently maintained by 
agencies and whether the information would be easy to locate without 
the kind of bibliographic control that NTIS provides. 

Subsequent to the issuance of GAO's May 2001 report, Congress took 
actions toward reexamining the role of NTIS. In December 2003, the 
21st Century Nanotechnology Research and Development Act was enacted, 
which provided a coordinated federal approach to stimulating 
nanotechnology research and development. The act directed the 
Secretary of Commerce to establish a clearinghouse for information 
related to the commercialization of nanotechnology research using the 
resources of NTIS to the extent possible. As of September 2012, NTIS 
noted that it held over 700 publications in its nanotechnology 
collection. The act did not make further changes to NTIS's role as a 
central repository. 

What GAO Found: 

In a November 2012 report, GAO updated aspects of its previous report 
and estimated that, on the basis of a sample of 384 of the 841,502 
reports in its repository added to NTIS's collection and made 
available for sale from fiscal years 1990 through 2011, most of the 
reports were readily available from other public websites, and nearly 
all of them could be obtained for free.[Footnote 2] Specifically, GAO 
estimated that approximately 621,917, or about 74 percent, of the 
841,502 reports were readily available from one of the other four 
publicly available sources GAO searched (i.e., the issuing 
organization's website; the Government Printing Office's Federal 
Digital System website; the U.S. government's official web portal, 
USA.gov; or another website located through a search of Google, a 
commercial search engine).[Footnote 3] The source that most often had 
the reports GAO was searching for was another website located at 
[hyperlink, http://www.Google.com]. The figure below shows the 
estimated availability of reports added to NTIS's repository since 
fiscal year 1990 by date of publication. 

Figure: Estimated Availability of Reports by Year of Publication[A]: 

[Refer to PDF for image: vertical bar graph] 

1989 or earlier: 
Available at other sources: 55%; 
Not available at other sources: 45%. 

1990-2000: 
Available at other sources: 70%; 
Not available at other sources: 30%. 

2001-2004: 
Available at other sources: 87%; 
Not available at other sources: 13%. 

2005-2008: 
Available at other sources: 91%; 
Not available at other sources: 9%. 

2009-2011: 
Available at other sources: 87%; 
Not available at other sources: 13%. 

Also depicted: upper and lower bound of the 95% confidence level for 
each value. 

Source: GAO estimates based on NTIS provided data. 

[A] The percentage shown inside each bar is the actual estimate. 

[End of figure] 

In addition, about 95 percent of the reports in the sample that were 
available elsewhere could also be obtained free of charge from one of 
the four other sources GAO searched.[Footnote 4] The remaining 5 
percent were available from the public sources for a fee.[Footnote 5] 
These results show that NTIS disseminates and charges for many reports 
that overlap with information that is available for free from federal 
agencies and other public websites. The following are examples of 
reports that NTIS makes available for a fee and are also available 
free of charge from the issuing organization's website: 

* Hazardous Waste Characteristics Scoping Study, November 1996, 
Environmental Protection Agency, 278 pages. (At NTIS, print on demand 
[Footnote 6] costs $73, electronic $25.) 

* Homeland Security: Intelligence Indications and Warning, December 
2002, Naval Postgraduate School, 5 pages. (At NTIS, print on demand 
costs $17, electronic $15.) 

* Export Controls: System for Controlling Exports of High Performance 
Computing Is Ineffective, 2000, GAO, 60 pages. (At NTIS, print on 
demand costs $48, electronic $15.) 

* FDA Enforcement Report: July 20, 2011, July 2011, Food and Drug 
Administration, 28 pages. (At NTIS, print on demand costs $33, 
electronic $15.) 

* Principal Rare Earth Elements Deposits of the United States: A 
Summary of Domestic Deposits and a Global Perspective, 2010, 
Geological Survey, 104 pages. (At NTIS, print on demand costs $60, 
electronic $25.) 

* 2012 Annual Report: Opportunities to Reduce Duplication, Overlap and 
Fragmentation, Achieve Savings, and Enhance Revenue, 2012, GAO, 426 
pages. (At NTIS, print on demand costs $99, electronic $35.) 

The Director of NTIS acknowledged that the Internet has enabled 
federal agencies to easily and freely disseminate their information, 
including scientific, technical, and engineering information products 
via their own and other websites. Moreover, GAO reported that, over 
the last several years, NTIS has been experiencing declines in its 
sales of technical reports, in part because of the increasing 
availability of this information from other sources. While NTIS has 
not recovered all of its costs for products through subscriptions and 
other fees, it has been able to remain financially self-sustaining 
because of the other service offerings that it provides.[Footnote 7] 
NTIS reported that net revenues from all of its functions (products 
and services) totaled about $1.5 million in fiscal year 2011 because 
of revenues generated from other product and service offerings, such 
as the dissemination of products for other federal agencies. However, 
for its products, over most of the last 11 years, its costs exceeded 
revenues by an average of about $1.3 million. 

NTIS acknowledged in its 2011-2016 Strategic Plan that, because the 
Internet continues to change the way people acquire and use 
information and permits federal agencies to make their information 
products available for free, the agency is challenged to meet its 
statutory mandate as a self-financing repository and disseminator of 
technical information. As a result, the agency is taking steps to 
address the budget shortfall from products by making product and 
organizational improvements, such as adjusting the NTIS business model 
to support the increased demand for subscriptions and by reducing 
staff. Notwithstanding these efforts, NTIS could likely continue to 
face challenges in recouping the costs of its products given the 
increasing availability of technical information from other sources. 
Further, its current model also continues the problem of NTIS charging 
federal agencies for information that is available for free. 

Actions Needed and Potential or Other Financial Benefits: 

In light of the agency's declining revenue associated with its basic 
statutory function and the charging for information that is often 
freely available elsewhere, in November 2012, GAO suggested that 
Congress may wish to consider the following action: 

* examine the appropriateness and viability of the fee-based model 
under which NTIS currently operates for disseminating technical 
information to determine whether the use of this model should be 
continued. 

Agency Comments and GAO's Evaluation: 

GAO received comments on a draft of the November 2012 report on which 
this analysis is based in part, from the Acting Secretary of Commerce, 
who stated that NTIS did not believe GAO's conclusions (that the fee-
based model under which it operates for disseminating technical 
information may no longer be viable or appropriate) fully reflected 
the additional value that NTIS provides. The Department of Commerce 
(Commerce) stated that, through its federal clearinghouse and 
repository, the agency provides federally funded reports that are not 
otherwise readily available, such as most of those issued prior to 
1989. Additionally, Commerce stated that NTIS recognizes that it 
cannot remain financially solvent solely through sales and 
subscriptions of technical reports with expectations that these 
products will be widely available for free. The agency acknowledged 
the decline in sales of NTIS's technical reports, in part because of 
the increasing availability of this information from other sources, 
including websites and Internet search tools, and often at no charge. 

GAO maintains that the fee-based model under which NTIS currently 
operates for disseminating technical information may no longer be 
viable or appropriate. GAO's November 2012 report highlighted various 
initiatives that NTIS has undertaken to provide older reports that 
might not otherwise be readily available and to increase the value of 
its technical reports, information management services, and technology 
transfer capabilities. However, GAO found that the demand for older 
holdings in the agency's repository is lower than for new 
publications. For example, GAO estimated that between 96 and 100 
percent of the reports published from 2001 through 2011 had been 
distributed (sold), while only 21 percent of reports published in 1989 
or earlier were distributed during this period. Also, the agency's net 
revenue now comes primarily from services that are less directly 
related to its basic statutory function, while sales of its technical 
information products have resulted in net losses. 

GAO provided a draft of this report section to the Department of 
Commerce for its review and comment. In response, GAO received written 
comments from the Deputy Secretary of Commerce in which the Department 
said it believed that its earlier comments on our November 2012 report 
continue to be pertinent and relevant to recognizing the unique and 
permanent value that NTIS's repository and clearinghouse provides to 
the public, academia, and research communities. In addition, Commerce 
stated that NTIS remains committed to successfully performing its 
statutory mission of efficiently and perpetually making available the 
results of authenticated federally funded science research. 

How GAO Conducted Its Work: 

The information contained in this analysis is based on findings from 
products listed in the related GAO products section. To determine the 
extent to which reports that NTIS collects are readily available from 
other public sources, GAO searched the Internet to determine if each 
of the reports included in its sample of 384 of the 841,502 reports in 
its repository could be found elsewhere and at no cost.[Footnote 114] 
Using a tiered approach, GAO searched the following four sources in 
the order shown: (1) the issuing organization's website; (2) the U.S. 
Government Printing Office's Federal Digital System website--
[hyperlink, http://www.gpo.gov/fdsys]; (3) the federal government 
Internet portal, USA.gov--[hyperlink, http://www.USA.gov]; and (4) a 
web search conducted using the commercial search engine [hyperlink, 
http://www.Google.com]. Specifically, GAO determined whether each 
report was first available at no cost on the issuing organization's 
website and, if so, concluded the Internet search at this point. 
However, if the report was not available, then the search continued to 
the second source, and so on, until either the report was found to be 
available at one of the remaining sources or all sources were 
exhausted.[Footnote 8] GAO then used its results to estimate the 
percentage of the total population of NTIS reports added to the 
repository during fiscal years 1990 through 2011 that was available 
from other public sources. 

All of the results derived from the sample analyses constituted 
estimates that are subject to sampling errors. These sampling errors 
measure the extent to which the sample size and structure are likely 
to differ from the population they represent. Because GAO followed a 
probability procedure based on random selections, its sample is only 
one of a large number of samples that GAO might have drawn. Since each 
sample could have provided different estimates, GAO expressed its 
confidence in the precision of a particular sample's results as a 95 
percent confidence interval. This is the interval that would contain 
the actual population value for 95 percent of the samples GAO could 
have drawn. 

Related GAO Products: 

Information Management: National Technical Information Service's 
Dissemination of Technical Reports Needs Congressional Attention. 
[hyperlink, http://www.gao.gov/products/GAO-13-99]. Washington, D.C.: 
November 19, 2012. 

Information Management: Dissemination of Technical Reports. 
[hyperlink, http://www.gao.gov/products/GAO-01-490]. Washington, D.C.: 
May 19, 2001. 

Information Policy: NTIS's Financial Position Provides an Opportunity 
to Reassess Its Mission. [hyperlink, 
http://www.gao.gov/products/GAO/GGD-00-147]. Washington, D.C.: June 
30, 2000. 

Contact Information: 

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

Footnotes: 

[1] 15 USC § 1153. NTIS's product offerings include, among other 
things, subscription access to technical reports contained in its 
repository in both print and electronic formats; its services include 
the distribution of print-based informational materials to federal 
agencies' constituents and digitization and scanning services. 

[2] We obtained from NTIS the full list of document accession numbers 
for the reports added to its repository (841,502 reports) since our 
previous review in 2001. We subsequently selected a stratified random 
sample for a total sample size of 384 reports. All of the estimates 
made with this sample were weighted to reflect the stratified design). 
The 95 percent confidence interval for the estimated percentage of 
reports available elsewhere that could be obtained for free is (90.7, 
97.5) percentage points. 

[3] The 95 percent confidence interval for the estimated percentage of 
reports available through one or more of the four publicly available 
sources GAO searched is (67.9, 80.0) percentage points. In identifying 
the reports' availability elsewhere, we did not assess whether the 
report's content was unaltered from its original issuance. 

[4] The 95 percent confidence interval for this estimate is (90.7, 
97.5) percentage points. 

[5] The 95 percent confidence interval for this estimate is (2.5, 9.3) 
percentage points. 

[6] Print on demand means that once the customer makes a request for 
the report, NTIS will print out a copy of the report and send it to 
the customer via U.S. Mail. 

[7] As NTIS is a fee-based service entity, its revenues are generated 
exclusively from its products and services, and all its revenues, 
expenses, and capital expenditures are expected to be deposited and 
paid out of its revolving fund. 

[8] We obtained from NTIS the full list of document accession numbers 
for reports added to its repository (841,502 reports) since our 
previous review in 2001. We subsequently selected a stratified random 
sample for a total sample size of 384 reports. All of the estimates 
made with this sample were weighted to reflect the stratified design. 

[9] In identifying the reports' availability elsewhere, we did not 
assess whether the reports' content was unaltered from its original 
issuance. 

[End of Dissemination of Technical Research Reports area] 

11. Geospatial Investments: 

Better coordination among federal agencies that collect, maintain, and 
use geospatial information could help reduce duplication of geospatial 
investments and provide the opportunity for potential savings of 
millions of dollars. 

Why This Area Is Important: 

The federal government collects, maintains, and uses geospatial 
information--information linked to specific geographic locations 
[Footnote 1]--to help in decision making and to support many 
functions, including national security, law enforcement, health care, 
and environmental protection. Many activities, such as maintaining 
roads and responding to natural disasters--floods, hurricanes, and 
fires--can depend on critical analysis of geospatial information. 
Further, multiple federal agencies may provide services at the same 
geographic locations and may independently collect similar geospatial 
information about those locations. 

In June 2004, GAO reported that selected agencies' efforts to 
coordinate geospatial investments were not successful and agencies 
were independently acquiring and maintaining duplicative and costly 
geospatial data and systems.[Footnote 2] GAO recommended that the 
Director of the Office of Management and Budget (OMB) and the 
Secretary of the Interior (Interior) improve strategic planning, and 
that OMB develop criteria for assessing interagency coordination of 
proposed geospatial investments and increase its oversight of approved 
geospatial projects.[Footnote 3] OMB and Interior generally agreed 
with these recommendations. From 2004 through 2008, OMB and Interior 
created a number of strategic planning documents to encourage more 
coordination of geospatial assets, reduce needless redundancies, and 
decrease costs. In 2004 and 2006, OMB issued guidance to increase the 
amount of budget information available on geospatial investments and 
improve oversight of agencies' implementation of geospatial-related 
policies and activities. Nonetheless, in August 2012, Interior 
estimated that the federal government invests billions of dollars in 
geospatial data annually and reported that duplication among 
investments is common.[Footnote 4] 

What GAO Found: 

In November 2012, GAO reported that the Federal Geographic Data 
Committee (FGDC)--the committee that was established to promote the 
coordination of geospatial data nationwide--and selected federal 
departments and agencies had not effectively implemented policies and 
procedures for coordinating geospatial data as called for by executive 
order and OMB guidance.[Footnote 5] Additionally, federal agencies 
continue to make duplicative investments in areas of national 
interest, such as road and address data. 

Specifically, the FGDC is responsible for coordinating the development 
of the National Spatial Data Infrastructure (NSDI)--an infrastructure 
that includes data themes, standards, metadata, and a centralized 
clearinghouse for geospatial metadata.[Footnote 6] The purpose of the 
NSDI is to facilitate the efficient collection, sharing, and 
dissemination of geospatial data, and to reduce wasteful duplication 
among all levels of government and the public and private sectors. GAO 
reported that the FGDC had developed and endorsed key standards, and 
established a clearinghouse of metadata--a centralized repository of 
metadata records. The clearinghouse allows users to determine whether 
the geospatial data that they are seeking already exist and to 
identify planned acquisitions of geospatial data and opportunities to 
jointly acquire the data in order to help reduce duplication. GAO 
reported that the three federal departments in its review (Commerce, 
Interior, and Transportation) had described their existing geospatial 
data on the clearinghouse by making their metadata available on it. 
However, as of September 2012, federal agencies were not using the 
clearinghouse to identify planned acquisitions of geospatial data 
because the FGDC had not developed guidance for agencies that 
describes how to use the Geospatial Platform--the primary portal to 
access and search the clearinghouse--to identify planned geospatial 
investments. Without the ability to identify planned geospatial data 
acquisitions, agencies will likely miss opportunities to cooperatively 
acquire the data, thus resulting in the acquisition of potentially 
duplicative data. 

OMB guidance directed the FGDC to provide guidance to federal agencies 
by November 2011 about how to implement portfolio management--an 
approach in which agencies manage geospatial data as related groups of 
investments, both within and across federal agencies--to allow them to 
more effectively plan geospatial data collection efforts and minimize 
duplicative investments. However, while the FGDC initiated activities 
that FGDC officials said were first needed for agencies to establish a 
portfolio of geospatial data, it had not yet planned for or 
implemented a portfolio management approach. FGDC officials stated 
that they had developed a draft plan containing guidance to agencies 
in November 2011, but as of November 2012, the plan had not been 
finalized or approved, and officials were unable to provide a time 
frame for doing so. 

Additionally, as GAO reported in November 2012, none of the three 
federal departments in its review had fully implemented important 
activities identified in federal guidance for coordinating geospatial 
data and assets, as shown in the following table.[Footnote 7] 

Table: Status of Federal Departments' Implementation of Geospatial 
Activities: 

Activity: Designate a senior official with departmentwide 
responsibility for geospatial information issues; 
Commerce: Partially met; 
Interior: Fully met; 
Transportation: Partially met. 

Activity: Prepare and implement a strategy for advancing geospatial 
data activities appropriate to the mission; 
Commerce: Not met; 
Interior: Not met; 
Transportation: Not met. 

Activity: Develop a policy to make metadata available on the 
clearinghouse; 
Commerce: Partially met; 
Interior: Not met; 
Transportation: Not met. 

Activity: Make the department's metadata available on the 
clearinghouse; 
Commerce: Fully met; 
Interior: Fully met; 
Transportation: Fully met. 

Activity: Adopt procedures for accessing the clearinghouse before 
expending funds to collect or produce new data; 
Commerce: Not met; 
Interior: Not met; 
Transportation: Not met. 

Source: GAO analysis of department documentation. 

Legend: 

Fully met--the department provided evidence that addressed the 
criteria. 

Partially met--the department provided evidence that addressed about 
half or a large portion of the criteria. 

Not met--the department did not provide evidence that addressed the 
criteria or provided evidence that minimally addressed the criteria. 

[End of table] 

Further, the three agencies in GAO's review responsible for 
governmentwide management of specific geospatial data--NOAA, USGS, and 
BTS--had implemented some but not all important activities identified 
in federal guidance to ensure the national coverage and stewardship of 
geospatial data themes, as shown in the following table.[Footnote 8] 
For example, only one of the agencies had fully prepared or 
implemented a plan for the nationwide population of the data theme 
that included (1) the development of partnership programs with states, 
tribes, academia, the private sector, other federal agencies, and 
localities that meet the needs of users; (2) human and financial 
resource needs; (3) standards, metadata, and the clearinghouse needs; 
and (4) a timetable for the development for the theme. 

Table: Status of Agencies' Implementation of Geospatial Activities: 

Activity: Designate a point of contact responsible for the 
development, maintenance, and dissemination of theme-related data; 
NOAA: Fully met; 
USGS: Fully met; 
BTS: Fully met. 

Activity: Prepare goals and analyze user needs in support of the NSDI 
strategy; 
NOAA: Fully met; 
USGS: Partially met; 
BTS: Partially met. 

Activity: Develop and implement a plan for the nationwide population 
of the data theme; 
NOAA: Fully met; 
USGS: Partially met; 
BTS: Partially met. 

Activity: Create a plan to develop and implement theme standards; 
NOAA: Not met; 
USGS: Not met; 
BTS: Not met. 

Source: GAO analysis of agency documentation. 

Legend: 

Fully met--the agency provided evidence that addressed the criteria. 

Partially met--the agency provided evidence that addressed about half 
or a large portion of the criteria. 

Not met--the agency did not provide evidence that addressed the 
criteria or provided evidence that minimally addressed the criteria. 

[End of table] 

Moreover, while OMB has oversight responsibilities for investments in 
geospatial data, OMB staff members acknowledged that OMB does not have 
complete and reliable information to identify potentially duplicative 
geospatial investments. According to these officials, this is largely 
because agencies do not appropriately and consistently classify 
geospatial investments in their budget documents submitted to OMB. 

Finally, recent reports, as well as officials from state and local 
associations and the National Geospatial Advisory Committee, have all 
stated that duplicative geospatial data investments continue across 
all levels of government.[Footnote 9] For example, according to 
Transportation's Transportation for the Nation Strategic Plan, dated 
May 2011, duplication exists in the acquisition of nationwide road 
centerline data across federal agencies and other levels of 
government, resulting in millions of wasted taxpayer dollars.[Footnote 
10] In addition, according to a National Geospatial Advisory Committee 
official, several federal agencies collect, purchase, or lease address 
information in an uncoordinated fashion. Further, in a report on land 
parcel data, the National Academy of Sciences stated that the lack of 
nationally integrated land parcel data has led to duplication of 
effort among various levels of government and between the public and 
private sector.[Footnote 11] Moreover, representatives from an 
organization composed of state geospatial data managers stated that 
federal agencies are investing in geospatial data that exist at the 
state and local levels, noting that duplicative data continue to be 
procured in such areas as imagery, elevation, road centerlines, and 
address points. Improved coordination between agencies may help to 
reduce duplicative investments. 

FGDC, federal departments and agencies, and OMB had not yet fully 
implemented established policies and procedures for coordinating 
geospatial investments because these efforts had not been a priority. 
Until the FGDC, federal departments and agencies, and OMB decide that 
investments in geospatial information are a priority; FGDC and federal 
departments and agencies effectively implement the policies, 
procedures, and plans to coordinate their geospatial activities; and 
OMB obtains reliable information about federal geospatial investments, 
investments will remain uncoordinated, and federal agencies will 
likely continue to acquire duplicative geospatial information and 
waste taxpayer dollars. 

Actions Needed and Potential or Other Financial Benefits: 

GAO recommended in November 2012 that the Secretary of the Interior, 
as the FGDC Chair, direct the FGDC Steering Committee to take the 
following two actions: 

* establish a time frame for completing a plan to facilitate the 
implementation of OMB's November 2010 management guidance, and develop 
and implement the plan within the established time frame; and: 

* develop and implement guidance for identifying planned geospatial 
investments in the Geospatial Platform. 

In addition, GAO recommended that the Secretaries of Commerce, the 
Interior, and Transportation implement relevant executive order 
requirements and OMB guidance, including implementing, of the 
following seven actions, those that apply to their departments and 
agencies: 

* designate a senior agency official with departmentwide 
accountability, authority, and responsibility for geospatial 
information issues; 

* prepare, maintain, publish, and implement a strategy for advancing 
geographic information and related geospatial data activities 
appropriate to its mission; 

* develop a policy that requires the department to make its geospatial 
metadata available on the clearinghouse; 

* develop and implement internal procedures to ensure that the 
department accesses the NSDI clearinghouse before it expends funds to 
collect or produce new geospatial data to determine (1) whether the 
information has already been collected by others and (2) whether 
cooperative efforts to obtain the data are possible; 

* prepare goals relating to all datasets within the relevant theme 
that support the NSDI; 

* develop and implement a plan for the nationwide population of the 
relevant theme that addresses all datasets within the theme and that 
includes (1) the development of partnership programs with states, 
tribes, academia, the private sector, other federal agencies, and 
localities that meet the needs of users; (2) human and financial 
resource needs; (3) standards, metadata, and the clearinghouse needs; 
and (4) a timetable for the development for the theme; and: 

* create and implement a plan to develop and implement relevant theme 
standards. 

Further, GAO recommended that the Director of OMB take the following 
action: 

* develop a mechanism, or modify existing mechanisms, to identify and 
report annually on all geospatial-related investments, including 
dollars invested and the nature of the investment. 

Because neither federal agencies nor OMB captures cost information in 
a uniform manner, determining precise costs in this area is not 
feasible. Nevertheless, as previously mentioned, Interior has recently 
estimated that the federal government invests billions of dollars in 
geospatial data annually and that duplication among investments is 
common. As a result, better coordination by agencies and better 
oversight by OMB could help to reduce duplication of geospatial 
investments, providing the opportunity for potential savings on the 
estimated billions of dollars spent annually on geospatial information 
technology. 

Agency Comments and GAO's Evaluation: 

In commenting on the November 2012 report on which this analysis is 
based, the Departments of Commerce and the Interior generally agreed 
with GAO's recommendations and described actions planned and under way 
to implement them. Transportation neither agreed nor disagreed with 
the recommendations. However, Transportation officials commented that 
the department's Transportation for the Nation Strategic Plan 
partially satisfied the requirement to implement a strategy for 
advancing geospatial data within the department, noting that the 
strategic plan addresses the collection and maintenance of road 
centerline data, which represent the vast majority of travel in terms 
of both passengers and freight. However, GAO's analysis is that the 
strategic plan does not include a strategy for advancing all the 
department's geographic information and related geospatial data 
activities, describe how the department and its agencies are to 
coordinate their geospatial efforts to support the department's 
mission, or address geospatial themes other than transportation in 
which department officials stated that the department makes 
investments. Therefore, the department's Transportation for the Nation 
Strategic Plan does not constitute a departmentwide geospatial plan. 
Thus, the recommendation to develop such a strategy remains relevant 
to the department. OMB stated that it concurred with the need for 
improved collection of geospatial-related investments, but suggested 
that GAO clarify the recommendation to acknowledge that a new process 
is not required or expected. GAO agreed and clarified the 
recommendation. 

GAO provided a draft of this report section to OMB and the Departments 
of Commerce, the Interior, and Transportation for review and comment. 
OMB commented that GAO's review of the three agencies was helpful and 
that it illustrated the need for increased participation in federal-
wide geospatial capabilities and the elimination of duplicative 
capabilities and spending. OMB also noted that, in response to GAO's 
recommendation, in 2012 it developed new analysis tools and updated 
its models to improve its ability to identify and report on geospatial-
related investments. Interior's comments provided additional 
information on the status of steps being taken to address 
recommendations to both the FGDC and the department. For example, 
Interior noted that an updated capability for all federal departments 
and agencies to identify planned geospatial data investments using the 
FGDC's Geospatial Platform is currently under development and is 
targeted for deployment during fiscal year 2013. Interior also noted 
that it will be developing new internal geospatial policies, 
procedures, and plans, such as preparing, maintaining, publishing, and 
implementing a strategy for advancing geographic information and 
related geospatial activities appropriate to its mission. The 
Departments of Commerce and Transportation did not provide comments on 
this report section. Transportation reported that the Secretary had 
recently designated a senior agency official with departmentwide 
accountability, authority, and responsibility for geospatial 
information issues. 

How GAO Conducted Its Work: 

The information contained in this analysis is based on findings from 
the products in the related GAO products section. GAO looked at 
governmentwide activities to implement the NSDI, as well as efforts of 
the FGDC. To evaluate federal departments' efforts to implement the 
NSDI, GAO first identified the nine framework themes, as identified in 
Circular A-16.[Footnote 12] From those nine themes, GAO then randomly 
selected three themes and identified the federal departments and 
agencies responsible for managing the themes. The three departments, 
theme-lead agencies, and selected themes are: Commerce--NOAA--geodetic 
control; Interior--USGS--hydrography; and Transportation--BTS--
transportation. GAO reviewed and assessed FGDC and department 
documentation such as policies, procedures, strategic plans, meeting 
minutes, and budget documentation; OMB budget guidance and reports; 
and recent reports discussing duplicative geospatial investments; and 
interviewed FGDC and department officials and OMB staff members. 

Related GAO Products: 

Geospatial Information: OMB and Agencies Need to Make Coordination a 
Priority to Reduce Duplication. [hyperlink, 
http://www.gao.gov/products/GAO-13-94]. Washington, D.C.: November 26, 
2012. 

Information Technology: OMB Needs to Improve Its Guidance on IT 
Investments. [hyperlink, http://www.gao.gov/products/GAO-11-826]. 
Washington, D.C.: September 29, 2011. 

Geospatial Information: Better Coordination Needed to Identify and 
Reduce Duplicative Investments. [hyperlink, 
http://www.gao.gov/products/GAO-04-703]. Washington, D.C.: June 23, 
2004. 

Contact Information: 

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

Footnotes: 

[1] For example, entities such as houses, rivers, road intersections, 
power plants, and national parks can all be identified by their 
location. In addition, phenomena such as wildfires, the spread of the 
West Nile virus, and the thinning of trees because of acid rain can 
also be identified by their geographic locations. 

[2] The agencies reviewed were the U.S. Department of Agriculture, the 
Department of Commerce (Commerce), the Department of Defense, the 
Department of Health and Human Services, the Department of Homeland 
Security, the Department of the Interior, and the Environmental 
Protection Agency. 

[3] The Secretary of the Interior chairs the committee established by 
OMB to promote the coordination of geospatial data nationwide. 

[4] Interior included this estimate as a part of its exhibit 300 
submission to OMB; see Department of the Interior, Geospatial Line of 
Business Capital Asset Summary, Aug. 14, 2012. 

[5] A total of 31 federal departments and agencies collect, maintain, 
and use geospatial information, but we limited our review to three 
departments and three related agencies: Commerce and the National 
Oceanic and Atmospheric Administration (NOAA); Interior and the U.S. 
Geological Survey (USGS); and the Department of Transportation 
(Transportation) and the Bureau of Transportation Statistics (BTS). 
OMB, Circular No. A-16, Coordination of Geographic Information and 
Related Spatial Data Activities, Aug. 19, 2002; M-11-03, Issuance of 
OMB Circular A-16 Supplemental Guidance, Nov. 10, 2010; and Executive 
Order No. 12906, Coordinating Geographic Data Acquisition and Access: 
The National Spatial Data Infrastructure, 59 Fed. Reg. 17,671 (Apr. 
11, 1994). 

[6] Data themes are composed of one or more sets of geospatial data 
that have national significance, as established by federal guidance, 
such as hydrography (i.e., surface water features such as lakes, 
ponds, streams, and rivers). Metadata are information about data such 
as content, source, accuracy, method of collection, and point of 
contact. 

[7] OMB, Circular No. A-16, Coordination of Geographic Information and 
Related Spatial Data Activities, Aug. 19, 2002; OMB, M-06-07, 
Designation of a Senior Agency Official for Geospatial Information, 
Mar. 3, 2006; and Executive Order No. 12906, Coordinating Geographic 
Data Acquisition and Access: The National Spatial Data Infrastructure, 
59 Fed. Reg. 17,671 (Apr. 11, 1994). 

[8] OMB, Circular No. A-16, Coordination of Geographic Information and 
Related Spatial Data Activities, Aug. 19, 2002. 

[9] The National Geospatial Advisory Committee was established to 
provide the FGDC with advice and recommendations related to the 
implementation of established federal policies and the management of 
geospatial information. 

[10] U.S. Department of Transportation, Transportation for the Nation 
Strategic Plan, May 2011. 

[11] National Academy of Sciences, National Land Parcel Data: A Vision 
for the Future, 2007. Founded by congressional charter, the National 
Academy of the Sciences is a private, nonprofit organization that 
serves as advisers to the nation on issues of science and technology 
that frequently affect policy decisions. 

[12] OMB, Circular No. A-16, Coordination of Geographic Information 
and Related Spatial Data Activities, Aug. 19, 2002, identifies nine 
themes as critical for many geospatial applications. 

[End of Geospatial Investments area] 

International Affairs: 

12. Export Promotion: 

Enhanced collaboration between the Small Business Administration and 
two other agencies could help to limit overlapping export-related 
services for small businesses. 

Why This Area Is Important: 

In January 2010, the President launched the National Export Initiative 
with the goal of doubling U.S. exports over 5 years and prioritizing 
exports by small businesses. This goal was a key component of the 
administration's plan to help the United States transition from 
economic crisis to sustained recovery, as increasing exports could 
help accelerate job growth. Some of the approximately 20 member 
agencies of the Trade Promotion Coordinating Committee directly assist 
small businesses to export overseas, including the Small Business 
Administration (SBA), Department of Commerce (Commerce), and the 
Export-Import Bank. In fiscal year 2011, these three agencies' 
requests for export promotion funding totaled about $350 million, and 
SBA and the Export-Import Bank provided nearly $7 billion in financing 
assistance to small businesses. While Commerce has historically been 
the primary agency for promoting U.S. exports, in 2010, Congress 
directed SBA to increase its activities related to export counseling 
and financing. A nationwide network of over 900 Small Business 
Development Centers (SBDC)--nonfederal entities partially funded by 
SBA--provides counseling, including some export counseling, to small 
businesses. Both SBA's Office of International Trade, which leads 
SBA's efforts in assisting small businesses seeking to export, and the 
Export-Import Bank provide financial assistance to small businesses. 

What GAO Found: 

In January 2013, GAO reported that some SBA services overlap with 
Commerce counseling services and Export-Import Bank export financing 
programs, as outlined below: 

* SBDCs and Commerce provide some similar one-on-one export counseling 
services to small businesses. For example, both offer strategic advice 
to help companies identify target export markets, assist companies in 
ensuring they are compliant with export regulations, and develop 
seminars to teach small businesses about the fundamentals of exporting. 

* SBA and the Export-Import Bank offer overlapping programs that 
target some of the same small businesses and are delivered through 
some of the same lending institutions. These export working capital 
loan guarantee products have many similar features, but each program 
also has limitations, which may restrict its use in some situations, 
as shown in the table below. 

Table: Select Features and Limitations of SBA and Export-Import Bank 
Working Capital Loan Guarantees: 

Program features and limitations: Product; 
SBA Export Working Capital program: Loan guarantee; 
Export-Import Bank Working Capital Guarantee program: Loan guarantee. 

Program features and limitations: Type; 
SBA Export Working Capital program: Single order or revolving line of 
credit, but allows for advances against purchase orders; 
Export-Import Bank Working Capital Guarantee program: Single order or 
revolving line of credit. 

Program features and limitations: Eligibility; 
SBA Export Working Capital program: Small business operating for at 
least 1 year (can be waived based on management experience); 
Export-Import Bank Working Capital Guarantee program: Business of any 
size operating for at least 1 year (can be waived based on management 
experience); 
Must meet certain financial requirements, including having positive 
net worth and meeting minimum standards on certain key industry ratios. 

Program features and limitations: Collateral; 
SBA Export Working Capital program: Export-related inventory and 
accounts receivable from the export sales; 
Personal or corporate guarantee of the owner; 
Export-Import Bank Working Capital Guarantee program: Export-related 
inventory and accounts receivable from the export sales; 
Personal or corporate guarantee of the owner. 

Program features and limitations: Content requirements; 
SBA Export Working Capital program: None; 
Export-Import Bank Working Capital Guarantee program: Must contain 
more than 50 percent U.S. content; 
Cannot be used to finance defense articles or services, with limited 
exceptions. 

Program features and limitations: Loan percentage guaranteed; 
SBA Export Working Capital program: Up to 90 percent; 
Export-Import Bank Working Capital Guarantee program: Up to 90 percent. 

Program features and limitations: Loan amount guaranteed; 
SBA Export Working Capital program: $5 million; 
Export-Import Bank Working Capital Guarantee program: No limit. 

Source: GAO analysis of Department of the Treasury, SBA, and Export-
Import Bank documents. 

[End of table] 

These overlapping services can be confusing for small businesses and 
may result in an inefficient use of government resources. Both agency 
officials and some private sector representatives that GAO interviewed 
said overlapping services can make it difficult to navigate the 
federal export assistance system. According to officials from SBA, 
SBDCs, Commerce, and the Export-Import Bank, small businesses 
typically do not know which services each agency provides or where to 
go for assistance. Private sector representatives agreed it is 
challenging for small businesses to determine what each federal entity 
does. They noted that export financing assistance is important for 
small businesses to be competitive in international markets, but 
understanding the differences between federal loan programs for 
financing exports can be difficult. 

Enhancing collaboration between SBA and other agencies could 
potentially improve program efficiency and help limit some of the 
confusion caused by overlapping services. GAO's prior work has 
outlined practices of effective collaboration, including (1) 
establishing clearly defined roles and responsibilities and (2) 
leveraging other agencies' resources.[Footnote 1] SBA and Commerce 
officials have not clearly outlined each entity's roles and 
responsibilities for counseling small business clients. Not all 
Commerce and SBDC counseling services overlap, and Commerce and SBDC 
officials indicated that they try to focus on the areas where each 
entity has relatively more experience. For example, Commerce officials 
generally prefer to work with existing exporters looking to expand to 
different markets (known as new-to-market businesses) that can quickly 
take advantage of Commerce's extensive services and overseas 
resources; businesses that are new-to-export are generally referred to 
SBDCs, where they can benefit from an array of general business 
development services. However, the division of counseling 
responsibilities between Commerce and the SBDCs is not so clearly 
defined in practice, and neither agency has developed guidance that 
directs SBDC counselors and Commerce staff to focus on any one type of 
client.[Footnote 2] Commerce and SBDC staff in the field indicated 
that interagency roles and responsibilities for counseling new-to-
export and new-to-market companies are unclear and said they work with 
both new-to-export and new-to-market businesses. Officials from both 
entities also noted they may counsel the same clients, but they do not 
regularly discuss client services with one another, nor do they 
regularly share client information. 

According to SBA and Export-Import Bank officials, overlapping 
financial products respond to lender preferences. Both SBA and Export-
Import Bank officials GAO interviewed said many lenders prefer to work 
with only one agency and few lenders use both agencies' products, so 
small businesses may be able to access only one agency's products. 
Therefore, if a client only meets the eligibility requirements for one 
agency's product but its bank does not use that product, the client 
may need to find a new bank in order to use a loan guarantee program. 
SBA and the Export-Import Bank both attempt to expedite the process 
through similar delegated authority programs for lenders, which allow 
lenders to process these loans without prior agency review. Lenders 
can receive delegated authority from both agencies, but SBA and Export-
Import Bank staff that GAO interviewed noted many lenders are 
reluctant to work with both agencies due to the time and expertise 
needed to learn each agency's compliance standards and to process each 
agency's products. SBA and the Export-Import Bank may be able to 
explore options to harmonize export financing products and to assist 
lenders in more easily adapting to the rules for both agencies' 
products. 

SBA and other agencies could also better leverage one another's 
resources by consistently sharing client information, where possible. 
Field staff from SBA, SBDCs, Commerce, and the Export-Import Bank that 
GAO interviewed said accessing other agencies' client lists could help 
them reach more clients and potentially improve client services. 
However, the extent to which SBA and other agencies regularly share 
exporters' information varies. SBDC counselors generally cannot share 
specific client information with other entities unless they receive 
permission from the client,[Footnote 3] and SBA's Office of 
International Trade does not regularly share its client list with 
SBDCs, Commerce, or the Export-Import Bank, nor does it regularly 
receive client lists from other entities. Commerce and the Export-
Import Bank have an informal agreement to share certain public client 
information with one another on a regular basis. Agency officials 
noted that information sharing is limited by certain privacy 
restrictions, but SBA and other agencies' officials told us they are 
currently reviewing the types of information that they could share 
with each other. In November 2012, the Commerce Office of Inspector 
General found that restrictions on sharing of client information 
constrained Commerce's ability to collaborate with other agencies and 
recommended that it explore the possibility of requiring clients to 
waive confidentiality as a condition for receiving services. Commerce 
concurred with this recommendation. 

Actions Needed and Potential Financial or Other Benefits: 

To limit the extent to which SBA programs overlap with those of other 
agencies, in January 2013, GAO recommended that the Administrator of 
SBA take the following two actions to improve collaboration: 

* consult with Commerce and the Export-Import Bank and more clearly 
define roles and responsibilities of export promotion entities' export 
counseling and financing staff at the agency-wide and local levels, 
which could assist small businesses and federal partner entities' 
staff in understanding the various export assistance provided by 
different federal entities and maximize the use of government 
resources; and: 

* consult with Commerce and the Export-Import Bank and identify ways 
to increase, where possible, sharing of client information deemed 
useful for SBA, Commerce, and the Export-Import Bank. 

Implementation of these recommendations could help to improve the 
efficiency of federal export promotion services for small businesses. 
GAO was unable to quantify any potential financial benefits resulting 
from these actions because they would likely result in a more 
efficient use of existing resources and improved client services, 
rather than distinct cost savings. 

Agency Comments and GAO's Evaluation: 

In commenting on the January 2013 report on which this analysis is 
based, SBA agreed with the above recommendations and noted it is 
taking steps to address them. SBA and Commerce provided copies of a 
December 2012 Interagency Communiqué that was intended to clarify 
counseling roles and responsibilities and provides guidance on 
referring U.S. businesses seeking export assistance to federal, state, 
and nonfederal resources according to each firm's export readiness and 
business needs. The communiqué does not provide referral protocols for 
clients seeking trade finance assistance, which the communiqué said 
would be issued by the end of January 2013. It also notes that 
agencies intend to develop local Export Outreach Teams to increase 
awareness of local international trade expertise and enhance 
communication and collaboration at the local level. Among other 
things, the Export Outreach Teams would develop referral protocols and 
initiate ongoing discussions of shared clients. Thus, the communiqué's 
plans, when fully implemented, would begin to address the 
recommendations above. GAO will continue to monitor the agencies' 
implementation of these plans. 

GAO provided a draft of this report section to SBA, Commerce, and the 
Export-Import Bank. SBA officials stated that SBA and the Export-
Import Bank are taking steps to respond to GAO's recommendations, 
including developing a new program that bundles non-overlapping 
financial products from both agencies that address specific lender and 
exporter needs and exploring the possibility of providing joint 
training for both agencies' export finance specialists so they are 
well versed in both agencies' programs. SBA officials also stated that 
SBA and Commerce have begun organizing Export Outreach Teams 
throughout the SBA network to enhance communication and collaboration 
between SBA's partners and international trade networks. Commerce 
officials added that the Trade Promotion Coordinating Committee has 
developed a webinar on client referrals, which they planned to roll 
out to field locations starting in March 2013. They noted that this 
action, in combination with actions taken under the December 2012 
Interagency Communiqué, went a long way toward addressing our 
recommendations. 

How GAO Conducted Its Work: 

The information contained in this analysis is based on findings from 
the product in the related GAO product section. GAO analyzed 
government-wide initiatives, strategies, and laws, as well as 
agencies' documents. GAO interviewed officials from key export 
promotion entities in headquarters and six field locations--Chicago, 
Dallas, Irvine (California), Miami, New York, and Portland (Oregon). 
GAO selected these locations based on the number of key entities in 
the location, the types of services provided, and Commerce's 
assessment of the locations' export potential. Commerce, SBA, and SBDC 
officials that provide export assistance were present in all 
locations, while Export-Import Bank officials were present in five of 
the six locations. At some locations, GAO also met with private sector 
representatives that used federal export assistance. GAO's interviews 
at these six locations are not generalizable to all U.S. locations but 
provided GAO with insights about how agencies collaborate with one 
another at the local level and challenges local officials face in 
doing so. GAO assessed interagency coordination primarily against 
selected elements of GAO's practices for enhancing and sustaining 
collaboration. Table 9 in appendix IV lists the programs GAO 
identified that might have similar or overlapping objectives, provide 
similar services, or be fragmented across government missions. Overlap 
and fragmentation might not necessarily lead to actual duplication, 
and some degree of overlap and duplication may be justified. 

Related GAO Product: 

GAO, Export Promotion: Small Business Administration Needs to Improve 
Collaboration to Implement Its Expanded Role. [hyperlink, 
http://www.gao.gov/products/GAO-13-217]. Washington, D.C.: January 30, 
2013. 

Contact Information: 

For additional information about this area, contact Loren Yager at 
(202) 512-4347 or yagerl@gao.gov. 

Footnotes: 

[128] GAO, Results-Oriented Government: Practices That Can Help 
Enhance and Sustain Collaboration among Federal Agencies, [hyperlink, 
http://www.gao.gov/products/GAO-06-15] (Washington, D.C.: Oct. 21, 
2005). 

[129] In commenting on a draft of the January 2013 report on which 
this submission is based, SBA and Commerce noted that the agencies 
have begun to clarify counseling roles and responsibilities through an 
interagency communiqué that provides guidance on how to assess the 
export readiness of clients and identifies general referral channels 
once a business has been classified as (1) not a good candidate for 
exporting, (2) not ready to export, (3) ready to export, or (4) an 
existing exporter. 

[130] See 15 U.S.C. § 648(a)(7)(A). 

[End of Export Promotion area] 

13. International Broadcasting: 

The Broadcasting Board of Governors--with a budget of $752 million in 
fiscal year 2012--has recognized the need to reduce overlap and 
reallocate limited resources to broadcasts that will have the greatest 
impact, but the agency could do more to achieve this goal, such as 
systematically considering overlap of language services in its annual 
language services review. 

Why This Area Is Important: 

U.S. international broadcasting is intended to communicate directly 
with audiences in countries with limited journalism alternatives and 
to inform, engage, and connect people around the world. U.S. 
international broadcasting has grown considerably in the seven decades 
since it was first launched, with Congress creating additional 
broadcasting entities to target new audiences. These entities now 
broadcast through radio, television, Internet, and mobile technology, 
reaching an estimated weekly audience of 175 million people. The 
Broadcasting Board of Governors (BBG) is the federal agency 
responsible for U.S. international broadcasting. The Board oversees 
BBG's broadcast entities--Voice of America, Radio Free Europe/Radio 
Liberty, Office of Cuba Broadcasting, Radio Free Asia, and Middle East 
Broadcasting Networks, Inc. 

What GAO Found: 

In January 2013, GAO found that nearly two-thirds of the BBG language 
services--offices that produce content for particular languages and 
regions--overlap with a language service offered by another BBG entity 
by providing programs to the same countries in the same languages. GAO 
identified 23 instances of overlap, involving 43 of BBG's 69 language 
services. For example, in 8 instances involving 16 services, a Voice 
of America service and a Radio Free Asia service overlapped. Almost 
all overlapping services also broadcast on the same platform (i.e., 
radio or television). The figure below shows the extent of overlap 
among BBG language services as of June 2012. 

Figure: Overlap of BBG Entities' Language Services, as of June 2012: 

[Refer PDF for image: illustration] 

Voice of America: 
Overlap with Radio Free Asia: 16; 
Overlap with Office of Cuba Broadcasting: 2; 
Overlap with Radio Free Europe/Radio Liberty: 23. 

Radio Free Europe/Radio Liberty: 
Overlap with Middle East Broadcasting Networks, Inc.: 2. 

Source: GAO analysis of Broadcasting Board of Governors information. 

[End of figure] 

The total cost associated with maintaining the 43 overlapping language 
services is about $149 million, or nearly 20 percent of BBG's total 
appropriations for fiscal year 2011.[Footnote 1] This amount 
represents the sum of the total cost for all overlapping language 
services as reported in BBG's Language Service Review Briefing Book 
from fiscal year 2011. The amount of money that could be saved by 
reducing or eliminating overlapping language services would depend on 
a variety of factors, including which services were reduced or 
eliminated, which transmission assets or broadcast hours were reduced 
or transferred, and whether staff and other resources from an 
eliminated service were transferred to the remaining services. 

According to BBG officials, language services that broadcast in the 
same country and language are sometimes distinguished by broadcast 
hours or purpose and content. 

* Broadcast hours. BBG officials told us that overlapping language 
services generally coordinate with one another to broadcast at 
different hours of the day. 

* Purpose and content. BBG officials said that although Voice of 
America and the other BBG broadcasters have different purposes, 
flexibility in their governing laws allows some overlapping content. 
Officials noted that according to the law, Voice of America must 
represent the United States, presenting and explaining the country's 
policies in addition to providing accurate news, while the other BBG 
broadcasters generally act as regional or local news providers. 
However, BBG's interpretation of the entities' mandates and missions 
allows for some flexibility related to programming content, which 
could lead to content overlap. 

The International Broadcasting Act, as amended, directs BBG to 
consider issues related to overlap, such as duplication, among some 
language services. For example, the law requires that grant agreements 
to Radio Free Europe/Radio Liberty shall include a provision stating 
that duplication of language services and technical operations between 
RFE/RL and VOA should be reduced to the extent appropriate, as 
determined by BBG's Board of Governors.[Footnote 2] 

BBG's annual language service review--the agency's primary method of 
prioritizing broadcast languages and planning resource allocations--
does not systematically consider the cost and impact of language 
service overlap. BBG's language service review is intended to help the 
agency make decisions on allocating resources to language services by 
considering factors such as foreign policy priorities and the domestic 
media environment in countries that receive BBG broadcasts. The 
resulting Annual Language Service Review Briefing Book provides 
detailed data for all language services, but does not discuss the cost 
or impact associated with overlap. BBG officials stated that the 
methodology for the language service review does not include an 
assessment of the cost and impact of overlapping language services 
because officials are already aware of overlap among their language 
services and because the law has not required BBG to include 
assessments of overlap as part of its annual language service review. 
However, by not systematically considering overlap, the agency risks 
missing opportunities to reduce overlap as appropriate, strengthen 
impact, and improve coordination among its entities. 

Actions Needed and Potential Financial or Other Benefits: 

In January 2013, GAO recommended that BBG take the following action: 

* ensure that BBG's annual language service review includes systematic 
consideration of the cost and impact of internal overlap among BBG 
entities' language services. 

GAO was able to estimate the total cost for overlapping language 
services but was not able to determine the potential savings 
associated with reducing overlap; the amount of money that could be 
saved by reducing or eliminating overlapping language services would 
depend on a variety of factors, including whether staff and other 
resources from an eliminated service were transferred to the remaining 
services. 

Agency Comments and GAO's Evaluation: 

In commenting on the January 2013 report on which this analysis is 
based, BBG agreed with our recommendations and said that it had begun 
the planning necessary to include a more in-depth and systematic 
review of overlapping language services in its annual language service 
review. BBG noted that its spending in fiscal year 2011 to maintain 
language services broadcasting in the same countries and languages--
$149 million--represented the baseline budget for the 43 overlapping 
language services we identified but not the amount that could be saved 
if overlapping services were eliminated. For example, BBG stated that 
some overlap may be necessary and beneficial and that, in some cases, 
the overlap resulted from statutory mandates. 

GAO provided a draft of this report section to BBG for review and 
comment. In an email received on February 22, 2013, the BBG 
Congressional Coordinator stated that the BBG is making some progress 
toward addressing GAO's January 2013 recommendation regarding the 
annual language service review process. Specifically, BBG has begun 
work on an online information portal that will integrate information 
on research, strategy, development, budget, and performance by 
country, and will allow for more in-depth analysis of overlap. BBG 
hopes to use this tool for the 2013 Language Service Review. 

How GAO Conducted Its Work: 

The information contained in this analysis is based on findings from 
the product in the related GAO product section. GAO reviewed laws, 
reports, and other documents related to U.S. international 
broadcasting. GAO also reviewed and analyzed information on the 
missions of the five BBG entities--Voice of America, the Office of 
Cuba Broadcasting, Middle East Broadcasting Networks, Inc., Radio Free 
Asia, and Radio Free Europe/Radio Liberty--and on their broadcast 
coverage, by country, language, and platform. We interviewed officials 
from BBG, and each of the five BBG entities. Table 10 in appendix IV 
lists the programs GAO identified that might have similar or 
overlapping objectives, provide similar services, or be fragmented 
across government missions. Overlap and fragmentation might not 
necessarily lead to actual duplication, and some degree of overlap and 
duplication may be justified. 

Related GAO Product: 

GAO, Broadcasting Board of Governors: Additional Steps Needed to 
Address Language Service Overlap. [hyperlink, 
http://www.gao.gov/products/GAO-13-172]. Washington, D.C.: January 29, 
2013. 

Contact Information: 

For additional information about this area, contact Timothy J. 
DiNapoli at (202) 512-3665, or dinapolit@gao.gov. 

Footnotes: 

[1] The cost for each language service includes employee salaries and 
benefits, and general operating expenses. This amount exceeds the 
potential savings from eliminating or reducing overlap, given that it 
includes all services that overlap in a particular country and 
language and that some staff and other resources from eliminated 
language services would likely be transferred to remaining services. 

[2] BBG is managed by a nine-member part-time bipartisan Board of 
Governors. 

[End of International Broadcasting area] 

14. Rural Water Infrastructure: 

Additional coordination by the Environmental Protection Agency and the 
Department of Agriculture could help three water and wastewater 
infrastructure programs with combined funding of about $4.3 billion 
avoid potentially duplicative application requirements, as well as 
associated costs and time developing engineering reports and 
environmental analyses. 

Why This Area Is Important: 

Many communities with populations of 10,000 or less face significant 
challenges in financing the costs of replacing or upgrading aging and 
obsolete drinking water and wastewater infrastructure. The total 
estimated cost of such drinking water and wastewater infrastructure 
projects in these communities, many of which are considered rural, is 
estimated by federal agencies to be more than $100 billion in the 
coming decades. For example, communities may need to upgrade basic 
wastewater systems, which treat wastes by allowing them to settle out 
in ponds or lagoons, with more sophisticated equipment that 
mechanically and biologically removes solids and contaminants. As 
another example, communities may need to upgrade to more expensive 
filtration equipment to remove contaminants, such as arsenic or excess 
nutrients, as regulations become more stringent for drinking water 
quality and wastewater. 

Communities typically pay for drinking water and wastewater 
infrastructure through the rates charged to users of the drinking 
water and wastewater systems. In some cases, however, these 
communities do not have the number of users of drinking water and 
wastewater systems needed to spread the cost of major infrastructure 
projects and still maintain affordable user rates. In addition, unlike 
larger, urban communities that can issue their own public bonds to pay 
for major water and wastewater infrastructure improvements, rural 
communities face difficulty independently financing such major 
improvements. In many cases, rural communities have limited access to 
financial markets, restricting their ability to issue bonds to raise 
capital. As a result, these communities depend heavily on federal and 
state grants and subsidized loan programs to finance their water and 
wastewater infrastructure projects. 

The Environmental Protection Agency (EPA) and the U.S. Department of 
Agriculture (USDA) oversee the three largest federally funded drinking 
water and wastewater infrastructure assistance programs. EPA provides 
grant funding to states to administer Drinking Water State Revolving 
Funds (SRF), which provide annual funding to communities to finance 
projects for publicly and privately owned drinking water treatment 
plants, distribution and storage infrastructure, and source projects. 
EPA also provides grants to states to administer Clean Water State 
Revolving Funds, which provide funding to communities to finance 
projects for constructing, replacing, or upgrading publicly owned 
municipal wastewater treatment plants, as well as managing nonpoint 
source pollution, watersheds, and estuaries. EPA allocates its funding 
in the form of capitalization grants to revolving fund programs 
administered by each state, and state officials in turn distribute 
loan funding for qualified drinking water and wastewater 
infrastructure projects in local communities. Communities of any size 
can apply for assistance. Over the long term, the state revolving fund 
programs are intended to be sustained through communities' repayment 
of loans, creating a continuing source of assistance for priority 
drinking water and wastewater infrastructure projects. In fiscal year 
2011, the Drinking Water and Clean Water State Revolving Fund programs 
received $963 million and $1.5 billion in federal appropriations, 
respectively. 

USDA's Rural Utilities Service administers the Water and Waste 
Disposal program, which provides funding for both drinking water and 
wastewater projects in low-income rural communities of 10,000 or less. 
In fiscal year 2011, the program received $516 million in 
appropriations, which USDA allocated to its offices located in each 
state, using a formula based on the state's rural population, number 
of households in poverty, and rate of unemployment. 

In December 2009, GAO reported that EPA, USDA, and other federal 
agencies that fund drinking water and wastewater infrastructure for 
rural communities along the U.S.-Mexico border lacked coordinated 
policies and processes and did not efficiently coordinate their 
programs, priorities, or funding. To better address the needs of the 
region, GAO suggested in December 2009 that Congress consider 
establishing an interagency mechanism to coordinate programs and 
funding, such as a task force on water and wastewater infrastructure, 
in the border region. GAO also identified the need for additional 
coordination on drinking water and wastewater infrastructure on the 
U.S.-Mexico border in its March 2011 report on opportunities to reduce 
duplication in federal programs. GAO updated the status of this work 
in January 2012 and again in January 2013. While Congress has not 
created a task force or other means to coordinate in the border 
region, officials from the federal agencies involved, including EPA 
and USDA, said they were working to coordinate their efforts to 
provide drinking water and wastewater infrastructure in the border 
region within the current statutory authorities that exist. 

Following up on this work, GAO conducted a nationwide review of the 
largest drinking water and wastewater infrastructure funding programs--
EPA's Drinking Water and Clean Water state revolving fund programs and 
USDA's Rural Utilities Service Water and Waste Disposal program--and 
reported on this review in October 2012. 

What GAO Found: 

Funding for rural water and wastewater infrastructure is fragmented 
across the three federal programs GAO reviewed and reported on in 
October 2012, leading to program overlap and potential duplication of 
effort by communities that apply for funding from the programs. The 
three EPA and USDA water and wastewater infrastructure programs have, 
in part, an overlapping purpose to fund projects in rural communities 
with populations of 10,000 or less. For the 54 projects GAO reviewed 
in Colorado, Montana, North Carolina, Pennsylvania, and South Dakota, 
this overlap did not result in duplicate funding--that is, funding for 
the same activities on the same projects. However, GAO identified the 
potential for communities to complete duplicate funding applications 
and related documents when applying for funding from both the state 
SRF programs and the Rural Utilities Service's Water and Waste 
Disposal program. In particular, some communities have to prepare 
preliminary engineering reports and environmental analyses for each 
program. Potentially duplicative application requirements may make it 
more costly and time consuming for communities to complete the 
application process. GAO's analysis showed--and community officials 
and their consulting engineers confirmed--that these reports usually 
contain similar information but have different formats and levels of 
detail. Completing separate engineering reports and environmental 
analyses is duplicative and can result in increased costs and delays 
for communities applying to both programs. Engineers GAO interviewed 
estimated that preparing additional engineering reports could cost 
from $5,000 to $50,000 and that the cost of a typical environmental 
analysis could add as little as $500 to a community's costs or as much 
as $15,000. Moreover, having to complete separate preliminary 
engineering reports or environmental analyses may delay a project 
because of the additional time required to complete and submit these 
documents. 

In October 2012, GAO reported that EPA and USDA have taken some 
actions to coordinate their programs and funding at the federal and 
state levels to help meet the water infrastructure needs of rural 
communities. The report describes examples of coordination between EPA 
and USDA at the federal level, designed to encourage states to 
emphasize coordination between their SRF programs and USDA's state-
level programs. For example, according to EPA and USDA officials, to 
inform state officials and communities about the programs and funding 
opportunities available in their respective states, the federal 
agencies participate in conferences and workshops, conduct webinars, 
and sponsor training. In addition, EPA and USDA signed a joint 
memorandum in 1997 encouraging state-level programs and communities to 
coordinate in four key areas: program planning documents; policy and 
regulatory barriers; project funding; and environmental analyses and 
other common federal requirements. In part to address the last item on 
common requirements, in February 2012, EPA and USDA formed a working 
group with representatives from the Department of Housing and Urban 
Development, the Indian Health Service, and state programs to draft 
guidelines for uniform preliminary engineering reports to meet federal 
and state requirements. At the time GAO issued its report in October 
2012, the agencies had not completed the draft guidelines, and EPA and 
USDA had not yet taken action to help states coordinate on 
environmental analyses, by for example, developing guidelines for 
uniform environmental analyses. Without such guidelines, communities 
face a continuing burden and cost of applying for federal funds to 
improve rural water and wastewater infrastructure. 

GAO's October 2012 report also demonstrated that coordination in the 
four key areas of the 1997 memorandum varied across the five states 
GAO visited. For example, state and federal officials in Montana 
created a drinking water and wastewater working group to coordinate 
project funding and to resolve regulatory barriers such as different 
funding cycles between the programs. In addition, state and federal 
officials in Pennsylvania agreed upon uniform environmental analyses 
that are accepted by all programs. However, in Colorado and North 
Carolina, state-level programs did not coordinate well initially about 
project funding, which resulted in the state-level programs planning 
to pay for the same projects. The state SRF programs and state-level 
USDA programs were able to avoid paying for the same projects, but 
state-level USDA programs had or expected to deobligate almost $20 
million committed to these projects and return the funds to USDA. 
Specifically, two USDA state offices could not fully obligate their 
available funds to new projects by internal deadline dates and, as a 
result, had to return the funds to the USDA headquarters pool to be 
made available for projects in other states. If the state programs had 
been coordinating on projects and funding, the USDA offices might have 
had more notice of the need to develop new projects in time to keep 
the funding in their respective states. Further delays in coordinating 
programs could hinder the efficient use of federal funds in states 
with high wastewater and drinking water infrastructure needs by 
preventing funds from reaching needy communities. 

Actions Needed and Potential Financial or Other Benefits: 

To improve coordination and to reduce the potential for inefficiencies 
and duplication of effort, GAO recommended in October 2012 that the 
Secretary of Agriculture and the Administrator of EPA take the 
following three actions: 

* ensure the timely completion of the interagency effort to develop 
guidelines to assist states in developing their own uniform 
preliminary engineering reports to meet federal and state requirements; 

* work together and with state and community officials to develop 
guidelines to assist states in developing uniform environmental 
analyses that could be used, to the extent appropriate, to meet state 
and federal requirements for water and wastewater infrastructure 
projects; and: 

* work together and with state and community officials through 
conferences and workshops, webinars, and sponsored training to 
reemphasize the importance of coordinating in all four key areas in 
the 1997 memorandum. 

Implementation of these recommendations could help make more efficient 
use of federal funds for rural water and wastewater infrastructure. In 
particular, it could help avoid the reprogramming of state funds and 
the delay involved in getting funds to communities for their projects. 
In addition, implementation of guidance on engineering reports and 
environmental analyses could help eliminate potential duplication of 
effort and associated costs by communities when they apply for funds. 
Because the size of individual water and wastewater infrastructure 
projects can vary significantly, the additional costs associated with 
duplicative preliminary engineering report and environmental analysis 
requirements differ for individual projects. As a result, the costs 
associated with potentially duplicative efforts are difficult to 
quantify at the program level without reviewing a representative 
sample of project applications to multiple programs for the same 
projects. 

Agency Comments and GAO's Evaluation: 

In commenting on the October 2012 report on which this analysis is 
based, EPA and USDA neither agreed nor disagreed with GAO's 
recommendations to develop guidelines to help states develop uniform 
engineering reports and uniform environmental analyses, pointing out 
that they have continued to coordinate their efforts but have been 
limited in what they can require states to do. In particular, both 
agencies emphasized that EPA does not have the authority to require 
the states to use particular engineering reports or environmental 
analyses. They committed to meeting and discussing common areas and 
guidance and said that they would work with states to encourage the 
use of uniform requirements in application documents. EPA agreed with 
GAO's recommendation that the agencies reemphasize coordination at the 
state-level, while USDA did not agree or disagree with it. 

GAO provided a draft of this report section to EPA and USDA for review 
and comment. In an e-mail received on January 24, 2013, EPA reaffirmed 
its comments on the October 2012 report, and in a separate e-mail on 
January 25, 2013, USDA stated that it is currently considering the 
actions it will take on recommendations made in that report. As of 
January 2013, EPA and USDA have taken action on the first and second 
recommendations, but more work remains to be done. On the first 
recommendation, both EPA and USDA officials said the preliminary 
engineering report working group has drafted an interagency memorandum 
that includes the purpose of the working group, a general outline of a 
preliminary engineering report, and a detailed template of each 
component of the report. As of mid-January 2013, EPA, USDA, and the 
Indian Health Service have signed the memorandum and 17 states have 
been involved in developing the memorandum. EPA and USDA can continue, 
however, to work with participating states and the remaining states to 
help them successfully adopt the memorandum and template. On the 
second recommendation, EPA and USDA have begun efforts to coordinate 
on environmental analyses. The agencies met in mid-January 2013 to 
discuss uniform environmental analyses, and have formed a new 
workgroup of federal and state stakeholders, with EPA as chair. The 
new workgroup will initially focus on collecting information on 
possible duplicative environmental review processes. 

USDA said that the draft did not provide an accurate picture of the 
coordination that is already occurring between the agencies, and 
provided additional examples of interagency coordination at the 
federal level. The October 2012 report described these additional 
examples, but the purpose of this document is to summarize the key 
findings of the report. The section in this report has been clarified 
by adding a reference to the original report. Both agencies also 
provided technical comments, which were incorporated as appropriate. 

How GAO Conducted Its Work: 

The information contained in this analysis is based on findings from 
the October 2012 report in the related GAO products section. GAO 
reviewed relevant statutes, regulations, guidance, budgets, and other 
documents and interviewed officials from EPA and USDA. In addition, 
GAO selected a nongeneralizeable sample of five states--Colorado, 
Montana, North Carolina, Pennsylvania, and South Dakota--by comparing 
data on funding needs for rural areas, geographic location, and level 
of coordination between federal programs. In each state selected, we 
judgmentally selected a nongeneralizeable sample of communities to 
visit and projects to observe by analyzing lists of water and 
wastewater infrastructure projects we obtained from state SRF and 
state-level USDA officials. We reviewed a total of 54 projects in 31 
communities across the five states that had applied for or received 
funding from at least one of the three programs. We conducted site 
visits to each state to observe selected projects and to meet with 
representatives from engineering firms, local communities, and 
relevant nonprofit organizations associated with the projects. To 
assess the extent of overlap between the programs, GAO compared annual 
funding data from EPA and USDA and discussed with state and local 
officials their experiences in disbursing and applying for funding 
from the EPA and USDA programs. In addition, to determine the extent 
to which agencies coordinate at the federal and state levels to help 
meet the water infrastructure needs of rural communities, GAO met with 
federal and state officials and considered EPA's and USDA's efforts to 
promote the guidance established in the 1997 joint memorandum. To 
identify leading practices for coordination, GAO reviewed its prior 
work on practices that can help enhance and sustain collaboration 
among federal agencies. Table 11 in appendix IV lists the programs GAO 
identified that might have similar or overlapping objectives, might 
provide similar services, or might be fragmented across government 
missions. Overlap and fragmentation might not necessarily lead to 
actual duplication, and some degree of overlap and duplication may be 
justified. 

Related GAO Products: 

Rural Water Infrastructure: Additional Coordination Can Help Avoid 
Potentially Duplicative Application Requirements. [hyperlink, 
http://www.gao.gov/products/GAO-13-111]. Washington, D.C.: October 16, 
2012. 

Annual Special Report: Opportunities to Reduce Duplication, Overlap 
and Fragmentation, Achieve Savings, and Enhance Revenue. [hyperlink, 
http://www.gao.gov/products/GAO-12-342SP]. Washington, D.C.: February 
28, 2012. 

Government Operations: Opportunities to Reduce Potential Duplication 
in Government Programs, Save Tax Dollars, and Enhance Revenue. 
[hyperlink, http://www.gao.gov/products/GAO-11-318SP]. Washington, 
D.C.: March 1, 2011. 

Rural Water Infrastructure: Improved Coordination and Funding 
Processes Could Enhance Federal Efforts to Meet Needs in the U.S.-
Mexico Border Region. [hyperlink, 
http://www.gao.gov/products/GAO-10-126]. Washington, D.C.: December 
18, 2009. 

Contact Information: 

For additional information about this area, contact J. Alfredo Gómez 
at (202) 512-3841 or gomezj@gao.gov. 

[End of Rural Water Infrastructure area] 

Social Services: 

15. Drug Abuse Prevention and Treatment Programs: 

More fully assessing the extent of overlap and potential duplication 
across the fragmented 76 federal drug abuse prevention and treatment 
programs and identifying opportunities for increased coordination, 
including those programs where no coordination has occurred, would 
better position the Office of National Drug Control Policy to better 
leverage resources and increase efficiencies. 

Why This Area Is Important: 

Abuse of illicit drugs results in significant public health, social, 
and economic consequences for the United States. For example, the 
Department of Justice's National Drug Intelligence Center estimated 
that the economic impact of illicit drug use, including the costs of 
health care, crime, and lost productivity, was more than $193 billion 
in 2007.[Footnote 1] Furthermore, the scale of the problem has not 
improved over the past decade. An estimated 22.5 million Americans 
aged 12 or older were illicit drug users in 2011, representing 8.7 
percent of this population, according to the National Survey on Drug 
Use and Health.[Footnote 2] In addition, illicit drug use rates among 
Americans aged 12 and older from 2009 through 2011 were among the 
highest since trend data were available in 2002. 

Multiple federal departments, agencies, and components (collectively 
referred to as agencies) administer programs intended to prevent 
illicit drug use or treat the abuse of illicit drugs.[Footnote 3] 
These programs provide or fund a range of services--such as education 
and outreach activities, drug testing, medical evaluation, 
intervention, and therapy--in order to discourage first-time drug use 
and to assist regular drug users to become and remain drug free. Of 
the 76 drug abuse prevention and treatment programs GAO reviewed in 
its March 2013 report, there was evidence of overlap across 59 
programs (nearly 80 percent) because they can provide or fund at least 
one drug abuse prevention or treatment service that one or more other 
programs can also provide or fund, to similar population groups to 
reach similar program goals. The Office of National Drug Control 
Policy (ONDCP) is responsible for, among other things, overseeing and 
coordinating the implementation of national drug control policy, 
including drug abuse prevention and treatment program activities, 
across the federal government to address illicit drug use.[Footnote 4] 
ONDCP reported that about $10.1 billion was provided for drug abuse 
prevention and treatment programs in fiscal year 2012. 

What GAO Found: 

GAO reported in March 2013 that federal drug abuse prevention and 
treatment programs are fragmented across 15 federal agencies.[Footnote 
5] In fiscal year 2012, about $4.5 billion was allocated to these 15 
agencies that administer 76 programs that are, in all or in part, 
intended to prevent or treat illicit drug use or abuse.[Footnote 6] 
Specifically, GAO reported that: 

* 22 programs were drug abuse prevention programs, that is, programs 
that provide services, allocate funding, or allow for activities 
focused on discouraging the first-time use of controlled substances--
specifically illicit drugs and the problematic use of alcohol--and 
encouraging those who have begun to use controlled substances to cease 
their use; 

* 21 programs were drug abuse treatment programs, that is, programs 
that provide services, allocate funding, or allow for activities 
focused on identifying and assisting users of controlled substances--
specifically illicit drugs and the problematic use of alcohol--to 
become drug-free and remain drug-free; 

* 13 programs were drug abuse prevention and treatment programs; and: 

* 20 programs were neither drug abuse prevention nor treatment 
programs, but programs that may provide or fund drug abuse prevention 
or treatment services to support other program objectives, such as 
promoting housing stability within low-income communities.[Footnote 7] 

In addition, GAO reported in March 2013 that there was overlap in the 
drug abuse prevention or treatment services of 59 of the 76 programs 
that GAO reviewed.[Footnote 8] For example: 

* Officials from 6 of the 76 programs reported that their programs can 
provide or fund drug abuse prevention services for students and youth 
in order to support program goals of preventing drug use and abuse 
among young people. For example, officials from all six programs 
reported that they can provide or fund services to conduct outreach 
and educate youth on drug use. 

* Officials from 15 programs reported that their programs can provide 
or fund many of the same prevention and treatment services to the 
offender population--that is, those individuals involved in the 
criminal justice system--in order to support program goals of 
identifying and meeting the treatment needs of offenders and providing 
services to reduce recidivism and facilitate reentry.[Footnote 9] For 
example, 12 of the 15 programs can provide or fund medical evaluations 
and different forms of therapy, including individual and family 
therapy. 

* Officials from nine other programs reported that they can provide or 
fund drug abuse prevention and treatment services to multiple 
population groups in support of program goals to expand the capacities 
of state-and community-level entities to respond to and prevent drug 
abuse. These services include youth education, family education and 
support services, and public outreach activities. 

A more in-depth analysis of two areas (prevention services for 
students and youth, and prevention and treatment services for 
offenders) found that all the agencies administering these programs 
took various efforts to coordinate overlapping programs or services 
where the programs had similar objectives, reducing the risk of 
duplication. Specifically, GAO reported: 

* Prevention services for students and youth. Although officials from 
all 6 programs reported that they can provide or fund services to 
conduct outreach and educate youth on drug use, the risk of 
duplication among these programs is low because of coordination 
efforts taken by the administering agencies to improve efficiencies. 
[Footnote 10] For example, using an interagency agreement, the 
Department of Education jointly administers the Safe Schools/Healthy 
Students program with the Departments of Justice and Health and Human 
Services to provide complementary educational, mental health, and law 
enforcement services to prevent youth violence and drug use. 
Similarly, the Substance Abuse and Mental Health Services 
Administration (SAMHSA) and ONDCP maintain an interagency agreement to 
jointly administer the Drug Free Communities Support program. 
Officials from SAMHSA explained that the agreement defines the roles 
and responsibilities of the two agencies, and establishes agreed-upon 
standard operating procedures. 

In addition, officials from the Department of Education, ONDCP, and 
SAMHSA reported that some programs and the services they can provide 
or fund are distinct because they target specific subgroups among 
students and youth, or they differ in scope. For example, the 21st 
Century Community Learning Center program allows for additional uses 
of funds that are not related to drug abuse prevention, like after-
school tutoring and mentoring, and does not require that grantees 
include drug abuse prevention as a program component. Officials from 
the Department of Education said this indicates a difference in scope 
from the Safe Schools/Healthy Students program, which requires 
grantees to include drug abuse prevention services as a main program 
component. These officials reported taking steps to identify 
opportunities for increasing efficiencies. For example, in its fiscal 
year 2013 budget justification, the Department of Education proposed 
consolidating several existing programs that seek to help schools 
provide activities involving alcohol, drug, and violence prevention. 
According to Department of Education officials, the consolidation 
would more effectively target resources and address the needs of 
grantees. 

* Prevention and treatment services for offenders. Officials from the 
four agencies overseeing the 15 programs that can provide or fund some 
of the same prevention and treatment services to the offender 
population also cited coordination efforts to help ensure that 
programs provide complementary services to this population, which can 
minimize the risk of potential duplication.[Footnote 11] For example, 
according to Office of Justice Programs (OJP) and SAMHSA officials, 
SAMHSA funding for drug courts is used for treatment services, while 
OJP funding for drug courts is used for administrative or case 
management purposes. While OJP resources are not restricted from 
funding the same treatment services SAMHSA can fund, officials from 
both agencies said that they use multiple coordination mechanisms to 
help minimize the risk of duplication. For example, OJP and SAMHSA 
jointly administer two programs. Additionally, officials from OJP and 
SAMHSA reported that their programs specifically serve offenders in 
the state and local justice systems, while the four programs 
administered by the Bureau of Prisons and the one program administered 
by the Administrative Office of the United States Courts target 
offenders who are or were incarcerated in federal prisons. Officials 
from the Bureau of Prisons and the Administrative Office of the United 
States Courts reported that the two agencies regularly share 
information and coordinate on prerelease planning for inmates in 
federal prisons and on transitioning inmates from prison to court-
ordered drug testing and treatment after release, or vice-versa. 

Although the agencies' coordination efforts in these two areas were 
consistent with practices that GAO had previously reported federal 
agencies use to implement collaborative efforts, not all of the 76 
programs surveyed are involved in coordination efforts with other 
federal agencies.[Footnote 12] Specifically, officials from 29 of the 
76 programs surveyed reported that no staff representing their 
programs had coordinated with other federal agencies on drug abuse 
prevention or treatment programs in the year prior to GAO's survey. As 
GAO has previously reported, because fragmentation across agencies can 
create an environment in which programs are not delivered as 
efficiently and effectively as possible, coordination across 
government is essential.[Footnote 13] Therefore, there may be 
additional opportunities to implement interagency coordination efforts 
among the 29 programs that did not report any such efforts to identify 
potential efficiencies that better leverage available resources and 
minimize overlap and potential duplication. 

Furthermore, GAO reported that although ONDCP coordinates efforts to 
develop and implement the National Drug Control Strategy (the 
Strategy) and budget, it has not systematically assessed drug abuse 
prevention and treatment programs to examine the extent of overlap and 
potential for duplication as well as opportunities for greater 
coordination. Officials from ONDCP and other agencies with whom GAO 
spoke reported that the Strategy--ONDCP's plan for reducing illicit 
drug use and its consequences--emphasizes the importance of 
coordinating efforts.[Footnote 14] For example, it designates lead and 
partner agencies for each of the activities in the Strategy and 
discusses the use of interagency working group meetings, both of which 
are used to coordinate Strategy implementation. In addition, ONDCP 
officials stated that as part of the office's annual process for 
developing the National Drug Control Program Budget, they review 
prevention and treatment programs for which funding is requested to 
verify that they serve unique populations.[Footnote 15] However, the 
purpose of the budget process is to develop a consolidated funding 
request to implement the Strategy and help ensure that the Strategy 
has adequate resources rather than to identify overlap or duplication 
across all programs, or opportunities for coordination. Furthermore, 
the purpose of the interagency meetings and other efforts to 
facilitate coordination is to develop and implement the Strategy and 
not to identify overlap or duplication. Accordingly, ONDCP has not 
conducted a systematic assessment of all prevention and treatment 
programs, including those not captured in the budget, and the services 
they are allowed to provide to determine the extent to which they 
overlap and where opportunities exist to pursue coordination 
strategies to more efficiently use limited resources. 

GAO also reported in March 2013 that ONDCP established the Performance 
Reporting System, which includes performance measures to monitor and 
assess collective agency progress toward achieving National Drug 
Control Strategy goals and objectives. The office plans to report on 
results for the first time in 2013. In addition, GAO reported that the 
15 agencies administering the 76 drug abuse prevention and treatment 
programs had completed evaluations of 6 programs since 2007--though 22 
more program evaluations were under way or planned.[Footnote 16] While 
program evaluations allow for comprehensive assessments of whether 
programs are achieving desired results to help allocate scarce 
resources to effective interventions, among other things, they are 
generally not required. ONDCP and agency officials said that they have 
taken other steps to help ensure that programs are effective, 
including collecting and analyzing other program performance 
information or requiring or encouraging the programs to use evidence-
based interventions to carry out their programs.[Footnote 17] 

Standards for Internal Control in the Federal Government highlights 
the importance of having access to operational and other data to 
determine whether programs are meeting goals for accountability and 
efficient use of resources.[Footnote 18] Additionally, the Standard 
for Project Management states that to ensure related projects are 
managed to achieve more benefits than could be achieved with stand-
alone efforts, management should coordinate common activities or 
programs and the efficient use of resources across activities. 
[Footnote 19] This can include such efforts as mapping out how various 
activities across organizations will achieve the desired benefits. 

Actions Needed and Potential Financial or Other Benefits: 

ONDCP is uniquely situated to conduct an assessment across the 76 drug 
abuse prevention and treatment programs that GAO identified in its 
review, nearly 40 percent (29 programs) of which reported not having 
coordinated with other agencies on drug abuse prevention or treatment 
programs over the past year. GAO's analysis identified fragmentation 
and overlap across those 76 programs, which ONDCP could use, along 
with other information, to identify overlap and potential duplication 
and opportunities for coordination. Such an assessment would better 
position ONDCP to help ensure that federal agencies undertaking 
similar prevention and treatment efforts identify opportunities for 
increased efficiencies, such as using coordination mechanisms to 
mitigate the risk of duplication and reducing administrative burdens 
on grantees, and better leverage available resources. These mechanisms 
could include, for example, joint program administration, establishing 
interagency agreements, and sharing requests for grant applications. 

Therefore, GAO recommended in March 2013 that the Director of ONDCP 
take the following action: 

* assess the extent of overlap and potential for duplication across 
federal drug abuse prevention and treatment programs and identify 
opportunities for increased coordination to help agencies take actions 
to increase efficiencies and better leverage their resources. ONDCP 
could use the results of GAO's analysis in the March 2013 report as a 
starting point for this assessment. 

The potential financial benefit of this action cannot be known until 
an assessment is completed. 

Agency Comments and GAO's Evaluation: 

GAO provided a draft of this report section, as well as the March 2013 
report on which it is based, to ONDCP; the Departments of Health and 
Human Services, Justice, Education, Defense, Housing and Urban 
Development, Labor, Transportation, and Veterans Affairs; and the 
Federal Judiciary for review and comment. ONDCP agreed with GAO's 
recommendation to assess the extent of overlap and potential for 
duplication across federal drug abuse prevention and treatment 
programs and identify opportunities for increased coordination. In its 
comments on both this section and the report, ONDCP reiterated that 
GAO reported finding overlap but not actual instances of duplication 
among the drug prevention and treatment programs we reviewed. The 
office also made the points, with examples, that some overlapping 
programs (1) may not serve identical populations and may target 
different specific subgroups of a large population category, such as 
different types of youth age groups, and (2) may provide distinct 
services. GAO acknowledged these factors in our report, and maintains 
that this is why it is important to systematically review the extent 
of overlap among prevention and treatment programs, taking into 
account targeted subgroups and allowable services, to help ensure that 
they efficiently use limited resources to deliver these important 
services. ONDCP also reiterated, as GAO stated, that overlapping 
programs may provide positive benefits, such as reinforcing key 
prevention messages. 

Further, the office agreed that coordination efforts among programs 
can help avoid duplication and maximize program effectiveness. This is 
consistent with GAO's report, which noted that overlap and 
fragmentation may not necessarily lead to duplication, but can create 
an environment in which programs are not delivered as efficiently and 
effectively as possible, and that coordination among programs helps to 
reduce the risk of duplication and increase efficiencies. ONDCP stated 
that while extensive coordination of prevention and treatment programs 
is already taking place, there is always room for improvement, and 
that it will work with agencies administering these programs to 
further enhance coordination. The Departments of Health and Human 
Services, Justice, Education, Defense, Transportation, and Housing and 
Urban Development provided technical comments on this section and the 
report, which were incorporated as appropriate. 

How GAO Conducted Its Work: 

The information contained in this analysis is based on findings from 
products listed in the related GAO products section. To identify 
federal drug abuse prevention and treatment programs, GAO reviewed the 
fiscal year 2013 National Drug Control Program Budget and the National 
Drug Control Strategy, among other sources. In identifying these 
programs, GAO excluded programs that, for example, exclusively focus 
on law enforcement or policy, conduct research, or fund overhead 
costs, as well as programs that reimburse drug abuse prevention or 
treatment services as part of a health benefit plan. GAO distributed a 
web-based questionnaire to officials at the 15 agencies that 
administer these programs to collect information such as program 
purpose, services provided, and population served, and analyzed the 
responses for 76 programs to identify potential fragmentation, 
overlap, or duplication based on the framework established in GAO's 
previous work.[Footnote 20] The response rate for the questionnaire 
was 100 percent. 

To gather additional information about the programs, GAO also reviewed 
relevant documents, such as completed program evaluations[Footnote 21] 
and agency policies and procedures, and interviewed agency officials 
who were responsible for overseeing the programs regarding areas of 
overlap and potential duplication and program evaluations that were 
completed, under way, or planned since 2007.[Footnote 22] To assess 
coordination efforts to reduce overlap or potential duplication, GAO 
analyzed questionnaire responses on agency efforts to coordinate drug 
abuse prevention and treatment programs and interviewed ONDCP and 
agency officials about actions taken to coordinate activities. GAO 
compared these reported actions to criteria for coordinating 
interagency efforts identified in our prior work.[Footnote 23] Table 
12 in appendix IV lists the programs GAO identified that might have 
similar or overlapping objectives, provide similar services, or be 
fragmented across government missions. Overlap and fragmentation might 
not necessarily lead to actual duplication, and some degree of overlap 
and duplication may be justified. 

Related GAO Products: 

Office of National Drug Control Policy: Office Could Better Identify 
Opportunities to Increase Program Coordination. [hyperlink, 
http://www.gao.gov/products/GAO-13-333]. Washington, D.C.: 2013. 

Drug Control: Initial Review of the National Strategy and Drug Abuse 
Prevention and Treatment Programs. [hyperlink, 
http://www.gao.gov/products/GAO-12-744R]. Washington, D.C.: July 6, 
2012. 

Contact Information: 

For additional information about this area, contact Eileen Larence at 
(202) 512-8777, or larencee@gao.gov, or Linda Kohn at (202) 512-7114, 
or kohnl@gao.gov. 

[Footnotes: 

[1] See Department of Justice, National Drug Intelligence Center, The 
Economic Impact of Illicit Drug Use on American Society (Washington, 
D.C.: April 2011). According to the report, 2007 is the most recent 
year for which data are available. 

[2] Overall illicit drug use includes the use of marijuana (including 
hashish), cocaine (including crack), heroin, hallucinogens, and 
inhalants as well as the nonmedical use of prescription drugs, such as 
pain relievers and sedatives. The 22.5 million represents individuals 
who reported that they used an illicit drug during the month prior to 
the survey interview. See Department of Health and Human Services, 
Substance Abuse and Mental Health Services Administration, Results 
from the 2011 National Survey on Drug Use and Health: Summary of 
National Findings (Rockville, Md.: September 2012). 

[3] Federal agencies may administer these programs through a variety 
of means, including, but not limited to, grants to state, local, 
tribal, and nonprofit entities, contracts to service providers, or 
services directly provided to beneficiaries by the federal agency 
itself. 

[4] ONDCP was established by the Anti-Drug Abuse Act of 1988, Pub. L. 
No. 100-690, 102 Stat. 4181, to, among other things, enhance national 
drug control planning and coordination and represent the drug policies 
of the executive branch before Congress. 

[5] For the purpose of its March 2013 report, GAO referred to programs 
that provide or fund drug abuse prevention and drug abuse treatment 
services as "drug abuse prevention and treatment programs," including 
those programs that provide or fund services to support program 
objectives other than the prevention and treatment of drug abuse. 

[6] GAO focused its review on programs that administer drug abuse 
prevention or treatment services. Therefore, GAO excluded programs 
that, for example, exclusively focus on law enforcement or policy, 
conduct research, or fund overhead costs. In addition, GAO excluded 
programs that reimbursed drug abuse treatment services as part of a 
health benefit plan, such as the Department of Health and Human 
Services' Medicare and Medicaid programs, which account for almost 
$4.5 billion of the $10.1 billion ONDCP reported was allocated for 
drug abuse prevention and treatment programs, and the Department of 
Defense's Defense Health Program, which includes military health 
benefit plans like TRICARE. 

[7] Program officials from 12 of the 20 programs reported that a 
combined total of around $30 million was obligated for their programs 
in fiscal year 2011 for drug abuse prevention or treatment services 
specifically. The remaining 8 programs were not able to provide 
obligation data specific to drug abuse prevention or treatment 
services. 

[8] To identify overlap--that is, programs providing similar drug 
abuse prevention or treatment services to similar beneficiaries with a 
similar goal or objective--GAO administered a web-based questionnaire 
to drug abuse prevention and treatment program officials in the 15 
agencies included in the review. 

[9] The term "recidivism" generally refers to the act of committing 
new criminal offenses after having been arrested or convicted of a 
crime. See GAO, Adult Drug Courts: Studies Show Courts Reduce 
Recidivism, but DOJ Could Enhance Future Performance Measure Revision 
Efforts, [hyperlink, http://www.gao.gov/products/GAO-12-53] 
(Washington, D.C.: Dec. 9, 2011). 

[10] These programs included 2 programs administered by the Department 
of Education; 1 program administered by the Department of Health and 
Human Services' Substance Abuse and Mental Health Services 
Administration (SAMHSA); 1 program administered by ONDCP; 1 program 
administered jointly by the Department of Education, SAMHSA, and the 
Department of Justice; and 1 program administered jointly by SAMHSA 
and ONDCP. 

[11] These programs included 5 programs administered by the Office of 
Justice Programs (OJP); 4 programs administered by the Bureau of 
Prisons; 3 programs administered by SAMHSA, 2 programs jointly 
administered by OJP and SAMHSA; and 1 program administered by the 
Administrative Office of the United States Courts. 

[12] See for example GAO, Managing for Results: Key Considerations for 
Implementing Interagency Collaborative Mechanisms, [hyperlink, 
http://www.gao.gov/products/GAO-12-1022] (Washington, D.C.: Sept. 27, 
2012), 

[13] See GAO, Homelessness: Fragmentation and Overlap in Programs 
Highlight the Need to Identify, Assess, and Reduce Inefficiencies, 
[hyperlink, http://www.gao.gov/products/GAO-12-491] (Washington, D.C.: 
May 10, 2012). 

[14] ONDCP is required annually to develop a National Drug Control 
Strategy, which sets forth a plan to reduce illicit drug use through 
programs intended to prevent or treat drug use or reduce the 
availability of illegal drugs. The 2010 National Drug Control Strategy 
is the inaugural strategy under President Obama's administration and 
is intended to be a 5-year strategy, with annual updates issued each 
year. 

[15] GAO reported on the National Drug Control Program Budget process 
in GAO, Office of National Drug Control Policy: Agencies View the 
Budget Process as Useful for Identifying Priorities, but Challenges 
Exist, [hyperlink, http://www.gao.gov/products/GAO-11-261R] 
(Washington, D.C.: May 2, 2011). Agencies included in the National 
Drug Control Program Budget are required to follow a detailed process 
in developing their annual budget submissions. Agencies submit to 
ONDCP the portion of their budget requests dedicated to drug control. 
ONDCP provides annual budget recommendations to these agencies that 
are intended to specifically delineate what priorities each agency is 
expected to fund in the coming year submission. Each fiscal year, 
ONDCP assesses the adequacy of agency budget submissions to implement 
the Strategy and certifies or decertifies the submissions based on its 
assessment. 

[16] Three of the 15 agencies in GAO's review had completed 
evaluations of 6 programs since 2007, and 8 agencies had started or 
planned 22 additional evaluations. 

[17] Evidence-based interventions are approaches to drug abuse 
prevention or treatment that are based in theory and have previously 
undergone scientific evaluation. 

[18] GAO, Standards for Internal Control in the Federal Government, 
[hyperlink, http://www.gao.gov/products/GAO/AIMD-00-21.3.1] 
(Washington, D.C.: November 1999). 

[19] The Project Management Institute, The Standard for Program 
Management (2006). 

[20] See GAO, Opportunities to Reduce Potential Duplication in 
Government Programs, Save Tax Dollars, and Enhance Revenue, 
[hyperlink, http://www.gao.gov/products/GAO-11-318SP] (Washington, 
D.C.: Mar. 1, 2011) and 2012 Annual Report: Opportunities to Reduce 
Duplication, Overlap and Fragmentation, Achieve Savings, and Enhance 
Revenue, [hyperlink, http://www.gao.gov/products/GAO-12-342SP] 
(Washington, D.C.: Feb. 28, 2012). 

[21] GAO defines program evaluations as individual, systematic studies 
to assess how well a program or programs are working. 

[22] GAO selected 2007 as the starting point in order to provide a 
long enough time frame to include evaluations that may take multiple 
years to complete. 

[23] See GAO, Results-Oriented Government: Practices That Can Help 
Enhance and Sustain Collaboration among Federal Agencies, [hyperlink, 
http://www.gao.gov/products/GAO-06-15] (Washington, D.C.: Oct. 21, 
2005) and [hyperlink, http://www.gao.gov/products/GAO-12-1022]. 

[End of Drug Abuse Prevention and Treatment Programs area] 

Training, Employment and Education: 

16. Higher Education Assistance: 

Federal agencies providing assistance for higher education should 
better coordinate to improve program administration and help reduce 
fragmentation. 

Why This Area Is Important: 

Higher education has long been crucial to America's ability to remain 
competitive in the global knowledge economy; however, the 
affordability of American higher education remains a topic of concern. 
The federal government assists with the cost of higher education 
through a variety of mechanisms, including federal student aid 
programs authorized under Title IV of the Higher Education Act of 
1965, as amended (Title IV); tax expenditures (reductions in federal 
tax liabilities through tax credits, deductions, exemptions, and tax-
preferred savings programs); and tuition assistance provided to 
veterans and military service members. In fiscal year 2010, the U.S. 
Department of Education (Education) provided approximately $37.5 
billion in grants and made more than $104.3 billion in loan assistance 
available through Title IV programs reviewed in GAO's May 2012 report. 
[Footnote 1] GAO also reported that revenue losses--the amount of 
revenue the government forgoes--from higher education tax expenditures 
were an estimated $25 billion in the same year. In addition, the 
Department of Veterans Affairs (VA) provided $7.4 billion to fund 
education benefits in fiscal year 2010, and the Department of 
Defense's (DOD) Military Tuition Assistance Program provided $531 
million in tuition assistance in the same fiscal year. For over 10 
years, GAO has identified weaknesses in the coordination of federal 
assistance for higher education, as well as a lack of evaluative 
research on the effectiveness of this assistance. GAO identified 
higher education as part of a broader governmental challenge--
Education and Employment--and has raised questions about whether and 
how the federal government's higher education policy programs can be 
better coordinated.[Footnote 2] 

What GAO Found: 

GAO found that federal assistance for higher education is fragmented 
across four departments: Education, which administers Title IV 
programs; the Department of the Treasury (Treasury), which administers 
higher education tax provisions; VA, which administers funds through 
the Post-9/11 Veterans Educational Assistance Act of 2008 (Post-9/11 
GI Bill) and other programs for service members, veterans, or their 
dependents; and DOD, which provides tuition assistance to service 
members.[Footnote 3] Moreover, within these departments there are 
multiple forms of assistance available with the same fundamental 
purpose--to assist students and families with financing higher 
education--though they do so for different populations at different 
times. GAO identified eight large tax expenditures, seven large Title 
IV programs, five VA programs, and one DOD program that help students 
and families save for, pay, and repay the costs of higher education 
(see the figure below and appendix IV).[Footnote 4] 

Figure: Federal Higher Education Assistance: 

[Refer to PDF for image: chart] 

Department of Education: 
* Pell Grant; 
* Subsidized Stafford Loan; 
* Unsubsidized Stafford Loan; 
* Parent Loan for Undergraduate Students; 
* Federal Supplemental Educational Opportunity Grant; 
* Perkins Loan; 
* Federal Work Study. 

Internal Revenue Service:
* American Opportunity Credit; 
* Lifetime Learning Credit; 
* Earned Income Tax Credit; 
* Tuition and Fees Deduction; 
* Student Loan Interest Deduction; 
* Qualified Tuition Program (539 plan); 
* Coverdell Education Savings Account; 
* Parental Personal Exemption. 

Department of Veterans Affairs: 
* Post-9/11 GI Bill; 
* Montgomery GI Bill-Active Duty; 
* Montgomery GI Bill-Selected Reserve; 
* Survivors' and Dependents Educational Assistance Program; 
* Reserve Educational Assistance Program. 

Department of Defense: 
* Military Tuition Assistance. 

Source: GAO. 

Note: The Earned Income Tax Credit and the Parental Personal Exemption 
are included here because they provide additional tax benefits to 
parents of students. Parents can generally claim children as 
dependents under the age of 19, but both of these tax provisions 
permit parents to claim dependents aged 19 through 23 if the dependent 
is a full-time student at least 5 months of the year. 

[End of figure] 

Providing federal financial assistance in these varied ways presents 
students and their families with multiple tools to help them pay 
higher education expenses. While many meaningful results that the 
federal government seeks to achieve--including those for higher 
education--require the coordinated efforts of more than one agency, 
level of government, or sector, the fragmented nature of federal 
higher education assistance may make it difficult for some families to 
understand and make the best use of this assistance. For example, in 
GAO's analysis of 2009 Internal Revenue Service (IRS) data for 
selected returns with information on education expenses, GAO found 
that tax filers do not always choose tax expenditures that maximize 
their potential tax benefits. Specifically, about 14 percent of filers 
(1.5 million of almost 11 million eligible returns) failed to claim an 
education credit or deduction for which they appear eligible.[Footnote 
5] Taxpayers might not maximize their tax benefits because they are 
unaware of their eligibility for the provisions or confused about 
their use. The number and similarity of higher education tax 
provisions may make it harder for taxpayers to determine which one is 
best for them. For example, IRS Publication 970 includes four 
different tax expenditures for educational saving, each with different 
requirements and benefits to the taxpayer. IRS and Education have 
taken steps to provide information on these provisions, but the number 
of filers failing to claim a higher education tax provision suggests 
more could be done. In addition to filing taxes to obtain federal 
assistance, there is a separate application process for students or 
families seeking Title IV aid--the Free Application for Federal 
Student Aid (FAFSA) administered by Education. Many experts, both 
within and outside the government, have raised concerns that the 
length and complexity of the FAFSA may discourage some students from 
applying for aid.[Footnote 6] 

Agencies' fragmented processes for administering federal assistance 
for higher education could benefit from better interagency 
coordination. After the start of VA's comprehensive Post-9/11 GI Bill 
program on August 1, 2009, improper payments for education benefits 
increased from $63.7 million, or 2 percent of the total outlay, in 
fiscal year 2008 to $712.8 million, or 8 percent of the total outlay, 
in fiscal year 2010.[Footnote 7] GAO found in May 2011 that to address 
program implementation challenges, VA could leverage lessons learned 
from Education's experience with streamlining its administrative 
processes for delivering student aid. Specifically, Education has 
gained efficiencies in its processes to return and reconcile federal 
student aid funds, and these practices could help improve VA's 
administration of the Post-9/11 GI Bill program. Similarly, GAO found 
in March 2011 that DOD could better leverage compliance information 
already collected by Education to improve its oversight of 
postsecondary schools. This information could provide additional 
insight into a school's financial stability, quality of education, and 
compliance with regulations that provide consumer protections for 
students and the federal government. Collaborating with Education 
could provide opportunities for VA and DOD to achieve greater 
efficiencies in program administration and effectively safeguard 
federal funds. 

Although multiple federal agencies provide higher education 
assistance, evidence on the effects of this assistance on student 
outcomes--such as the likelihood students will continue their 
education--is limited. Evaluative research can help policymakers 
better understand the merits and value of various federal assistance 
efforts, especially in an environment of limited resources. Given the 
methodological challenges associated with such research, substantive 
changes such as the introduction and expiration of federal programs 
and tax provisions are among the most viable opportunities for 
evaluative research. Building on evidence from evaluative research, 
policymakers can consider whether to invest further in successful 
programs and make changes to less effective programs. To help inform 
these decisions, GAO identified factors that contribute to effective 
and efficient higher education assistance programs. Policymakers can 
assess whether programs incorporate the following elements in their 
design: 

* achievement of program goals and production of demonstrable results, 

* provision of appropriate incentives for targeted populations, 

* facilitation of beneficiaries' use of the program, 

* effective interaction with other programs, 

* minimization of costs and risks, and: 

* establishment of monitoring and evaluation mechanisms. 

Considering these factors can help inform the need to make 
improvements to current programs, consolidate programs, eliminate 
programs, or design features of new programs. 

Actions Needed and Potential Financial or Other Benefits: 

To address the issues related to fragmentation, GAO has previously 
recommended that the federal agencies providing higher education 
assistance take the five actions outlined below. Some of the five 
actions focus on program efficacy and maximizing program benefits, 
while others have the potential to generate efficiencies or reduce 
improper payments. 

To help ensure individuals who are eligible to claim a higher 
education tax expenditure are aware of their eligibility and the 
benefit they may receive, GAO recommended in May 2012 that the 
Commissioner of Internal Revenue and the Secretary of Education should 
work together to take the following two actions: 

* identify characteristics of tax filers who are not claiming a higher 
education tax expenditure when they appear to be eligible for one and 
possible reasons for this; and: 

* use this information to identify strategies to improve information 
provided to eligible students and families. 

To improve VA's administration of the Post-9/11 GI Bill program and 
address ongoing challenges, GAO recommended in May 2011 that the 
Secretary of Veterans Affairs take the following action: 

* collaborate with Education and the higher education community, 
leveraging their experiences in administering aid. These 
collaborations should include assessing the applicability and 
viability of adopting processes and actions taken by Education, where 
practical, such as returning overpayments of program funds or 
reconciling benefit payments. 

To improve its oversight of schools receiving Tuition Assistance 
funds, GAO recommended in March 2011 that the Secretary of Defense 
take the following action: 

* direct the Undersecretary of Defense for Personnel and Readiness to 
undertake a systematic review of its oversight of schools receiving 
tuition assistance program funds. In doing so, the Undersecretary of 
Defense for Personnel and Readiness should consider reviewing 
Education's recently promulgated requirements for state authorization 
of schools and coordinate with Education to determine the extent to 
which these requirements are useful for overseeing schools receiving 
tuition assistance funds. 

To provide federal policymakers information on the relative 
effectiveness of Title IV programs and higher education tax 
expenditures, GAO recommended in May 2012 that the Secretary of 
Education take the following action: 

* take advantage of opportunities presented by recent and anticipated 
substantive program changes to sponsor and conduct evaluative research 
into the effectiveness of Title IV programs and higher education tax 
expenditures at improving student outcomes. 

Agency Comments and GAO's Evaluation: 

In commenting on the May 2012, May 2011, and March 2011 reports, on 
which this analysis is based, the Department of Education, the 
Department of Defense, the Department of Veterans Affairs, and the 
Internal Revenue Service agreed with GAO's recommendations. Education 
noted that while it does not have access to tax data, it will work 
with IRS to assist in taxpayer outreach. 

GAO provided a draft of this report section to these agencies for 
review and comment. In emails received on January 17, 23, and 24, 
2013, officials from Education, IRS, Treasury, and DOD provided 
updated information on their progress in implementing the recommended 
actions. Regarding the first and second actions, Education and IRS 
officials stated they have held meetings to discuss opportunities for 
additional outreach to taxpayers. IRS officials stated they are using 
information learned through collaboration with Education to inform 
their American Opportunity Credit communication strategy. Treasury 
added that there is new language on IRS Form 1040EZ, Income Tax Return 
for Single and Joint Filers With No Dependents, notifying tax filers 
who paid higher education expenses that they may be eligible for 
benefits. In addition, IRS' research group is in the process of 
identifying tax filers that appeared to be eligible for an education 
credit but did not claim one. Regarding the fourth action, DOD stated 
it has begun working with Education and other agencies to share 
monitoring information and strengthen enforcement in the area of 
higher education benefits. Regarding the fifth action, Education 
officials said they are in the process of determining whether 
financial aid data can be made available to researchers for evaluative 
research. 

How We Conducted Our Work: 

The information contained in this analysis is based on findings from 
the reports in the related GAO products section and additional work 
GAO conducted. GAO analyzed fiscal year 2010 and fiscal year 2011 
budget data from Education and VA. GAO also analyzed Education's 2007-
2008 National Postsecondary Student Aid Study, IRS' 2006-2009 
Statistics of Income (SOI) individual tax return file, and the Federal 
Reserve's 2007 Survey of Consumer Finances. GAO also reviewed relevant 
federal laws, regulations, and agency documents and conducted 
interviews with agency officials and other parties. Tables 13 and 14 
in appendix IV list the programs and tax expenditures GAO identified 
that might have similar or overlapping objectives, provide similar 
services, or be fragmented across government missions. Overlap and 
fragmentation might not necessarily lead to actual duplication, and 
some degree of overlap and duplication may be justified. 

Related GAO Products: 

Higher Education: Improved Tax Information Could Help Families Pay for 
College. [hyperlink, http://www.gao.gov/products/GAO-12-863T]. 
Washington, D.C.: July 25, 2012. 

Higher Education: Improved Tax Information Could Help Families Pay for 
College. [hyperlink, http://www.gao.gov/products/GAO-12-560]. 
Washington, D.C.: May 18, 2012. 

Veterans' Education Benefits: Enhanced Guidance and Collaboration 
Could Improve Administration of the Post-9/11 GI Bill Program. 
[hyperlink, http://www.gao.gov/products/GAO-11-356R]. Washington, 
D.C.: May 5, 2011. 

DOD Education Benefits: Further Actions Needed to Improve Oversight of 
Tuition Assistance Program. [hyperlink, 
http://www.gao.gov/products/GAO-11-389T]. Washington, D.C.: March 2, 
2011. 

DOD Education Benefits: Increased Oversight of Tuition Assistance 
Program Is Needed. [hyperlink, 
http://www.gao.gov/products/GAO-11-300]. Washington, D.C.: March 1, 
2011. 

VA Education Benefits: Actions Taken, but Outreach and Oversight Could 
Be Improved. [hyperlink, http://www.gao.gov/products/GAO-11-256]. 
Washington, D.C.: February 28, 2011. 

Federal Student Aid: Highlights of a Study Group on Simplifying the 
Free Application for Federal Student Aid. [hyperlink, 
http://www.gao.gov/products/GAO-10-29]. Washington, D.C.: October 29, 
2009. 

Higher Education: Multiple Higher Education Tax Incentives Create 
Opportunities for Taxpayers to Make Costly Mistakes. [hyperlink, 
http://www.gao.gov/products/GAO-08-717T]. Washington, D.C.: May 1, 
2008. 

VA Student Financial Aid: Management Actions Needed to Reduce Overlap 
in Approving Education and Training Programs and to Assess State 
Approving Agencies. [hyperlink, 
http://www.gao.gov/products/GAO-07-384]. Washington, D.C.: March 8, 
2007. 

Postsecondary Education: Multiple Tax Preferences and Title IV Student 
Aid Programs Create a Complex Education Financing Environment. 
[hyperlink, http://www.gao.gov/products/GAO-07-262T]. Washington, 
D.C.: December 5, 2006. 

Student Aid and Postsecondary Tax Preferences: Limited Research Exists 
on Effectiveness of Tools to Assist Students and Families through 
Title IV Student Aid and Tax Preferences. [hyperlink, 
http://www.gao.gov/products/GAO-05-684]. Washington, D.C.: July 29, 
2005. 

Student Aid and Tax Benefits: Better Research and Guidance Will 
Facilitate Comparison of Effectiveness and Student Use. [hyperlink, 
http://www.gao.gov/products/GAO-02-751]. Washington, D.C.: September 
13, 2002. 

Contact Information: 

For more information about this area, contact George A. Scott at (202) 
512-7215, or scottg@gao.gov or James R. White at: (202) 512-9110, or 
whitej@gao.gov. 

Footnotes: 

[1] See GAO, Higher Education: Improved Tax Information Could Help 
Families Pay for College, [hyperlink, 
http://www.gao.gov/products/GAO-12-560] (Washington, D.C.: May 18, 
2012). 

[2] See GAO, 21st Century Challenges: Reexamining the Base of the 
Federal Government, [hyperlink, 
http://www.gao.gov/products/GAO-05-325SP] (Washington, D.C.: February 
2005). 

[3] Title IV programs and tax expenditures are available to the 
general public, depending on eligibility. VA and DOD administer 
benefit programs specifically for veterans, service members, or their 
dependents. For more information on these programs, see appendix IV. 

[4] There are other Title IV programs beyond the scope of our review, 
in addition to other higher education provisions listed in the 
Publication 970 Tax Benefits for Education. For detailed information 
on our scope and methodology, see [hyperlink, 
http://www.gao.gov/products/GAO-12-560]. 

[5] On average, these filers lost a tax benefit of $466. GAO estimates 
that the total amount of tax benefits filers did not claim was 
approximately $726 million in 2009. GAO's analysis is limited to tax 
filers who appeared eligible for the lifetime learning credit (LLC) or 
the tuition and fees deduction in 2009, had a Form 1098-T Tuition 
Statement with information on the student's education expenses, and 
had a tax liability after claiming other tax benefits. After 
eliminating returns where eligibility was not clear, GAO included only 
29 percent of returns in our analysis of filers with a 1098-T but 
selected neither the LLC nor the tuition deduction in 2009. Estimates 
have 95 percent confidence intervals that are within 10 percent of the 
estimate itself. Details on GAO's methodology and its limitations can 
be found in [hyperlink, http://www.gao.gov/products/GAO-12-560]. 

[6] Education began coordinating with IRS in 2010 to provide an option 
for tax filers to prepopulate the FAFSA using an automatic data 
transfer from their tax returns. Education estimated this IRS data 
retrieval process would improve the administration of student aid and 
reduce inaccurate payments by at least $340 million in fiscal year 
2012. 

[7] The term "improper payments" refers to any payment that should not 
have been made or that was made in an incorrect amount, any payment to 
an ineligible recipient, any payment for an ineligible service, and 
duplicate payments. This includes both over-and underpayments. 

[End of section] 

17. Veterans' Employment and Training: 

[End of Higher Education Assistance area] 

The Departments of Labor, Veterans Affairs, and Defense need to better 
coordinate the employment services each provides to veterans, and 
Labor needs to better target the Disabled Veterans' Outreach Program 
so that it does not overlap with other programs. 

Why This Area Is Important: 

In fiscal year 2011, the federal government spent an estimated $1.2 
billion on six veterans' employment and training programs, serving 
about 880,000 participants. The Department of Labor (Labor) 
administers five of these programs, and the Department of Veterans 
Affairs (VA) administers one. In addition, the Department of Defense 
(DOD) expanded the employment assistance it provides to National Guard 
and Reserve members who may face unique challenges associated with 
being reintegrated into the civilian workforce multiple times during 
their military careers. Despite these efforts, the unemployment rate 
for veterans who have recently separated from the military is higher 
than that for other veterans and nonveterans. Moreover, more than 1 
million service members are projected to separate from the military 
and transition to civilian life from 2011 to 2016. Because there are 
multiple programs spread across multiple agencies and demand for 
services will likely increase, it is important to understand (1) the 
services these programs provide, (2) whom the services are provided 
to, (3) the steps agencies have taken to coordinate their efforts, and 
(4) the employment outcomes of participants. 

What GAO Found: 

In December 2012, GAO reported that the six federal veterans' programs 
provide similar services (e.g., job placement) but largely serve 
different populations. The following programs provide employment and 
training services to a specific population: 

* Labor's Transition Assistance Program serves transitioning service 
members and their spouses, 

* Labor's Homeless Veterans' Reintegration Program serves homeless 
veterans, and: 

* VA's Vocational Rehabilitation & Employment Program (Vocational 
Rehabilitation) serves veterans with service-connected disabilities. 
[Footnote 1] 

The remaining three programs serve a broader population of veterans. 
Labor's Veterans' Workforce Investment Program serves veterans with 
significant barriers to employment, among others.[Footnote 2] Labor is 
currently requesting that Congress defund this program.[Footnote 3] Of 
the two remaining programs, the Local Veterans' Employment 
Representative Program and the Disabled Veterans' Outreach Program can 
serve all eligible veterans.[Footnote 4] Veterans generally obtain 
access to the Local Veterans' Employment Representative Program by 
first participating in the Disabled Veterans' Outreach Program. The 
Disabled Veterans' Outreach Program has the most potential overlap 
with the other veterans' employment and training programs, as well as 
with Labor's other workforce programs available to the general 
population, because of its broad definition of who can be eligible for 
the program. Because this overlap could result in duplication, GAO 
focused in detail on the Disabled Veterans' Outreach Program's target 
population and services. 

Federal law prioritizes certain populations of veterans for services 
provided by the Disabled Veterans' Outreach Program,[Footnote 5] but 
Labor's guidance does not provide states with information to assist 
them in prioritizing veterans for services. Federal law governing the 
Disabled Veterans' Outreach Program makes all veterans who meet the 
broad definition of "eligible veteran" eligible for its services, but 
gives disabled veterans and economically or educationally 
disadvantaged veterans the highest priority for services. However, 
Labor's guidance does not define what it means to be economically or 
educationally disadvantaged, leaving states--which administer the 
program using federal funds--without criteria to help them prioritize 
veterans based on these attributes, thereby potentially diluting the 
targeting that the law intended. The law also generally requires that 
Disabled Veterans' Outreach Program staff provide participants with 
intensive services (e.g., individual employment plans),[Footnote 6] 
but Labor's data indicate that nationally 28 percent of participants 
received such services in 2011. In explaining this statistic, Labor 
officials said one possible explanation was that staff enroll people 
who do not need intensive services. Labor said it plans to develop 
guidance on prioritizing services, and it also has a six-state pilot 
to improve monitoring of who receives program services that may help 
to better prioritize services. Labor expects these efforts to be 
completed in early 2013. 

In 2008, Labor and VA compiled a handbook intended to guide the roles 
of their respective staff in coordinating services to disabled 
veterans; however, they have not updated the handbook. In addition, 
Labor and VA have not included related DOD employment initiatives 
available to certain segments of the veteran population, such as 
National Guard and Reserve members, in their interagency agreements. 
Through interviews with VA and Labor officials, GAO identified two 
instances in which sections of the handbook are subject to 
misunderstanding or provide insufficient guidance that resulted in 
challenges meeting desired program outcomes and may have made having 
successful employment outcomes more difficult for program 
participants. They pertain to incorporating labor market information 
into rehabilitation plans and finding "suitable employment" for 
participants. For example, the handbook says Labor and VA are to 
coordinate to achieve "suitable employment"--employment that follows 
the veteran's rehabilitation plan and does not aggravate the 
disability. However, it does not explicitly say how staff should 
navigate situations where a veteran's financial need or preferences do 
not align with this goal. For example, Labor officials noted that some 
veterans may choose to accept a job that pays more than a "suitable" 
job choice, which may, in the long run, aggravate their disability. In 
such instances, program staff may work at cross-purposes and veterans 
may accept jobs that do not count as suitable employment. Further, DOD 
is expanding its employment assistance to National Guard and Reserve 
members, some of whom may also meet Labor and VA veterans' program 
eligibility requirements. However, DOD does not have an interagency 
agreement that would allow it to effectively coordinate with Labor and 
VA. Absent an updated handbook and integration of DOD into the 
coordination framework, there is an increased risk for poor 
coordination. Currently there is some evidence that the lack of 
coordination may be affecting Labor resources and confusing employers. 
For example, according to Labor officials, Disabled Veterans' Outreach 
Program staff participation at DOD job fairs reduces the amount of 
time available for their primary duties, such as providing intensive 
services to program participants.[Footnote 7] 

The information Labor reports makes determining the extent to which 
each program is achieving its annual performance goals difficult, and 
the research Labor and VA have conducted does not provide them with 
information on their programs' effectiveness. Labor sets annual 
performance goals for its veterans' employment and training programs, 
but it does not consistently report the results relative to those 
goals in its annual veterans' program report. And even though Labor is 
not required to report program outcomes in relation to goals in this 
report, it reports outcomes and goals for its other workforce programs 
that are aimed at the general population. Moreover, while both Labor 
and VA have studies completed or under way, neither has conducted 
impact evaluations that assess program effectiveness to determine 
whether outcomes are attributable to program participation and not 
other factors. As a result, Congress and other key stakeholders lack 
essential information needed to assess each program's performance and 
hold federal agencies accountable for achieving results. 

Actions Needed and Potential Financial or Other Benefits: 

GAO recommended in December 2012 that the Secretary of Labor take the 
following action: 

* consistently report both performance goals and associated 
performance outcomes for each of its veterans' employment and training 
programs. 

GAO also recommended that the Secretaries of Labor and VA take the 
following two actions: 

* incorporate additional guidance to address the two problem areas GAO 
identified into any update to the interagency handbook that governs 
their coordination for veterans' employment and training programs; and: 

* to the extent possible, determine the extent to which veterans' 
employment outcomes result from program participation or are the 
result of other factors. 

Finally, GAO further recommended that the Secretaries of Labor, VA, 
and DOD take the following action: 

* incorporate DOD's employment assistance initiatives into the 
agreements that guide interagency coordination. 

Implementing these recommendations will help (1) increase the 
effectiveness of coordination efforts for programs administered by 
different federal agencies, (2) ensure that government resources are 
used efficiently, and (3) enhance transparency and accountability for 
achieving results. In addition, it will be important for Labor to 
complete its ongoing efforts to develop guidance on prioritizing 
services for the Disabled Veterans' Outreach Program and finalize new 
monitoring protocols. 

Agency Comments and GAO's Evaluation: 

In commenting on the December 2012 report on which this analysis is 
based, Labor, VA, and DOD generally agreed with the recommendations. 
Both Labor and VA said they would work to enhance coordination with 
each other with respect to additional guidance in their interagency 
handbook. All three agencies said they would work to ensure 
interagency coordination included DOD. In response to GAO's 
recommendation on reporting program performance, Labor said it will 
explore ways to increase consistency and transparency of the 
information it reports. In response to GAO's recommendation to Labor 
and VA regarding assessing program effectiveness, VA agreed and Labor 
did not specify whether or not it agreed. Labor said that it is 
committed to robust program evaluation and that each agency, including 
Veterans' Employment and Training Service, develops an annual 
evaluation agenda and sets priorities. Labor said it has a 
multicomponent agenda for evaluating services to veterans and cited 
some current studies, such as a study of the Transition Assistance 
Program and a statistical analysis of services received by veterans 
and the services' outcomes using the public workforce system. 
Obtaining information about the effectiveness of veterans' programs is 
important because such information can assist Congress in assessing 
program results and identifying areas where adjustments may be needed. 
As Labor and VA conduct research on program outcomes, considering 
approaches that would enable them to separate the impact of their 
programs from other factors that might influence participants' 
outcomes will be important. 

GAO provided a draft of this report section to the Department of 
Labor, the Department of Veterans Affairs, and the Department of 
Defense for review and comment. These three agencies did not provide 
comments on this report section. 

How GAO Conducted Its Work: 

The information contained in this analysis is based on findings from a 
GAO December 2012 report.[Footnote 8] As part of that report, GAO 
reviewed the six programs that targeted veterans and were identified 
in its January 2011 report that analyzed all federal employment and 
training programs. Labor oversees five of the programs that target 
veterans: (1) the Disabled Veterans' Outreach Program, (2) the 
Homeless Veterans' Reintegration Program, (3) the Local Veterans' 
Employment Representative Program, (4) the Transition Assistance 
Program, and (5) the Veterans' Workforce Investment Program. VA 
oversees the sixth program: the Vocational Rehabilitation Program. GAO 
also included in its analysis three Labor programs that are available 
to the general population, which includes veterans: the Workforce 
Investment Act Adult and Dislocated Worker Programs and the Employment 
Service Program. In examining coordination, GAO also included two DOD 
programs that have recently begun providing employment services: (1) 
the Yellow Ribbon Reintegration Program, and (2) the Employer Support 
of the Guard and Reserve. GAO also analyzed agency data on participant 
characteristics, services received, and outcomes and policy documents, 
relevant federal laws and regulations, reports, and studies; GAO also 
interviewed federal and regional officials and state officials in six 
states: Florida, Massachusetts, Ohio, Oregon, Texas, and Virginia. 
These states were selected to achieve geographic and demographic 
diversity. Furthermore, GAO used data from the Labor Exchange 
Reporting System and Veterans' Employment and Training Service 
Operations and Programs Activity Report data system for program years 
2006 to 2010. GAO also used data from the VA Corporate Case Management 
System for fiscal years 2006 to 2011. In addition, GAO used fiscal 
year 2011 data from the Defense Manpower Data Center. Table 15 in 
appendix IV lists the programs GAO identified that might have similar 
or overlapping objectives, provide similar services, or be fragmented 
across government missions. Overlap and fragmentation might not 
necessarily lead to actual duplication, and some degree of overlap and 
duplication may be justified. 

Related GAO Products: 

Veterans' Employment and Training Programs: Better Targeting, 
Coordinating, and Reporting Needed to Enhance Program Effectiveness. 
[hyperlink, http://www.gao.gov/products/GAO-13-29]. Washington, D.C.: 
December 13, 2012. 

Multiple Employment and Training Programs: Providing Information on 
Colocating Services and Consolidating Administrative Structures Could 
Promote Efficiencies. [hyperlink, 
http://www.gao.gov/products/GAO-11-92]. Washington, D.C.: January 13, 
2011. 

Contact Information: 

For additional information about this area, contact Andrew Sherrill at 
(202) 512-7215 or sherrilla@gao.gov. 

Footnotes: 

[1] 38 U.S.C. § 3102(a). To receive Vocational Rehabilitation program 
services, veterans generally must have at least a 20 percent 
disability rating and an employment handicap. Veterans with a 10 
percent disability rating may also be entitled to receive services if 
they have a serious employment handicap. 

[2] The program also serves veterans with service-connected 
disabilities; veterans who served on active duty in the armed forces 
during a war, campaign, or expedition for which a campaign badge has 
been authorized; and recently separated veterans. 

[3] Labor seeks to defund the program because of the increasingly high 
cost per placement into employment for program participants. Labor 
found that other employment and training programs could provide the 
same service at a lower cost or with stronger accountability measures. 

[4] "Eligible veteran" is defined as a person who meets one of the 
following criteria: (1) served on active duty for a period of more 
than 180 days and was discharged or released with other than a 
dishonorable discharge; (2) was discharged or released from active 
duty because of a service-connected disability; (3) as a member of a 
reserve component under an order to active duty under certain 
circumstances, served on active duty during a period of war or in a 
campaign or expedition for which a campaign badge is authorized, and 
was discharged or released from such duty with other than a 
dishonorable discharge; or (4) was discharged or released from active 
duty by reason of a sole survivorship discharge. See 38 U.S.C. § 
4101(4), which incorporates the definition from 38 U.S.C. § 4211(4). 

[5] 38 U.S.C. § 4103A(a). 

[6] Id. 

[7] The law generally requires that program staff provide participants 
with intensive services (e.g., case management). 

[8] GAO. Veterans' Employment and Training: Better Targeting, 
Coordinating, and Reporting Needed to Enhance Program Effectiveness. 
[hyperlink, http://www.gao.gov/products/GAO-13-29. Washington, D.C.: 
December 13, 2012. 

[End of Veterans' Employment and Training area] 

[End of Section I] 

Section II: Areas in Which GAO Has Identified Other Cost Savings or 
Revenue Enhancement Opportunities: 

This section summarizes 14 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. 

Agriculture: 

18. Agricultural Quarantine Inspection Fees: 

The United States Department of Agriculture's Animal and Plant Health 
Inspection Service could have achieved as much as $325 million in 
savings (based on fiscal year 2011 data, as reported in GAO's March 
2013 report) by more fully aligning fees with program costs; although 
the savings would be recurring, the amount would depend on the cost-
collections gap in a given fiscal year and would result in a reduced 
reliance on Customs and Border Protection's annual Salaries and 
Expenses appropriations for agricultural inspection services. 

Why This Area Is Important: 

The movement of people and goods across U.S. borders is vital to the 
U.S. economy but also poses risks because imported products sometimes 
contain exotic pests and diseases that have resulted in billions of 
dollars in damages and lost agricultural revenues. Further, the 
terrorist attacks of September 11, 2001, heightened concerns about 
agriculture's vulnerability to terrorism, including the deliberate 
introduction of livestock, poultry, and crop diseases. The 
Agricultural Quarantine Inspection program helps to guard against 
these threats by inspecting international passengers and cargo at U.S. 
ports of entry, seizing prohibited material, and intercepting foreign 
agricultural pests. The Agricultural Quarantine Inspection program is 
coadministered by the United States Department of Agriculture's (USDA) 
Animal and Plant Health Inspection Service (APHIS), which has 
authority to set Agricultural Quarantine Inspection user fees, and the 
Department of Homeland Security's (DHS) U.S. Customs and Border 
Protection (CBP), which has responsibility for inspection activities 
at ports of entry. The program, which cost $861 million in 2011, is 
funded in part with revenues from fees assessed on those subject to 
inspection and in part with moneys from CBP's annual Salaries and 
Expenses appropriation. GAO has reported several times on the need to 
revise the fees to cover program costs as authorized. In May 2006, GAO 
recommended that DHS and USDA work together to revise the user fees to 
ensure that revenues cover the Agricultural Quarantine Inspection 
program's costs. In September 2007 and February 2008, GAO reported on 
various other challenges related to these fees, including that 
Agricultural Quarantine Inspection user fees were misaligned with 
program costs. In 2010, APHIS hired a contractor to conduct a 
comprehensive fee review to determine the full cost of Agricultural 
Quarantine Inspection services, identify potential changes to the fee 
structure, and recommend new fees. On the basis of this review, APHIS 
and CBP are currently considering options for a new fee structure; 
pending departmental approval, APHIS expects to issue a proposed rule 
in fall 2013. 

Efforts to better align fees with costs are important, especially in 
an environment of tightening discretionary budgets, because user fees 
can reduce reliance on taxpayer funding of federal programs that 
provide a service to an identifiable beneficiary. In light of 
increased congressional interest in user fee financing, GAO developed 
a normative framework for examining user fee design characteristics 
that may influence the effectiveness of user fees. Specifically, GAO's 
federal user fee design guide examined how the four key design and 
implementation characteristics of user fees--how fees are set, 
collected, used, and reviewed--may affect the economic efficiency, 
equity, revenue adequacy, and administrative burden of cost-based 
fees.[Footnote 1] Since 2007, GAO has examined a variety of federal 
user fees--including the Agricultural Quarantine Inspection fees--in 
the context of this framework. 

What GAO Found: 

In March 2013, GAO reported that its analysis of the Agricultural 
Quarantine Inspection fee and cost data revealed a more than $325 
million gap between fee revenues and total program costs in fiscal 
year 2011, or 38 percent of Agricultural Quarantine Inspection program 
costs. The gap exists for three reasons: (1) APHIS does not set fee 
rates to recover the full costs of the program--partly because of gaps 
in APHIS's statutory authority and partly because APHIS chooses not to 
fully exercise the Agricultural Quarantine Inspection fee authorities, 
(2) CBP's program costs are understated, and (3) APHIS's and CBP's 
collection processes do not provide reasonable assurance that all 
Agricultural Quarantine Inspection fees due are collected. 

GAO found that APHIS does not set fee rates to recover the full costs 
of the program. Specifically, 

* APHIS has chosen not to charge some classes of passengers for which 
it has authority to charge fees. In particular, although APHIS has 
authority to charge Agricultural Quarantine Inspection fees to all 
international passengers, it currently charges fees only to 
international commercial air passengers, citing administrative burdens 
and anticipated challenges relating to collecting fees from other 
passengers. Furthermore, APHIS's authority permits it to charge all 
passengers for the cost of inspecting both passengers and the vehicles 
in which they arrive, but does not always permit APHIS to do the 
reverse; that is, to include in the vehicle Agricultural Quarantine 
Inspection fees the cost of inspecting the passengers arriving in the 
vehicles. Charging the cost of inspecting bus, private aircraft, 
private vessel, and rail passengers and the vehicles in which they 
arrive to the passengers themselves would be administratively 
burdensome because there is no existing mechanism for collecting 
Agricultural Quarantine Inspection fees from these classes of 
passengers. However, in several instances, CBP can and does charge 
customs fees--fees collected to help offset the costs of customs 
inspections--to private vehicles rather than the passengers. If APHIS 
had statutory authority to charge all vehicles in which passengers 
travel, rather than only the passengers themselves, then APHIS could 
leverage existing customs fee collection mechanisms to minimize the 
administrative burden in collecting Agricultural Quarantine Inspection 
fees. 

* APHIS does not consider all imputed costs (that is, costs incurred 
by other agencies on behalf of the Agricultural Quarantine Inspection 
program) when setting fees. APHIS estimated that these costs were 
about $38 million in fiscal year 2011, the most recent year for which 
data were available. In February 2008, GAO recommended that the 
Secretary of Agriculture include these costs when setting Agricultural 
Quarantine Inspection fees consistent with federal accounting 
standards, Office of Management and Budget guidance, and USDA policy. 
APHIS agreed with the recommendation and has included some, but not 
all, of these costs in its current analysis of Agricultural Quarantine 
Inspection costs. 

* The allowable rates for overtime services are misaligned with the 
personnel costs of performing those services. CBP is authorized to 
charge for overtime for agriculture inspection and related services in 
some situations, known as reimbursable overtime. APHIS has the 
authority to set reimbursable charges to recover the full costs of 
overtime services, but the reimbursement rates have not been adjusted 
since 2005; hence, the rates charged do not cover current costs. 
Further, GAO reported that CBP does not consistently charge for these 
services, and when CBP does charge for these services, it does not 
collect payments in a timely manner. 

* APHIS's authority does not permit it to charge all persons seeking 
entry to the United States and does not permit it to charge the costs 
of those inspections to others. While APHIS can take additional steps 
within its existing authority to better align fees with costs, APHIS 
lacks the authority to recover the full costs of the Agricultural 
Quarantine Inspection program through fees. Specifically, APHIS does 
not have the authority to charge Agricultural Quarantine Inspection 
fees to pedestrians or military personnel and their vehicles, or to 
recover the costs of these inspections through the fees assessed on 
others. Gaps between Agricultural Quarantine Inspection fee 
collections and program costs are generally covered by CBP using its 
Salaries and Expenses appropriation, which is authorized for necessary 
expenses related to agricultural inspections, among other activities. 
Absent authority to either charge all pathways for Agricultural 
Quarantine Inspection services or to permit cross-subsidization among 
pathways when setting fees--that is, allowing fees paid by some users 
to be set to recover the costs of services provided to other users--
the Agricultural Quarantine Inspection program cannot recover its full 
costs and must continue to rely on appropriated funds. 

GAO also found that CBP's program costs are understated. CBP does not 
capture all time spent on agriculture activities in its Cost 
Management Information System--the system in which CBP tracks its 
activities and determines personnel costs. CBP guidance specifies that 
time spent by officers conducting inspections--which include aspects 
of agriculture, customs, and immigration inspections--is to be 
attributed to a mix of codes representing each of these three 
functions. In analyzing countrywide data, GAO found that at 31 ports 
and other locations, CBP did not charge any primary inspection time to 
agriculture-related codes for all or a portion of fiscal year 2012, 
which means that Agricultural Quarantine Inspection costs at these 
ports are understated. Because CBP's Agricultural Quarantine 
Inspection costs are underreported by an unknown amount, APHIS does 
not have complete information about CBP's Agricultural Quarantine 
Inspection-related costs and therefore is unable to consider total 
program costs when setting Agricultural Quarantine Inspection fee 
rates. 

Finally, GAO found that APHIS's and CBP's collection processes do not 
provide reasonable assurance that all Agricultural Quarantine 
Inspection fees due are collected. Specifically, APHIS does not 
collect Agricultural Quarantine Inspection fees for railcars 
consistent with its regulations. According to the regulations, 
railcars seeking to enter the United States may either pay a $7.75 fee 
per arrival of a loaded commercial railcar or they can prepay an 
annual $155 flat fee for a specific railcar. The $155 annual fee is 
equal to the cost of 20 arrivals. According to APHIS officials, all 
railcar companies choose to pay the $7.75 per arrival fee. However, 
rather than collecting this fee for each arrival APHIS only collects 
fees for the first 20 arrivals a railcar makes each year. This 
resulted in a revenue loss of $13.2 million in 2010 because 1.7 
million railcar arrivals did not pay a fee even though a fee was due. 
Further, CBP does not verify that it collects fees due for every 
commercial truck, private aircraft, and private vessel, resulting in 
an unknown amount of revenue loss annually. CBP has tools available to 
help remedy these issues but does not require their use. Until APHIS 
and CBP improve oversight of these collection processes, they will 
continue to forgo revenue due the government, which will increase 
reliance on appropriated funds to cover program costs. 

Actions Needed and Potential Financial or Other Benefits: 

To more closely recover the costs of the Agricultural Quarantine 
Inspection program, in March 2013, GAO recommended that the 
Secretaries of Agriculture and Homeland Security take a series of 
specific steps, which are summarized below. 

The Secretary of Agriculture should take the following action: 

* ensure that fee rates are set to recover program costs, including 
imputed costs, as authorized; 

The Secretary of Homeland Security should take the following action: 

* direct CBP to update and widely disseminate guidance to ensure that 
all ports of entry correctly charge time spent on agriculture-related 
functions; 

The Secretaries of Agriculture and Homeland Security should take the 
following two actions: 

* work together to amend overtime regulations for agriculture services 
so that reimbursable overtime rates are aligned with the costs of 
those services; and: 

* ensure that all inspection fees are collected when due, including 
fees for agriculture overtime services that are eligible for 
reimbursement. 

Further, GAO suggested in March 2013 that Congress should consider the 
following action: 

* take steps to allow the Secretary of Agriculture to set fee rates to 
recover the full costs of the Agricultural Quarantine Inspection 
program. 

Taking these actions would position the Departments of Agriculture and 
Homeland Security to more closely recover the costs of the 
Agricultural Quarantine Inspection program. Doing so would achieve 
$325 million in savings by reducing the reliance on CBP's annual 
Salaries and Expenses appropriation. 

Agency Comments and GAO's Evaluation: 

In commenting on the March 2013 report, DHS concurred with GAO's 
recommendations and described corrective actions the agency plans to 
take to implement them. USDA generally agreed with the recommendations 
GAO made to the Secretary of Agriculture. USDA also noted that the 
agency has gathered data regarding a number of different Agricultural 
Quarantine Inspection fees as it considers initiating a notice and 
comment rulemaking regarding the Agricultural Quarantine Inspection 
fees. Given the number of factors that go into the rulemaking process, 
including considering stakeholder comments, GAO recognizes that any 
particular component or a specific amount of fees is dependent on that 
process. USDA and DHS also provided technical comments, which GAO 
incorporated as appropriate. 

GAO provided a draft of this report section to USDA and DHS for review 
and comment. USDA provided no comments on this report section. DHS 
provided technical comments, which GAO incorporated as appropriate. 

How We Conducted Our Work: 

The information contained in this analysis is based on findings from 
the March 2013 report listed in the related GAO products section. GAO 
reviewed APHIS's cost study and proposed revisions, relevant statutes 
and regulations, and Agricultural Quarantine Inspection cost and fee 
revenue data. GAO analyzed APHIS and CBP Agricultural Quarantine 
Inspection cost data and interviewed APHIS and CBP officials. GAO 
assessed the reliability of the data and determined that they were 
sufficiently reliable for our purposes. In addition, GAO selected a 
nonprobability sample of ports of entry to visit: Miami, Florida; Port 
Huron, Michigan; San Diego, California, and its surrounding areas; and 
Seattle and Blaine, Washington. In selecting these ports, GAO 
considered factors including the presence or absence of agriculture 
inspections for which Agricultural Quarantine Inspection user fees 
were and were not charged, passenger and cargo volumes, the diverse 
set of inspection challenges faced by ports in varied parts of the 
country, different types of ports (e.g., land border, seaports, etc.), 
and our resource constraints. While information from these visits 
cannot be generalized to other ports of entry, themes GAO identified 
from the visits allowed GAO to understand commonalities and 
differences in inspection practices and fee collection processes at 
various ports and provide illustrative examples. GAO also visited 
APHIS's Plant Protection and Quarantine offices in Miami, San Diego, 
and Seattle to understand the Agricultural Quarantine Inspection-
related work conducted by APHIS in the field. 

Related GAO Products: 

Agricultural Quarantine Inspection Fees: Major Changes Needed to Align 
Fee Revenues with Program Costs. [hyperlink, 
http://www.gao.gov/products/GAO-13-268]. Washington, D.C.: March 1, 
2013. 

Homeland Security: Agriculture Inspection Program Has Made Some 
Improvements, but Management Challenges Persist. [hyperlink, 
http://www.gao.gov/products/GAO-12-885]. Washington, D.C.: September 
27, 2012. 

Federal User Fees: A Design Guide. [hyperlink, 
http://www.gao.gov/products/GAO-08-386SP]. Washington, D.C.: May 29, 
2008. 

Federal User Fees: Substantive Reviews Needed to Align Port-Related 
Fees with the Programs They Support. [hyperlink, 
http://www.gao.gov/products/GAO-08-321]. Washington, D.C.: February 
22, 2008. 

Federal User Fees: Key Aspects of International Air Passenger 
Inspection Fees Should Be Addressed Regardless of Whether Fees Are 
Consolidated. [hyperlink, http://www.gao.gov/products/GAO-07-1131]. 
Washington, D.C.: September 24, 2007. 

Homeland Security: Management and Coordination Problems Increase the 
Vulnerability of U.S. Agriculture to Foreign Pests and Disease. 
[hyperlink, http://www.gao.gov/products/GAO-06-644]. Washington, D.C.: 
May 19, 2006. 

Contact Information: 

For more information about this area, contact Susan J. Irving at (202) 
512-6806, or irvings@gao.gov. 

Footnote: 

[1] GAO, Federal User Fees: A Design Guide, [hyperlink, 
http://www.gao.gov/products/GAO-08-386SP] (Washington, D.C.: May 29, 
2008). 

[End of Agricultural Quarantine Inspection Fees area] 

19. Crop Insurance: 

To achieve up to $1.2 billion per year in cost savings in the Federal 
Crop Insurance program, Congress could consider limiting the subsidy 
for premiums that an individual farmer can receive each year, reducing 
the subsidy for all or high-income farmers participating in the 
program, or some combination of limiting and reducing these subsidies. 

Why This Area Is Important: 

Federally subsidized crop insurance, which farmers can purchase to 
help manage the risk inherent in farming, has become one of the most 
important programs in the farm safety net. In March 2012, GAO 
recognized the federal crop insurance program's important role in 
mitigating farmers' losses caused by natural disasters. The 2012 
drought is an example of such a natural disaster. Looking to the 
future, however, GAO also recognizes that the program must be as cost-
effective as possible, particularly in view of the nation's long-term 
fiscal challenges. 

In 2012, the federal crop insurance program provided about $116 
billion in insurance coverage for 281 million acres of farmland. The 
federal government's crop insurance costs have increased in recent 
years--rising from an average of $3.1 billion per year from fiscal 
years 2000 through 2006 to an average of $7.6 billion per year from 
fiscal years 2007 through 2012--and are expected to increase further. 
The Congressional Budget Office estimates that, for fiscal years 2013 
through 2022, federal crop insurance costs will average $8.9 billion 
per year. The cost of the federal crop insurance program has come 
under increased scrutiny because of the nation's budgetary pressures, 
particularly when farm income is at record high levels. The U.S. 
Department of Agriculture (USDA) projects 2012 net farm income to be 
$112.8 billion, down 4.3 percent from an all-time high in 2011. The 
top 6 years for net farm income during the past three decades have 
occurred since 2004, attesting to the recent profitability of farming. 

Under the federal program, farmers can choose various levels and types 
of insurance protection--for example, they can insure against losses 
caused by poor crop yields, declines in crop prices, or both, for each 
insurable crop they produce. USDA's Risk Management Agency (RMA) has 
overall responsibility for administering the federal crop insurance 
program, including controlling costs and protecting against fraud, 
waste, and abuse. RMA partners with 15 private insurance companies 
that sell and service the federal insurance policies and share a 
percentage of the risk of loss and opportunity for gain associated 
with each policy. 

The federal government's crop insurance costs include subsidies to pay 
for part of a farmer's crop insurance premiums. The Agricultural Risk 
Protection Act of 2000 and the Food, Conservation, and Energy Act of 
2008 (the 2008 farm bill) set premium subsidy rates, that is, the 
percentage of the premium paid by the government. Premium subsidy 
rates vary by the level of insurance coverage that the farmer chooses 
and the geographic diversity of the crops insured. For most policies, 
the statutory subsidy rates range from 38 percent to 80 percent of the 
premium. 

The average of premium subsidies for all policies--premium subsidies 
as a percentage of total premiums--increased from 37 percent in 2000 
to 60 percent in 2001, when the Agricultural Risk Protection Act's 
premium subsidy rates became effective. In 2012, the average of 
premium subsidies for all policies was more than 62 percent. In 
addition, the cost of premium subsidies rose as crop prices increased 
because as crop prices increase, the value of the crops being insured 
increases, which results in higher crop insurance premiums and premium 
subsidies. Premium subsidies increased from about $1 billion in 2000 
to about $7 billion in 2012. 

Unlike the crop insurance program, many farm programs, including 
disaster assistance programs, have statutory income and payment limits 
that apply to individual farmers and legal entities, including 
corporations.[Footnote 1] For example, USDA provides about $5 billion 
in fixed annual payments--called direct payments--to farmers based on 
a farm's crop production history. However, a person or legal entity 
with an average adjusted gross farm income (over the preceding 3 tax 
years) exceeding $750,000 is generally ineligible for direct payments. 
In addition, for direct payments, the annual payment limit in the 2008 
farm bill is generally $40,000 per person or legal entity.[Footnote 2] 
For a 2008 farm bill disaster assistance program, the annual payment 
limit is $100,000 per person or legal entity. 

What GAO Found: 

As GAO reported in March 2012, applying limits on premium subsidies to 
individual farmers participating in the federal crop insurance 
program, similar to the payment limits for other farm programs, could 
save billions of federal dollars over 5 years. The amount of these 
savings would depend on whether, and the extent to which, farmers and 
legal entities reorganized their businesses to avoid or lessen the 
effect of limits on premium subsidies. Without limits on the premium 
subsidies in the crop insurance program, the nearly 900,000 
participating farmers received subsidies of $7.4 billion in 2011. 
[Footnote 3] However, if a limit of $40,000 per participating farmer 
for premium subsidies had been applied to the crop insurance program 
for 2011--the annual payment limit specified in the 2008 farm bill for 
another USDA farm program subsidy (direct payments)--GAO estimated 
that up to 33,690 farmers (3.9 percent of all farmers participating in 
the federal crop insurance program) would have received lower 
subsidies, for an annual savings of up to $1 billion to the federal 
government.[Footnote 4] If the limit on premium subsidies had been set 
at the higher level of $100,000, up to 4,202 farmers would have 
received lower subsidies in 2011, for an annual savings of up to $232 
million. 

At the highest end of the distribution in 2011, 53 participating 
farmers each received more than $500,000 in premium subsidies. The 
participant receiving the largest amount was a corporation that had 
crop insurance coverage for nursery crops and received about $2.2 
million in premium subsidies. Another participant insured canola, 
corn, dry beans, potatoes, soybeans, sugar beets, and wheat and 
received about $1.3 million in premium subsidies. 

In addition to limiting premium subsidies to individual participants, 
Congress could reduce crop insurance costs by reducing premium subsidy 
rates for all crop insurance participants. For example, if the premium 
subsidy rate for 2011 had been reduced from an average of 62 percent 
to 52 percent for all crop insurance participants, GAO estimated that 
the cost savings would have been about $1.2 billion. Recent studies, 
such as Restoring America's Future, by the Bipartisan Policy Center's 
Debt Reduction Task Force, have had similar findings. 

The above methods--limits on premium subsidies and reduced rates for 
premium subsidies--could be used in various combinations to achieve 
cost savings. In addition, Congress could incorporate income limits 
into these methods. For example, participants whose income exceeds a 
threshold could receive premium subsidies at a reduced rate. A 
variation on this limitation would be for Congress to apply it on a 
sliding scale in which premium subsidy rates declined as income 
increased. 

Premium subsidy limits or reduced premium subsidy rates have the 
potential to lead to lower participation in the federal crop insurance 
program and requests for higher disaster assistance payments to 
farmers. In the past, Congress has authorized ad hoc disaster 
assistance payments to help farmers whose crops were damaged or 
destroyed by natural disasters. However, in view of the nation's 
budgetary pressures, Congress may be less willing to approve such 
payments than it has been in the past. 

Limits on premium subsidies to individual farmers would primarily 
affect farmers who have large farms, but these farms are better 
positioned than smaller farms to pay a higher share of their premiums, 
according to GAO's review of USDA data for 2008 and 2009, the most 
recent years for which data were available. In addition, if the large 
farmers affected by a limit on premium subsidies were to reduce their 
coverage, they might be able to self-insure through a variety of risk 
management methods, such as crop and other types of diversification. 

Actions Needed and Potential Financial or Other Benefits: 

Recognizing current budget constraints, several options exist to 
reduce the cost of subsidies for crop insurance premiums. To save 
federal dollars in the crop insurance program, GAO suggested in March 
2012 that Congress may wish to consider the following action: 

* either limit the amount of premium subsidies that an individual 
farmer can receive each year--as it limits the amount of payments to 
individual farmers in many farm programs--or reduce premium subsidy 
rates for all participants in the crop insurance program, or both 
limit premium subsidies and reduce premium subsidy rates. 

If a limit of $40,000 per individual farmer for premium subsidies had 
been applied for 2011, the estimated cost savings in that year would 
have been up to $1 billion. If a limit of $100,000 per individual 
farmer for premium subsidies had been applied for 2011, the estimated 
cost savings would have been up to $232 million. The amount of these 
savings would have depended on whether, and to what extent, farmers 
and legal entities reorganized their businesses to avoid or lessen the 
effect of limits on premium subsidies. If the premium subsidy rate had 
been reduced from an average of 62 percent to 52 percent for all crop 
insurance participants for 2011, the estimated cost savings would have 
been about $1.2 billion. 

Agency Comments and GAO's Evaluation: 

In commenting on the March 2012 report on which this analysis is 
based, USDA stated it was ill advised for GAO to suggest that Congress 
consider limiting or reducing premium subsides without further study. 
USDA stated that in recommending a limit on premium subsidies, the 
report does not fully account for all potentially negative impacts and 
costs resulting from such a change. However, GAO's report recognizes 
that setting a subsidy limit may have impacts and discusses some of 
these potential impacts. For example, as noted above, premium subsidy 
limits or reduced premium subsidy rates have the potential to lead to 
lower participation in the crop insurance program. Moreover, at a time 
when the agriculture sector is enjoying record farm income and the 
nation is facing severe deficit and long-term fiscal challenges, GAO 
believes that crop insurance premium subsidies--the single largest 
component of farm program costs--are a potential area for federal cost 
savings that should be considered. Furthermore, the administration, in 
its budget for fiscal year 2013, and the Congressional Budget Office 
each proposed a reduction in premium subsidies. 

GAO provided a draft of this report section to USDA for review and 
comment. In an email received on January 30, 2013, USDA reaffirmed its 
comments on the March 2012 report. 

How GAO Conducted Its Work: 

The information contained in this analysis is based on findings from 
the products in the related GAO products section. For the March 2012 
report, GAO analyzed USDA data for 2010 and 2011, reviewed economic 
studies, and interviewed USDA officials. For the October 2008 and 
April 2004 reports, GAO analyzed USDA data on farm program payments 
and interviewed USDA officials. Table 16 in appendix IV lists the 
program GAO identified that might have opportunities for cost savings 
or revenue enhancement. 

Related GAO Products: 

Crop Insurance: Savings Would Result from Program Changes and Greater 
Use of Data Mining. GAO-12-256. Washington, D.C.: March 13, 2012. 

Federal Farm Programs: USDA Needs to Strengthen Controls to Prevent 
Payments to Individuals Who Exceed Income Eligibility Limits. GAO-09-
67. Washington, D.C.: October 24, 2008. 

Farm Program Payments: USDA Needs to Strengthen Regulations and 
Oversight to Better Ensure Recipients Do Not Circumvent Payment 
Limitations. GAO-04-407. Washington, D.C.: April 30, 2004. 

Contact Information: 

For additional information about this area, contact Anne-Marie Fennell 
at (202) 512-3841 or fennella@gao.gov. 

Footnotes: 

[1] USDA's Farm Service Agency is responsible for ensuring that only 
eligible individuals receive farm program payments, either directly or 
as a member of an entity, and do not receive payments that exceed the 
established limits. 

[2] A husband and wife can each receive a payment, which enables them 
collectively to receive up to $80,000 in direct payments annually. 

[3] In 2012, participating farmers received premium subsidies of $6.9 
billion. 

[5] GAO selected $40,000 as an example of a potential premium subsidy 
limit because it is the payment limit for direct payments, which cost 
about $5 billion per year and are one of the largest components of the 
farm safety net. A higher or lower premium subsidy limit would affect 
cost savings accordingly. 

[End of Crop Insurance area] 

20. Joint Basing: 

The Department of Defense needs an implementation plan to guide joint 
bases to achieve millions of dollars in cost savings and efficiencies 
anticipated from combining support services at 26 installations 
located close to one another. 

Why This Area Is Important: 

GAO has designated Department of Defense (DOD) support infrastructure-
-which refers to activities that support DOD's ability to meet its 
missions, such as training, logistics, and force management--as a high-
risk area and identified installation support as one key support 
infrastructure category where opportunities existed for savings. 
[Footnote 1] Installation support includes personnel and activities 
that fund, equip, and maintain facilities from which defense forces 
operate. GAO has stated that reducing the cost of excess 
infrastructure activities is critical to making effective use of 
scarce resources and maintaining high levels of military capabilities. 

In a recommendation submitted for the 2005 base realignment and 
closure (BRAC) round, DOD proposed to the BRAC Commission that the 
department consolidate 26 military installations operated by 
individual military services into 12 joint bases to take advantage of 
opportunities for efficiencies arising from such consolidation and 
elimination of similar support services on bases located close to one 
another. DOD estimated that by taking this action it could save about 
$2.3 billion over a 20-year period, with $601 million in savings by 
the end of the implementation period in fiscal year 2011.[Footnote 2] 

In its justification for the recommendation, DOD noted, among other 
things, that because the installations either shared a common boundary 
or were located close to at least one other installation and performed 
common support functions, there was a significant opportunity to 
reduce duplication of similar support services, which could produce 
savings. DOD noted that consolidating installations located close to 
one another could allow for, among other things, reduced manpower and 
facilities requirements, for example by reducing unnecessary 
management personnel and achieving greater economies of scale. DOD 
also noted that further savings could come from consolidation of 
service contract requirements, from establishing a single space 
management authority to increase utilization of facilities and 
infrastructure, and from reducing the number of base support vehicles 
and equipment. 

GAO has continued to monitor DOD's ability to achieve economies of 
scale and savings by consolidating and eliminating similar 
installation support services at joint bases. 

What GAO Found: 

In March 2009, GAO reported that the cost of installation support at 
joint bases was expected to increase rather than decrease, due in part 
to the adoption of new common standards for installation service 
support. These common standards established expected levels of support 
services on the joint bases in diverse areas from airfield operations 
to grounds maintenance, and replaced the previous service-specific 
support standards. 

GAO found that the new common standards required higher levels of 
funding in some cases than the previous standards. In addition, GAO 
found that the military services' approach to implementing joint 
basing would result in additional administrative costs and the loss of 
some existing installation support efficiencies. For example, 
additional costs for installation administration were expected at the 
six joint bases where the Air Force was the lead for providing 
installation support because the Air Force established an additional 
organizational unit at those bases to manage installation support. 

GAO recommended that to address the expected increased installation 
support costs from joint basing implementation, the Secretary of 
Defense should direct the Deputy Under Secretary of Defense 
(Installations and Environment) to periodically review administrative 
costs as joint basing is implemented to minimize any additional costs 
and prevent the loss of existing installation support efficiencies. 
DOD partially agreed with this recommendation, but stated that it 
already had a process to periodically review joint basing costs as 
part of its planning, program, budget, and execution system, and that 
the joint base memorandums of agreement required periodic reviews of 
mission and resource impacts. DOD stated that further action to 
implement the recommendation was not necessary because the department 
had established a process to review costs as part of its regular 
budget process. However, GAO stated that DOD's intended cost reviews 
would occur only after joint base implementation, and therefore GAO 
continued to believe DOD needed to also review costs during the 
implementation of the joint bases to avoid losing cost efficiencies. 

In November 2012, GAO reported that the Office of the Secretary of 
Defense (OSD) had not developed an implementation plan to guide joint 
bases in their efforts to achieve the cost savings and efficiencies 
arising from consolidation and elimination of duplicate support 
services that were envisioned in DOD's recommendation to the BRAC 
Commission on joint basing. Moreover, although DOD originally 
estimated that the department could achieve a savings of $2.3 billion 
over a 20-year period by establishing joint bases, GAO's most recent 
analysis, reported in June 2012, showed that the 20-year savings 
estimate had fallen by nearly 90 percent to about $249 million. 
[Footnote 3] Moreover, although joint base officials provided GAO with 
some anecdotal examples of efficiencies that have been achieved at 
joint bases, it is unclear whether DOD has achieved any significant 
cost savings to date, in part due to its adoption of more costly 
common support standards, higher projected administrative costs, and 
weaknesses in its approach to tracking costs and estimated savings. 
Despite these implementation challenges, DOD may be able to achieve 
significant savings through joint basing if it adopts a more rigorous 
and comprehensive department-wide approach to managing this 
initiative. Such an approach should include developing specific 
implementation goals, plans, and timelines; improving its efforts to 
track costs and savings; and more broadly sharing and applying lessons 
learned across the joint bases. 

Officials in the Office of the Deputy Under Secretary of Defense 
(Installations and Environment) said they did not have a plan in place 
to guide the efforts to achieve cost savings and efficiencies by 
consolidating and eliminating duplicate support services at the joint 
bases because joint basing is a relatively new initiative and they are 
still resolving implementation issues and working to achieve cultural 
change. Moreover, DOD indicated that the department made a conscious 
decision to defer near-term savings to better ensure success for the 
long term. However, without an implementation plan for achieving 
efficiencies and cost savings, DOD is not well positioned to realize 
significant cost savings. 

In November 2012, GAO also reported that DOD did not yet have a fully 
developed method for accurately gathering information on the costs, 
estimated savings, and efficiencies achieved specifically as a result 
of joint basing. Although OSD developed a data collection tool, called 
the Cost and Performance Visibility Framework (the Framework), through 
which the joint bases reported installation support cost and 
performance data, GAO found inconsistencies in the way the joint bases 
reported these data. In addition, the data collection tool did not 
exclude costs and savings that were not specific to joint basing, and 
OSD was not yet able to accurately isolate the effects of joint basing 
on the cost of providing base support services. Without such 
information, DOD does not have a clear picture of the total costs and 
estimated savings from joint basing. GAO also found that OSD and the 
joint bases had some processes in place to identify implementation 
challenges, but did not always share information among the joint 
bases, and between OSD and the joint bases, on challenges and possible 
solutions. Without processes to identify common challenges and share 
information across the joint bases, DOD will not be in the best 
position to identify opportunities for greater efficiencies. 

GAO has reported that successful organizational transformations--such 
as merging components and transforming organizational cultures--in 
both the public and private sectors involve several key practices, 
including ensuring that top leadership drives the transformation and 
setting implementation goals, including a timeline to show progress. 

* Ensuring top leadership drives the transformation. DOD leadership 
has not provided clear direction to joint basing officials on 
achieving the cost savings and efficiency goals of joint basing. Some 
joint basing officials told GAO they perceived a lack of direction 
from OSD about the joint basing initiative and more specifically about 
whether the purpose of joint basing is to meet the joint base common 
standards for installation support or to achieve cost savings and 
efficiencies. These two goals may not always be in harmony because DOD 
has required the joint bases to deliver installation services in 
accordance with the new standards even though the military departments 
have not previously funded such services at the levels needed to meet 
the new standards. Thus, this approach can lead to increased costs 
rather than cost savings. 

* Setting implementation goals and a timeline to show progress. One of 
DOD's stated objectives for joint basing was to save money; however, 
it did not establish quantifiable and measurable implementation goals 
for how to achieve cost savings or efficiencies through joint basing, 
to include a timeline to achieve such goals. Methods for achieving 
cost savings or efficiencies could include, for example, reducing 
duplication of efforts, reducing unnecessary management personnel, 
consolidating and optimizing service contract requirements, and 
reducing the number of base support vehicles and equipment, among 
other things noted in DOD's recommendation to the 2005 BRAC Commission. 

* Establish a communication strategy. DOD has not established a 
communication strategy that provides information to meet the needs of 
joint basing officials on how to achieve the joint basing goals of 
cost savings and efficiencies. Some joint base officials told GAO that 
they desire additional guidance about how to achieve cost savings and 
efficiencies. 

Actions Needed and Potential or Other Financial Benefits: 

GAO recommended in November 2012 that to achieve cost savings and 
efficiencies by reducing duplication in providing installation support 
services, the Secretary of Defense should direct the Deputy Under 
Secretary of Defense (Installations and Environment) to take the 
following three actions: 

* develop and implement a plan that provides measurable goals linked 
to achieving savings and efficiencies at the joint bases and provide 
guidance to the joint bases that directs them to identify 
opportunities for cost savings and efficiencies. DOD should at a 
minimum consider the items identified in its recommendation to the 
2005 BRAC Commission as areas for possible savings and efficiencies, 
including paring unnecessary management personnel, consolidating and 
optimizing contract requirements, establishing a single space 
management authority to achieve greater utilization of facilities, and 
reducing the number of base support vehicles and equipment; 

* continue to develop and refine the Cost and Performance Visibility 
Framework to eliminate data reliability problems, facilitate 
comparisons of joint basing costs with the cost of operating the 
separate installations prior to joint basing, and identify and isolate 
the costs and savings resulting from actions and initiatives 
specifically resulting from joint basing; and: 

* develop a common strategy to expand routine communication between 
the joint bases, and between the joint bases and OSD, to encourage 
joint resolution of common challenges and the sharing of best 
practices and lessons learned. 

Agency Comments and GAO's Evaluation: 

In commenting on the November 2012 report on which this analysis is 
based, DOD disagreed with GAO's recommendation to develop and 
implement a plan providing measurable goals linked to achieving 
savings and efficiencies and providing guidance to the joint bases on 
achieving those savings and efficiencies. DOD stated that establishing 
such a plan and targets would restrict the authority of local 
commanders to manage the merger of formerly standalone bases into 
joint bases. Moreover, the department stated that it should continue 
with its approach of being patient with obtaining cost savings and 
efficiencies because it believes this approach is working. However, 
DOD's current position of deferring near-term savings contradicts its 
original recommendation to the BRAC Commission, which stated that 
joint basing would produce cost savings that would immediately exceed 
the implementation costs. Further, the original 20-year savings 
estimate of more than $2.3 billion has fallen by more than 90 percent, 
to $249 million. Realization of some of the savings identified in 
DOD's justification for joint basing is attainable by developing 
guidance and encouraging appropriate practices, goals, and time 
frames. Therefore, GAO's recommendation continues to have merit, 
particularly in light of the federal government's fiscal outlook. 

DOD partially agreed with the recommendation to continue to develop 
and refine the Cost and Performance Visibility Framework, stating that 
the department had already taken some steps to improve the Framework 
and that it would be impractical to attempt to isolate and distinguish 
joint basing cost savings from other DOD-or service-wide actions, and 
DOD identified an alternative process for capturing this information. 
However, the alternative approach proposed by DOD would produce 
inaccurate results, whereas refinements in the Framework would 
position the department to effectively measure savings from joint 
basing. 

Finally, DOD partially agreed with the recommendation to develop a 
common strategy to expand routine communication among joint bases, and 
between the joint bases and OSD, to share best practices and lessons 
learned. DOD stated that there were already mechanisms in place for 
such communication, and that it was increasing those opportunities. 
However, according to DOD's policy for joint basing, problems should 
be identified and addressed at the lowest possible level, which can 
include only officials at any given base, and therefore the majority 
of issues may not be shared among the bases or with OSD. Thus, 
additional mechanisms could help the department achieve greater 
efficiencies from joint basing. 

GAO provided a draft of this report section to DOD for review and 
comment. DOD stated that GAO had given negligible consideration to the 
department's concerns about GAO's November 2012 report on joint 
basing. We carefully considered DOD's comments; we held several 
meetings with DOD to discuss our findings and conclusions in the 
November 2012 report. Our findings and conclusions are based on all of 
the evidence that DOD provided during the course of our review. 
Consequently, we continue to believe that our recommendations are 
still warranted. 

How GAO Conducted Its Work: 

The information contained in this analysis is based on findings from 
the products in the related GAO products section. In order to assess 
the extent to which DOD developed and implemented a plan to achieve 
cost savings and efficiencies at the joint bases, GAO analyzed DOD 
guidance related to joint base implementation, specifically looking 
for any measures or reporting processes on efficiencies and cost 
savings. GAO also reviewed its prior findings on key practices and 
implementation steps for mergers and organizational transformations. 
GAO interviewed officials at the military service headquarters and 
OSD, as well as officials at three selected joint bases, and obtained 
answers to written questions from the remaining nine joint bases. To 
select the three joint bases to visit, GAO developed a nonprobability 
sample based on several factors, including which military department 
had the lead for providing support services, geographic diversity, and 
the implementation phase of the base. 

Related GAO Products: 

DOD Joint Bases: Management Improvements Needed to Achieve Greater 
Efficiencies. GAO-13-134. Washington, D.C.: November 15, 2012. 

Military Base Realignments and Closures: Updated Costs and Savings 
Estimates from BRAC 2005. GAO-12-709R. Washington, D.C.: June 29, 2012. 

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

Defense Infrastructure: DOD Needs to Periodically Review Support 
Standards and Costs at Joint Bases and Better Inform Congress of 
Facility Sustainment Funding Uses. GAO-09-336. Washington, D.C.: March 
30, 2009. 

Results-Oriented Cultures: Implementation Steps to Assist Mergers and 
Organizational Transformations. GAO-03-669. Washington, D.C.: July 2, 
2003. 

Highlights of a GAO Forum: Mergers and Transformation: Lessons Learned 
for a Department of Homeland Security and Other Federal Agencies. GAO-
03-293SP. Washington, D.C.: November 14, 2002. 

High-Risk Series: Defense Infrastructure. GAO/HR-97-7. Washington, 
D.C.: February 1997. 

Contact Information: 

For additional information about this area, contact Brian J. Lepore, 
(202) 512-4523 or leporeb@gao.gov. 

Footnotes: 

[176] Force management provides funding, equipment, and personnel for 
the management and operation of all major military command 
headquarters. 

[177] Department of Defense, Base Closure and Realignment Report, Vol. 
1 (Washington, D.C.: May 2005). 

[178] These figures are expressed in 2005 dollars to facilitate 
comparison with the original 20-year savings estimates developed in 
2005. 

[End of Joint Basing area] 

Energy: 

21. Department of Energy's Isotope Program: 

Assessing the value of isotopes to customers, and other factors such 
as prices of alternatives, may show that the Department of Energy 
could increase prices for isotopes that it sells to commercial 
customers to create cost savings by generating additional revenue. 

Why This Area Is Important: 

Overall, approximately 20 million medical procedures are performed 
each year in the United States using isotopes.[Footnote 1] For 
example, isotopes are used to diagnose heart disease. Other 
applications for isotopes include oil and gas exploration, physics 
research, and radiation detection monitors that screen cargo and 
vehicles at ports and border crossings. The Department of Energy's 
(DOE) Isotope Development and Production for Research and Applications 
program (Isotope Program) is the only domestic supplier for many of 
the more than 300 different isotopes that it sells because DOE 
facilities associated with the Isotope Program are recognized as 
uniquely capable of producing some isotopes that are critical to 
medical, commercial, research, and national security applications. 

The Isotope Program's three-pronged mission is to (1) produce or 
distribute isotopes in short supply, as well as their associated by-
products and surplus materials, and deliver isotope-related services; 
(2) maintain the infrastructure required to produce and supply 
isotopes and related services; and (3) investigate and develop new or 
improved isotope production and processing techniques that can make 
new isotopes available for research and other applications. To achieve 
its mission, the Isotope Program relies on annual appropriations and 
revenues from isotope sales. In fiscal year 2012, annual 
appropriations totaled almost $20 million, and revenues from sales of 
isotopes alone totaled over $25 million, according to data provided by 
agency officials.[Footnote 2] All funding, including sales revenues, 
is deposited into a revolving fund from which the Isotope Program 
obligates funds to operate its facilities, produce isotopes, and fund 
research, among other activities. Moreover, the revolving fund allows 
the program to carry over balances from year to year, giving it 
budgeting flexibility. 

When selling isotopes, the Isotope Program may produce or make 
available to customers more than 300 different isotopes, but fewer 
than that number are sold in a given year. In fiscal year 2012, for 
example, the program sold less than 180 distinct isotopes. In the same 
year, the Isotope Program sold isotopes or provided isotope-related 
services to more than 100 customers, both in the United States and 
internationally; 6 of those customers accounted for almost 90 percent 
of the program's sales revenue in fiscal year 2012. About 95 percent 
of the Isotope Program's annual revenue came from the sale of 6 
different isotopes in fiscal year 2012; these 6 isotopes generated 
over $24 million in revenue (see the following table). 

Table: The Six Top-Selling Isotopes of DOE's Isotope Program in Fiscal 
Year 2012: 

Isotope: Strontium-82; 
2012 revenue: $10,982,000. 

Isotope: Californium-252; 
2012 revenue: $6,866,000[A]. 

Isotope: Helium-3; 
2012 revenue: $3,015,000. 

Isotope: Germanium-68; 
2012 revenue: $2,214,000. 

Isotope: Strontium-90; 
2012 revenue: $618,000. 

Isotope: Nickel-63; 
2012 revenue: $526,000. 

Isotope: Total; 
2012 revenue: $24,221,000. 

Source: DOE. 

[A] This amount includes $2 million that was paid in fiscal year 2009 
by customers as advance payments for future production costs. 

[End of table] 

What GAO Found: 

GAO reported in May 2012 that the Isotope Program may be forgoing 
revenue that could further its mission because it is not using 
thorough assessments to set prices for commercial isotopes. The Atomic 
Energy Act of 1954 states that the federal government should be 
reasonably compensated for isotopes it sells and that isotope prices 
should not discourage commercial isotope producers from entering the 
market. Aside from these constraints, the Isotope Program has broad 
authority in setting isotope prices. To this end, the Isotope Program 
established a pricing policy in 1990--updated in May 2012--that 
provides the program latitude in establishing prices for isotopes. The 
policy states that isotopes for the commercial market are to be priced 
to recover the full cost of producing the isotopes--full cost 
recovery--or, if a market price already exists that is higher than 
full cost recovery, the market price should be used. The policy also 
states that additional factors may be considered when establishing 
prices, including the value of the product to the customer, the number 
of domestic or foreign suppliers, and current and future demand. 
Additionally, in cases where no market currently exists--as is the 
case for many of the commercial isotopes produced and sold by the 
Isotope Program--guidance from the Office of Management and Budget 
states that prices can be set by taking into account the prevailing 
prices for goods that are the same as or substantially similar to 
those provided by the government and then adjusting the supply made 
available, prices of the goods, or both so that there will be neither 
a shortage nor a surplus. 

In practice, according to Isotope Program officials, the Isotope 
Program generally sets the prices for commercial isotopes at full cost 
recovery--the lowest price possible for the program to recover its 
costs for providing an isotope. According to program officials, prices 
for commercial isotopes are set above full cost recovery only when a 
higher price for the isotope already exists in the commercial market 
and pricing the isotope at full cost recovery would be so low as to 
distort the existing market. Program officials told us, however, that 
in instances where the Isotope Program is the only domestic supplier, 
which it is for most of the isotopes it produces and sells, the 
program has not formally assessed such factors as determining the 
value of isotopes to customers or prices of alternatives. Instead, 
Isotope Program officials told us that they gain a sense of customers' 
value for isotopes through their communications with these customers. 
According to Isotope Program documents, the program has also collected 
limited market information for a small number of isotopes, but these 
studies are outdated or do not consider pricing. For example, a 2002 
market study projected the future demand and potential revenues for 25 
different isotopes used in medicine over the next 5 to 10 years, but 
that study is now outdated. Without thoroughly assessing isotopes, 
including such factors as assessing the value of isotopes to 
commercial customers or the prices of alternatives for isotopes where 
the Isotope Program is the only domestic supplier, the Isotope Program 
does not know if its full cost recovery prices are appropriate. If the 
Isotope Program's prices are artificially low, for example, the prices 
may, in turn, discourage private entities from entering the isotope 
market, discourage commercial entities or researchers from exploring 
alternatives to using some isotopes, or encourage overconsumption. 
Increasing prices, in these instances, could, among other things, 
generate additional revenue and reduce the program's level of 
appropriated funds. 

Moreover, in the absence of established market prices and without 
current information on the value customers place on isotopes and 
prices of similar products, the Isotope Program cannot ensure that the 
prices it sets are appropriate. If such assessments show that prices 
can be increased above full cost recovery for some commercial 
isotopes, the additional revenue could be used to reduce appropriated 
funds or to further the Isotope Program's mission. For example, 
revenues could be used to fund research for the development of new or 
more efficient production capabilities for additional isotopes. 

Actions Needed and Potential or Other Financial Benefits: 

GAO recommended in May 2012 that the Secretary of Energy direct the 
Isotope Program to improve the program's transparency in setting 
prices by taking the following action: 

* Clearly define the factors to be considered when the program sets 
prices for isotopes sold commercially, including defining under what 
circumstances it will set prices at or above full cost recovery. This 
should include assessing, when appropriate, current information on the 
value of isotopes to customers and the prices of similar products. 

GAO is unable to quantify the potential for further financial benefits 
because Isotope Program officials have not performed the assessments 
needed to determine the market value or what customers are willing to 
pay for most of the isotopes it sells. Although GAO cannot quantify 
the potential for additional financial benefits, further efforts by 
the Isotope Program to examine the prices it sets for commercial 
isotopes could present opportunities for cost savings by generating 
additional revenues. 

Agency Comments and GAO's Evaluation: 

In commenting on the May 2012 report on which this analysis is based, 
DOE stated that it will address GAO's recommendations, but took 
exception to GAO's characterization of how the Isotope Program sets 
prices for commercial isotopes. In its comments, DOE states that the 
Isotope Program does consider "value of isotopes to customers" when 
setting prices for commercial isotopes. Nevertheless, none of the 
documents provided by the Isotope Program during GAO's review show 
that the program conducted a current, formal analysis of what 
customers are willing to pay for commercial isotopes. GAO's May 2012 
report points out that program officials gain a sense of the value 
customers place on commercial isotopes through communication with the 
customers themselves. Such communications, in GAO's view, do not 
provide a rigorous approach to determining a customer's value for 
commercial isotopes, as customers generally strive to obtain needed 
materials, including isotopes, at the lowest possible cost. In its 
comments, DOE also expressed concern that GAO's May 2012 report 
suggests maximizing revenue and pricing commercial isotopes to 
increase revenue. The report does not emphasize maximizing revenue or 
setting prices solely to increase revenue. Rather, the report shows 
that the Isotope Program has not performed the formal market analyses 
required by its own pricing policy. Such analyses, including assessing 
the value of isotopes to customers and prices of alternatives, may 
show that prices could be increased, thus increasing revenue. 

GAO provided a draft of this report section to DOE for review and 
comment. DOE did not provide comments on this report section. 

How GAO Conducted Its Work: 

The information contained in this analysis is based on findings from 
the products in the related GAO products section. GAO reviewed 
documents from DOE's Isotope Program, including budget data for fiscal 
year 2012 obligations and revenues and the Isotope Program's updated 
pricing policy, dated May 29, 2012. GAO also interviewed relevant 
agency officials. Table 17 in appendix IV lists the programs GAO 
identified that might have opportunities for cost savings or revenue 
enhancement. 

Related GAO Products: 

Managing Critical Isotopes: DOE's Isotope Program Needs Better 
Planning for Setting Prices and Managing Production Risks. [hyperlink, 
http://www.gao.gov/products/GAO-12-591]. Washington, D.C.: May 23, 
2012. 

Managing Critical Isotopes: Weaknesses in DOE's Management of Helium-3 
Delayed the Federal Response to a Critical Supply Shortage. 
[hyperlink, http://www.gao.gov/products/GAO-11-472]. Washington, D.C.: 
May 12, 2011. 

Contact Information: 

For additional information about this area, contact David Trimble at 
(202) 512-3841, or trimbled@gao.gov. 

Footnotes: 

[179] Isotopes are varieties of a given chemical element with the same 
number of protons but different numbers of neutrons. For example, the 
helium-3 isotope, which is used in research and to detect neutrons in 
radiation detection equipment, has one less neutron than the helium-4 
isotope, which is the helium isotope commonly used in party balloons. 

[180] The Isotope Program's yearly appropriations are used to, among 
other things, pay for infrastructure costs associated with producing 
isotopes that are used for research purposes, thus allowing the 
Isotope Program to sell research isotopes at a reduced price. 

[End of Department of Energy's Isotope Program area] 

General Government: 

22. Additional Opportunities to Improve Internal Revenue Service 
Enforcement of Tax Laws: 

The Internal Revenue Service can realize cost savings and increase 
revenue collections by billions of dollars by, among other things, 
using more rigorous analyses to better allocate enforcement and other 
resources. 

Why This Area Is Important: 

The Internal Revenue Service (IRS) has estimated that the gross tax 
gap--the difference between taxes owed and taxes paid on time--was 
$450 billion for tax year 2006 (the most recent year for which data 
were available). IRS estimated that it would eventually recover about 
$65 billion of this amount through late payments and enforcement 
actions, leaving a net tax gap of $385 billion. Federal deficits and 
long-term fiscal challenges have heightened the importance of reducing 
the tax gap. To help reduce the tax gap, in fiscal year 2012, Congress 
appropriated $5.3 billion to IRS for its enforcement activities to 
support approximately 48,000 staff. Congress also appropriated $2.2 
billion to IRS for its taxpayer service activities to support 30,500 
staff. IRS's enforcement of the tax laws contributes to voluntary 
compliance by giving all taxpayers a sense that their neighbors and 
business competitors are paying their fair share. Notwithstanding 
IRS's enforcement and service programs, the net tax gap remains large. 
Accordingly, tax law enforcement is on GAO's high-risk list.[Footnote 
1] 

What GAO Found: 

Since last reporting on cost savings and revenue collection 
opportunities related to IRS's enforcement efforts in February 2012, 
GAO has identified several areas where IRS can further improve its 
programs and collect billions of dollars in tax revenue, reduce its 
costs, and facilitate voluntary compliance. These include the 
following: 

* Using return on investment (ROI) and similar analyses to better 
target its resources. Resource limitations prevent IRS from examining 
more than a small fraction of individual tax returns filed. In its 
December 5, 2012, report, GAO estimated that modest reallocations of 
IRS's examination resources might raise billions of dollars in direct 
revenue with little, if any, decline in voluntary compliance. For 
example, a hypothetical shift of a relatively small share of resources 
(about $124 million) from examinations of less productive groups of 
tax returns--specifically, lower-income returns with the earned income 
tax credit and lower-income business returns--to more productive 
groups of tax returns--specifically, higher-income returns and lower-
income nonbusiness returns without the earned income tax credit--could 
have increased direct revenue collection by an estimated $1 billion 
over the $5.5 billion per year IRS actually collected from its 
examination activities in fiscal years 2007 and 2008.[Footnote 2] 
Additionally, in June 2012, GAO reported that providing return on 
investment estimates or other economic analyses, such as cost-
effectiveness analyses, in its budget requests for new investment 
initiatives could aid in making decisions about budget and resource 
allocations.[Footnote 3] When comparisons of alternative investments 
do not consider costs, budget decision makers cannot be assured that 
alternatives were fully evaluated and the best alternative was 
selected. Finally, in that same report, GAO stated that although IRS 
tracks the schedule and cost performance of its information technology 
investments, it does not have a similar quantitative measure to 
determine the extent to which these investments are delivering planned 
functionality. Without a quantitative measure, budget decision makers 
lack information about how well IRS is managing its information 
technology investment projects. 

* Using more risk-based approaches to aid in earlier and less costly 
collection of balances due. In our December 18, 2012, report, GAO 
reported that taxpayers filed 3.8 million individual income tax 
returns with self-acknowledged balances due totaling $13.8 billion for 
tax year 2010 (the most recent year for which data were available). 
The majority of this amount is either fully paid or accounted for 
through installment agreements during IRS's notice phase, when it 
sends letters to taxpayers telling them how to pay their balances. 
However, at least $4.4 billion remained uncollected after IRS sent as 
many as four notices to the taxpayer. These amounts become subject to 
more costly collection actions, such as face-to-face contact, if they 
remain uncollected. Best practices, such as risk-based approaches 
where contacts are tailored based on characteristics of the taxpayer, 
have helped increase collections in states such as California. IRS has 
developed an analytics plan and uses some risk-based processes to 
identify which notices taxpayers will receive, but has not yet 
implemented the plan, and management responsibilities are unclear. As 
a result, IRS has not tested more advanced risk-based approaches. 
Using more risk-based approaches, including implementation of its data 
analytics plan, may increase revenue collections by a portion of the 
$4.4 billion that either moves to more expensive collection methods or 
ultimately goes uncollected. 

* Using Small Employer Health Insurance Tax Credit examination results 
to more efficiently allocate resources. The Small Employer Health 
Insurance Tax Credit was established to help eligible small businesses 
or tax-exempt entities provide health insurance for employees. In May 
2012, GAO reported that although fewer small employers claimed the tax 
credit in tax year 2010 than were estimated to be eligible, IRS could 
better use the enforcement resources devoted to the program. GAO found 
that IRS does not systemically analyze examination results related to 
the credit to understand the types of errors being made and whether 
examinations are the best way to ensure compliance. As an example of 
potentially inefficient resource use, over half of the completed small 
business health insurance claim examinations for tax year 2010 found 
no errors. By contrast, for examinations of business entities as a 
whole, IRS is better able to target its resources with errors found at 
much higher rates. By analyzing small employer health insurance claims 
examination results, IRS would be better able to decide how much in 
examination resources should be invested in verifying those claims. In 
commenting on GAO's May 2012 report, IRS stated that although its 
information systems do not capture adjustments by issue, it would 
leverage existing information systems and manually analyze exam 
results if necessary to optimize its compliance efforts. Any 
examination resources saved on this credit could be shifted to other 
priorities and potentially increase revenue collected. 

* Using third-party information reporting to enforce compliance for 
reporting international income. Given the mobility of money and 
proliferation of foreign financial institutions, the potential for 
U.S. taxpayers to evade taxes on funds held in offshore accounts is 
greater than ever. In 2010, Congress passed the Foreign Account Tax 
Compliance Act as part of the Hiring Incentives to Restore Employment 
Act of 2010.[Footnote 4] The Act requires certain U.S. taxpayers to 
report to IRS their overseas assets and requires U.S. entities to 
withhold a portion of certain payments made to foreign financial 
institutions that have not entered into an agreement with IRS to 
report certain information with respect to the institutions' U.S. 
accounts. The Act is an effort to reduce tax evasion by creating 
greater transparency and accountability with respect to offshore 
accounts and entities held by U.S. taxpayers and providing IRS with 
tools to further enforce tax laws and collect additional revenue. On 
April 16, 2012, GAO reported that although IRS had begun discussing 
how it will use this information to improve compliance, it had not yet 
completed or fully documented a strategy for doing so. IRS has not 
developed key timelines for accomplishing the tasks necessary to 
enable it to use this information to improve taxpayer compliance. IRS 
has also not developed performance measures to assess the cost and 
benefits of its compliance efforts. If IRS does not have a broad 
strategy, it risks negatively affecting implementation of the Act. 

* Reversing declines in taxpayer service can benefit voluntary 
compliance. IRS interacts with millions of taxpayers by processing tax 
returns, issuing refunds, answering telephone calls and 
correspondence, and providing other services, including those on its 
website. Providing taxpayer services can promote voluntary compliance 
for taxpayers who wish to comply with tax laws but do not understand 
their obligations. On December 18, 2012, GAO reported that IRS has 
realized efficiency gains and provided alternative types of services, 
including more automated services. Notwithstanding these efforts, IRS 
has not kept up with the demand for service. Key indicators of its 
taxpayer service performance have continued to decline--the percentage 
of taxpayers seeking live telephone assistance who receive it has 
decreased, and telephone wait times and the percentage of paper 
correspondence IRS did not address within 45 days have increased. 
While IRS plans to continue to pursue efficiency gains, its strategy 
for future years does not specifically address how it plans to manage 
these negative trends. Managing the declines in telephone and 
correspondence services may require IRS to consider difficult trade-
offs, such as reassessing which phone calls IRS should answer with a 
live assister. If the declines in taxpayer service are not effectively 
managed, voluntary compliance could be affected. 

GAO has long reported that a broader opportunity to address the tax 
gap involves simplifying the tax code, as complexity can cause 
taxpayer confusion resulting in unintentional noncompliance as well as 
provide opportunities to hide willful noncompliance. GAO reiterated 
this point in testimony on April 19, 2012, and in its February 2013 
high-risk report. Fundamental tax reform could result in a smaller tax 
gap if the new system has fewer tax preferences or complex tax code 
provisions, reducing IRS's enforcement challenges and increasing 
public confidence in the fairness of the tax system. Short of 
fundamental reform, targeted simplification opportunities exist. For 
example, GAO's May 2012 report on higher education credits shows how 
changing tax laws to include more consistent definitions across tax 
provisions could help taxpayers better understand how to claim these 
tax benefits. Similarly, in September 2011, GAO reported that the 
complexity of tax rules for derivatives and other financial 
instruments makes proper reporting of taxes difficult.[Footnote 5] 

Actions Needed and Potential Financial or Other Benefits: 

Since last reporting on cost savings and revenue-raising opportunities 
related to IRS's enforcement efforts in February 2012, GAO made 
additional recommendations to reduce the tax gap and improve taxpayer 
service in five reports issued April 16, May, June, December 5, and 
December 18, of 2012. Specifically, GAO recommended that the 
Commissioner of the IRS take the following seven actions: 

* determine whether IRS has a basis for adjusting its allocation of 
enforcement resources each year; 

* ensure cost-effectiveness analyses are conducted for future 
significant initiatives/investments; 

* develop a quantitative measure of scope, at a minimum, for its major 
information technology investments to have information on the 
performance of these investments; 

* pilot more risk-based approaches for contacting taxpayers who have a 
balance due, which could include implementing its data analytics plan; 

* use Small Employer Health Insurance Tax Credit examination results 
more efficiently by analyzing results from examinations of credit 
claimants and using those results to identify and address any errors 
through alternative approaches; 

* complete a broad strategy, including a timeline and performance 
measures, for how IRS intends to use information collected based on 
the Foreign Account Tax Compliance Act requirements to improve tax 
compliance; and: 

* develop a strategy that defines appropriate levels of telephone and 
correspondence service and wait time and lists specific steps to 
manage service based on an assessment of time frames, demand, 
capabilities, and resources. 

These actions should either generate cost savings from applying more 
rigorous analyses, achieving program efficiencies, and improving 
resource allocations or they should increase revenue collections 
through better enforcement of tax laws and services designed to 
facilitate voluntary compliance. 

Agency Comments and GAO's Evaluation: 

In commenting on the reports cited under related GAO products, IRS 
agreed with six of the recommendations discussed in this analysis but 
did not state whether it agreed or disagreed with a seventh. For those 
six it agreed with, IRS said it is taking action to address them. For 
example, in its response to GAO's recommendation to pilot approaches 
for contacting taxpayers with a balance due, including implementing 
its data analytics plan, IRS said that its plan has been finalized and 
is under consideration for funding. In the event that full funding is 
not available, IRS will evaluate the effectiveness of incremental 
development and deployment of its plan. IRS did not agree or disagree 
with GAO's recommendation to develop a strategy that defines 
appropriate levels of taxpayer service. IRS said it already had an 
objective of providing taxpayers with access to accurate services 
while managing demand by improving efficiency. However, although IRS 
has realized efficiency gains and provided more automated services, 
its efforts to date have not reversed these declines. 

GAO provided a draft of this report section to IRS for review and 
comment. IRS provided additional comments in response to three of 
GAO's recommendations. To ensure that cost-effectiveness analyses are 
conducted for future significant initiatives/investments, IRS said it 
is developing procedures to use cost-effectiveness analyses in its 
budget formulation processes where appropriate. To use Small Employer 
Health Insurance Tax Credit examination results more efficiently, IRS 
said it is reviewing a sample of closed cases and plans to use the 
results to consider alternative approaches to address compliance. To 
use Foreign Account Tax Compliance Act information to improve tax 
compliance, IRS said it formed a working group to respond to the 
recommendation. IRS did not provide comments on GAO's other four 
recommendations presented in this report section. 

How GAO Conducted Its Work: 

The information contained in this analysis is based on findings from 
the products in the related GAO products section. GAO analyzed agency 
documents and interviewed officials from the Department of the 
Treasury, IRS, and other parties. GAO analyzed fiscal year 2011 and 
fiscal year 2012 budget data from IRS and related budget documents. 
GAO also analyzed relevant federal laws, regulations, and procedures. 

Related GAO Products: 

2012 Tax Filing: IRS Faces Challenges Providing Service to Taxpayers 
and Could Collect Balances Due More Effectively. [hyperlink, 
http://www.gao.gov/products/GAO-13-156]. Washington, D.C.: December 
18, 2012. 

Tax Gap: IRS Could Significantly Increase Revenues by Better Targeting 
Enforcement Resources. [hyperlink, 
http://www.gao.gov/products/GAO-13-151]. Washington, D.C.: December 5, 
2012. 

IRS 2013 Budget: Continuing to Improve Information on Program Costs 
and Results Could Aid in Resource Decision Making. [hyperlink, 
http://www.gao.gov/products/GAO-12-603]. Washington, D.C.: June 8, 
2012. 

Higher Education: Improved Tax Information Could Help Families Pay for 
College. [hyperlink, http://www.gao.gov/products/GAO-12-560]. 
Washington, D.C.: May 18, 2012. 

Small Employer Health Tax Credit: Factors Contributing to Low Use and 
Complexity. [hyperlink, http://www.gao.gov/products/GAO-12-549]. 
Washington, D.C.: May 14, 2012. 

Tax Gap: Sources of Noncompliance and Strategies to Reduce It. 
[hyperlink, http://www.gao.gov/products/GAO-12-651T]. Washington, 
D.C.: April 19, 2012. 

Foreign Account Reporting Requirements: IRS Needs to Further Develop 
Risk, Compliance, and Cost Plans. [hyperlink, 
http://www.gao.gov/products/GAO-12-484]. Washington, D.C.: April 16, 
2012. 

Financial Derivatives: Disparate Tax Treatment and Information Gaps 
Create Uncertainty and Potential Abuse. [hyperlink, 
http://www.gao.gov/products/GAO-11-750]. Washington, D.C.: September 
20, 2011. 

Contact Information: 

For additional information about this area, contact James R. White at 
(202) 512-9110, or whitej@gao.gov. 

Footnotes: 

[181] For the most current high-risk report, see GAO, High-Risk 
Series: An Update, [hyperlink, http://www.gao.gov/products/GAO-13-283] 
(Washington, D.C.: February 2013). 

[182] GAO's December 5, 2012, report also describes limitations of 
this estimate. Specifically, exam resource reallocation can also 
affect tax collections indirectly by influencing the voluntary 
compliance of nonexamined taxpayers. These indirect effects are 
difficult to estimate, and IRS has no empirical evidence that would 
allow it to say whether overall voluntary compliance would increase or 
decrease as a result of specific resource allocations. 

[183] IRS's return on investment calculations have limitations that 
reflect the challenges of estimating ROIs. For example, they do not 
include benefits of improved voluntary compliance. In addition, the 
"investment," or costs, should ideally recognize not just IRS costs, 
but any costs borne by others. IRS's return on investment estimates 
provide useful information, but given the limits of current data, are 
not complete estimates of benefits and costs. 

[184] Pub. L. No. 111-147, Title V, subtitle A, 124 Stat. 71, 97 
(2010). 

[185] Policymakers may find GAO reports issued in September 2005 and 
November 2012 helpful when considering changes to the tax laws. See 
GAO, Understanding the Tax Reform Debate: Background, Criteria, & 
Questions, [hyperlink, http://www.gao.gov/products/GAO-05-1009SP] 
(Washington, D.C.: September 2005), and Tax Expenditures: Background 
and a Guide for Evaluation Criteria and Questions, [hyperlink, 
http://www.gao.gov/products/GAO-13-167SP] (Washington, D.C.: Nov. 29, 
2012). 

[End of Additional Opportunities to Improve Internal Revenue Service 
Enforcement of Tax Laws area] 

23. Agencies' Use of Strategic Sourcing: 

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--
savings of one percent from selected agencies' procurement spending 
alone would equate to over $4 billion. 

Why This Area Is Important: 

The private sector has found that strategic sourcing, a process that 
moves a company away from numerous individual procurements to a 
broader aggregate approach, allowed companies to achieve savings of 10 
percent or more of total procurement costs. Through strategic 
sourcing, an organization can leverage its aggregate buying power to 
negotiate lower prices. Because procurement within the federal 
government is generally decentralized, the government is not fully 
leveraging its aggregate buying power and could benefit from adoption 
of strategic sourcing practices. For example, in March 2011 GAO 
reported that saving 10 percent of the total federal procurement 
spending would produce more than $50 billion in savings annually, and 
stated that leaders across the government needed to embrace a 
strategic sourcing approach, beginning with collecting, maintaining, 
and analyzing data on current procurement spending. In 2005, the 
Office of Management and Budget (OMB) directed federal agencies to 
develop and implement a strategic sourcing effort to help control 
spending. OMB also established a government-wide strategic sourcing 
program--known as the Federal Strategic Sourcing Initiative (FSSI). 
The FSSI was created to address government-wide opportunities to 
strategically source commonly purchased products and services and 
eliminate duplication of efforts across agencies. The FSSI Program 
Management Office is located within the General Services 
Administration (GSA). The Program Management Office closely 
collaborates with and provides regular reporting to OMB's Office of 
Federal Procurement Policy. In 2012, GAO reviewed government-wide 
strategic sourcing efforts conducted through the FSSI, as well as 
agency-wide strategic sourcing initiatives at selected top-spending 
agencies. 

What GAO Found: 

In September 2012, GAO reported that selected agencies among those 
with the highest fiscal year 2011 procurement obligations leveraged a 
fraction of their buying power through strategic sourcing and achieved 
limited savings. In fiscal year 2011, the Departments of Defense 
(DOD), Homeland Security (DHS), Energy, and Veterans Affairs (VA) 
accounted for 80 percent of the $537 billion in federal procurement 
spending, but reported managing about 5 percent, or $25.8 billion of 
their procurements, through strategic sourcing efforts and reported a 
combined savings of $1.8 billion. Most selected agencies' efforts did 
not address their highest-spending areas such as services, which may 
provide opportunities for additional savings.[Footnote 1] By contrast, 
DHS reported that nearly 20 percent of its fiscal year 2011 
procurement spending was directed through strategically sourced 
contracts, including the majority of its top 10 spending categories of 
products and services. While strategic sourcing may not be suitable 
for all procurement spending, leading companies strategically manage 
about 90 percent of their procurements and report annual savings of 10 
percent or more. 

In fiscal year 2011, the FSSI program managed $339 million through 
several government-wide strategic sourcing initiatives and reported 
$60 million in savings. However, total spending through the program 
remains low, as only 15 percent of government-wide spending for the 
products and services covered by the FSSI initiatives went through the 
FSSI contracts in fiscal year 2011. In addition, the program has not 
yet targeted the products and services on which the government spends 
the most. 

Most of the four selected agencies and the FSSI program have not fully 
adopted a strategic sourcing approach, but have actions under way. For 
example, GAO found that DOD had invested limited resources in 
strategic sourcing, tracked department-wide strategic sourcing 
initiatives on an ad hoc basis which may have led to underreporting, 
and had not focused on using its spend analysis to identify high-spend 
opportunities for department-wide strategic sourcing; however, DOD 
reported it is currently assessing the need for additional resources, 
identifying additional strategic sourcing efforts, and creating 
additional guidance that will include a process for regular review of 
proposed strategic sourcing initiatives. In another example, VA was 
not systematically considering its highest-spend commodities for 
department-wide strategic sourcing. In addition, VA reported that it 
had not been maintaining complete data on strategic sourcing contract 
spending, which limited its ability to establish metrics and goals for 
spending managed through strategic sourcing. However, VA reported it 
has recently taken steps to better measure such spending. VA is also 
in the process of reviewing business cases for new strategic sourcing 
initiatives and adding resources to increase strategic sourcing 
efforts. 

A lack of clear guidance on metrics for measuring success has affected 
the management of ongoing FSSI efforts as well as most selected 
agencies' efforts. For example, officials from these agencies used a 
variety of different methodologies to calculate savings, making 
strategic sourcing savings difficult to track and compare. In 
contrast, DHS leaders held senior managers accountable to meet 
strategic sourcing goals. DHS also set targets for use of strategic 
sourcing contracts, and reported that nearly 20 percent of its fiscal 
year 2011 procurement spending was directed through strategically 
sourced contracts, with reported savings of $324 million. 

In December 2012, OMB further directed agencies to improve strategic 
sourcing efforts by requiring agencies to designate a Strategic 
Sourcing Accountable Official, and assigned large federal agencies new 
responsibilities for designing and implementing government-wide 
strategic sourcing solutions. For example, OMB created an interagency 
strategic sourcing leadership council with representation from DOD, 
Energy, DHS, and VA, as well as the Department of Health and Human 
Services, the General Services Administration, the National 
Aeronautics and Space Administration, and the Small Business 
Administration. By March 2013, the council was to recommend at least 
five products or services for which new government-wide strategic 
sourcing vehicles or management approaches should be developed to 
ensure that the federal government receives the most favorable offers 
possible. However, while the council was directed to estimate savings 
opportunities for each of the recommended products or services, no 
guidance was given on what method should be used to calculate savings. 
Overall, these actions have the potential to improve the federal 
government's strategic sourcing outcomes, but it is too early to tell 
how effectively the OMB memorandum will be implemented. 

Actions Needed and Potential Financial or Other Benefits: 

To improve strategic sourcing efforts across the government, in 
September 2012, GAO recommended that the Secretary of Defense, the 
Secretary of Veterans Affairs, and the Director of the Office of 
Management and Budget take a series of detailed steps, which are 
summarized below. 

The Secretary of Defense should take the following action: 

* evaluate the need for additional guidance, resources, and 
strategies, and focus on DOD's highest-spending categories. 

The Secretary of Veterans Affairs should take the following action: 

* evaluate strategic sourcing opportunities, set goals, and establish 
metrics. 

The Director of OMB should take the following action: 

* issue updated government-wide guidance on calculating savings, 
establish metrics to measure progress toward goals, and identify 
spending categories most suitable for strategic sourcing. 

Taking these actions would allow federal agencies to better implement 
strategic sourcing practices and maximize their ability to realize 
billions of dollars in potential savings annually. 

Agency Comments and GAO's Evaluation: 

In commenting on the September 2012 report on which this analysis is 
based, DOD, VA, and OMB concurred with the recommendations and stated 
they would take action to adopt them. OMB staff also noted that our 
report compared the percent of spending through strategic sourcing to 
total procurement spending, rather than to spending on the products 
and services for which strategic sourcing is applicable. In response, 
we revised our draft report to more explicitly acknowledge that not 
all spending is suitable for strategic sourcing. DOD, Energy, and GSA 
also provided technical comments, which were incorporated as 
appropriate. 

GAO provided a draft of this report section to DOD, Energy, DHS, VA, 
GSA, and OMB. In its technical comments, DOD provided an updated and 
more comprehensive list of the department's strategic sourcing 
initiatives and noted a more focused targeting of top procurement 
spending categories for supplies, equipment, and services. OMB 
reiterated its comment noted above. DHS and GSA also provided 
technical comments that were incorporated as appropriate. 

How GAO Conducted Its Work: 

The information contained in this analysis is based on findings from 
the products listed in the related GAO products section. In 2012, GAO 
selected four agencies that were among the highest in fiscal year 2011 
procurement obligations--DOD, DHS, Energy, and VA--and reviewed 
strategic sourcing efforts at those agencies as well as government-
wide FSSI efforts. For each, GAO analyzed fiscal year 2011 strategic 
sourcing data and policies, and interviewed responsible officials. GAO 
did not independently validate agency spending or savings data 
reported to it by the agencies; however, GAO did assess information 
from agency officials about the reliability of the data and resolved 
some discrepancies. 

Related GAO Products: 

Strategic Sourcing: Improved and Expanded Use Could Save Billions in 
Annual Procurement Costs. GAO-12-919. Washington, D.C.: September 20, 
2012. 

Streamlining Government: Opportunities Exist to Strengthen OMB's 
Approach to Improving Efficiency. GAO-10-394. Washington, D.C.: May 7, 
2010. 

Contracting Strategies: Data and Oversight Problems Hamper 
Opportunities to Leverage Value of Interagency and Enterprisewide 
Contracts. GAO-10-367. Washington, D.C.: April 29, 2010. 

Best Practices: Using Spend Analysis to Help Agencies Take a More 
Strategic Approach to Procurement. GAO-04-870. Washington, D.C.: 
September 16, 2004. 

Best Practices: Improved Knowledge of DOD Service Contracts Could 
Reveal Significant Savings. GAO-03-661. Washington, D.C.: June 9, 2003. 

Contact Information: 

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

Footnote: 

[1] Examples of high-spend services procured by selected agencies 
included engineering and technical assistance, management support 
services, and data processing and telecommunication services. 

[End of Agencies' Use of Strategic Sourcing area] 

24. Opportunities to Help Reduce Government Satellite Program Costs: 

Government agencies could achieve considerable cost savings on some 
missions by leveraging commercial spacecraft through innovative 
mechanisms such as hosted payload arrangements and sharing launch 
vehicle costs. Selected agencies have reported saving hundreds of 
millions of dollars to date from using these innovative mechanisms. 

Why This Area Is Important: 

U.S. government satellite systems are a critical component of our 
nation's economy and the health and safety of its citizens. For 
example, we reported in September 2010 that the Department of 
Defense's (DOD) Global Positioning System (GPS) is a vital part of the 
infrastructure that supports major sectors including 
telecommunications, power distribution, banking, transportation, 
agriculture, and emergency services.[Footnote 1] In addition, we have 
repeatedly reported that environmental satellite data gathered by the 
National Oceanic and Atmospheric Administration (NOAA) and the 
National Aeronautics and Space Administration (NASA), as well as some 
DOD satellites, play a crucial role in our nation's ability to 
forecast the weather, predict the path and intensity of hurricanes, 
develop and manage water reservoirs, estimate food crop production, 
and predict the potential for solar activities to affect the power 
grid.[Footnote 2] In addition, the Federal Aviation Administration 
(FAA) and the U.S. Coast Guard are responsible for aircraft navigation 
and landing systems and maritime safety and law enforcement, 
respectively, and have used satellite-based sensors[Footnote 3] to 
improve their performance in these areas. 

These satellite systems can cost the government billions of dollars 
each year. For example, in recent years, more than $25 billion a year 
has been appropriated to agencies for developing space systems. 
[Footnote 4] Moreover, these systems are put in orbit by rockets that 
can cost from $80 million to $200 million per launch. DOD, in 
particular, plans to spend about $19 billion[Footnote 5] for launch 
services from fiscal years 2013 through 2017 for its Evolved 
Expendable Launch Vehicle--and total estimated program costs through 
2030 approach $70 billion.[Footnote 6] 

The President's National Space Policy issued in 2010 calls on federal 
departments and agencies to actively explore the use of inventive, 
nontraditional arrangements for acquiring commercial space products 
and services, including measures such as developing public-private 
partnerships,[Footnote 7] hosting government capabilities on 
commercial spacecraft, and purchasing scientific or operational data 
products from commercial satellite operators in support of government 
missions.[Footnote 8] In addition, DOD's Quadrennial Defense Review in 
2010 called for the department to leverage commercial expertise and 
partnerships to better ensure the resiliency of space systems. 
[Footnote 9] 

According to the Department of Commerce's Office of Space 
Commercialization, placing a government payload on a commercial 
satellite could cost a fraction of the amount of building, launching, 
and operating an entire satellite.[Footnote 10] For example, the 
Australian government recently contracted for a hosted payload for 
military communications from a commercial satellite operator, which 
Australia estimates will save them over $150 million over the 15-year 
life of the contract compared with the cost of acquiring their own 
satellite or leasing the capability.[Footnote 11] 

What GAO Found: 

As federal agencies and program managers strive to achieve their 
agency's missions and goals and provide accountability for their 
operations, the administration has directed that the agencies should 
seek to identify opportunities and implement approaches that could 
reduce the cost of government operations in order to help maintain 
effective and efficient stewardship of public resources.[Footnote 12] 
Government agencies seeking to save money and gain access to space can 
take advantage of several nontraditional approaches, including hosted 
payload arrangements where government instruments are placed on 
commercial satellites, and ride sharing arrangements where multiple 
satellites share the same launch vehicle. While selected space-based 
programs may not be able to use nontraditional approaches due to 
specific security or mission requirements, other programs could 
achieve benefits from doing so. Several federal agencies, including 
DOD, NASA, FAA, NOAA, and the U.S. Coast Guard, are actively using or 
beginning to look at these approaches in order to save costs. 
Specifically: 

* DOD has two ongoing hosted payload pilot missions and has taken 
preliminary steps to develop a follow-on effort.[Footnote 13] DOD 
estimated that the Commercially Hosted Infrared Payload Flight 
Demonstration Program answered the majority of the government's 
technical questions through its commercial partnership, while saving 
it over $200 million over a dedicated technical demonstration mission. 
In addition, DOD is investigating ride sharing to launch GPS 
satellites beginning in fiscal year 2017, which could save well over 
$60 million per launch. 

* NASA has two hosted payload technology-demonstration efforts under 
way. The agency has also collected information on potential ride 
sharing opportunities and available hosts for hosted payloads through 
requests for information to satellite operators. Because these 
initiatives are relatively new or planned, NASA does not yet have 
information on potential cost savings; the agency intends to obtain 
more information on the potential for cost savings through its 
requests for information, requests for proposals, and demonstrations. 

* FAA's Wide Area Augmentation System involves two satellite-based 
sensors carried on commercial satellites. This hosted payload 
arrangement was designed to improve the accuracy of GPS signals for 
aircraft navigation and landing. FAA conducted a lease versus buy 
analysis at the beginning of the program and found that a lease would 
be more cost-effective than the purchase of a satellite, saving $260 
million over the 21 year life cycle. 

* NOAA has performed studies of cost sharing opportunities, including 
through ride sharing and hosted payloads, but has not yet committed to 
such options. One potential opportunity is the total and spectral 
solar irradiance sensor, which NOAA intends to launch on a standalone 
satellite, called a free flyer. The agency is considering use of a 
launch vehicle with sufficient space to add the free flyer as a 
secondary payload. Because the agency has not finalized its plans, it 
did not provide information on any expected cost savings from using a 
ride sharing arrangement. 

* The U.S. Coast Guard explored the use of a satellite-based receiver 
for its Automatic Identification System.[Footnote 14] This hosted 
payload effort was designed to improve identifying and tracking ships 
at sea. While the original sensor failed in 2009, the capability 
exists on other satellites from the company that hosted the original 
payload, and the government now purchases these data. 

Moreover, NASA and the Air Force are working to collect and develop 
the types of information needed to facilitate more widespread 
government use of commercially hosted payloads and commercial ride 
sharing in the future. Specifically, NASA recently issued requests for 
information on potential hosts for hosted payloads in the low earth 
and geostationary orbits, including the weight and power available for 
potential secondary payloads, and also issued a request for 
information about potential commercial ride sharing. According to a 
NASA official, this information is intended to go into databases 
available to potential sensor developers. In addition, Air Force 
officials at its newly formed Hosted Payload Office told us that they 
are in the process of developing an acquisition strategy, with input 
from NASA, to facilitate the use of commercially hosted payloads as an 
alternative path to space from the typical government-owned satellite. 
As part of the strategy, a contract for an indefinite quantity of 
satellite services for a fixed period of time will be developed, which 
all government agencies will be able to use. They currently expect to 
complete this initial effort and hold meetings with commercial 
companies to discuss the strategy in the spring of 2013. Further, Air 
Force officials noted that they are developing a plan to allow for 
better decision making on hosted payload solutions. 

In addition to government efforts, the satellite industry has embraced 
the idea of hosting government payloads on commercial satellites. In 
2011, a group of satellite operators and manufacturers formed a 
satellite industry alliance to increase awareness of the benefits of 
hosted government payloads on commercial satellites as well as to 
facilitate communication between satellite companies and potential 
users. The alliance includes many U.S. and foreign satellite operators 
and manufacturers.[Footnote 15] Further, a commercial satellite 
operator reported that given approximately 3 years notice, all but one 
of their most recently launched geostationary satellites could have 
accommodated an additional payload. The one satellite that could not 
host additional payloads was already hosting a foreign government 
payload. The officials also stated that the company plans to launch 
approximately 20 satellites into geostationary orbit over the next 
decade and most of them could be built to accommodate a government 
payload. 

While ride sharing and hosted payloads clearly hold promise for 
providing lower-cost access to space in the future, there are also a 
variety of technical, cultural, logistical, and legal and policy 
challenges. Specifically: 

* Technical Challenges: Ensuring compatibility between sensors and 
host satellites could be a challenge when undertaking hosted payloads 
because of the variable interfaces on different companies' satellites. 
NOAA and NASA officials noted that the absence of standardized 
technical interfaces among the various companies present a challenge 
to potential government payload developers. To try to get insight on 
this issue, NASA officials stated that they had collected information 
on current interface parameters of potential commercial providers as 
part of their announcement of opportunities for the Earth Venture 
program.[Footnote 16] Further, not all commercial satellites may have 
sufficient power, or available space, for a hosted payload. In 
addition, finding hosted payload or ride share opportunities for 
certain orbits (such as polar orbits[Footnote 17]) could be difficult 
due to a lack of available commercial satellite launches in this 
orbital path or commercial providers could reposition the satellite 
once in orbit, which could impact an agency's mission. 

* Cultural Challenges: Government agencies that have traditionally 
managed their own space missions face cultural challenges in using 
hosted payload arrangements and GAO has previously found that the DOD 
space community is highly risk averse to adopting technologies from 
commercial providers that are new to DOD.[Footnote 18] In addition, 
agency officials expressed concerns about using a commercial host for 
their payloads, noting that they would lose some control over their 
missions. DOD and NOAA officials noted that their security and mission 
assurance requirements and processes may make integrating hosted 
payloads on commercial satellites more complicated to manage. Further, 
agency officials expressed concerns about scheduling launches and 
noted that commercial providers may not be flexible about changing 
launch dates if the instruments or satellites experience delays. 

* Logistical Challenges: There are logistical challenges in scheduling 
and funding hosted payload arrangements. The timeline associated with 
developing many sensors is much longer than that of commercial 
satellites, potentially creating difficulties in scheduling and 
funding hosted payload and ride sharing arrangements. NASA officials 
noted that the development of a government sensor would need to be 
under way well in advance before a decision would be made to pursue a 
commercial hosted payload arrangement. DOD officials also noted that 
their budget and planning process requires commitments to funding up 
to 2 years in advance of actually receiving those funds--which does 
not align well with commercial timelines. In addition, federal law 
generally prohibits agencies from paying in advance for a future 
service or from obligating future appropriations.[Footnote 19] 

* Legal and Policy Challenges: Federal law and policy have limited the 
government's access to some hosted payload and ride sharing options. 
Specifically, under federal statute, the federal government is 
required to acquire space transportation services from U.S. commercial 
providers unless exempted. In addition, the U.S. Space Transportation 
Policy authorized by the President in 2004 states that government 
payloads shall be launched on space launch vehicles manufactured in 
the United States, regardless of whether the payload is on a 
commercial or government satellite, unless otherwise exempted. 
[Footnote 20] According to both NASA and the commercial Hosted Payload 
Alliance, U.S. companies often rely on foreign launch vehicles to 
reach space. For instance, in the example noted previously in which a 
commercial company plans to launch multiple satellites over the next 
15 years, company officials noted that they plan to rely on foreign 
companies' launch vehicles because of limitations in U.S. companies' 
launch capacity and the cost of these launches.[Footnote 21] The U.S. 
Space Transportation Policy is currently undergoing revision, but no 
date has been announced for when the revised policy will be finalized. 

* In addition, there may be issues of liability or adherence to 
government policy, such as the U.S. Government Orbital Debris 
Mitigation Standard Practices,[Footnote 22] that agencies need to 
consider when determining whether it is cost effective to use hosted 
payloads or ride sharing. 

Actions Needed and Potential Financial or Other Benefits: 

Given the significant expense of space programs and the federal 
government's fiscal limitations, it is vital that the government 
manage its space programs and projects as efficiently and effectively 
as possible. While selected space-based programs may not be able to 
utilize opportunities for ride sharing and hosted payloads on 
commercial satellites due to specific security or mission 
requirements, agencies may be able to leverage these commercial 
opportunities to achieve significant cost savings. However, in order 
for the government to achieve this cost savings, there are key 
challenges that need to be addressed. 

Agency cultural barriers and certain technical and logistical 
challenges will likely only be resolved as agencies work with 
commercial satellite providers in developing and executing future 
missions. As they do this, collecting and disseminating lessons 
learned will be important. This will require effective leadership and 
commitment from senior officials across government. To help accomplish 
this, in February 2012, GAO suggested that the Director of the Office 
of Management and Budget (OMB) work with the National Security Council 
to assess options for providing strong centralized leadership of the 
space community in order to set priorities across individual agencies 
and to address inefficiencies.[Footnote 23] While OMB agreed that 
coordinating space activities across the government has been and 
continues to be a major challenge, it noted that it was concerned that 
the suggested action would add an extra layer of bureaucracy on top of 
ongoing coordination efforts, and could cause confusion about roles 
and authorities among the existing mechanisms. Subsequently, OMB 
stated that the administration is updating the U.S. Space 
Transportation Policy, in part to improve interagency coordination and 
collaboration. However, OMB does not believe any further actions are 
necessary. Though an update to the policy to improve interagency 
coordination could be beneficial, such changes do not address GAO's 
prior concerns with fragmented leadership and a lack of a single 
authority in overseeing the acquisition of space programs. As such, 
GAO maintains that assessing options for providing strong centralized 
leadership of the space community continues to have merit and should 
be implemented. 

In addition, to better take advantage of nontraditional approaches to 
save money in satellite programs, Congress may wish to consider the 
following action: 

* authorizing agencies enhanced flexibility to acquire certain 
satellite services related to hosted payload and ride sharing 
arrangements, when appropriately planned and justified. 

Moreover, although federal statute and the U.S. Space Transportation 
Policy were intended to support the U.S. industrial base by requiring 
the government to use U.S. commercial launch services, the policy 
significantly limits the government's ability to take advantage of 
available foreign commercial launch options for hosted payloads 
because many commercial satellite providers routinely use launch 
vehicles from other countries. Congress and the Executive Office of 
the President may wish to consider the following action: 

* revisiting the law and the policy to determine whether efforts 
should be made to provide federal agencies additional flexibility to 
select space transportation services and launch vehicles from other 
countries for hosted payloads to encourage cost savings. 

While using hosted payloads and ride sharing are likely to reduce 
government launch costs and savings estimates reported to date are in 
the hundreds of millions of dollars over the life of the projects, GAO 
is unable to quantify the potential for further financial benefits 
because there is too limited a pool of available data. Once the 
government has collected more data and gained more experience in 
collaborating with commercial satellite vendors on ride sharing and 
hosted payloads, actual data on cost savings and cost avoidances 
should be more readily available. 

Agency Comments and GAO's Evaluation: 

GAO provided a draft of this report section to OMB, as well as DOD, 
FAA, NASA, NOAA, and the U.S. Coast Guard for review and comment. OMB 
provided technical comments, which were incorporated as appropriate, 
but did not agree or disagree with our recommended action. DOD, NASA, 
NOAA, and the U.S. Coast Guard also provided technical comments, which 
were incorporated as appropriate. FAA responded by e-mail that they 
had no comments on the report section. 

How GAO Conducted Its Work: 

The information contained in this analysis is based, in part, on 
reports listed in the related GAO products section as well as on 
additional work GAO conducted. To identify potential opportunities for 
cost savings with federal government satellite programs, GAO reviewed 
existing government satellite programs and hosted payload efforts, as 
well as studies that looked at opportunities for government satellite 
cost savings and efficiency. GAO also reviewed academic and industry 
publications on existing hosted payload efforts, as well as ways and 
reasons to potentially increase their use. GAO interviewed agency 
officials at DOD, FAA, NASA, NOAA, and the U.S. Coast Guard, as well 
as officials from two commercial satellite companies that were 
selected based on their overall experience with satellite operations 
in two different arenas and because they had interest or experience 
related to hosted payloads. While these officials' views are not 
generalizable to all satellite companies, they provided us with useful 
information on hosted payload operations. 

Related GAO Products: 

Evolved Expendable Launch Vehicle: DOD Is Addressing Knowledge Gaps in 
Its New Acquisition Strategy. [hyperlink, 
http://www.gao.gov/products/GAO-12-822]. Washington, D.C.: July 26, 
2012. 

Polar-Orbiting Environmental Satellites: Changing Requirements, 
Technical Issues, and Looming Data Gaps Require Focused Attention. 
[hyperlink, http://www.gao.gov/products/GAO-12-604]. Washington, D.C.: 
June 15, 2012. 

NASA: Assessments of Selected Large-Scale Projects. [hyperlink, 
http://www.gao.gov/products/GAO-12-207SP]. Washington, D.C.: March 1, 
2012. 

Additional Cost Transparency and Design Criteria Needed for NASA 
Projects. [hyperlink, http://www.gao.gov/products/GAO-11-364R]. 
Washington, D.C.: March 3, 2011. 

Space Acquisitions: Challenges in Commercializing Technologies 
Developed under the Small Business Innovation Research Program. 
[hyperlink, http://www.gao.gov/products/GAO-11-]. Washington, D.C.: 
November 10, 2010. 

Global Positioning System: Challenges in Sustaining and Upgrading 
Capabilities Persist. [hyperlink, 
http://www.gao.gov/products/GAO-10-636]. Washington, D.C.: September 
15, 2010. 

Environmental Satellites: Strategy Needed to Sustain Critical Climate 
and Space Weather Measurements. [hyperlink, 
http://www.gao.gov/products/GAO-10-456]. Washington, D.C.: April 27, 
2010. 

Briefing on Commercial and Department of Defense Space System 
Requirements and Acquisition Practices. [hyperlink, 
http://www.gao.gov/products/GAO-10-315R]. Washington, D.C.: January 
10, 2010. 

Contact Information: 

For additional information about this area, contact David A. Powner at 
(202) 512-9286, or pownerd@gao.gov, or Cristina T. Chaplain at (202) 
512-4841, or chaplainc@gao.gov. 

Footnotes: 

[1] See GAO, Global Positioning System: Challenges in Sustaining and 
Upgrading Capabilities Persist, [hyperlink, 
http://www.gao.gov/products/GAO-10-636] (Washington, D.C.: Sept. 15, 
2010). 

[2] See GAO, Polar-Orbiting Environmental Satellites: Changing 
Requirements, Technical Issues, and Looming Data Gaps Require Focused 
Attention, [hyperlink, http://www.gao.gov/products/GAO-12-604] 
(Washington, D.C.: June 15, 2012) and Environmental Satellites: 
Strategy Needed to Sustain Critical Climate and Space Weather 
Measurements, [hyperlink, http://www.gao.gov/products/GAO-10-456] 
(Washington, D.C.: Apr. 27, 2010). 

[3] Satellite sensors are instruments that are used for remotely 
determining information about the earth's atmosphere, land surface, 
oceans, or the space environment. 

[4] A space system can include multiple components such as satellites, 
ground control stations, terminals, and user equipment. 

[5] During the agency review and comment period for this report 
section, DOD officials told us that this figure will be significantly 
lower due to negotiation for launch services with the United Launch 
Alliance. The new cost figure will be reported in the department's 
fiscal year 2014 budget, which has not yet been released. 

[6] The Evolved Expendable Launch Vehicle program launches satellites 
for military and intelligence customers. 

[7] Under the National Defense Authorization Act for Fiscal Year 2013, 
DOD now has the authority to enter into contracts and other agreements 
with commercial companies to enable these companies to share DOD space 
transportation resources and facilities (10 U.S.C. § 2276). DOD 
officials believe that this will help to reduce costs and make 
launches and testing more affordable. 

[8] Office of the President of the United States, National Space 
Policy of the United States of America, (Washington, D.C.: June 28, 
2010). 

[9] DOD, Quadrennial Defense Review Report (February 2010). 

[10] A payload is a system, sensor, or instrument that is to be 
launched on a satellite. 

[11] A study conducted by Washington, D.C.-based consulting firm, 
Avascent, for the hosting company, estimated that Australia saved $148 
million over the cost of acquiring a standalone satellite, and $613 
million over the cost of leasing equivalent capacity. 

[12] Exec. Order No. 13589, Promoting Efficient Spending, 76 Fed. Reg. 
70,863 (Nov. 9, 2011). 

[13] The missions are the Internet Protocol Routing in Space Joint 
Capability Technology Demonstration, which is to provide Internet 
routing onboard the satellite in order to provide users with increased 
speed and direct access to the Internet, eliminating the need for a 
ground-based teleport; and the Commercially Hosted Infrared Payload 
Flight Demonstration Program, which is an experiment designed to 
support next-generation infrared sensor development by placing a wide 
field of view infrared sensor on a commercial communications satellite. 

[14] The Nationwide Automatic Identification System enhances maritime 
domain awareness by combining Automatic Identification System data--
such as vessel location, source, and speed--with other government 
information and sensor data to form a holistic view of maritime vessel 
traffic near the continental United States and its territorial waters. 

[15] As of November 2012, the Hosted Payload Alliance board consisted 
of representatives from Arianespace, ATK Space Systems, Boeing, EADS 
North America, Harris, Intelsat General Corporation, Iridium, Lockheed 
Martin, Northrop Grumman, Orbital, Raytheon, SES Government Solutions, 
and Space Systems/Loral. 

[16] Under NASA's Earth Venture line of instrument and small mission 
opportunities, the agency awards contracts for small, targeted science 
investigations intended to complement its larger research missions. 
The first opportunity for space-based Earth Venture instruments was 
announced in February 2012, and proposals are now under review. NASA 
officials expect to continue to regularly award contracts for 
instruments that could be carried as secondary instruments on NASA-or 
partner-led missions, or as hosted payloads on commercial platforms. 

[17] Geostationary satellites maintain a fixed position relative to 
the earth and are used for many commercial communications purposes, 
while polar-orbiting satellites constantly circle the earth in an 
almost North-South orbit, providing global coverage of conditions that 
affect the weather and climate. 

[18] See GAO, Space Acquisitions: Challenges in Commercializing 
Technologies Developed under the Small Business Innovation Research 
Program, [hyperlink, http://www.gao.gov/products/GAO-11-21] 
(Washington, D.C.: Nov. 10, 2010). 

[19] With respect to prohibiting agencies from paying in advance for a 
future service, see 31 U.S.C. § 3324, and from obligating future 
appropriations, see 31 U.S.C. § 1341(a). 

[20] See 51 U.S.C. § 50131. While agencies can apply for waivers to 
the requirement under certain conditions, the decision to grant the 
waiver is made as a matter of discretion on a case-by-case basis. 
According to NASA officials, because the waivers are not guaranteed 
and may not be granted in a timely manner, it may be difficult for the 
government to commit to a scheduled launch. 

[21] A dearth of reliable, available launch vehicles has repeatedly 
affected government satellite programs. Specifically, we recently 
reported that 9 of 21 major NASA programs we reviewed had reported 
challenges associated with launch vehicles, including increasing costs 
and lack of availability of allowable launch vehicles. See GAO, NASA: 
Assessments of Selected Large-Scale Projects, [hyperlink, 
http://www.gao.gov/products/GAO-12-207SP] (Washington, D.C.: Mar. 1, 
2012). 

[22] According to the National Space Policy of the United States of 
America, government agencies must follow the U.S. Government Orbital 
Debris Mitigation Standard Practices. These practices require agencies 
to control the amount of debris released during normal space 
operations. Commercial companies are generally not required to adhere 
to these practices, unless they are providing services for federal 
agencies. If government agencies were to utilize commercial companies 
for hosted payloads or ride sharing, there could be additional costs 
for the government in order for the company to comply with the 
practices. 

[23] See GAO, 2012 Annual Report: Opportunities to Reduce Duplication, 
Overlap and Fragmentation, Achieve Savings, and Enhance Revenue, 
[hyperlink, http://www.gao.gov/products/GAO-12-342SP] (Washington, 
D.C.: Feb. 28, 2012). 

[End of Opportunities to Help Reduce Government Satellite Program 
Costs area] 

Health: 

25. Medicare Prepayment Controls: 

More widespread use of prepayment edits could reduce improper payments 
and achieve other cost savings for the Medicare program, as well as 
provide more consistent coverage nationwide. 

Why This Area Is Important: 

The Centers for Medicare & Medicaid Services (CMS) has estimated that 
$29.6 billion--or 8.5 percent--of the $350 billion in payments for 
services provided to about 37 million beneficiaries in the traditional 
Medicare fee-for-service program in 2012 were improper.[Footnote 1] In 
part due to Medicare's susceptibility to improper payments, GAO has 
designated it as a high-risk program. To better ensure the program's 
integrity, CMS has stated that one of its key goals is to pay Medicare 
claims properly the first time--that is, to ensure that payments go to 
legitimate providers in the right amounts for reasonable and necessary 
services covered by the program for eligible beneficiaries. One 
strategy that CMS uses to achieve this goal is the application of 
controls called prepayment edits, which are instructions programmed 
into claims processing systems to compare claims data to Medicare 
requirements in order to approve or deny claims or flag them for 
further review. For example, an edit may deny payment for quantities 
of service that exceed those provided under normal medical practice or 
that are anatomically impossible, such as more than one appendectomy 
on the same beneficiary. 

Many prepayment edits are designed to ensure that claims comply with 
Medicare coverage, payment, and coding policies. These policies may be 
established by law, by CMS, or by the contractors that process 
Medicare claims for CMS. The national Medicare coverage and payment 
policies set by CMS include national coverage determinations, which 
describe the circumstances under which Medicare will cover particular 
items or services nationwide, as well as policies on payments to 
providers and coverage limitations contained in the Medicare Claims 
Processing Manual and other CMS documents. In addition, each 
contractor has the authority to develop local coverage determinations 
that delineate the circumstances under which services will be 
considered "reasonable and necessary"[Footnote 2] and therefore 
covered in the geographic area in which that contractor processes 
claims, as long as these policies do not conflict with national 
policies established by CMS or by law. Prepayment edits may be 
implemented either at CMS's direction or independently by contractors. 
Because of the volume of claims processed--4.8 million per business 
day--most of the prepayment edits implemented by CMS and its 
contractors are automated, meaning that if a claim does not meet the 
criteria of the edit, it is automatically denied. Other prepayment 
edits are manual, meaning that they flag claims for review by trained 
contractor staff. 

GAO reported in March 2011 that weaknesses exist in CMS's prepayment 
controls for durable medical equipment claims, and these weaknesses 
may lead to contractors failing to identify potentially fraudulent 
claims.[Footnote 3] In November 2012, GAO examined further 
opportunities for CMS to improve and expand upon prepayment controls. 

What GAO Found: 

As GAO reported in November 2012, prepayment edits saved Medicare at 
least $1.76 billion in fiscal year 2010, according to CMS data, but 
savings could have been greater had CMS improved its processes for 
implementing edits based on national coverage, payment, and coding 
policies and encouraged more widespread use of effective local edits 
by contractors. GAO illustrated this point by analyzing paid Medicare 
claims from fiscal year 2010 for consistency with a few national 
policies and local coverage determinations, where payments could have 
been prevented through the use of prepayment edits. GAO's analysis 
identified $14.7 million in payments that appeared to be inconsistent 
with four national coverage or coding policies and therefore may have 
been overpayments. GAO also identified more than $100 million in 
payments that were inconsistent with three selected local coverage 
determinations and that could have been identified using automated 
edits.[Footnote 4] The latter payments were not necessarily improper, 
since not all contractors had local coverage determinations in place 
to prohibit them. However, these payments illustrate the potential 
savings that could have been achieved if these edits and the local 
coverage determinations on which they were based had been implemented 
nationwide. 

Although CMS has three processes in place to identify the need for and 
to develop prepayment edits based on national policies, these 
processes have weaknesses that diminish their effectiveness in 
preventing improper payments. Comparing the processes to Standards for 
Internal Control in the Federal Government,[Footnote 5] GAO found 
weaknesses, including the (1) lack of specific time frames for 
implementing edits and other corrective actions; (2) lack of 
centralization in the implementation of some edits, which leads to 
inconsistencies; (3) incomplete assessment of whether edits are 
working as intended; and (4) lack of full documentation of the 
processes. For example, CMS has sometimes assigned responsibility to 
contractors to independently program edits based on national coverage 
determinations for the geographic areas in which they process claims, 
because there is a queue for implementing system changes centrally, 
and the contractors can sometimes implement edits more quickly. CMS 
officials acknowledged that having multiple contractors program some 
of these edits may have led to inconsistent implementation of national 
coverage policy, particularly since each contractor must update the 
edits regularly to reflect changes in the coding system used for 
claims. GAO's analysis of fiscal year 2010 Medicare claims found cases 
where inconsistent implementation of national coverage determinations 
may have led to improper payments. Specifically, of the $14.7 million 
in potential overpayments related to national policies, GAO found $6.1 
million in payments that appeared to be inconsistent with three 
selected national coverage determinations. 

GAO also reported a weakness in the structure of CMS's Medically 
Unlikely Edits, which deny payment for services when the quantity 
billed by the same provider on the same day is above limits set by 
CMS. CMS sets these quantity limits at a level not likely to be 
provided on a single day under normal medical practice to a single 
beneficiary, such as daily doses of drugs that far exceed the maximum 
quantity that a provider would prescribe under most circumstances. 
Medically Unlikely Edits are designed to look for excess quantities of 
services billed on an individual line of a single claim, but Medicare 
claims can have multiple lines for services. As a result, the limits 
for Medically Unlikely Edits can be exceeded if the excess quantities 
are broken up and claimed on multiple lines or on multiple claims. CMS 
allows exceptions to the limits when providers believe the services 
are clinically appropriate, and providers can include special codes 
called modifiers on these claims to indicate why the services were 
clinically appropriate. However, of the $14.7 million in potential 
overpayments related to national edits, GAO found $8.6 million in 
potential overpayments for claims that exceeded the limits for 
Medically Unlikely Edits and did not include appropriate modifiers. 
The vast majority of these payments ($8.2 million) were for claims in 
which the excess quantity of services was spread over multiple claim 
lines. 

GAO also reported that CMS could do more to encourage contractors to 
implement prepayment edits at the local level. Specifically, CMS could 
inform contractors about edits that other contractors had implemented 
based on their local coverage determinations and that these other 
contractors considered particularly effective in preventing the 
largest amount of payments for services they did not consider 
reasonable and necessary. More widespread use of such edits could have 
led to more consistent coverage throughout the country and to savings 
for the Medicare program as a whole. Currently, CMS does not have a 
complete, accurate, and centralized source of information on edits 
that would enable the agency to identify contractors' most effective 
edits and facilitate information sharing. 

In addition, the financial incentives CMS offers to contractors to 
promote use of effective edits are relatively small. Under the terms 
of their contracts, contractors may earn an incentive, known as an 
award fee, based on performance, in addition to reimbursement for 
allowable costs and a fixed base fee. Although CMS increased by 12 
percent the funding available to contractors for activities related to 
prepayment edits and associated claims review in fiscal year 2011, the 
award fees allocated to the one performance area most directly related 
to prepayment edits and associated claims review accounted for 3 
percent or less of the pool of award fees available to any contractor. 
Award fee dollars allocated to this area ranged from about $20,000 to 
about $82,000--out of total award fees ranging from $1 million to $3.2 
million--for those contractors whose award fee plans included this 
area in fiscal year 2011. 

Actions Needed and Potential Financial or Other Benefits: 

To achieve cost savings and help ensure proper payment, GAO 
recommended in November 2012 that the Administrator of CMS take the 
following five actions: 

* centralize within CMS the development and implementation of 
automated edits based on national coverage determinations to ensure 
greater consistency; 

* develop written procedures to provide guidance to agency staff on 
all steps in the processes for developing and implementing edits based 
on national policies, including time frames for taking corrective 
actions and methods for assessing the effects of corrective actions; 

* implement Medically Unlikely Edits that assess all quantities 
provided to the same beneficiary by the same provider on the same day, 
so providers cannot avoid claim denials by billing for services on 
multiple claim lines or multiple claims without including modifiers 
that reflect a declaration that quantities above the normal limit are 
reasonable and necessary; 

* improve the data collected about local prepayment edits to enable 
CMS to identify the most effective edits and the local coverage 
policies on which they are based and disseminate this information to 
contractors for their consideration; and: 

* assess the feasibility of providing increased incentives to 
contractors to implement effective prepayment edits. 

While the specific potential financial benefit of these actions cannot 
be quantified because the number of new edits that could be 
implemented at the national or local level--and the payments they 
would prevent--is not known, GAO's work illustrates that greater use 
of effective prepayment edits could help to reduce potential improper 
payments, generate savings to the Medicare program, and promote 
greater consistency in coverage nationwide. 

Agency Comments and GAO's Evaluation: 

In commenting on the November 2012 report on which this analysis is 
based, the Department of Health and Human Services generally concurred 
with GAO's recommendations and stated that CMS was taking or planned 
to take steps to address them. 

GAO provided a draft of this report section to the Department of 
Health and Human Services for review and comment. The Department of 
Health and Human Services provided technical comments, which were 
incorporated as appropriate. 

How GAO Conducted Its Work: 

The information contained in this analysis is based on findings from 
the product listed in the related GAO products section. GAO analyzed 
Medicare claims for consistency with selected coverage policies, 
reviewed CMS and contractor documents, and interviewed officials from 
CMS and selected contractors. GAO assessed the processes to identify 
the need for and implement edits against its standards for internal 
controls. Table 18 in appendix IV lists the program GAO identified 
that might have opportunities for cost savings or revenue enhancement. 

Related GAO Products: 

Medicare Program Integrity: Greater Prepayment Control Efforts Could 
Increase Savings and Better Ensure Proper Payment. [hyperlink, 
http://www.gao.gov/products/GAO-13-102]. Washington, D.C.: November 
13, 2012. 

High-Risk Series: An Update. [hyperlink, 
http://www.gao.gov/products/GAO-11-278]. Washington, D.C.: February 
2011. 

Medicare: Improvements Needed to Address Improper Payments for Medical 
Equipment and Supplies. [hyperlink, 
http://www.gao.gov/products/GAO-07-59]. Washington, D.C.: January 31, 
2007. 

Contact Information: 

For additional information about this area, contact Kathleen M. King 
at (202) 512-7114 or kingk@gao.gov. 

Footnotes: 

[210] An improper payment is any payment that should not have been 
made or that was made in an incorrect amount (including overpayments 
and underpayments) under statutory, contractual, administrative, or 
other legally applicable requirements. Improper Payments Elimination 
and Recovery Act of 2010, Pub. L. No. 111-204, § 2(e), 124 Stat. 2224, 
2227 (codified at 31 U.S.C. § 3321 note). 

[211] The Medicare program has defined certain categories of items and 
services as being eligible for coverage, and it excludes from coverage 
items or services that are determined not to be "reasonable and 
necessary" for the diagnosis and treatment of an illness or injury or 
to improve functioning of a malformed body part. 42 U.S.C. § 
1395y(a)(1)(A). CMS determines which services are covered under what 
conditions within the broad categories defined in law. 

[212] These weaknesses were reported in GAO, Opportunities to Reduce 
Potential Duplication in Government Programs, Save Tax Dollars, and 
Enhance Revenue, [hyperlink, http://www.gao.gov/products/GAO-11-318SP] 
(Washington, D.C.: Mar.1, 2011) and progress identified in Follow-up 
on 2011 Report: Status of Actions Taken to Reduce Duplication, 
Overlap, and Fragmentation, Save Tax Dollars, and Enhance Revenue, 
[hyperlink, http://www.gao.gov/products/GAO-12-453SP] (Washington, 
D.C.: Feb. 28, 2012) as part of an overall examination of cost-saving 
efforts involving claim reviews. 

[213] These local coverage determinations were unrelated to the 
national coverage and coding policies that GAO analyzed. 

[214] GAO, Standards for Internal Control in the Federal Government, 
[hyperlink, http://www.gao.gov/products/GAO/AIMD-00-21.3.1] 
(Washington, D.C.: November 1999). 

[End of Medicare Prepayment Controls area] 

26. Medicaid Supplemental Payments: 

To improve the transparency of and accountability for certain high-
risk Medicaid payments that annually total tens of billions of 
dollars, Congress should consider requiring the Centers for Medicare & 
Medicaid Services 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, which could lead to cost savings. GAO's 
analysis for providers for which data are available suggests that 
savings could be in the hundreds of millions, or billions, of dollars. 

Why This Area Is Important: 

Medicaid--the joint federal-state program that finances health care 
for certain low-income individuals--cost the federal government and 
states an estimated $410 billion in 2011. States pay qualified health 
care providers for covered services delivered to Medicaid 
beneficiaries and obtain federal matching funds for the federal share 
of these payments. In addition to regular Medicaid payments for 
covered services, states also make and obtain federal matching funds 
for supplemental payments, for example, to offset uncompensated care 
costs for Medicaid patients. Such payments are a significant and 
growing component of Medicaid spending. States reported spending at 
least $43 billion on Medicaid supplemental payments in fiscal year 
2011, up from $32 billion in fiscal year 2010 and $23 billion in 
fiscal year 2006. In November 2012, GAO reported that these amounts 
were likely understated because reporting of supplemental payments was 
incomplete. 

States make two general types of Medicaid supplemental payments. 
First, under federal Medicaid law, states are required to make 
disproportionate share hospital (DSH) payments to certain hospitals. 
These payments are designed to help offset these hospitals' 
uncompensated care costs for serving Medicaid and uninsured low-income 
patients. States' Medicaid payment rates are not required to cover the 
full costs of providing care to Medicaid beneficiaries, and many 
providers also provide care to low-income patients without any 
insurance or ability to pay. Under federal law, DSH payments are 
capped at a facility-specific level and state level. Second, many 
states also make another type of Medicaid supplemental payment--
referred to here as non-DSH supplemental payments--to hospitals and 
other providers, who, for example, serve high-cost Medicaid 
beneficiaries. Unlike DSH payments, non-DSH supplemental payments are 
not required under federal law, do not have a specified statutory or 
regulatory purpose, and are not subject to firm dollar limits at the 
facility or state level. Unlike regular Medicaid payments, which are 
paid on the basis of covered Medicaid services provided to Medicaid 
beneficiaries through an automated claims process, non-DSH 
supplemental payments are not necessarily made on the basis of claims 
for specific services to particular patients and can amount to tens or 
hundreds of millions of dollars to a single provider, annually. States 
make non-DSH supplemental payments under the flexibility of Medicaid's 
upper payment limit, which allows states to obtain federal matching 
payments for payments up to the amount Medicare, the federal program 
covering individuals age 65 and older and certain others, would pay 
for the same group of services.[Footnote 1] Non-DSH supplemental 
payments have increased significantly in recent years. They now exceed 
DSH payments in total payment amounts, with states reporting about $26 
billion in non-DSH supplemental payments in fiscal year 2011, compared 
to over $17 billion in DSH payments. 

For about two decades, GAO has raised concerns about supplemental 
payments and the adequacy of federal oversight. GAO has designated 
Medicaid a high-risk program, in part due to these concerns. For 
example, in February 2004, GAO reported that some states made 
relatively large non-DSH supplemental payments to relatively small 
numbers of government-owned providers and that these providers were 
then sometimes required to return these payments to the states, 
resulting in an inappropriate increase in federal matching funds. 
Since 2010, states have been required to submit annual facility-
specific reports and annual independent certified audits on the first 
type of supplemental payments--DSH payments. In connection with the 
independent audit requirement, standard methods were established for 
calculating DSH payment amounts. In its March 2011 annual report on 
duplication, overlap, and fragmentation, GAO reported that improved 
oversight of Medicaid supplemental payments had the potential to 
generate cost savings. Specifically, GAO reported that the Centers for 
Medicare & Medicaid Services (CMS) should establish uniform guidance 
for states that sets acceptable methods for calculating non-DSH 
payment amounts; require facility specific reporting of non-DSH 
supplemental payments; and develop a strategy to ensure that all state 
supplemental payment arrangements have been reviewed by CMS. CMS's 
progress to address this action can be found in GAO's Action Tracker. 
GAO has also examined the oversight information available on non-DSH 
supplemental payments, including that from the DSH audits and facility-
specific reports. 

CMS, an agency within the Department of Health and Human Services, is 
responsible for overseeing state Medicaid programs at the federal 
level. CMS responsibilities include helping ensure that state Medicaid 
payments are for Medicaid-covered services and beneficiaries and 
comply with Medicaid payment principles, in particular, that payments 
to providers are consistent with economy, efficiency, and quality of 
care. 

What GAO Found: 

In November 2012, GAO reported its analysis of non-DSH supplemental 
payments, which demonstrated how improved transparency of and 
accountability for these payments could help CMS ensure payments are 
used for Medicaid purposes and are consistent with Medicaid payment 
principles. In its report, GAO analyzed data on total regular Medicaid 
and non-DSH supplemental payments and compared these payments, for 
individual providers, to each provider's actual Medicaid costs that 
are captured in cost reports and summarized for certain facilities in 
the recently implemented facility-specific DSH reports.[Footnote 2] 
GAO's analysis of the available information suggests many states are 
making Medicaid payments to many providers that are far in excess of 
those providers' costs of providing Medicaid services. GAO found that 
at least one hospital in each of 39 states submitting a DSH report 
received total regular Medicaid and non-DSH supplemental payments in 
excess of Medicaid costs. Specifically, in these 39 states, a total of 
505 DSH hospitals received total regular Medicaid and non-DSH 
supplemental payments in excess of Medicaid costs by a total of about 
$2.7 billion. In some cases, payments greatly exceeded costs; for 
example, one hospital received almost $320 million in non-DSH payments 
and $331 million in regular Medicaid payments, which exceeded the $410 
million in costs reported for the hospital for providing Medicaid 
services by about $241 million. 

Medicaid payments that greatly exceed Medicaid costs raise questions 
about the purpose of the payments. Transparency regarding these 
payments could help CMS understand how payments relate to Medicaid 
services, whether payments are consistent with economy and efficiency, 
and whether payments contribute to beneficiaries' access to quality 
care. Having annual facility-specific information on non-DSH payments, 
guidance on acceptable methods for calculating non-DSH payments, and 
annual independent audits of these payments could improve CMS's 
oversight by enabling the agency to assess the relationship of 
Medicaid payments to Medicaid costs for each facility and identify 
payments that are not appropriate.[Footnote 3] Such requirements do 
not currently exist for non-DSH payments. Improved CMS oversight could 
lead to corrective actions to reduce inappropriate payments in the 
future, which could potentially provide cost savings. GAO has 
previously recommended that CMS take actions to improve its oversight 
of non-DSH supplemental payments, including recommendations in 
February 2004 to require facility-specific reporting of non-DSH 
supplemental payment information and to clarify guidance on 
permissible methods for calculating these payments. As of November 
2012, CMS had no plans to require states to report information on non-
DSH payments made to individual providers, clarify permissible methods 
for calculating non-DSH payments, or require annual independent audits 
of states' non-DSH payments, because in its view legislation has been 
crucial to implementing similar requirements for DSH payments. 

Actions Needed and Potential or Other Financial Benefits: 

To improve the oversight of non-DSH supplemental payments, GAO 
suggested in November 2012 that Congress should consider requiring the 
Administrator of CMS to take the following three actions: 

* improve state reporting of non-DSH supplemental payments, including 
requiring annual reporting of payments made to individual facilities 
and other information that the agency determines is necessary to 
oversee non-DSH payments; 

* clarify permissible methods of calculating non-DSH supplemental 
payments; and: 

* require states to submit an annual independent certified audit 
verifying state compliance with permissible methods for calculating 
non-DSH supplemental payments. 

Estimating the extent of potential cost saving is difficult because of 
the discretion states have in setting Medicaid payment rates. For 
example, GAO's analysis for providers for which data are available 
suggests that savings could be in the hundreds of millions, or 
billions, of dollars. However, CMS lacks the information to determine 
the extent and appropriateness of these payments, which would be 
necessary in order to estimate cost savings. The three actions are 
intended to improve CMS's ability to identify and then assess the 
appropriateness of payments that greatly exceed provider costs and to 
subject these payments to independent audit. 

Agency Comments and GAO's Evaluation: 

In commenting on a draft of the November 2012 report on which this 
analysis is based, the Department of Health and Human Services, agreed 
that improved reporting and oversight of non-DSH supplemental payments 
was needed. The Department of Health and Human Services also noted 
that some efforts were under way to do so, including a comprehensive 
review of state supplemental payment methodologies to ensure that 
payments are compliant with Medicaid statute and federal regulation. 

GAO provided a draft of this report section to the Department of 
Health and Human Services for review and comment. The Department of 
Health and Human Services did not provide comments on this report 
section. 

How GAO Conducted Its Work: 

The information contained in this analysis is based on findings from 
the products in the related GAO products section. To determine the 
information that existed to oversee non-DSH supplemental payments, GAO 
reviewed relevant federal laws, regulations, and guidance. In 
addition, GAO analyzed data on non-DSH supplemental payments, Medicaid 
payments, and Medicaid costs that were reported for DSH hospitals in 
states' 2010 DSH reports of 2007 Medicaid payments. Specifically, for 
each DSH hospital GAO compared total Medicaid payments (regular 
Medicaid and non-DSH supplemental payments) to Medicaid costs and 
identified DSH hospitals in which payments exceeded costs. In 
reviewing the DSH report data, GAO removed hospitals with incomplete 
information or for which independent auditors had raised questions 
about data reliability or the hospital's qualifications for receiving 
a DSH payment. GAO also conducted interviews with CMS officials. 
Determining the appropriateness of individual payments was beyond the 
scope of GAO's current work. Table 19 in appendix IV lists the program 
GAO identified that might have opportunities for cost savings or 
revenue enhancement. 

Related GAO Products: 

Medicaid: More Transparency of and Accountability for Supplemental 
Payments Are Needed. [hyperlink, 
http://www.gao.gov/products/GAO-13-48]. Washington, D.C.: November 26, 
2012. 

Medicaid: States Reported Billions More in Supplemental Payments in 
Recent Years. [hyperlink, http://www.gao.gov/products/GAO-12-694]. 
Washington, D.C.: July 20, 2012. 

Opportunities to Reduce Potential Duplication in Government Programs, 
Save Tax Dollars, and Enhance Revenue. [hyperlink, 
http://www.gao.gov/products/GAO-11-318SP]. Washington, D.C.: March 1, 
2011. 

High-Risk Series: An Update. [hyperlink, 
http://www.gao.gov/products/GAO-11-278]. Washington, D.C.: February 
2011. 

Medicaid: Ongoing Federal Oversight of Payments to Offset 
Uncompensated Hospital Care Costs Is Warranted. [hyperlink, 
http://www.gao.gov/products/GAO-10-69]. Washington, D.C.: November 20, 
2009. 

Medicaid: Improved Federal Oversight of State Financing Schemes Is 
Needed. [hyperlink, http://www.gao.gov/products/GAO-04-228]. 
Washington, D.C.: February 13, 2004. 

Contact Information: 

For additional information about this area, contact Katherine Iritani 
at (202) 512-7114 or iritanik@gao.gov. 

Footnotes: 

[1] Non-DSH supplemental payments are based on the difference between 
states' regular Medicaid payments and the upper payment limit on what 
the federal government will pay as its share of Medicaid payments for 
different classes of covered services. The upper payment limit is 
based on what Medicare--the federal health program that covers 
individuals aged 65 and over, individuals with end-stage renal 
disease, and certain disabled individuals--would pay for comparable 
services. The upper payment limit is not a facility-specific limit but 
is applied to all providers within three ownership categories: local 
(nonstate) government-owned or local (nonstate) government-operated 
facilities, state-government-owned or state-government-operated 
facilities, and privately owned and operated facilities. As a result, 
states have some discretion in how they distribute non-DSH 
supplemental payments to individual providers. Separate upper payment 
limits exist for inpatient services provided by hospitals, nursing 
facilities, and intermediate care facilities for individuals with 
intellectual disabilities, and outpatient services provided by 
hospitals and clinics. 

[2] The information available on non-DSH supplemental payments is 
limited, in that only the non-DSH payments received by hospitals that 
receive DSH payments can be found in the annual DSH reports that 
states must submit, so that any non-DSH payments received by other 
hospitals or facilities, such as nursing homes, are not reported. 
Payments to these other facilities can be significant; for example, 
non-DSH supplemental payments to these other facilities were at least 
$1.6 billion in fiscal year 2010. 

[3] GAO found that initial DSH audits--for which CMS will not take 
action during a certain transition period allowing states to correct 
identified problems--had identified many areas where state DSH 
payments were not compliant with DSH payment requirements. States will 
need to take corrective actions during the transition period in order 
to avoid potential loss of federal funds or having to redistribute 
payments to other hospitals that are qualified to receive DSH 
payments. The audits also examined and reported on the data sources 
and methods used for calculating DSH payments. 

[End of Medicaid Supplemental Payments area] 

27. Medicare Advantage Quality Bonus Payment Demonstration: 

Rather than implementing the Medicare Advantage quality bonus payment 
program specifically established by law, the Centers for Medicare & 
Medicaid Services is testing an alternative bonus payment structure 
under a broad demonstration authority through a 3-year demonstration 
that has design flaws, raises legal concerns, and is estimated to cost 
over $8 billion; about $2 billion could be saved if it were canceled 
for its last year, 2014. 

Why This Area Is Important: 

GAO has designated Medicare as a high-risk program in part because of 
major payment challenges involving the Medicare Advantage (MA) 
program.[Footnote 1] The MA program, an alternative to the original 
Medicare program, provides health care coverage to about a quarter of 
all Medicare beneficiaries through private health plans offered by 
organizations under contract with the Centers for Medicare & Medicaid 
Services (CMS). MA organizations generally offer beneficiaries one or 
more plans to choose from--with different coverage, premiums, and cost-
sharing features--in the areas they serve. To help beneficiaries 
select an MA plan, CMS rates MA contractors on a 5-star scale, with 5 
stars indicating the highest quality.[Footnote 2] 

The 2010 Patient Protection and Affordable Care Act as amended (PPACA) 
changed the way Medicare pays MA plans in several ways. CMS's 
actuaries estimated that the implementation of PPACA's reforms would 
reduce Medicare payments to MA plans by $145 billion over 9 years and 
would cause plans to offer less generous benefit packages.[Footnote 3] 
They also projected that MA enrollment in 2017 would be half as much 
as it would have been in PPACA's absence. Among its reforms, PPACA 
provided that plans with 4 or more stars receive quality bonus 
payments that were to be phased in from 2012 to 2014. However, rather 
than implementing PPACA's quality bonus program, CMS initiated a 3-
year demonstration to test an alternative bonus payment structure 
under authority provided in section 402 of the Social Security 
Amendments of 1967 as amended. This authority allows CMS to conduct 
demonstration projects to determine whether, and if so which, changes 
in payment methods would increase the efficiency and economy of 
Medicare services through the creation of additional incentives, 
without adversely affecting quality. Compared with PPACA, the MA 
Quality Bonus Payment Demonstration extends the bonuses to plans with 
3 or more stars, accelerates the phase-in of the bonuses for plans 
with 4 or more stars, and increases the size of the bonuses in 2012 
and 2013. Whereas about one-third of MA enrollees would have been 
covered by contracts eligible for a bonus in 2012 and 2013 under 
PPACA, about 90 percent of enrollees are covered by such contracts in 
these 2 years under the demonstration. 

What GAO Found: 

As GAO reported in March 2012, CMS's actuaries have estimated that the 
MA Quality Bonus Payment Demonstration will cost $8.35 billion over 10 
years, most of which will be paid to plans with average performance--
those receiving 3 and 3.5 stars.[Footnote 4] About $5.34 billion of 
this estimate is attributed to bonuses more generous than those 
prescribed in PPACA. Most of the remaining projected cost stems from 
higher MA enrollment because the bonuses enable MA plans to offer 
beneficiaries more benefits or lower premiums. Taken together, the 
expanded bonuses and higher MA enrollment mainly benefit 3-star and 
3.5-star plans. In addition, CMS's actuaries have estimated that the 
demonstration will offset (i.e., compensate plans for money they would 
otherwise be losing) more than one-third of the reduction in MA 
payments projected to occur under PPACA during the demonstration 
years. The largest annual offset is estimated to have occurred in 
2012--71 percent--followed by 32 percent in 2013 and 16 percent in 
2014. 

The MA Quality Bonus Payment Demonstration does not--and is not 
required by law to--conform to the principles of budget neutrality 
(i.e., the total costs of a demonstration cannot exceed the total 
costs in its absence). Officials from the Office of Management and 
Budget told us that they considered the costs of the demonstration in 
the context of other administrative actions in the Medicare program 
that are expected to generate savings, such as an adjustment to 
skilled nursing facility payment rates. However, they did not confirm 
whether specific offsets were identified to account for the total 
costs of the demonstration. 

The MA Quality Bonus Payment Demonstration dwarfs all other Medicare 
demonstrations--both mandatory and discretionary--conducted since 1995 
in its estimated budgetary impact and is larger in size and scope than 
many of them. The estimated budgetary impact of the demonstration, 
adjusted for inflation, is at least seven times larger than that of 
any other Medicare demonstration conducted since 1995 and is greater 
than the combined budgetary impact of all of those demonstrations. 
While the demonstration is similar in scale to some Medicare Part D 
demonstrations, it is unlike many Medicare pay-for-performance 
demonstrations in that it is implemented nationwide and allows all 
eligible entities to participate.[Footnote 5] 

The design of the demonstration precludes a credible evaluation of its 
effectiveness in achieving CMS's stated research goal--to test whether 
a scaled bonus structure leads to larger and faster annual quality 
improvement compared with what would have occurred under PPACA. 
Notably, because the demonstration lacks an appropriate comparison 
group that can represent what would have occurred under PPACA, it is 
not possible to isolate its effects. Furthermore, the demonstration's 
bonus payments are based largely on plan performance that predates the 
demonstration. All the performance data used to determine the 2012 
bonus payments and nearly all the data used to determine the 2013 
bonus payments were collected before the demonstration's final 
specifications were published. Accordingly, the demonstration's 
incentives to improve quality can have a full impact only in 2014, the 
demonstration's last year. In addition, the demonstration's design is 
inconsistent with CMS's research goal. First, the demonstration's 
bonus percentages are not continuously scaled. For example, in 2014, 
plans with 4, 4.5, and 5 stars will all receive the same bonus 
percentage. Second, the demonstration's bonus percentages in 2014 do 
not offer all plans better incentives than PPACA to achieve higher 
star ratings. In particular, most plans improving from 3.5 to 4 stars 
in 2014 would receive a larger increase in their bonus payment under 
PPACA. Furthermore, any effects that are observed could be 
attributable, at least in part, to other MA payment and policy changes. 

As GAO reported in July 2012, the demonstration's design also raises 
legal concerns about whether it falls within the Department of Health 
and Human Services' demonstration authority. Section 402(a)(1)(A) of 
the Social Security Amendments of 1967 as amended provides the 
Secretary of Health and Human Services with broad authority to modify 
Medicare payment methods; however, payment changes initiated under 
this authority must meet the criteria set forth in the statute, 
including providing additional incentives to increase the efficiency 
and economy of Medicare services and enabling a determination of 
whether the changes in payment methods actually increase the 
efficiency and economy of such services. Although a demonstration need 
not in fact result in increased efficiency and economy, it must meet 
these criteria. However, CMS has not established that either of these 
elements is present in the MA Quality Bonus Payment Demonstration. 

Actions Needed and Potential Financial or Other Benefits: 

GAO recommended in March 2012 that the Secretary of Health and Human 
Services should take the following action: 

* cancel the MA Quality Bonus Payment Demonstration and allow the MA 
quality bonus payment system established by PPACA to take effect. If, 
at a future date, the Secretary finds that this system does not 
adequately promote quality improvement, the Department of Health and 
Human Services should determine ways to modify that system, which 
could include conducting an appropriately designed demonstration. 

Although the demonstration is now in its second year, the Department 
of Health and Human Services still has an opportunity to achieve 
significant cost savings--about $2 billion, based on CMS actuaries' 
estimates--if it cancels the demonstration for 2014.[Footnote 6] 

Agency Comments and GAO's Evaluation: 

In commenting on the March 2012 report on which this analysis is 
based, the Department of Health and Human Services disagreed with 
GAO's recommendation to cancel the demonstration and its finding about 
the demonstration's design shortcomings. The agency stated that, 
unlike PPACA's quality bonus payment system, the demonstration 
provides an immediate incentive for many plans to improve the quality 
of care delivered to MA beneficiaries. The Department of Health and 
Human Services also noted that (1) the demonstration provides an 
incrementally larger quality bonus for each increase in an MA plan's 
star rating, with the exception of bonuses to plans with 4 or more 
stars in 2014, (2) it will compare the impact of the demonstration--as 
measured by plans' 2012 and 2013 star ratings--to what would have 
occurred under PPACA--as shown in their 2014 star ratings, and (3) it 
will determine the demonstration's impact on quality improvement by 
comparing MA plans' performance with that of non-MA plans. 

After reviewing the Department of Health and Human Services' response, 
GAO determined in its March 2012 report that its recommendation is 
warranted and its finding is sound. Regarding the Department of Health 
and Human Services' disagreement with the recommendation, GAO noted 
that the bonuses paid in 2012 and 2013 under both PPACA and the 
demonstration would primarily reward past performance, with the 
demonstration doing so far more generously. In addition, PPACA's bonus 
structure in 2014 provides many plans better incentives than the 
demonstration to achieve higher star ratings. In response to the 
Department of Health and Human Services' disagreement with the finding 
on the demonstration's design, GAO noted that 4-star and 4.5-star 
plans receive the same bonus percentage in all 3 years of the 
demonstration. In addition, GAO noted that the Department of Health 
and Human Services' planned comparison methodology fails to 
distinguish between predemonstration and demonstration performance. 
Specifically, the 2012 star ratings are based on data collected almost 
entirely before the demonstration's final specifications were 
published and, therefore, cannot be used to measure the 
demonstration's impact. The 2014 star ratings will be based on data 
collected during the demonstration and, therefore, will reflect the 
demonstration's incentives. Finally, GAO stated that non-MA plans are 
not an appropriate comparison group because they may serve different 
populations, may follow different regulations or policies, and may 
have different incentives to improve quality than MA plans. 

GAO provided a draft of this report section to the Department of 
Health and Human Services for review and comment. The Department of 
Health and Human Services did not provide comments on this report 
section. 

How GAO Conducted Its Work: 

The information contained in this analysis is based on findings from 
the products in the related GAO products section. GAO reviewed 10-year 
cost estimates, evaluation plans, and other documents related to the 
MA Quality Bonus Payment Demonstration. GAO also reviewed the budget 
neutrality policy for Medicare demonstrations, Office of Management 
and Budget cost estimates and CMS documents on Medicare 
demonstrations, and literature on evaluating Medicare demonstrations. 
In addition, GAO interviewed officials from CMS and the Office of 
Management and Budget. Finally, GAO reviewed the law governing 
Medicare demonstrations under section 402 of the Social Security 
Amendments of 1967 as amended and CMS's response to questions about 
how the MA Quality Bonus Payment Demonstration meets the law's 
requirements. 

Related GAO Products: 

Medicare Advantage: Quality Bonus Payment Demonstration Has Design 
Flaws and Raises Legal Concerns. [hyperlink, 
http://www.gao.gov/products/GAO-12-964T]. Washington, D.C.: July 25, 
2012. 

Medicare Advantage Quality Bonus Payment Demonstration. [hyperlink, 
http://www.gao.gov/products/B-323170]. Washington, D.C.: July 11, 2012. 

-323170 

Medicare Advantage: Quality Bonus Payment Demonstration Undermined by 
High Estimated Costs and Design Shortcomings. [hyperlink, 
http://www.gao.gov/products/GAO-12-409R]. Washington, D.C.: March 21, 
2012. 

Contact Information: 

For additional information about this area, contact James C. Cosgrove 
at (202) 512-7114 or cosgrovej@gao.gov. 

Footnotes: 

[1] See GAO, Medicare Advantage: Quality Bonus Payment Demonstration 
Undermined by High Estimated Costs and Design Shortcomings, 
[hyperlink, http://www.gao.gov/products/GAO-12-409R] (Washington, 
D.C.: Mar. 21, 2012). 

[2] MA plans' overall star ratings indicate their performance relative 
to that of all other plans on about 50 measures of clinical quality, 
patient experience, and contractor performance. 

[3] See CMS's Office of the Actuary, Estimated Financial Effects of 
the "Patient Protection and Affordable Care Act," as Amended 
(Baltimore, Md.: Apr. 22, 2010). 

[4] According to CMS's actuaries, most of the cost of the 
demonstration is estimated to be concentrated in the 3 demonstration 
years--2012 through 2014--but some of the cost is estimated to occur 
in the post-demonstration years mostly because of continued higher 
enrollment in MA as a result of the demonstration. 

[5] The Medicare Part D program provides voluntary, outpatient 
prescription drug coverage for eligible individuals. 

[6] Because all MA contracts for 2013 were in place by mid-September 
2012, canceling the demonstration in 2013 can only produce cost 
savings in 2014 or later. 

[End of Medicare Advantage Quality Bonus Payment Demonstration area] 

Homeland Security/Law Enforcement: 

28. Checked Baggage Screening: 

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. 

Why This Area Is Important: 

Since fiscal year 2006, over $6.8 billion has been made available to 
the Transportation Security Administration (TSA) for procuring and 
installing equipment to screen checked baggage for explosives at TSA-
regulated airports. TSA procures explosives detection systems and 
deploys them to airports for installation in optimal configurations 
to, among other things, achieve efficiencies and capabilities to 
better detect terrorist threats.[Footnote 1] To accommodate the 
installation of such systems, however, airports must often undertake 
facility modification projects. While TSA has sole responsibility for 
procuring and deploying screening equipment, the agency generally does 
not fully fund associated facility modification projects. These 
facility modification projects, which may be necessary or desired, 
include projects related to the installation of in-line baggage 
screening systems--an optimal configuration whereby one or more 
explosives detection systems are placed "in-line" with the baggage 
conveyor systems to expedite checked baggage screening--and generally 
require substantial and costly facility modifications. To offset the 
costs of such facility modification projects borne by nonfederal 
entities (typically airports or airlines), TSA enters into 
reimbursable agreements whereby the agency assumes financial 
responsibility for a portion--generally 90 percent--of an eligible 
facility modification project's costs to install baggage screening 
systems, subject to the availability of appropriations.[Footnote 2] 

What GAO Found: 

TSA has not conducted a study to determine if the 90 percent cost 
share it generally applies to reimbursable agreements supporting the 
installation of checked baggage screening systems continues to be 
appropriate given the current constrained fiscal environment. Absent 
direction from Congress that TSA conduct such a study, the agency 
currently has no plans to do so. According to senior TSA officials, 
the cost share agreements currently in place support good investment 
decisions. However, they did not provide analysis or clarifying 
details supporting this assertion. Moreover, TSA reported a shift in 
its strategic focus from completing optimal systems, such as in-line 
systems, to replacing and upgrading (i.e., recapitalizing) aging 
equipment. However, TSA identified that it will continue to support 
the deployment of integrated in-line systems, which may involve 
extensive facility modification projects, if the agency determines 
that such systems are an optimal and cost-effective solution at a 
particular airport. 

GAO's work suggests that studying the current cost share arrangement 
is warranted and could help maximize federal resources dedicated for 
aviation security. To illustrate the potential impact that could be 
achieved if the cost share were to be adjusted, GAO reported in April 
2012 that if TSA applied a 75 percent cost share to all reimbursable 
agreements it enters into in support of facility modification projects 
from fiscal years 2012 through 2030, the agency's anticipated 
expenditures for these modifications would be reduced by a total of 
roughly $300 million. GAO used the 75 percent cost share as a basis 
for comparison as it reflects the mandated federal cost share for 
letter of intent agreements entered into by TSA at larger TSA-
regulated airports through fiscal year 2007.[Footnote 3] This 
reduction in anticipated expenditures may enable TSA to install a 
greater number of optimal systems than it currently anticipates since, 
according to TSA officials, any costs not incurred by the federal 
government through a modification to the cost share would, consistent 
with applicable law, have to be used to support other or additional 
facility modification projects related to the installation of checked 
baggage screening equipment or for the procurement of such equipment. 
[Footnote 4] 

Based on data provided by TSA for GAO's April 2012 report, we reported 
that 76 percent of all TSA regulated airports were complete.[Footnote 
5] However, this figure includes 157 smaller airports that did not 
require in-line systems or facility modifications to be considered 
completely optimal, according to TSA.[Footnote 6] Without the 
inclusion of these 157 airports, the total percentage of complete 
airports was 62 percent. Moreover, most of the facility modification 
costs incurred by TSA are in support of modifications to the largest 
airports for which only 45 percent were completely optimal.[Footnote 
7] Thus, studying the 90 percent cost share TSA generally applies 
could, if a lower federal cost share was deemed appropriate, result in 
a reduced federal financial commitment for any remaining facility 
modification projects related to the installation of checked baggage 
screening systems. Furthermore, as GAO has reported since March 2005, 
installing in-line systems can enhance security, increase screening 
efficiencies, and lower screening costs by, among other things, 
reducing the number of personnel needed to conduct baggage screening 
and work-related injuries. For example, in March 2011, GAO reported 
that TSA could realize up to $470 million in net personnel cost 
savings from fiscal years 2011 through 2015 from reduced full-time 
equivalent baggage screener positions as a result of installing more 
efficient systems, including in-line screening systems.[Footnote 8] 

In 2006, consistent with the Intelligence Reform and Terrorism 
Prevention Act of 2004, TSA commissioned a working group to examine 
and report on what an appropriate federal government/airport cost 
share should be for the installation of checked baggage screening 
equipment.[Footnote 9] The working group, however, was unable to reach 
a consensus on an appropriate cost share formula, in large part 
because of the difficulties of measuring benefits, differing views on 
the federal role in funding capital investments related to checked 
baggage screening, and competing demands on the federal budget. While 
GAO acknowledges the challenges associated with developing cost share 
formulas, such as measuring associated benefits, conducting a study of 
the current federal cost share could help TSA respond to new budget 
realities by helping it identify new opportunities to achieve cost 
efficiencies for the federal government. If a study of the cost share 
TSA generally applies to reimbursable agreements shows that a 
reduction would be appropriate, the application of a lower federal 
cost share could enable TSA to support the installation of a greater 
number of baggage screening systems that best meet the needs of 
airports.[Footnote 10] 

In addition, the November 2010 report of the Debt Reduction Task 
Force, in discussing the costs of aviation security, noted that the 
main beneficiaries of transportation security enhancements are the 
users of the systems, which include airlines, airports, and 
passengers, who should pay for more of the costs.[Footnote 11] A study 
could recommend adjusting the cost share to better reflect the 
relationship between the benefits of optimal checked baggage systems 
to airports and the share of costs to airports for installing those 
systems. Finally, conducting such a study would also be consistent 
with the House of Representatives Committee on Appropriations' 
intention that TSA move aggressively towards a leaner organizational 
and mission approach to its screening and security mission, and its 
belief that there must be a better balance among personnel and 
technology, public and private capabilities, and increased use of risk-
based strategies in organization, operations, staffing, and 
acquisitions.[Footnote 12] 

In studying changes to the federal cost share, considering the effect 
on and coordination with industry stakeholders would be important. For 
instance, in April 2012, GAO reported that representatives from 8 of 
10 airports GAO visited opposed a reduction in the federal cost share 
for related airport modifications.[Footnote 13] Their concerns related 
to, among other things, hardships that would be imposed on airports if 
they assumed a larger share of airport modification costs because of 
funding constraints. Airport representatives also reported having a 
backlog of capital projects or a preference for funding initiatives 
that would provide additional revenue, such as parking garages or 
larger areas for concessions. Nonetheless, representatives of all 10 
airports also cited the additional advantages of in-line systems, 
including the reduction of passenger congestion in airport terminals 
and fewer instances of lost or stolen bags. 

Actions Needed and Potential Financial or Other Benefits: 

To better position TSA to achieve greater program efficiencies and 
support the installation of a greater number of optimal systems than 
currently anticipated, which could result in increased efficiencies 
and enhanced security, Congress may wish to consider taking the 
following two actions: 

* direct TSA to study, in consultation with relevant industry 
stakeholders, whether the 90 percent federal cost share that TSA 
generally applies to cost sharing agreements for eligible airport 
facility modification projects related to the installation of checked 
baggage screening systems is appropriate or should be adjusted; and: 

* consider whether an amendment to current legislation, or enactment 
of new legislation, is necessary and warranted if it is determined 
that a change in the current federal cost share that TSA generally 
applies to these cost sharing agreements is appropriate. 

Because TSA has revised its checked baggage acquisition strategy to 
focus more attention on recapitalizing aging equipment and less 
emphasis on the installation of in-line screening systems, GAO could 
not develop a precise estimate of the potential cost efficiencies 
associated with a change in the federal cost share. Nevertheless, 
based on information TSA provided for GAO's April 2012 report, GAO's 
illustration of the potential impact of reducing the federal share 
suggests that hundreds of millions of dollars could be made available 
to facilitate the installation of additional checked baggage screening 
systems. Moreover, because TSA stated that it will continue to support 
deploying integrated in-line systems, as appropriate, and GAO has 
reported such systems can improve security while possibly decreasing 
costs, a cost share study could identify opportunities for maximizing 
federal resources. 

Agency Comments and GAO's Evaluation: 

GAO provided a draft of this report section to the Department of 
Homeland Security (DHS) for review. In commenting on the draft DHS 
said that the GAO estimate of $300 million in reduced expenditures for 
anticipated modifications is extremely high because 89 percent of 
airports are now complete for optimal baggage screening systems. The 
department added that the estimate does not fully reflect the shift in 
TSA focus to replacing and upgrading aging equipment, which are 
recapitalization projects that TSA fully funds. DHS also noted that 
even at the current 90 percent funding level, TSA is not receiving any 
applications from airports to install in-line systems. DHS also stated 
that they had previously requested a decrease in the cost share for 
letters of intent to 75 percent, but it was not included as part of 
the appropriation. 

For our April 2012 report, GAO calculated the potential reduction in 
agency expenditures for anticipated modifications of roughly $300 
million based on information TSA provided on the cost of 
modifications, which at the time represented their best estimate. As 
we reported, 76 percent of airports were complete. Further, as we 
noted above, most of the facilities modification costs occur at the 
larger airports for which we determined that only 45 percent were 
complete. TSA has provided updated information that 89 percent of 
airports are complete, however as we noted above, 157 of the airports 
designated as complete did not require facility modifications because 
of their smaller size and lack of need for in-line systems. Excluding 
these 157 airports and considering only the airports that might need 
facility modifications would reduce the TSA estimate for completed 
airports from 89 to 83 percent. Although potential cost efficiencies 
might be lower with the completion of more optimization projects since 
GAO issued its 2012 report, some degree of cost efficiencies could be 
realized if a reduced cost share was applied to the remaining projects. 

GAO noted TSA's shift in focus from optimization to recapitalization 
both above and in its April 2012 report. Because GAO calculated the 
estimated reduction in expenditures for anticipated modifications 
based on information TSA provided for GAO's April 2012 report, the 
estimate portrays the shift in focus to the extent that the TSA 
information reflected it. Moreover, given that TSA is now emphasizing 
recapitalization, and it funds 100 percent of recapitalization costs, 
GAO believes this further underscores the need to seek opportunities 
for cost efficiencies on baggage system optimization projects. 

TSA reported for our April 2012 report that it does not independently 
survey airport needs, but rather waits for airports to apply for 
optimal systems. Thus, it lacks sound data on the needs of remaining 
airports and why they are not applying, which could be due to many 
factors other than cost share, such as their financial willingness and 
competing airport priorities, such as construction projects. GAO 
continues to believe that all of these factors would warrant 
consideration in studying the cost share if the Congress directed TSA 
to do so, and that a cost share study could identify opportunities for 
maximizing federal resources. 

Finally, regarding DHS's comment that it had previously requested a 
decrease in the cost share for letters of intent to 75 percent, we 
note that for fiscal years 2005 through 2007 TSA requested, and the 
respective Department of Homeland Security appropriations acts 
included, provisions establishing the federal cost share for letters 
of intent at 75 percent for certain airports. TSA also made the same 
request for fiscal year 2008, but TSA's appropriation for that year 
did not include a provision reflecting the 75 percent cost share. TSA 
has not made any subsequent requests for a reduced cost share, and 
attributes enactment of the Implementing Recommendations of the 9/11 
Commission Act of 2007 as being a definitive statement by Congress on 
the issue.[Footnote 14] Given the current fiscal environment as well 
as other security benefits and efficiencies GAO has reported on in its 
prior work, a study by TSA may better position the Congress to 
determine whether a modification to the cost share is appropriate. 

How GAO Conducted Its Work: 

The information contained in this analysis is based on findings from 
the reports listed in the related GAO products section. To determine 
the impact of reducing the current federal cost share on the amount 
TSA pays for these modifications, GAO calculated estimates based on 
TSA's August 2011 projections of how much airport modifications will 
cost for fiscal years 2012 through 2030. Furthermore, GAO interviewed 
senior TSA officials about their current facility modification plans 
and perspectives on reducing the federal costs share. Table 20 in 
appendix IV lists the programs GAO identified that might have 
opportunities for cost savings or revenue enhancement. 

Related GAO Products: 

Checked Baggage Screening: TSA Has Deployed Optimal Systems at the 
Majority of TSA-Regulated Airports, but Could Strengthen Cost 
Estimates. [hyperlink, http://www.gao.gov/products/GAO-12-266]. 
Washington, D.C.: April 27, 2012. 

Aviation Security: Systematic Planning Needed to Optimize the 
Deployment of Checked Baggage Screening Systems. [hyperlink, 
http://www.gao.gov/products/GAO-05-365]. Washington, D.C.: March 15, 
2005. 

Contact Information: 

For additional information about this area, contact Stephen M. Lord at 
(202) 512-4379 or lords@gao.gov. 

Footnotes: 

[1] The term "explosives detection systems" includes both explosives 
detection systems (EDS), which use X-rays with computer-aided imaging 
to automatically recognize the characteristic signatures of threat 
explosives, and explosives trace detection (ETD) machines, in which a 
human operator (baggage screener) uses chemical analysis to manually 
detect traces of explosive materials' vapors and residue. Optimal 
configurations achieve efficiencies by, among other things, enhancing 
baggage screening throughput, reducing the number of screeners needed, 
and reducing injuries. 

[2] TSA generally uses two types of reimbursable agreements--letters 
of intent and other transaction agreements--to support airport 
facility modification projects related to the installation of checked 
baggage screening equipment. Consistent with statutory requirements, 
the federal cost share for a letter of intent must be 90 percent for 
larger TSA-regulated airports. See 49 U.S.C. § 44923. In contrast, 
other transaction agreements afford TSA flexibility in applying cost 
shares it considers appropriate to support a project. In practice, TSA 
generally enters into other transaction agreements at the 90 percent 
cost share applicable to letter of intent agreements. 

[3] See Pub. L. No. 108-7, § 367, 117 Stat. 11, 423-24 (2003); see 
also, e.g., Pub. L. No. 109-295, 120 Stat. 1355, 1362-63 (2006). 

[4] In general, TSA has used the Aviation Security Capital Fund (the 
Fund) as its primary resource for supporting facility modification 
projects related to the installation of checked baggage screening 
equipment. The Fund, which is comprised of the first $250 million 
collected in passenger security fees each fiscal year, is available to 
support projects that will facilitate the deployment and installation 
of checked baggage screening equipment, but may also be available to 
support other security-related capital improvement projects. See 49 
U.S.C. § 44923(a), (h). Historically, TSA has used the Fund solely to 
account for its share of a checked baggage-related facility 
modification project's costs. In fiscal year 2012 (and as requested 
for fiscal year 2013), however, TSA obtained authorization through its 
annual appropriation to use the Fund in fiscal year 2012 to procure 
and install checked baggage screening equipment, in furtherance of its 
recapitalization effort to replace aging checked baggage screening 
equipment. See Pub. L. No. 112-74, Div. D, 125 Stat. 786, 950-51 
(2011). Consequently, in fiscal year 2012, the Fund was available for 
purposes other than reimbursing the costs of airport facility 
modification projects. 

[5] To be considered complete, as TSA considers it and we define it 
for purposes of this report, an airport must have completed 
installation and activation of optimal systems--that is, in-line or 
stand alone systems that best fit an airport's screening needs without 
relying on temporary stand alone systems--across the entire airport. 

[6] TSA classifies the over 400 TSA-regulated airports in the United 
States into one of five airport security categories (X, I, II, III, 
and IV) based on various factors, such as the total number of takeoffs 
and landings annually, the extent to which passengers are screened at 
the airport, and other special security considerations. In general, 
category X airports have the largest number of passenger boardings and 
category IV airports have the smallest. 

[7] By largest we mean category X and I airports. 

[8] These cost savings estimates were based on the assumption that all 
other nonpersonnel costs netted out to zero as was reported in GAO, 
Aviation Security: Systematic Planning Needed to Optimize the 
Deployment of Checked Baggage Screening Systems, [hyperlink, 
http://www.gao.gov/products/GAO-05-365] (Washington, D.C.: Mar. 15, 
2005). GAO does not know whether the cost savings as reported in 2005 
will continue to be achieved in the future. Net cost savings account 
for the differences in acquisition, modification, installation, and 
operation and maintenance costs between existing systems replaced with 
more efficient systems at airports. GAO, Opportunities to Reduce 
Potential Duplication in Government Programs, Save Tax Dollars, and 
Enhance Revenue, [hyperlink, http://www.gao.gov/products/GAO-11-318SP] 
(Washington, D.C.: Mar. 1, 2011). 

[9] See Pub. L. No. 108-458, § 4019, 118 Stat. 3638, 3721-22 (2004). 

[10] Whether or not a reduction in the federal cost share applied to 
the reimbursable agreements will in fact result in the installation of 
a greater number of baggage screening systems depends upon whether 
airports or airlines will continue to undertake such projects with a 
reduced federal contribution. 

[11] The Debt Reduction Task Force, Restoring America's Future: 
Reviving the Economy, Cutting Spending and Debt, and Creating a 
Simple, Pro-Growth Tax System (Washington, D.C.: Bipartisan Policy 
Center, November 2010). 

[12] See H.R. Rep. No. 112-492, at 63-64 (May 23, 2012) (accompanying 
H.R. 5855, 112th Cong. (2d Sess. 2012)). 

[13] Two airports had no comments. 

[14] See Pub. L. No. 110-53, §§ 1603-04, 121 Stat. 266, 480-81 (2007) 
(relating to in-line baggage screening systems). 

[End of Checked Baggage Screening area] 

Information Technology: 

29. Cloud Computing: 

Better planning of cloud-based computing solutions provides an 
opportunity for potential savings of millions of dollars. 

Why This Area Is Important: 

Each year the federal government spends billions of dollars on 
information technology (IT) investments; federal agencies reported to 
the Office of Management and Budget (OMB) that approximately $74 
billion was budgeted for IT for fiscal year 2013. Over the past 
several years, GAO has reported that federal IT projects too 
frequently incur cost overruns and schedule slippages while 
contributing little to mission outcomes. Cloud computing, an emerging 
approach to delivering IT services, provides on-demand access to a 
shared pool of scalable computing resources. According to OMB, cloud 
computing has the potential to address IT inefficiencies by providing 
services both more quickly and at a lower cost. OMB further noted that 
IT services costing billions of dollars annually could potentially be 
migrated to cloud computing. Accordingly, agencies reported saving 
millions of dollars from implementing cloud-based solutions. In 
particular, the Department of Homeland Security reported that its 
implementation of enterprise content delivery services avoids an 
estimated $5 million in costs annually. 

In December 2010, OMB issued a "Cloud First" policy that requires 
federal agencies, when evaluating options for IT deployments, to 
implement cloud-based solutions whenever a secure, reliable, and cost-
effective cloud option exists. Each agency was also required to 
migrate three IT services[Footnote 1] to a cloud solution by June 
2012[Footnote 2] and retire the associated legacy systems. 

What GAO Found: 

In July 2012, GAO reported that seven federal agencies GAO reviewed 
had made progress implementing OMB's Cloud First policy.[Footnote 3] 
Consistent with this policy, each of these seven agencies incorporated 
cloud computing requirements into their policies and processes. For 
example, one agency planned to review its IT investment portfolio to 
identify candidates for cloud solutions. Another agency identified 
cloud computing as a high priority and complied with the OMB deadlines 
by migrating existing IT services to or offering new services in a 
cloud-based environment. Further, five of the seven agencies reported 
that they had met the OMB deadlines to identify and implement three 
cloud services by June 2012. The other two agencies planned to 
implement three services from August through December 2012.[Footnote 
4] Each of the agencies also identified opportunities for future cloud 
implementations. For example, one agency is considering moving its 
storage and help desk services to a cloud environment, while another 
agency is considering moving its development environment to a cloud 
solution. 

In addition, each of the seven agencies submitted plans to OMB for 
implementing their respective cloud solutions. According to OMB, each 
plan is to contain, among other things, estimated costs of 
implementing the new cloud service, major milestones for implementing 
the service, performance goals, and plans for retiring the associated 
legacy systems. However, all but one plan were missing one or more key 
required elements. For example, of the plans we reviewed,[Footnote 5] 
7 did not include estimated costs for implementing the new cloud 
service, 5 did not include major milestones, 11 did not include 
performance goals, and 14 did not include plans to retire the 
associated legacy systems. According to agency officials, these 
elements were missing largely because the agencies did not have the 
information available at the time the plans were developed, despite 
OMB's requirement. GAO reported that identifying key elements--cost 
estimates, milestones, performance goals, and legacy system retirement 
plans--will be essential in determining whether agencies' activities 
constitute a positive return on investment, and therefore whether the 
benefits of their activities--improved operational efficiencies and 
reduced costs associated with retiring legacy systems--will be fully 
realized. 

Actions Needed and Potential or Other Financial Benefits: 

GAO recommended in July 2012 that the Secretaries of Agriculture, 
Health and Human Services, Homeland Security, State, and the Treasury 
and the Administrators of the General Services Administration and the 
Small Business Administration direct their respective Chief 
Information Officers to take the following two actions: 

* establish estimated costs, performance goals, and plans to retire 
associated legacy systems for each cloud-based service discussed in 
the report, as applicable; and: 

* develop, at a minimum, estimated costs, milestones, performance 
goals, and plans for retiring legacy systems, as applicable, for 
planned additional cloud-based services. 

These actions could help to ensure the success of agencies' 
implementation of cloud-based solutions. Determining precise costs and 
potential cost savings in this area is challenging because the costs 
of cloud-based solutions--and thus agencies' expenditures--vary based 
on consumption, and because the migrated cloud-based services may 
offer additional functionality not provided by the legacy system. 
Further, because agencies do not capture costs in a uniform manner, 
GAO was unable to quantify the cost savings associated with the 
migration. Nevertheless, agencies reported saving millions of dollars 
from implementing cloud-based solutions. 

On the basis of the level of investments that agencies are making and 
OMB's Cloud First policy, agencies have opportunities to achieve 
significant cost savings if they implement the actions outlined 
earlier. As agencies implement these and other cloud-based solutions, 
identifying key information--cost estimates, milestones, performance 
goals, and legacy system retirement plans--will also be essential in 
determining whether their activities will result in improved 
operational efficiencies and cost savings, and therefore whether the 
benefits of their activities will be fully realized. 

Agency Comments and GAO's Evaluation: 

In commenting on the July 2012 report on which this analysis was 
based, the Departments of Agriculture, Homeland Security, and the 
Treasury, and the General Services Administration, agreed with the 
recommendations; the Department of State (State) agreed with the 
second recommendation and disagreed with the first recommendation; and 
the Department of Health and Human Services and the Small Business 
Administration did not agree or disagree with the recommendations. In 
particular, the Department of State disagreed because the services in 
question did not have associated legacy systems to be retired. 
However, GAO noted that State had not established performance goals 
for its electronic library service, as called for in the 
recommendation; thus the recommendation remained applicable and 
relevant to the department. OMB and the National Institute of 
Standards and Technology provided technical comments, which were 
incorporated as appropriate. 

GAO provided a draft of this report section to the Departments of 
Agriculture, Health and Human Services, Homeland Security, State, and 
the Treasury, as well as the General Services Administration, the 
Small Business Administration, and the Office of Management and Budget 
for review and comment. The Department of Health and Human Services 
acknowledged its support for and the importance of establishing 
estimated costs and performance goals, and developing milestones, but 
noted that GAO's recommendation to develop plans for retiring legacy 
systems requires clarification. In particular, the department stated 
that retirement plans may not be necessary for all cloud 
implementations because legacy systems may not be retired, either 
because the cloud deployment is new development, the deployment 
augments, but does not replace, existing capacity, or the deployment 
replaces one service of a multi-tier application, resulting in the 
partial retirement of a legacy system. GAO acknowledges in its 
recommendation that a retirement plan may not be applicable for all 
cloud deployments, recognizing that some cloud implementations may be 
new or enhanced functionality. 

The department further stated that GAO's recommendations would benefit 
from some recognition that the depth of documentation and evaluation 
should bear some relationship to the cost or size of the cloud 
deployment, so that small innovative projects are not inhibited by 
requirements more suitable to large expensive ones. GAO does not 
disagree that the documentation and evaluation may be relative to the 
cost and size of the deployment. Nevertheless, GAO continues to 
believe that developing cost estimates, milestones, and performance 
goals for cloud deployments, as well as developing plans for retiring 
legacy systems, as appropriate, are important planning elements of 
each cloud implementation because such information enables agencies to 
determine whether cloud deployments are cost effective and ensures 
that savings generated from retiring legacy systems are realized. 

The Office of Management and Budget stated that it continues to 
emphasize its Cloud First policy with agencies as one of the primary 
ways that the cost of delivering IT services can be reduced in the 
future. The Department of Homeland Security provided a technical 
comment, which GAO incorporated. The Departments of Agriculture, 
State, and the Treasury, as well as the General Services 
Administration and the Small Business Administration did not provide 
any comments on this report section. 

How GAO Conducted Its Work: 

The information contained in this analysis is based on our July 2012 
report in the related GAO products section. GAO selected seven 
agencies using a combination of the size of the agencies' IT budgets 
and their prior experience in using cloud services. GAO analyzed 
documentation from the selected agencies, including 20 plans across 
seven agencies and progress reports submitted to OMB that described 
the actions agencies had taken to migrate selected services to a cloud 
solution, and interviewed officials responsible for implementing the 
cloud solutions to determine how the services were selected and 
migrated. GAO also compared agencies' documentation with OMB's 
associated guidance to determine any variances. 

Related GAO Products: 

Information Technology Reform: Progress Made but Future Cloud 
Computing Efforts Should be Better Planned. [hyperlink, 
http://www.gao.gov/products/GAO-12-756]. Washington, D.C.: July 11, 
2012. 

Information Technology Reform: Progress Made; More Needs to Be Done to 
Complete Actions and Measure Results. [hyperlink, 
http://www.gao.gov/products/GAO-12-461]. Washington, D.C.: April 26, 
2012. 

Information Security: Additional Guidance Needed to Address Cloud 
Computing Concerns. [hyperlink, 
http://www.gao.gov/products/GAO-12-130T]. Washington, D.C.: October 6, 
2011. 

Information Security: Governmentwide Guidance Needed to Assist 
Agencies in Implementing Cloud Computing. [hyperlink, 
http://www.gao.gov/products/GAO-10-855T]. Washington, D.C.: July 1, 
2010. 

Information Security: Federal Guidance Needed to Address Control 
Issues with Implementing Cloud Computing. [hyperlink, 
http://www.gao.gov/products/GAO-10-513]. Washington, D.C.: May 27, 
2010. 

Contact Information: 

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

Footnotes: 

[1] For example, agencies selected services such as e-mail, website 
hosting, and document management. 

[2] The first IT service was to be migrated by December 2011 and the 
other two by June 2012. 

[3] The selected agencies were the Departments of Agriculture, Health 
and Human Services, Homeland Security, State, and the Treasury; the 
General Services Administration; and the Small Business 
Administration. We selected these agencies using a combination of the 
size of the agencies' IT budgets and their prior experience in using 
cloud services. 

[4] As of Jan. 2013, the Department of Agriculture and Small Business 
Administration provided evidence that they had completed the three 
required implementations. 

[5] One of the seven agencies, the Small Business Administration, 
changed one of its services and did not submit a plan to OMB for the 
new service. 

[End of Cloud Computing area] 

30. Information Technology Operations and Maintenance: 

Strengthening oversight of key federal agencies' major information 
technology investments in operations and maintenance provides 
opportunity for savings on billions in information technology 
investments. 

Why This Area Is Important: 

Of the $79 billion federal agencies budgeted for information 
technology (IT) in fiscal year 2011, $54 billion (about 69 percent) 
was reported to have been spent on the operations and maintenance of 
existing legacy IT systems--commonly referred to as steady state 
investments. Given the magnitude of these investments, it is important 
that agencies effectively manage them to ensure the investments (1) 
continue to meet agency needs, (2) deliver value, and (3) do not 
unnecessarily duplicate or overlap with other investments. 
Accordingly, the Office of Management and Budget (OMB) developed 
guidance that calls for agencies to analyze (via operational analysis) 
whether such investments are continuing to meet business and customer 
needs and are contributing to meeting the agency's strategic goals. 
[Footnote 1] More specifically, this guidance calls for agencies to 
perform operational analyses annually on each steady state investment 
and requires that each operational analysis address 17 key factors, 
including cost, schedule, customer satisfaction, strategic and 
business results, financial goals, and whether the investment overlaps 
with other systems. 

What GAO Found: 

In October 2012, GAO reported that the five agencies it reviewed--the 
Departments of Defense (DOD), Health and Human Services (HHS), 
Homeland Security (DHS), the Treasury, and Veterans Affairs (VA)--
varied in the extent to which they performed operational analyses as 
called for by OMB guidance. Specifically, DHS and HHS conducted 
operational analyses, but in doing so, excluded key investments. DOD, 
Treasury, and VA did not conduct operational analyses. These five 
agencies' investments accounted for approximately $37 billion annually 
or about 70 percent of all reported federal operations and maintenance 
spending in fiscal year 2011. GAO focused on these agencies' 75 major 
IT investments valued at $4.6 billion annually that were strictly in 
the operations and maintenance phase and excluded mixed life-cycle 
investments that are in both development and operations and 
maintenance, which account for about $32 billion. The following table 
shows the total number of steady state investments for each agency, 
and provides the number and budgeted amount for those investments that 
underwent an operational analysis and those that did not. 

Table: Total Steady State IT Investments, and Number of Investments 
for Five Agencies That Had Operational Analyses and Did Not Have 
Operational Analyses with Cost: 

Agency (total investments in steady state): DOD (4); 
Total investments with an operational analysis: 0; 
Fiscal year 2011 cost: [Empty]; 
Total investments without an operational analysis: 4; 
Fiscal year 2011 cost: $381 million. 

Agency (total investments in steady state): DHS (44); 
Total investments with an operational analysis: 16; 
Fiscal year 2011 cost: $1.175 billion; 
Total investments without an operational analysis: 28; 
Fiscal year 2011 cost: $1.011 billion. 

Agency (total investments in steady state): HHS ( 8); 
Total investments with an operational analysis: 7; 
Fiscal year 2011 cost: $207 million; 
Total investments without an operational analysis: 1; 
Fiscal year 2011 cost: $77 million. 

Agency (total investments in steady state): Treasury (16); 
Total investments with an operational analysis: 0; 
Fiscal year 2011 cost: [Empty]; 
Total investments without an operational analysis: 16; 
Fiscal year 2011 cost: $152 million. 

Agency (total investments in steady state): VA (3); 
Total investments with an operational analysis: 0; 
Fiscal year 2011 cost: [Empty]; 
Total investments without an operational analysis: 3; 
Fiscal year 2011 cost: $1.6 billion. 

Agency (total investments in steady state): Total (75); 
Total investments with an operational analysis: 23; 
Fiscal year 2011 cost: $1.4 billion; 
Total investments without an operational analysis: 52; 
Fiscal year 2011 cost: $3.2 billion. 

Source: GAO analysis based on OMB data. 

Source: GAO analysis based on OMB data. 

Note: Costs by agency may not add to total due to rounding. 

[End of table] 

As shown in the table above, of DHS's 44 steady state investments, the 
department conducted operational analyses on 16 of them, which have a 
combined annual budget of almost $1.2 billion; it did not perform 
analyses on the other 28, which have an annual budget of about $1 
billion. HHS conducted analyses on 7 of its 8 steady state 
investments, which have an annual budget of $207 million; it did not 
perform an operational analysis on the remaining investment, which has 
an annual budget of $77 million. In addition, although DHS and HHS 
performed analyses, the agencies did not address all 17 key factors--
such as those on identifying lessons learned and reviewing the status 
of risk versus cost, schedule, and performance--in conducting them. 
DOD, Treasury, and VA did not conduct operational analyses for any of 
their 23 steady state investments that have combined annual budgets of 
$2.1 billion. 

The following illustrates how factors were fully addressed, partially 
addressed, or not addressed by component agencies within DHS and HHS. 

* In assessing the Information Technology Infrastructure Program, 
DHS's Transportation Security Administration addressed 8 of the 17 key 
factors. For example, on the factor calling for performance of a 
structured schedule assessment, the agency analyzed a detailed list of 
task descriptions, start and end dates, and planned versus actual 
costs to ensure the investment is performing against an established 
schedule, which can minimize costs over the life cycle of an 
investment. The agency partially addressed one key factor; 
specifically, the factor calling for identifying whether the 
investment supports customer processes and is delivering the goods and 
services intended. In assessing this factor, Transportation Security 
Administration conducted surveys to measure customer satisfaction, but 
in doing so did not include measures to assess whether the investment 
was delivering the goods and services it was designed to deliver. The 
agency did not address eight key factors. For example, it did not 
identify any areas for innovation or whether the investment overlapped 
with other systems. These latter steps are essential to identifying 
investment improvements, increasing value and reducing costs, and 
eliminating duplicate systems and the costs associated with them. 

* For its Infrastructure, Office Automation, and Telecommunications 
investment, HHS's Indian Health Service fully addressed 14 key 
factors. For example, in addressing the factor on assessing 
performance goals, it analyzed the investment's performance goals 
against the results to date for each goal. The agency partially 
addressed the factor on the status of risks versus cost, schedule, and 
performance. Specifically, it analyzed cost and schedule progress, but 
did not include an assessment of risks. Indian Health Service did not 
address two key factors; it did not identify lessons learned and 
whether the investment overlapped with other systems. Addressing these 
factors is important because they help agencies to, among other 
things, identify where cost-effective improvements can be made. 

Regarding why DOD and VA had not developed policies and were not 
performing analyses, officials from those agencies stated that in lieu 
of conducting operational analyses, they assessed the performance of 
steady state investments as part of developing their annual plans and 
business cases submitted to OMB (called exhibit 300s). While GAO 
previously reported that using the exhibit 300 process can be a tool 
to manage investment performance, our analysis showed that the process 
does not fully address 11 of the 17 factors. Treasury officials from 
the department's office of the Chief Information Officer said they 
decided not to perform operational analyses in 2011 and instead 
decided to use the time to develop a policy for conducting operational 
analyses. However, the officials stated that they did not anticipate 
the policy to be completed until the end of the calendar year. 

Until these agencies perform operational analyses on all their steady 
state investments and ensure they address all factors in doing so, 
there is increased potential for these multibillion dollar investments 
to result in waste and unnecessary duplication. To this point, there 
is evidence showing that duplication of such IT investments is 
occurring at two of these agencies. For example, within DOD, GAO 
reported in February 2012 there were 31 potentially duplicative 
investments totaling approximately $1.2 billion.[Footnote 2] In 
particular, GAO identified four Navy personnel assignment investments--
one system for officers, one for enlisted personnel, one for 
reservists, and a general assignment system--each of which is 
responsible for managing similar functions. In addition, at DHS, GAO 
reported that the department independently identified duplicative 
functionality in four investments--including a personnel security 
investment, time and attendance investment, human resources 
investment, and an information network investment. These two agencies 
are taking steps to implement recommendations we made to identify and 
address such duplicative investments. While this is a positive 
development, it is important to note that these two agencies and the 
other three GAO reviewed reportedly spent over $4.6 billion in fiscal 
year 2011 on steady state investments and $32 billion on mixed life-
cycle investments so the potential for identifying and avoiding costs 
associated with duplicative functionality across investments is 
significant. 

Actions Needed and Potential or Other Financial Benefits: 

To ensure that major steady state IT investments are being adequately 
analyzed, GAO recommended in October 2012 that the Secretaries of 
Defense, Homeland Security, Health and Human Services, Veterans 
Affairs, and the Treasury take the following action: 

* direct appropriate officials to annually perform operational 
analyses on all investments and ensure the assessments include all key 
factors. 

In addition, to ensure these annual assessments are conducted, GAO 
recommended in October 2012 that the Director of OMB take the 
following action: 

* direct agencies to report operational analysis results for all 
steady state investments to OMB for oversight and dissemination via a 
publicly available OMB website on federal IT spending and performance. 

Implementation of these recommendations could help agencies achieve 
cost savings by strengthening the oversight of their steady state 
investments in operations and maintenance, including identifying and 
terminating investments that no longer meet agency needs or 
unnecessarily overlap and duplicate other investments, thus resulting 
in the potential for savings on billions of dollars in IT investments. 

Agency Comments and GAO's Evaluation: 

In commenting on a draft of the October 2012 report on which this 
submission is based, OMB and the five agencies agreed with the 
findings and recommendations. 

GAO provided a draft of this submission to OMB and the five agencies 
for review and comment. Overall, OMB and two agencies (DOD and 
Treasury) agreed with the submission, one agency (DHS) had technical 
comments, and the two remaining agencies (HHS and VA) either had no 
comments or had no objections. Specifically, in an email received on 
January 23, 2013, OMB officials stated that they concurred with GAO's 
recommendations and reiterated the actions it had taken to address 
them. In an email received on January 23, 2013, DOD reaffirmed 
concurrence with GAO's recommendation and added that it is in the 
process of drafting operational analysis guidance which the department 
plans to coordinate with the services and other departmental 
components before finalizing and implementing the guidance. In 
addition, in an email received on January 28, 2013, Treasury officials 
stated that they agreed with GAO's recommendations and that the 
department had issued a revised operational analysis policy (dated 
November 5, 2012). The officials also noted that Treasury has directed 
that operational analyses be performed for all major investments that 
have production elements. Treasury anticipates receiving operational 
analyses for all of these investments in calendar year 2013 and plans 
to share the results with OMB. Further, in its technical comments 
provided on January 23, 2013, DHS noted that after receiving a draft 
of our October 2012 report, the department identified and provided to 
us OAs that it had performed on 3 additional investments in fiscal 
year 2011.[Footnote 3] Finally, in an email received on January 24, 
2013, HHS officials stated they had no comment on the submission and 
in an email received on January 22, 2013, VA officials stated they had 
no objection to the submission. 

How GAO Conducted Its Work: 

The information contained in this analysis is based on findings from 
the report in the related GAO products section. As part of that 
report, GAO selected the five agencies with the largest budgets for 
major steady state IT investments; these agencies report spending $37 
billion annually (or about 70 percent) of the $54 billion reportedly 
spent by all federal agencies on operations and maintenance of legacy 
systems in fiscal year 2011. In doing this, GAO focused on these 
agencies' 75 major IT investments valued at $4.6 billion in fiscal 
year 2011 that were strictly in the operations and maintenance phase 
(i.e., excluded systems that are in both development and operations 
and maintenance which account for about $32 billion). GAO reviewed all 
operational analyses performed on these agencies' major IT investments 
during fiscal year 2011 and compared them to OMB and related criteria. 
Table 21 in appendix IV lists the programs GAO identified that might 
have opportunities for cost savings or revenue enhancement. 

Related GAO Products: 

Information Technology: Agencies Need to Strengthen Oversight of 
Billions of Dollars in Operations and Maintenance Investments. 
[hyperlink, http://www.gao.gov/products/GAO-13-87]. Washington, D.C.: 
October 16, 2012. 

Contact Information: 

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

Footnotes: 

[243] OMB, Capital Programming Guide, Supplement to OMB Circular A-11, 
Part 7 (July 2012). 

[244] GAO, Information Technology: Departments of Defense and Energy 
Need to Address Potentially Duplicative Investments, [hyperlink, 
http://www.gao.gov/products/GAO-12-241] (Washington, D.C.: Feb. 17, 
2012). 

[245] The three investments were the Automated Targeting System, 
Transportation Worker Identification Credential, and Computer-Linked 
Application Information Management System 4.0. 

[End of Information Technology Operations and Maintenance area] 

International Affairs: 

31. Tobacco Taxes: 

Federal revenue losses were as much as $615 million to $1.1 billion 
between April 2009 and 2011 because manufacturers and consumers 
substituted higher-taxed smoking tobacco products with similar lower-
taxed products. To address future revenue losses, Congress should 
consider modifying tobacco tax rates to eliminate significant tax 
differentials between similar products. 

Why This Area Is Important: 

Tobacco use is the leading cause of preventable death, disease, and 
disability and a significant contributor to health care costs in the 
United States. Federal and state legislation has aimed to discourage 
tobacco use and raise revenues by increasing excise taxes on tobacco 
products. In April 2009, the Children's Health Insurance Program 
Reauthorization Act (CHIPRA) increased federal excise tax rates for 
smoking tobacco products (cigarettes, roll-your-own tobacco, pipe 
tobacco, small cigars, and large cigars); however, it did not equalize 
the tax rate across all of these smoking tobacco products. The 
Department of the Treasury (Treasury) collects federal excise taxes on 
tobacco products. 

What GAO Found: 

As GAO reported in April 2012, large federal excise tax disparities 
among smoking tobacco products, which resulted from CHIPRA, created 
opportunities for tax avoidance and led to significant market shifts 
by manufacturers and price-sensitive consumers towards the lower-taxed 
products. While revenue collected for all smoking tobacco products 
from April 2009 through September 2011 amounted to $40 billion, GAO 
estimated that federal revenue losses, due to market shifts from roll-
your-own to pipe tobacco and from small to large cigars, ranged from 
about $615 million to $1.1 billion for the same period. Though CHIPRA 
increased federal excise tax rates for pipe tobacco and large cigars, 
the rates for pipe tobacco remain significantly lower than for other 
smoking tobacco products and large cigar rates can be significantly 
lower, depending on price. According to our analysis and interviews 
with government, industry, and nongovernmental organization 
representatives, the tax disparities created incentives for price-
sensitive consumers to substitute higher-taxed products with lower-
taxed products, particularly as manufacturers have made changes so 
that their lower-tax products more directly substitute for the higher-
tax products. 

Cigars are differentiated from cigarettes by their wrapper and whether 
the product is, for a number of reasons, likely to be offered to, or 
purchased by, consumers as a cigarette. Large and small cigars are 
differentiated by a weight threshold alone--with small cigars being 
defined as those weighing 3 pounds or less per thousand sticks. Roll-
your-own tobacco and pipe tobacco are defined by factors such as the 
use for which the product is suited and how they are offered for sale, 
as indicated by their appearance, type, packaging, and labeling. The 
following photograph shows a sample of different cigarette and cigar 
products. Several of the products closely resemble each other in size 
and shape. 

Figure: Examples of Cigarette and Cigar Products: 

[Refer to PDF for image: photograph] 

1. Roll-your-own cigarette made by hand with roll-your-own tobacco; 
2. Roll-your-own cigarette made in a commercial roll-your-own machine 
with pipe tobacco; 
3. Factory-made cigarette; 
4. Small cigar; 
5. Filtered large cigar; 
6. Traditional large cigar. 

Source: GAO. 

[End of figure] 

Prior to CHIPRA, roll-your-own and pipe tobacco were taxed at the same 
rate ($1.10 per pound). However, CHIPRA raised the federal excise tax 
rates for roll-your-own tobacco and pipe tobacco by different amounts, 
resulting in a $21.95 per pound difference between the higher-taxed 
roll-your-own tobacco ($24.78 per pound) and the lower-taxed pipe 
tobacco ($2.83 per pound). As a result, of the three cigarette 
products shown in the photograph above, the cigarette made with pipe 
tobacco is taxed at a much lower rate than either the factory-made 
cigarette or the cigarette made with roll-your-own tobacco. As shown 
in the figure below, from January 2009 to September 2011, monthly 
sales of pipe tobacco increased from approximately 240,000 pounds to 
over 3 million pounds, while monthly sales of roll-your-own tobacco 
dropped from about 2 million pounds to 315,000 pounds during the same 
time period. According to government officials and representatives of 
industry and nongovernmental organizations, roll-your-own tobacco 
manufacturers shifted to producing lower-taxed pipe tobacco with 
minimal, if any, changes to their products, and consumers substituted 
pipe tobacco for use in roll-your-own cigarettes. 

Figure: Monthly Sales for Roll-Your-Own and Pipe Tobacco, and for 
Small and Large Cigars, Fiscal Years 2001 through 2011: 

[Refer to PDF for image: 2 multiple line graphs] 

First graph depicts pounds of tobacco per month in millions for roll-
your-own tobacco and pipe tobacco from October 2000 through September 
2011. 

Second graph depicts number of cigars per month in millions for large 
cigars and small cigars from October 2000 through September 2011. 

Source: GAO analysis of Treasury data. 

[End of figure] 

CHIPRA also significantly changed the tax rates on cigars, resulting 
in a large tax-rate disparity between low-priced large cigars and 
small cigars. Large cigars are unique among tobacco products in that 
the tax rate is ad valorem (a percentage of the manufacturer's or 
importer's sale price per thousand sticks), up to a maximum tax per 
thousand sticks. While CHIPRA increased small cigar tax rates from 
$1.83 to $50.33 per thousand sticks, the ad valorem rate for large 
cigars increased from 20.72 percent to 52.75 percent of the 
manufacturer's or importer's sale price, up to a maximum tax of 
$402.60 per thousand sticks. As a result, cigars with a manufacturer's 
price of $50 per thousand, for example, would experience a tax savings 
of $23.95 per thousand if they qualified as large rather than small 
cigars. While the small cigar and filtered large cigar shown in the 
photograph above are similar in appearance, they are likely taxed at 
significantly different rates, depending on the price of the filtered 
large cigar. According to government officials and representatives of 
nongovernmental organizations, because weight is the only 
characteristic that distinguishes small cigars from large cigars, many 
cigar manufacturers made their small cigars slightly heavier to 
qualify for the large cigar tax rate and avoid higher taxes levied on 
small cigars after CHIPRA. As shown in the monthly sales figure above, 
from January 2009 to September 2011, large cigar sales increased from 
411 million to over 1 billion cigars, while small cigar sales dropped 
from about 430 million to 60 million cigars during the same time 
period. 

Although Treasury has taken steps to respond to these market shifts, 
it has limited options. For example, Treasury has attempted to 
differentiate between roll-your-own and pipe tobacco for tax purposes 
but faces challenges because the definitions of the two products in 
the Internal Revenue Code of 1986 do not specify distinguishing 
physical characteristics. Treasury also has limited options to address 
the market shift to large cigars because, according to Treasury 
officials, the agency lacks the authority to take action against 
manufacturers' legitimate modifications of small cigars to qualify 
them for the lower tax rate on large cigars. In addition, Treasury 
faces added complexity in monitoring and enforcing tax payments due to 
the change in large cigar tax rates. 

Actions Needed and Potential or Other Financial Benefits: 

GAO suggested in April 2012 that Congress, as it continues its 
oversight of CHIPRA, may wish to consider taking the following two 
actions: 

* consider equalizing tax rates on roll-your-own and pipe tobacco; and: 

* in consultation with Treasury, consider options for reducing tax 
avoidance due to tax differentials between small and large cigars. 

Taking these two actions will address further revenue losses that 
amounted to an estimated $615 million to $1.1 billion between April 
2009 and September 2011. Two bills have been introduced in the 113TH 
Congress that would address this issue of tobacco tax disparities, but 
as of March 8, 2013, Congress had not acted on either bill. 

Agency Comments and GAO's Evaluation: 

In commenting on the April 2012 report on which this analysis is 
based, Treasury generally agreed with GAO's overall conclusion that 
CHIPRA's introduction of large tax disparities between similar 
products contributed to the substitution of higher-taxed tobacco 
products with lower-taxed tobacco products. Treasury also agreed with 
GAO's observation that modifying tobacco tax rates to eliminate 
significant tax differentials between similar products would address 
the market shifts that GAO identified. 

GAO provided a draft of this report section to Treasury for review and 
comment. Treasury generally agreed with GAO's overall conclusions. In 
commenting on this submission in January 2013, a Treasury official 
noted that the substitution trends have continued. The official 
observed that in the year proceeding CHIPRA, of all of the cigars 
"sold" in the United States by domestic manufactures, 52 percent were 
small cigars and 48 percent were large cigars. In the 2 years 
following CHIPRA, these numbers were 8 percent for small cigars and 92 
percent for large cigars. 

How GAO Conducted Its Work: 

The information contained in this analysis is based on findings from 
the product listed in the related GAO product section. GAO analyzed 
documents and interviewed agency officials from Treasury's Alcohol and 
Tobacco Tax and Trade Bureau, the U.S. Food and Drug Administration 
(FDA), and the Centers for Disease Control and Prevention, as well as 
tobacco industry members, representatives of public health, and other 
nongovernmental organizations, and academics, to obtain information on 
tobacco legislation and regulations, tobacco product sales trends, and 
consumption patterns. GAO analyzed Treasury data to identify sales 
trends across the different tobacco products from October 2001 through 
September 2011. GAO collected and analyzed data on federal excise tax 
rates for smoking tobacco products and the revenues generated from 
their sale during the same time period. GAO estimated what the effect 
on tax revenue collection would have been if the sales trend for roll-
your-own and pipe tobacco and for small and large cigars had not been 
affected by substitution between the products but had been affected by 
the increase in price due to the tax--in other words, if the market 
shifts resulting from the substitution of higher-taxed products with 
lower-taxed products had not occurred. GAO's analysis takes into 
account the expected fall in quantity demanded due to the price 
increases resulting from higher federal excise tax rates that CHIPRA 
imposed on all four of these smoking tobacco products. Table 22 in 
appendix IV lists the programs GAO identified that might have 
opportunities for cost savings or revenue enhancement. 

Related GAO Product: 

Tobacco Taxes: Large Disparities in Rates for Smoking Products Trigger 
Significant Market Shifts to Avoid Higher Taxes. GAO-12-475. 
Washington, D.C.: April 18, 2012. 

Contact Information: 

For additional information about this area, contact David Gootnick at 
(202) 512-3149, or gootnickd@gao.gov. 

[End of Tobacco Taxes area] 

[End of Section II] 

Appendix I: List of Congressional Addressees: 

The Honorable Barbara A. Mikulski:
Chairwoman:
The Honorable Richard Shelby:
Vice Chairman:
Committee on Appropriations:
United States Senate: 

The Honorable Patty Murray:
Chairman:
The Honorable Jeff Sessions:
Ranking Member:
Committee on the Budget:
United States Senate: 

The Honorable Thomas R. Carper:
Chairman:
The Honorable Tom Coburn:
Ranking Member:
Committee on Homeland Security and Governmental Affairs:
United States Senate: 

The Honorable Harold Rogers:
Chairman:
The Honorable Nita M. Lowey:
Ranking Member:
Committee on Appropriations:
House of Representatives: 

The Honorable Paul Ryan:
Chairman:
The Honorable Chris Van Hollen:
Ranking Member:
Committee on the Budget:
House of Representatives: 

The Honorable Darrell Issa:
Chairman:
The Honorable Elijah E. Cummings:
Ranking Member:
Committee on Oversight and Government Reform:
House of Representatives: 

The Honorable Claire McCaskill:
United States Senate:
The Honorable Mark R. Warner:
United States Senate: 

[End of Appendix I] 

Appendix II: 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 governmentwide. This provision also 
requires GAO to report annually to Congress on its findings, including 
the cost of such duplication, and recommendations for consolidation 
and elimination to reduce duplication and specific rescissions 
(legislation canceling previously enacted budget authority) that 
Congress may wish to consider.[Footnote 1] 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 minimize 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.[Footnote 2] This report 
presents 17 areas of fragmentation, overlap, and duplication where 
greater efficiencies or effectiveness in providing government services 
may be achievable. In light of the long-term fiscal imbalances that 
the federal government faces, and consistent with our approach for the 
first annual report, we also highlighted other opportunities for 
potential cost saving or revenue enhancements. 

GAO's Approach: 

While the areas identified in our annual reports, however, do not 
represent the full extent of our systematic examination, 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 over the course of our 2011 
through 2013 annual reports. This examination used a multiphase 
approach: 

* Examination of budget functions and subfunctions of the federal 
government: We examined OMB's MAX Information System[Footnote 3] data 
to identify and analyze which federal agencies obligated funds for 
budget functions and subfunctions, representing X percent of the 
overall federal funds obligated in fiscal year 2010. Budget functions 
provide a system of classifying budget resources so that budget 
authority, outlays, receipts, and tax expenditures can be related to 
the national needs being addressed. Each budget account is generally 
placed in the single budget function (for example, national defense or 
health) that best reflects its major purpose, an important national 
need. A budget function may be divided into two or more subfunctions, 
depending on the complexity of the national need addressed. Because 
federal budget functions classify budget resources by important 
national need (such as National Defense, Energy, and Agriculture), 
identifying instances when multiple federal agencies obligate funds 
within a budget function or subfunction may indicate potential 
duplication or cost savings opportunities. Although this type of 
analysis cannot answer the question of whether fragmentation or 
overlap exists--nor indicate whether the overlap shown is duplicative--
it can help in the selection of areas for further investigation. Using 
this information, we identified each instance in which an executive 
branch or independent agency obligated more than $10 million within 
these 18 budget functions for further consideration. 

* Examination of key agency documents: When multiple federal agencies 
have similar missions, goals or programs, the potential for 
unnecessary fragmentation, overlap, and duplication exists. As a 
result, we examined key agency documents such as strategic plans, 
performance and accountability reports, and budget justifications to 
determine and analyze their missions, goals or programs. 

* Review of key external published sources: We reviewed key external 
published sources of information. For example, we reviewed reports 
published by the Congressional Budget Office, Inspectors General, and 
the Congressional Research Service. 

Because it is not possible to examine every instance of potential 
duplication or opportunities for cost savings across the federal 
government, we considered a variety of factors to determine whether 
such potential instances or opportunities were significant enough to 
require additional examination. 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. On the basis of this 
multiphased approach we identified areas of potential fragmentation, 
overlap, and duplication and opportunities for costs savings or 
revenue enhancement. GAO programmed work to examine these areas for 
reporting in this or future annual reports. 

Each issue area contained in Sections I and II 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 ongoing work or update in the section entitled "How GAO Conducted 
Its Work" of each issue area. 

Identifying Actions: 

To identify what actions, if any, exist to minimize 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,[Footnote 4] and evaluating performance 
and results achieving efficiencies.[Footnote 5] 

While the areas identified in our annual reports may not cover the 
full universe of fragmentation, overlap, and duplication within the 
federal government, we have conducted a systematic and practical 
examination across the federal government to provide reasonable 
coverage for areas of potential fragmentation, overlap, and 
duplication government-wide over the course of our 2011 through 2013 
annual reports. GAO plans to continue to identify and report on 
additional areas of fragmentation, overlap, and duplication as well as 
opportunities for cost savings and revenue enhancement as they arise 
in the future. 

To identify the potential financial and other benefits that might 
result from actions addressing fragmentation, overlap, and duplication 
as well as opportunities for cost savings and revenue enhancement, 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, and duplication 
as well as opportunities for cost savings and revenue enhancement 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 fragmentation, overlap, 
and duplication as well as opportunities for cost savings and revenue 
enhancement 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 III that provide a 
detailed listing of federally-funded program names and associated 
budgetary information. While 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. When available, we collected obligations 
information for fiscal year 2010 for consistent 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 GAO takes to assess the 
reliability of data vary but are chosen to accomplish the auditing 
requirement that the data be sufficiently reliable given the purposes 
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. GAO 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. GAO 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 GAO often compares 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 Areas and Actions: 

To examine the extent to which the legislative and executive branches 
have made progress in implementing the 131 areas we have reported on 
in previous annual reports on fragmentation, overlap, and duplication, 
we reviewed relevant legislation and documents such as budgets, 
policies, strategic and implementation plans, guidance, and other 
information related to the approximately 300 actions included in these 
previous reports.[Footnote 6] We also analyzed, to the extent 
possible, whether or not financial or other benefits have been 
attained, and included this information as appropriate. In addition, 
we discussed the implementation status of the areas with officials at 
the relevant agencies. 

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 approximately 
300 actions within their areas of expertise. A core group of GAO staff 
examined all 300 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 areas and 
actions. 

* We determined that an area was "addressed" if all actions in that 
area were addressed; "partially addressed" if at least one action 
needed in that area showed some progress toward implementation but not 
all actions were addressed; and "not addressed" if none of the actions 
needed in that area were addressed or partially addressed. 

* 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 
some instances, the 2013 assessment of a legislative branch action 
changed from "partially addressed" to "not addressed." These instances 
occurred because we assessed the action as "partially addressed" in 
2012 because a relevant bill passed committee during the 112th 
Congress; however, this year we assessed the action as "not addressed" 
because the relevant bill was not enacted into law before the end of 
the 112TH Congress and no similar bill has passed out of committee in 
the 113th Congress as of March 6, 2013. 

* 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. 

GAO provided drafts of these assessments to the agencies involved for 
their technical comments and incorporated these comments, as 
appropriate. 

This report is based upon work GAO previously conducted in accordance 
with generally accepted government auditing standards. Those 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. We incorporated a summary 
of comments on the prior GAO work upon which each issue area is based 
and also sought comments for each issue area from the agencies 
involved and incorporated their comments, as appropriate. Consistent 
with GAO policy, we are not reprinting copies of agency's 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. 

Footnotes: 

[1] To date, this work has not identified a basis for proposing 
specific funding rescissions. 

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

[3] The MAX Information System is used to support the federal budget 
process. The system has the capability to collect, validate, analyze, 
model, and publish information relating to governmentwide management 
and budgeting activities and can also be used as an information 
sharing and communication portal between government organizations. 

[4] GAO, Results-Oriented Government: Practices That Can Help Enhance 
and Sustain Collaboration among Federal Agencies, [hyperlink, 
http://www.gao.gov/products/GAO-06-15] (Washington, D.C.: Oct. 21, 
2005). 

[5] GAO, Managing for Results: A Guide for Using the GPRA 
Modernization Act to Help Inform Congressional Decision Making, 
[hyperlink, http://www.gao.gov/products/GAO-12-621SP] (Washington, D.C. 

[6] We are not assessing 9 actions this year that were previously 
included in our 2011 and 2012 reports. Based on subsequent audit work 
that we conducted, these actions have either been consolidated, 
redirected from a Congressional to an executive branch action, or 
revised to reflect updated information or data that we obtained. 
Further, 16 actions reported in 2011 and 2012 were revised this year 
due to additional audit work or other information GAO considered. 

June 15, 2012). 

[End of Appendix II] 

Appendix III: Areas Identified in 2011-2013 Annual Reports, by Mission: 

This enclosure presents a summary of the areas we identified in our 
2011-2013 annual reports. It also includes our assessment of the 
overall progress made in each of the 132 areas that we identified in 
our 2011 and 2012 annual reports[Footnote 1] in which Congress and the 
executive branch could take actions to reduce or eliminate potential 
duplication, overlap, and fragmentation or achieve other potential 
financial benefits. We have not yet made any assessments of progress 
for its 2013 areas. Table 1 presents our assessment of the overall 
progress made in implementing the actions needed in the areas related 
to duplication, overlap, or fragmentation. Table 2 presents our 
assessment of the overall progress made in implementing the actions 
needed in the areas related to cost savings or revenue enhancement. 

Table 1: GAO Identified Areas of Duplication, Overlap, and 
Fragmentation in 2011-2013 Annual Reports: 

Mission: Agriculture; 
Annual Report: 2011; 
Areas identified: Area 1: Fragmented food safety system has caused 
inconsistent oversight ineffective coordination, and inefficient use 
of resources; 
Overall assessment: Partially addressed. 

Mission: Agriculture; 
Annual Report: 2012; 
Areas identified: Area 1: Protection of Food and Agriculture: 
Centrally coordinated oversight is needed to ensure nine federal 
agencies effectively and efficiently implement the nation's fragmented 
policy to defend the food and agriculture systems against potential 
terrorist attacks and major disasters; 
Overall assessment: Partially addressed. 

Mission: Agriculture; 
Annual Report: 2013; 
Areas identified: Area 1: Catfish Inspection: Repealing provisions of 
the 2008 Farm Bill that assigned U.S. Department of Agriculture's Food 
Safety and Inspection Service responsibility for examining and 
inspecting catfish and for creating a catfish inspection program would 
avoid duplication of federal programs and could save taxpayers 
millions of dollars annually without affecting the safety of catfish 
intended for human consumption; 
Overall assessment: [A]. 

Mission: Defense; 
Annual Report: 2011; 
Areas identified: Area 2: Realigning the Department of Defense's (DOD) 
military medical command structures and consolidating common functions 
could increase efficiency and result in projected savings ranging from 
$281 million to $460 million annually; 
Overall assessment: Partially addressed. 

Mission: Defense; 
Annual Report: 2011; 
Areas identified: Area 3: Opportunities exist for consolidation and 
increased efficiencies to maximize response to warfighter urgent needs; 
Overall assessment: Partially addressed. 

Mission: Defense; 
Annual Report: 2011; 
Areas identified: Area 4: Opportunities exist to avoid unnecessary 
redundancies and improve the coordination of counter-improvised 
explosive device efforts; 
Overall assessment: Partially addressed. 

Mission: Defense; 
Annual Report: 2011; 
Areas identified: Area 5: Opportunities exist to avoid unnecessary 
redundancies and maximize the efficient use of intelligence, 
surveillance, and reconnaissance capabilities; 
Overall assessment: Partially addressed. 

Mission: Defense; 
Annual Report: 2011; 
Areas identified: Area 6: A departmentwide acquisition strategy could 
reduce DOD's risk of costly duplication in purchasing Tactical Wheeled 
Vehicles; 
Overall assessment: Partially addressed. 

Mission: Defense; 
Annual Report: 2011; 
Areas identified: Area 7: Improved joint oversight of DOD's 
propositioning programs for equipment and supplies may reduce 
unnecessary duplication; 
Overall assessment: Partially addressed. 

Mission: Defense; 
Annual Report: 2011; 
Areas identified: 201 Area 8: DOD's business systems modernization: 
opportunities exist for optimizing business operations and systems; 
Overall assessment: Partially addressed. 

Mission: Defense; 
Mission: [Empty]; 
Annual Report: 2012; 
Areas identified: Area 2: Electronic Warfare: Identifying 
opportunities to consolidate DOD airborne electronic attack programs 
could reduce overlap in the department's multiple efforts to develop 
new capabilities and improve the department's return on its 
multibillion-dollar acquisition investments; 
Overall assessment: Partially addressed. 

Mission: Defense; 
Annual Report: 2012; 
Areas identified: Area 3: Unmanned Aircraft Systems: Ineffective 
acquisition practices and collaboration efforts in the DOD unmanned 
aircraft systems portfolio creates overlap and the potential for 
duplication among a number of current programs and systems; 
Overall assessment: Partially addressed. 

Mission: Defense; 
Annual Report: 2012; 
Areas identified: Area 4: Counter-Improvised Explosive Device Efforts: 
DOD continues to risk duplication in its multibillion-dollar counter 
Improvised Explosive Device efforts because it does not have a 
comprehensive database of its projects and initiatives; 
Overall assessment: Partially addressed. 

Mission: Defense; 
Annual Report: 2012; 
Areas identified: Area 5: Defense Language and Culture Training: DOD 
needs a more integrated approach to reduce fragmentation in training 
approaches and overlap in the content of training products acquired by 
the military services and other organizations; 
Overall assessment: Partially addressed. 

Mission: Defense; 
Annual Report: 2012; 
Areas identified: Area 6: Stabilization, Reconstruction, and 
Humanitarian Assistance Efforts: Improving the DOD's evaluations of 
stabilization, reconstruction, and humanitarian assistance efforts, 
and addressing coordination challenges with the Department of State 
(State) and the U.S. Agency for International Development (USAID), 
could reduce overlapping efforts and result in the more efficient use 
of taxpayer dollars; 
Overall assessment: Partially addressed. 

Mission: Defense; 
Annual Report: 2013; 
Areas identified: Area 2: Combat Uniforms: The Department of Defense's 
fragmented approach to developing and acquiring uniforms could be more 
efficient, better protect service members, and result in up to $82 
million in savings in development and acquisition cost savings through 
increased collaboration among the military services; 
Overall assessment: Mission: [A]. 

Mission: Defense; 
Annual Report: 2013; 
Areas identified: Area 3: Defense Foreign Language Support Contracts: 
DOD should explore opportunities to gain additional efficiencies in 
contracts for foreign language support, which is estimated to cost 
more than $1 billion annually, by addressing fragmentation in the 
department's acquisition; 
Overall assessment: [A]. 

Mission: Economic Development; 
Annual Report: 2011; 
Areas identified: Area 9: The efficiency and effectiveness of 
fragmented economic development programs are unclear; 
Overall assessment: Partially addressed. 

Mission: Economic Development; 
Annual Report: 2011; 
Areas identified: Area 10: The federal approach to surface 
transportation is fragmented, lacks clear goals, and is not 
accountable for results; 
Overall assessment: Addressed. 

Mission: Economic Development; 
Annual Report: 2011; 
Areas identified: Area 11: Fragmented federal efforts to meet water 
needs in the U.S.-Mexico border region have resulted in an 
administrative burden, redundant activities, and an overall 
inefficient use of resources; 
Overall assessment: Not addressed. 

Mission: Economic Development; 
Annual Report: 2012; 
Areas identified: Area 7: Support for Entrepreneurs: Overlap and 
fragmentation among the economic development programs that support 
entrepreneurial efforts require the Office of Management and Budget 
(OMB) and other agencies to better evaluate the programs and explore 
opportunities for program restructuring, which may include 
consolidation, within and across agencies; 
Overall assessment: Partially addressed. 

Mission: Economic Development; 
Annual Report: 2012; 
Areas identified: Area 8: Surface Freight Transportation: Fragmented 
federal programs and funding structures are not maximizing the 
efficient movement of freight; 
Overall assessment: Partially addressed. 

Mission: Energy; 
Annual Report: 2011; 
Areas identified: Area 12: Resolving conflicting requirements could 
more effectively achieve federal fleet energy goals; 
Overall assessment: Not addressed. 

Mission: Energy; 
Annual Report: 2011; 
Areas identified: Area 13: Addressing duplicative federal efforts 
directed at increasing domestic ethanol production could reduce 
revenue losses by more than $5.7 billion annually; 
Overall assessment: Addressed. 

Mission: Energy; 
Annual Report: 2012; 
Areas identified: Area 9: Department of Energy Contractor Support 
Costs: The Department of Energy (DOE) should assess whether further 
opportunities could be taken to streamline support functions, 
estimated to cost over $5 billion, at its contractor-managed 
laboratory and nuclear production and testing sites, in light of 
contractors' historically fragmented approach to providing these 
functions; 
Overall assessment: Addressed. 

Mission: Energy; 
Annual Report: 2012; 
Areas identified: Area 10: Nuclear Nonproliferation: Comprehensive 
review needed to address strategic planning limitations and potential 
fragmentation and overlap concerns among programs combating nuclear 
smuggling overseas; 
Overall assessment: Not addressed. 

Mission: Energy; 
Annual Report: 2013; 
Areas identified: Area 3: Renewable Energy Initiatives: Federal 
support for wind and solar energy, biofuels, and other renewable 
energy sources, which has been estimated at several billion dollars 
per year, is fragmented because 23 agencies implemented hundreds of 
renewable energy initiatives in fiscal year 2010--the latest year for 
which GAO developed these original data. Further, the DOE and USDA 
could take additional actions--to the extent possible within their 
statutory authority--to help ensure effective use of financial support 
from several wind initiatives, which GAO found provided duplicative 
support that may not have been needed in all cases for projects to be 
built; 
Overall assessment: [A]. 

Mission: General government; 
Annual Report: 2011; 
Areas identified: Area 14: Enterprise architectures: key mechanisms 
for identifying potential overlap and duplication; 
Overall assessment: Partially addressed. 

Mission: General government; 
Annual Report: 2011; 
Areas identified: Area 15: Consolidating federal data centers provides 
opportunity to improve government efficiency; 
Overall assessment: Partially addressed. 

Mission: General government; 
Annual Report: 2011; 
Areas identified: Area 16: Collecting improved data on interagency 
contracting to minimize duplication could help the government leverage 
its vast buying power; 
Overall assessment: Partially addressed. 

Mission: General government; 
Annual Report: 2011; 
Areas identified: Area 17: Periodic reviews could help ineffective tax 
expenditures and redundancies in related tax and spending programs, 
potentially reducing revenue losses by billions of dollars; 
Overall assessment: Partially addressed. 

Mission: General government; 
Annual Report: 2012; 
Areas identified: Area 11: Personnel Background Investigations: The 
Office of Management and Budget (OMB) should take action to prevent 
agencies from making potentially duplicative investments in electronic 
case management and adjudication systems; 
Overall assessment: Not addressed. . 

Mission: General government; 
Annual Report: 2012; 
Areas identified: Area 12: Cybersecurity Human Capital: Governmentwide 
initiatives to enhance cybersecurity workforce in the federal 
government need better structure, planning, guidance, and coordination 
to reduce duplication; 
Overall assessment: Partially addressed. 

Mission: General government; 
Annual Report: 2012; 
Areas identified: Area 13: Spectrum Management: Enhanced coordination 
of federal agencies' efforts to manage radio frequency spectrum and an 
examination of incentive mechanisms to foster more efficient spectrum 
use may aid regulators' attempts to jointly respond to competing 
demands for spectrum while identifying valuable spectrum that could be 
auctioned for commercial use, thereby generating revenues for the U.S. 
Department of Treasury (Treasury); 
Overall assessment: Partially addressed. 

Mission: Health; 
Annual Report: 2011; 
Areas identified: Area 18: Opportunities exist for DOD and the U.S. 
Department of Veterans Affairs (VA) to jointly modernize their 
electronic health records systems; 
Overall assessment: Partially addressed. 

Mission: Health; 
Annual Report: 2011; 
Areas identified: Area 19: VA and DOD need to control drug costs and 
increase joint contracting wherever it is cost-effective; 
Overall assessment: Partially addressed. 

Mission: Health; 
Annual Report: 2011; 
Areas identified: Area 20: The U.S. Department of Health and Human 
Services (HHS) needs an overall strategy to better integrate 
nationwide public health information systems; 
Overall assessment: Not addressed. . 

Mission: Health; 
Annual Report: 2012; 
Areas identified: Area 14: Health Research Funding: The National 
Institutes of Health (NIH), DOD, and VA can improve sharing of 
information to help avoid the potential for unnecessary duplication; 
Overall assessment: Partially addressed. 

Mission: Health; 
Annual Report: 2012; 
Areas identified: Area 15: Military and Veterans Health Care: DOD and 
VA need to improve integration across care coordination and case 
management programs to reduce duplication and better assist 
servicemembers, veterans, and their families; 
Overall assessment: Partially addressed. 

Mission: Health; 
Annual Report: 2013; 
Areas identified: Area 5: Joint Veterans and Defense Health Care 
Services: The Departments of Veterans Affairs and Defense should 
enhance their collaboration to reduce costs, overlap, and potential 
duplication in the delivery of health care services; 
Overall assessment: Mission: [A]. 

Mission: Health; 
Annual Report: 2013; 
Areas identified: Area 6: Medicaid Program Integrity: The Centers for 
Medicare & Medicaid Services needs to take steps to eliminate 
duplication and increase efficiency in two Medicaid Integrity Program 
activities--provider audits and the collection of state program 
integrity data; 
Overall assessment: [A]. 

Mission: Homeland security/law enforcement; 
Annual Report: 2011; 
Areas identified: Area 21: Strategic oversight mechanisms could help 
integrate fragmented interagency efforts to defend against biological 
threats; 
Overall assessment: Partially addressed. 

Mission: Homeland security/law enforcement; 
Annual Report: 2011; 
Areas identified: Area 22: DHS oversight could help eliminate 
potential duplicating efforts of interagency forums in securing the 
northern border; 
Overall assessment: Not addressed. 

Mission: Homeland security/law enforcement; 
Annual Report: 2011; 
Areas identified: Area 23: The Department of Justice (DOJ) plans 
actions to reduce overlap in explosives investigations, but monitoring 
is needed to ensure successful implementation; 
Overall assessment: Addressed. 

Mission: Homeland security/law enforcement; 
Annual Report: 2011; 
Areas identified: Area 24: The Transportation Security 
Administration's (TSA) security assessments on commercial trucking 
companies overlap with those of another agency, but efforts are under 
way to address the overlap; 
Overall assessment: Partially addressed. 

Mission: Homeland security/law enforcement; 
Annual Report: 2011; 
Areas identified: Area 25: DHS could streamline mechanisms for sharing 
security-related information with public transit agencies to help 
address overlapping information; 
Overall assessment: Partially addressed. 

Mission: Homeland security/law enforcement; 
Annual Report: 2011; 
Areas identified: Area 26: The Federal Emergency Management Agency 
(FEMA) needs to improve its oversight of grants and establish a 
framework for assessing capabilities to identify gaps and prioritize 
investments; 
Overall assessment: Partially addressed. 

Mission: Homeland security/law enforcement; 
Annual Report: 2012; 
Areas identified: Area 16: Department of Justice Grants: The 
Department of Justice could improve how it targets nearly $3.9 billion 
to reduce the risk of potential unnecessary duplication across the 
more than 11,000 grant awards it makes annually; 
Overall assessment: Partially addressed. 

Mission: Homeland security/law enforcement; 
Annual Report: 2012; 
Areas identified: Area 17: Homeland Security Grants: DHS needs better 
project information and coordination among four overlapping grant 
programs; 
Overall assessment: Partially addressed. 

Mission: Homeland security/law enforcement; 
Annual Report: 2012; 
Areas identified: Area 18: Federal Facility Risk Assessments: Agencies 
are making duplicate payments for facility risk assessments by 
completing their own assessments, while also paying DHS for 
assessments that the department is not performing; 
Overall assessment: Partially addressed. 

Mission: Homeland security/law enforcement; 
Annual Report: 2013; 
Areas identified: 102. Area 7: Department of Homeland Security 
Research and Development: Better policies and guidance for defining, 
overseeing, and coordinating research and development investments and 
activities would help DHS address fragmentation, overlap, and 
potential unnecessary duplication; 
Overall assessment: [A]. 

Mission: Homeland security/law enforcement; 
Annual Report: 2013; 
Areas identified: Area 8: Field-Based Information Sharing: To help 
reduce inefficiencies resulting from overlap in analytical and 
investigative support activities, the Departments of Justice and 
Homeland Security and the Office of National Drug Control Policy could 
improve coordination among five types of field-based information 
sharing entities that may collect, process, analyze, or disseminate 
information in support of counterterrorism-related efforts--Joint 
Terrorism Task Forces, Field Intelligence Groups, Regional Information 
Sharing Systems centers, state and major urban area fusion centers, 
and High Intensity Drug Trafficking Areas Investigative Support 
Centers; 
Overall assessment: Mission: [A]. 

Mission: Homeland security/law enforcement; 
Annual Report: 2013; 
Areas identified: Area 9: Justice and Treasury Asset Forfeiture: 
Conducting a study to evaluate the feasibility of consolidating 
Justice's and Treasury's multimillion dollar asset forfeiture 
activities could help the departments identify the extent to which 
consolidation of potentially duplicative activities would help 
increase the efficiency and effectiveness of the programs and achieve 
cost savings; 
Overall assessment: [A]. 

Mission: Information technology; 
Annual Report: 2012; 
Areas identified: Area 19: Information Technology Investment 
Management: OMB, and DOD and DOE need to address potentially 
duplicative information technology investments to avoid investing in 
unnecessary systems; 
Overall assessment: Partially addressed. 

Mission: Information technology; 
Annual Report: 2013; 
Areas identified: Area 10: Dissemination of Technical Research 
Reports: Congress may wish to consider whether the fee-based model 
under which the National Technical Information Service currently 
operates for disseminating technical information is still viable or 
appropriate, given that many of the reports overlap with similar 
information available from the issuing organizations or other sources 
for free; 
Overall assessment: [A]. 

Mission: Information technology; 
Annual Report: 2013; 
Areas identified: Area 11: Geospatial Investments: Better coordination 
among federal agencies that collect, maintain, and use geospatial 
information could help reduce duplication of geospatial investments 
and provide the opportunity for potential savings of millions of 
dollars; 
Overall assessment: [A]. 

Mission: International affairs; 
Annual Report: 2011; 
Areas identified: Area 27: Lack of information sharing could create 
the potential for duplication of efforts between U.S. agencies 
involved in development efforts in Afghanistan; 
Overall assessment: Partially addressed. 

Mission: International affairs; 
Annual Report: 2011; 
Areas identified: Area 28: Despite restructuring, overlapping roles 
and functions still exist at State's Arms Control and Nonproliferation 
Bureaus; 
Overall assessment: Addressed. 

Mission: International affairs; 
Annual Report: 2012; 
Areas identified: Area 20: Overseas Administrative Services: U.S. 
government agencies could lower the administrative cost of their 
operations overseas by increasing participation in the International 
Cooperative Administrative Support Services system and by reducing 
reliance on American officials overseas to provide these services; 
Overall assessment: Partially addressed. 

Mission: International affairs; 
Annual Report: 2012; 
Areas identified: Area 21: Training to Identify Fraudulent Travel 
Documents: Establishing a formal coordination mechanism could help 
reduce duplicative activities among seven different entities that are 
involved in training foreign officials to identify fraudulent travel 
documents; 
Overall assessment: Not addressed. 

Mission: International affairs; 
Annual Report: 2013; 
Areas identified: Area 12: Export Promotion: Enhanced collaboration 
between the Small Business Administration (SBA) and two other agencies 
could help to limit overlapping export-related services for small 
businesses; 
Overall assessment: [A]. 

Mission: International affairs; 
Annual Report: 2013; 
Areas identified: Area 13: International Broadcasting: The 
Broadcasting Board of Governors--with a budget of $752 million in 
fiscal year 2012--has recognized the need to reduce overlap and 
reallocate limited resources to broadcasts that will have the greatest 
impact, but the agency could do more to achieve this goal, such as 
systematically considering overlap of language services in its annual 
language services review; 
Overall assessment: [A]. 

Mission: Science and the environment; 
Annual Report: 2012; 
Areas identified: Area 22: Coordination of Space System Organizations: 
Fragmented leadership has led to program challenges and potential 
duplication in developing multibillion-dollar space systems; 
Overall assessment: Partially addressed. 

Mission: Science and the environment; 
Annual Report: 2012; 
Areas identified: Area 23: Space Launch Contract Costs: Increased 
collaboration between the Department of Defense and the National 
Aeronautics and Space Administration could reduce launch contracting 
duplication; 
Overall assessment: Partially addressed. 

Mission: Science and the environment; 
Annual Report: 2012; 
Areas identified: Area 24: Diesel Emissions: Fourteen grant and loan 
programs at DOE, Department of Transportation (DOT), and the 
Environmental Protection Agency (EPA), and three tax expenditures fund 
activities that have the effect of reducing mobile source diesel 
emissions; enhanced collaboration and performance measurement could 
improve these fragmented and overlapping programs; 
Overall assessment: Not addressed. 

Mission: Science and the environment; 
Annual Report: 2012; 
Areas identified: Area 25: Environmental Laboratories: EPA needs to 
revise its overall approach to managing its 37 laboratories to address 
potential overlap and fragmentation and more fully leverage its 
limited resources; 
Overall assessment: Partially addressed. 

Mission: Science and the environment; 
Annual Report: 2012; 
Areas identified: Area 26: Green Building: To evaluate the potential 
for overlap or fragmentation among federal green building initiatives, 
the Department of Housing and Urban Development (HUD), DOE, and EPA 
should lead other federal agencies in collaborating on assessing their 
investments in more than 90 initiatives to foster green building in 
the nonfederal sector; 
Overall assessment: Partially addressed. 

Mission: Science and the environment; 
Annual Report: 2013; 
Areas identified: Area 14: Rural Water Infrastructure: Additional 
coordination by the EPA and the USDA could help three water and 
wastewater infrastructure programs with combined funding of about $4.3 
billion avoid potentially duplicative application requirements, as 
well as associated costs and time developing engineering reports and 
environmental analyses; 
Overall assessment: [A]. 

Mission: Social services; 
Annual Report: 2011; 
Areas identified: Area 29: Actions needed to reduce administrative 
overlap among domestic food assistance programs; 
Overall assessment: Not addressed. 

Mission: Social services; 
Annual Report: 2011; 
Areas identified: Area 30: Better coordination of federal homelessness 
programs may minimize fragmentation and overlap; 
Overall assessment: Partially addressed. 

Mission: Social services; 
Annual Report: 2011; 
Areas identified: Area 31: Further steps needed to improve cost-
effectiveness and enhance services for transportation-disadvantaged 
persons; 
Overall assessment: Partially addressed. 

Mission: Social services; 
Annual Report: 2012; 
Areas identified: Area 27: Social Security Benefit Coordination: 
Benefit offsets for related programs help reduce the potential for 
overlapping payments but pose administrative challenges; 
Overall assessment: Partially addressed. 

Mission: Social services; 
Annual Report: 2012; 
Areas identified: Area 28: Housing Assistance: Examining the benefits 
and costs of housing programs and tax expenditures that address the 
same or similar populations or areas, and potentially consolidating 
them, could help mitigate overlap and fragmentation and decrease costs; 
Overall assessment: Not addressed. 

Mission: Social services; 
Annual Report: 2013; 
Areas identified: Area 15: Drug Abuse Prevention and Treatment 
Programs: More fully assessing the extent of overlap and potential 
duplication across the fragmented 76 federal drug abuse prevention and 
treatment programs and identifying opportunities for increased 
coordination, including those programs where no coordination has 
occurred, would better position the Office of National Drug Control 
Policy to better leverage resources and increase efficiencies; 
Overall assessment: [A]. 

Mission: Training, employment, and education; 
Annual Report: 2011; 
Areas identified: Area 32: Multiple employment and training programs: 
providing information on colocating services and consolidating 
administrative structures could promote efficiencies; 
Overall assessment: [Empty]. 

Mission: Training, employment, and education; 
Annual Report: 2011; 
Areas identified: Area 33: Teacher quality: proliferation of programs 
complicates federal efforts to invest dollars effectively; 
Overall assessment: [Empty]. 

Mission: Training, employment, and education; 
Annual Report: 2011; 
Areas identified: Area 34: Fragmentation of financial literacy efforts 
makes coordination essential; 
Overall assessment: Addressed. 

Mission: Training, employment, and education; 
Annual Report: 2012; 
Areas identified: Area 29: Early Learning and Child Care: The 
Departments of Education and Health and Human Services (HHS) should 
extend their coordination efforts to other federal agencies with early 
learning and child care programs to mitigate the effects of program 
fragmentation, simplify children's access to these services, collect 
the data necessary to coordinate operation of these programs, and 
identify and minimize any unwarranted overlap and potential 
duplication; 
Overall assessment: Partially addressed. 

Mission: Training, employment, and education; 
Annual Report: 2012; 
Areas identified: Area 30: Employment for People with Disabilities: 
Better coordination among 45 programs in nine federal agencies that 
support employment for people with disabilities could help mitigate 
program fragmentation and overlap, and reduce the potential for 
duplication or other inefficiencies; 
Overall assessment: Partially addressed. 

Mission: Training, employment, and education; 
Annual Report: 2012; 
Areas identified: Area 31: Science, Technology, Engineering, and 
Mathematics Education: Strategic planning is needed to better manage 
overlapping programs across multiple agencies; 
Overall assessment: Partially addressed. 

Mission: Training, employment, and education; 
Annual Report: 2012; 
Areas identified: Area 32: Financial Literacy: Overlap among financial 
literacy activities makes coordination and clarification of roles and 
responsibilities essential, and suggests potential benefits of 
consolidation; 
Overall assessment: Addressed. 

Mission: Training, employment, and education; 
Annual Report: 2013; 
Areas identified: Area 16: Higher Education Assistance: Federal 
agencies providing assistance for higher education should better 
coordinate to improve program administration and help reduce 
fragmentation; 
Overall assessment: [A]. 

Mission: Training, employment, and education; 
Annual Report: 2013; 
Areas identified: Area 17: Veterans' Employment and Training: The 
Departments of Labor, Veterans Affairs, and Defense need to better 
coordinate the employment services each provides to veterans, and 
Labor needs to better target the Disabled Veterans' Outreach Program 
so that it does not overlap with other programs; 
Overall assessment: [A]. 

Source: GAO analysis. 

[A] As of April 9, 2013, we have not assessed the 2013 areas 
identified. 

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

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

Not addressed, meaning none of the actions needed in that area were 
addressed. 

Consolidated or other = actions were not assessed this year. 

[End of table] 

Table 2: GAO Identified Areas of Cost-Savings and Revenue-Enhancement 
Opportunities in 2011-2013 Annual Reports: 

Mission: Agriculture; 

Annual Report: 2011; 
Areas identified: 2. Area 35: Reducing some farm program payments 
could result in savings from $800 million over 10 years to up to $5 
billion annually; 
Overall assessment: Not addressed. 

Annual Report: 2013; 
Areas identified: Area 18: Agricultural Quarantine Inspection Fees: 
The United States Department of Agriculture's Animal and Plant Health 
Inspection Service could have achieved as much as $325 million in 
savings (based on fiscal year 2011 data, as reported in GAO's March 
2013 report) by more fully aligning fees with program costs; 
although the savings would be recurring, the amount would depend on 
the cost-collections gap in a given fiscal year and would result in a 
reduced reliance on U.S. Customs and Border Protection's annual 
Salaries and Expenses appropriations used for agricultural inspection 
services; 
Overall assessment: [A]. 

Annual Report: 2013; 
Areas identified: Area 19: Crop Insurance: To achieve up to $1.2 
billion per year in cost savings in the crop insurance program, 
Congress could consider limiting the subsidy for premiums that an 
individual farmer can receive each year, reducing the subsidy for all 
or high-income farmers participating in the program, or some 
combination of limiting and reducing these subsidies; 
Overall assessment: [A]. 

Mission: Defense; 

Annual Report: 2011; 
Areas identified: Area 36: DOD should assess costs and benefits of 
overseas military presence options before committing to costly 
personnel realignments and construction plans, thereby possibly saving 
billions of dollars; 
Overall assessment: Partially addressed. 

Annual Report: 2011; 
Areas identified: Area 37: Total compensation approach is needed to 
manage significant growth in military personnel costs; 
Overall assessment: Partially addressed. 

Annual Report: 2011; 
Areas identified: Area 38: Employing best management practices could 
help DOD save money on its weapon systems acquisition programs; 
Overall assessment: Partially addressed. 

Annual Report: 2011; 
Areas identified: Area 39: More efficient management could limit 
future costs of DOD's spare parts inventory; 
Overall assessment: Partially addressed. 

Annual Report: 2011; 
Areas identified: Area 40: More comprehensive and complete cost data 
can help DOD improve the cost-effectiveness of sustaining weapons 
systems; 
Overall assessment: Partially addressed. 

Annual Report: 2011; 
Areas identified: Area 41: Improved corrosion prevention and control 
practices could help DOD avoid billions in unnecessary costs over time; 
Overall assessment: Partially addressed. 

Annual Report: 2012; 
Areas identified: Area 33: Air Force Food Service: The Air Force has 
opportunities to achieve millions of dollars in cost savings annually 
by reviewing and renegotiating food service contracts, where 
appropriate, to better align with the needs of installations; 
Overall assessment: Addressed. 

Annual Report: 2012; 
Areas identified: Area 34: Defense Headquarters: DOD should review and 
identify further opportunities for consolidating or reducing the size 
of headquarters organizations; 
Overall assessment: Partially addressed. 

Annual Report: 2012; 
Areas identified: Area 35: Defense Real Property: Ensuring the receipt 
of fair market value for leasing underused real property and 
monitoring administrative costs could help the military services' 
enhanced use lease programs realize intended financial benefits; 
Overall assessment: Partially addressed. 

Annual Report: 2012; 
Areas identified: Area 36: Military Health Care Costs: To help achieve 
significant projected cost savings and other performance goals, DOD 
needs to complete, implement, and monitor detailed plans for each of 
its approved health care initiatives; 
Overall assessment: Partially addressed. 

Annual Report: 2012; 
Areas identified: Area 37: Overseas Defense Posture: DOD could reduce 
costs of its Pacific region presence by developing comprehensive cost 
information and re-examining alternatives to planned initiatives; 
Overall assessment: Partially addressed. 

Annual Report: 2012; 
Areas identified: Area 38: Navy's Information Technology Enterprise 
Network: Better informed decisions are needed to ensure a more cost-
effective acquisition approach for the U.S. Navy's Next Generation 
Enterprise Network; 
Overall assessment: Not addressed. 

Annual Report: 2013; 
Areas identified: Area 20: Joint Basing: DOD needs an implementation 
plan to guide joint bases to achieve millions of dollars in cost 
savings and efficiencies anticipated from combining support services 
at 26 installations located close to one another; 
Overall assessment: [A]. 

Mission: Economic development; 

Annual Report: 2011; 
Areas identified: Area 42: Revising the essential air service program 
could improve efficiency; 
Overall assessment: Partially addressed. 

Annual Report: 2011; 
Areas identified: Area 43: Improved design and management of the 
universal service fund as it expands to support broadband could help 
avoid cost increases for consumers; 
Overall assessment: Partially addressed. 

Annual Report: 2011; 
Areas identified: Area 44: The U.S. Army Corps of Engineers should 
provide Congress with project-level information on unobligated 
balances; 
Overall assessment: Addressed. 

Annual Report: 2012; 
Areas identified: 40. Area 39: Auto Recovery Office: Unless the 
Secretary of Labor can demonstrate how the Auto Recovery Office has 
uniquely assisted auto communities, Congress may wish to consider 
prohibiting the Department of Labor from spending any of its 
appropriations on the Auto Recovery Office and instead require that 
the department direct the funds to other federal programs that provide 
funding directly to affected communities; 
Overall assessment: Not addressed. 

Mission: Energy; 

Annual Report: 2011; 
Areas identified: Area 45: Improved management of federal oil and gas 
resources could result in approximately $2 billion over 10 years; 
Overall assessment: Partially addressed. 

Annual Report: 2012; 
Areas identified: Area 40: Excess Uranium Inventories: Marketing the 
Department of Energy's excess uranium could provide substantial 
revenue for the government; 
Overall assessment: Not addressed. 

Annual Report: 2013; 
Areas identified: Area 21: Department of Energy's Isotope Program: 
Assessing the value of isotopes to customers, and other factors such 
as prices of alternatives, may show that the Department of Energy 
could increase prices for isotopes that it sells to commercial 
customers to create cost savings by generating additional revenue; 
Overall assessment: [A]. 

Mission: General government; 

Annual Report: 2011; 
Areas identified: Area 46: Efforts to address governmentwide improper 
payments could result in significant costs savings; 
Overall assessment: Partially addressed. 

Annual Report: 2011; 
Areas identified: Area 47: Promoting competition for the over $500 
billion in federal contracts could potentially save billions of 
dollars over time; 
Overall assessment: Partially addressed. 

Annual Report: 2011; 
Areas identified: Area 48: Applying strategic sourcing best practices 
throughout the federal procurement system could saves billions of 
dollars annually; 
Overall assessment: Partially addressed. 

Annual Report: 2011; 
Areas identified: Area 49: Adherence to guidance on award fee 
contracts could improve agencies' use of award fees to produce savings; 
Overall assessment: Addressed. 

Annual Report: 2011; 
Areas identified: Area 50: Agencies could realize cost savings of at 
least $3 billion by continued disposal of unneeded federal real 
property; 
Overall assessment: Consolidated or other. 

Annual Report: 2011; 
Areas identified: Area 51: Improved cost analysis used for making 
federal facility ownership and leasing decisions could save tens of 
millions of dollars; 
Overall assessment: Not addressed. 

Annual Report: 2011; 
Areas identified: Area 52: The Office of Management and Budget's IT 
Dashboard reportedly has already resulted in savings and can further 
help identify opportunities to invest more efficiently in information 
technology; 
Overall assessment: Addressed. 

Annual Report: 2011; 
Areas identified: Area 53: Increasing electronic filing of individual 
income tax returns could reduce IRS's processing costs and increase 
revenues by hundreds of millions of dollars; 
Overall assessment: Partially addressed. 

Annual Report: 2011; 
Areas identified: Area 54: Using return on investment information to 
better target IRS enforcement could reduce the tax gap; 
for example, a 1 percent reduction would increase tax revenues by $3 
billion.[A]; 
Overall assessment: Partially addressed. 

Annual Report: 2011; 
Areas identified: Area 55: Better management of tax debt collection 
may resolve cases faster with lower IRS costs and increase debt 
collected; 
Overall assessment: Partially addressed. 

Annual Report: 2011; 
Areas identified: Area 56: Broadening IRS's authority to correct 
simple tax return errors could facilitate correct tax payments and 
help IRS avoid costly, burdensome audits; 
Overall assessment: Not addressed. 

Annual Report: 2011; 
Areas identified: Area 57: Enhancing mortgage interest information 
reporting could improve tax compliance; 
Overall assessment: Not addressed. 

Annual Report: 2011; 
Areas identified: Area 58: More information on the types and uses of 
canceled debt could help IRS limit revenue losses of forgiven mortgage 
debt; 
Overall assessment: Partially addressed. 

Annual Report: 2011; 
Areas identified: 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; 
Overall assessment: Partially addressed. 

Annual Report: 2011; 
Areas identified: Area 60: Revisions to content and use of Form 1098-T 
could help IRS enforce higher education requirements and increase 
revenues; 
Overall assessment: Partially addressed. 

Annual Report: 2011; 
Areas identified: Area 61: Many options could improve the tax 
compliance of sole proprietors and begin to reduce their $68 billion 
portion of the tax gap; 
Overall assessment: Partially addressed. 

Annual Report: 2011; 
Areas identified: Area 62: IRS could find additional businesses not 
filing tax returns by using third-party data, which show such 
businesses have billions of dollars in sales; 
Overall assessment: Partially addressed. 

Annual Report: 2011; 
Areas identified: Area 63: Congress and IRS can help S corporations 
and their shareholders be more tax compliant, potentially increasing 
tax revenues by hundreds of millions of dollars each year; 
Overall assessment: Partially addressed. 

Annual Report: 2011; 
Areas identified: Area 64: IRS needs an agencywide approach for 
addressing tax evasion among the at least 1 million networks of 
businesses and related entities; 
Overall assessment: Partially addressed. 

Annual Report: 2011; 
Areas identified: Area 65: Opportunities exist to improve the 
targeting of the $6 billion research tax credit and reduce forgone 
revenue; 
Overall assessment: Not addressed. 

Annual Report: 2011; 
Areas identified: Area 66: Converting the new markets tax credit to a 
grant program may increase program efficiency and significantly reduce 
the $3.8 billion 5 years revenue cost of the program; 
Overall assessment: Not addressed. 

Annual Report: 2011; 
Areas identified: Area 67: Limiting the tax-exempt status of certain 
governmental bonds could yield revenue; 
Overall assessment: Not addressed. 

Annual Report: 2011; 
Areas identified: Area 68: Adjusting civil tax penalties for inflation 
potentially could increase revenues by tens of millions of dollars per 
year, not counting any revenues that may result from maintaining the 
penalties' deterrent effect; 
Overall assessment: Partially addressed. 

Annual Report: 2011; 
Areas identified: Area 69: IRS may be able to systematically identify 
nonresident aliens reporting unallowed tax deductions or credits; 
Overall assessment: Addressed. 

Annual Report: 2011; 
Areas identified: Area 70: Tracking undisbursed balances in expired 
grant accounts could facilitate the reallocation of scarce resources 
or the return of funding to the Treasury; 
Overall assessment: Addressed. 

Annual Report: 2012; 
Areas identified: Area 41: General Services Administration Schedules 
Contracts Fee Rates: Re-evaluating fee rates on the General Services 
Administration's Multiple Award Schedules contracts could result in 
significant cost savings governmentwide; 
Overall assessment: Addressed. 

Annual Report: 2012; 
Areas identified: Area 42: U.S. Currency: Legislation replacing the $1 
note with a $1 coin would provide a significant financial benefit to 
the government over time; 
Overall assessment: Not addressed. 

Annual Report: 2012; 
Areas identified: Area 43: Federal User Fees: Regularly reviewing 
federal user fees and charges can help the Congress and federal 
agencies identify opportunities to address inconsistent federal 
funding approaches and enhance user financing, thereby reducing 
reliance on general fund appropriations; 
Overall assessment: Not addressed. 

Annual Report: 2012; 
Areas identified: Area 44: Internal Revenue Service Enforcement 
Efforts: Enhancing the Internal Revenue Service's enforcement and 
service capabilities can help reduce the gap between taxes owed and 
paid by collecting billions in tax revenue and facilitating voluntary 
compliance; 
Overall assessment: Partially addressed. 

Annual Report: 2013; 
Areas identified: Area 21: Additional Opportunities to Improve 
Internal Revenue Service Enforcement of Tax Laws: The Internal Revenue 
Service can realize cost savings and increase revenue collections by 
billions of dollars by, among other things, using more rigorous 
analyses to better allocate enforcement and other resources; 
Overall assessment: [A]. 

Annual Report: 2013; 
Areas identified: Area 23: Agencies' Use of Strategic Sourcing: 
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--
savings of one percent from selected agencies' procurement spending 
alone would equate to over $4 billion; 
Overall assessment: [A]. 

Annual Report: 2013; 
Areas identified: Area 24: Opportunities to Help Reduce Government 
Satellite Program Costs: Government agencies could achieve 
considerable cost savings on some missions by leveraging commercial 
spacecraft through innovative mechanisms such as hosted payload 
arrangements and sharing launch vehicle costs. Selected agencies have 
reported saving hundreds of millions of dollars to date from using 
these innovative mechanisms; 
Overall assessment: 

Mission: Health; 

Annual Report: 2011; 
Areas identified: Area 71: Preventing billions in Medicaid improper 
payments requires sustained attention and action by CMS; 
Overall assessment: Partially addressed. 

Annual Report: 2011; 
Areas identified: Area 72: Federal oversight over Medicaid 
supplemental payments needs improvement, which could lead to 
substantial cost savings; 
Overall assessment: Not addressed. 

Annual Report: 2011; 
Areas identified: Area 73: Better targeting of Medicare's claims 
review could reduce improper payments; 
Overall assessment: Partially addressed. 

Annual Report: 2011; 
Areas identified: Area 74: Potential savings in Medicare's payment for 
health care; 
Overall assessment: Partially addressed. 

Annual Report: 2012; 
Areas identified: Area 45: Medicare Advantage Payment: The Centers for 
Medicare & Medicaid Services could achieve billions of dollars in 
additional savings by better adjusting for differences between 
Medicare Advantage plans and traditional Medicare providers in the 
reporting of beneficiary diagnoses; 
Overall assessment: Partially addressed. 

Annual Report: 2012; 
Areas identified: Area 46: Medicare and Medicaid Fraud Detection 
Systems: The Centers for Medicare & Medicaid Services needs to ensure 
widespread use of technology to help detect and recover billions of 
dollars of improper payments of claims and better position itself to 
determine and measure financial and other benefits of its systems; 
Overall assessment: Partially addressed. 

Annual Report: 2013; 
Areas identified: Area 25: Medicaid Prepayment Controls: More 
widespread use of prepayment edits could reduce improper payments and 
achieve other cost savings for the Medicare program, as well as 
provide more consistent coverage nationwide; 
Overall assessment: [A]. 

Annual Report: 2013; 
Areas identified: Area 26: Medicaid Supplemental Payments: To improve 
the transparency of and accountability for certain high-risk Medicaid 
payments that annually total tens of billions of dollars, Congress 
should consider requiring the Centers for Medicare & Medicaid Services 
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, which could lead to cost savings. GAO's analysis for 
providers for which data are available suggests that savings could be 
in the hundreds of millions, or billions, of dollars; 
Overall assessment: [A]. 

Annual Report: 2013; 
Areas identified: Area 27: Medicare Advantage Quality Bonus Payment 
Demonstration: Rather than implementing the Medicare Advantage quality 
bonus payment program specifically established by law, the Centers for 
Medicare & Medicaid Services is testing an alternative bonus payment 
structure under a broad demonstration authority through a 3-year 
demonstration that has design flaws, raises legal concerns, and is 
estimated to cost over $8 billion; about $2 billion could be saved if 
it were canceled for its last year, 2014; 
Overall assessment: [A]. 

Mission: Homeland security/law enforcement; 

Annual Report: 2011; 
Areas identified: Areas 75 and 76: DHS's management of acquisitions 
could be strengthened to reduce cost overruns and schedule and 
performance shortfalls; 
Overall assessment: Partially addressed. 

Annual Report: 2011; 
Areas identified: Area 77: Validation of TSA's behavior-based 
screening program is needed to justify funding or expansion; 
Overall assessment: Partially addressed. 

Annual Report: 2011; 
Areas identified: Area 78: More efficient baggage screening systems 
could result in about $470 million in reduced TSA personnel costs over 
the next 5 years; 
Overall assessment: Partially addressed. 

Annual Report: 2011; 
Areas identified: Area 79: Clarifying availability of certain customs 
fee collections could produce a one-time savings of $640 million; 
Overall assessment: Addressed. 

Annual Report: 2012; 
Areas identified: Area 47: Border Security: Delaying proposed 
investments for future acquisitions of border surveillance technology 
until the Department of Homeland Security better defines and measures 
benefits and estimates life-cycle costs could help ensure the most 
effective use of future program funding; 
Overall assessment: Partially addressed. 

Annual Report: 2012; 
Areas identified: Area 48: Passenger Aviation Security Fees: Options 
for adjusting the passenger aviation security fee could further offset 
billions of dollars in civil aviation security costs; 
Overall assessment: Not addressed. 

Annual Report: 2012; 
Areas identified: Area 49: Immigration Inspection Fee: The air 
passenger immigration inspection user fee should be reviewed and 
adjusted to fully recover the cost of the air passenger immigration 
inspection activities conducted by 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; 
Overall assessment: Partially addressed. 

Annual Report: 2013; 
Areas identified: Area 28: Checked Baggage Screening: 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; 
Overall assessment: [A]. 

Mission: Income security; 

Annual Report: 2011; 
Areas identified: Area 80: Social Security needs data on pensions from 
noncovered earnings to better enforce offsets and ensure benefit 
fairness, resulting in estimated $2.4-$2.9 billion savings over 10 
years; 
Overall assessment: Not addressed. 

Mission: Information technology; 

Annual Report: 2013; 
Areas identified: Area 29: Cloud computing: Better planning of cloud-
based computing solutions provides an opportunity for potential 
savings of millions of dollars; 
Overall assessment: [A]. 

Annual Report: 2013; 
Areas identified: Area 30: Information Technology Operations and 
Maintenance: Strengthening oversight of key federal agencies' major 
information technology investments in operations and maintenance 
provides opportunity for savings on billions in information technology 
investments; 
Overall assessment: [A]. 

Mission: International affairs; 

Annual Report: 2011; 
Areas identified: Area 81: Congress could pursue several options to 
improve collection of antidumping and countervailing duties; 
Overall assessment: Not addressed. 

Annual Report: 2012; 
Areas identified: Area 50: Iraq Security Funding: When considering new 
funding requests to train and equip Iraqi security forces, Congress 
should consider the government of Iraq's financial resources, which 
afford it the ability to contribute more toward the cost of Iraq's 
security; 
Overall assessment: Addressed. 

Annual Report: 2013; 
Areas identified: 156. Area 31: Tobacco Taxes: Federal revenue losses 
were as much as $615 million to $1.1 billion between April 2009 and 
2011 because manufacturers and consumers substituted higher-taxed 
smoking tobacco products with similar lower-taxed products. To address 
future revenue losses, Congress should consider modifying tobacco tax 
rates to eliminate significant tax differentials between similar 
products; 
Overall assessment: [A]. 

Mission: Social Services; 

Annual Report: 2012; 
Areas identified: Area 51: Domestic Disaster Assistance: The Federal 
Emergency Management Agency could reduce the costs to the federal 
government related to major disasters declared by the President by 
updating the principal indicator on which disaster funding decisions 
are based and better measuring a state's capacity to respond without 
federal assistance; 
Overall assessment: Not addressed. 

Source: GAO. 

[A] As of April 9, 2013, we have not assessed the 2013 areas 
identified. 

Legend: 

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

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

Not addressed, meaning none of the actions needed in that area were 
addressed. 

Consolidated or other = actions were not assessed this year. 

[End of table] 

[End of Appendix III] 

Appendix IV: Lists of Programs Identified: 

This appendix includes lists of federal programs or other activities 
related to issue areas in this report, and their fiscal year 2010 
obligations data, where such information was available. In some cases, 
we did not report budgetary information because it was either not 
available or sufficiently reliable. For some issue areas, agencies 
were not able to readily provide programmatic information needed to 
determine whether and to what extent programs are actually 
duplicative. Additionally, in some instances of duplication, overlap, 
or fragmentation, it may be appropriate for multiple agencies or 
entities to be involved in the same programmatic or policy area due to 
the nature or magnitude of the federal effort. 

Table 1: Catfish Inspection: List of Federal Programs: 

Agency: Department of Health and Human Services, Food and Drug 
Administration (FDA), Center for Food Safety and Applied Nutrition; 
Program name: Imported Seafood Safety Program; and; Enhanced 
Aquaculture and Seafood Inspection Program; 
Program description: Under the authority of the Federal Food, Drug and 
Cosmetic Act, the Public Health Service Act, FDA's seafood regulations 
require seafood processors to conduct hazard analysis and implement 
controls to prevent or mitigate significant hazards. In addition, to 
ensure the safety of seafood, FDA also conducts research, inspections, 
compliance, enforcement, outreach, and develops guidance. 

Agency: Department of Agriculture (USDA), Food Safety Inspection 
Service, Office of Catfish Inspection Programs; 
Program name: Catfish Inspection Program; 
Program description: Although the program has not been implemented, 
its goal is to ensure that catfish products distributed in commerce 
are wholesome, not adulterated, and properly marked, labeled, and 
packaged. 

Agency: Department of Commerce, National Oceanic and Atmospheric 
Administration (NOAA), National Marine Fisheries Service; 
Program name: Seafood Inspection Program; 
Program description: The NOAA Seafood Inspection Program offers a 
variety of services that assure private sector organization compliance 
with all applicable food regulations. The services provided include 
establishment sanitation inspection; system and process audits; 
product inspection and grading; product lot inspection; laboratory 
analyses; training; consultation; and export certification. 

Source: GAO analysis of USDA, FDA, and National Marine Fisheries 
Service documents. 

[End of table] 

Table 2: Defense Foreign Language Support Contracts: List of 
Contracting Organizations and Related Contract Obligation Information: 

Agency or component: Department of Defense (DOD) Executive Agent; 
Contracting organization: Army Intelligence and Security Command; 
Fiscal years 2008 through 2012 obligations (nominal dollars)[A]: 
$5,247,931,000. 

Agency or component: Army; 
Contracting organization: 80 distinct contracting organizations; 
Fiscal years 2008 through 2012 obligations (nominal dollars)[A]: 
$642,501,000. 

Agency or component: Marine Corps; 
Contracting organization: 9 distinct contracting organizations; 
Fiscal years 2008 through 2012 obligations (nominal dollars)[A]: 
$463,031,000. 

Agency or component: Air Force; 
Contracting organization: 29 distinct contracting organizations; 
Fiscal years 2008 through 2012 obligations (nominal dollars)[A]: 
$31,044,000. 

Agency or component: Defense Legal Services Agency; 
Contracting organization: Washington Headquarters Services; 
Fiscal years 2008 through 2012 obligations (nominal dollars)[A]: 
$27,561,000. 

Agency or component: Defense Security Cooperation Agency; 
Contracting organization: 2 distinct contracting organizations; 
Fiscal years 2008 through 2012 obligations (nominal dollars)[A]: 
$8,698,000. 

Agency or component: Navy; 
Contracting organization: 33 distinct contracting organizations; 
Fiscal years 2008 through 2012 obligations (nominal dollars)[A]: 
$8,578,000. 

Agency or component: Other Department of Defense Agencies; 
Contracting organization: 5 distinct contracting organizations; 
Fiscal years 2008 through 2012 obligations (nominal dollars)[A]: 
$573,000. 

Agency or component: Total; 
Contracting organization: [Empty]; 
Fiscal years 2008 through 2012 obligations (nominal dollars)[A]: 
$6,429,917,000. 

Source: GAO analysis of DOD contract data. 

[A] GAO found that DOD components considered exempted by the executive 
agent from the executive agent's program obligated an additional $394 
million on contracts for foreign language support. 

[End of table] 

Table 3: Renewable Energy Initiatives: List of Federal Wind Energy 
Initiatives and Related Budgetary Information: 

U.S. Department of Agriculture: 

Agency: Agricultural Research Service; 
Program name: Bioenergy National Program; 
Fiscal year 2011 obligation specifically related to wind: $225,000. 

Agency: US Forest Service; 
Program name: Landownership Management Program; 
Fiscal year 2011 obligation specifically related to wind: [A]. 

Agency: National Institute of Food and Agriculture; 
Program name: Small Business Innovation Research Program: Rural 
Development Topic Area; 
Fiscal year 2011 obligation specifically related to wind: $659,954. 

Fiscal year 2011 obligation specifically related to wind: 
Program name: Small Business Innovation Research Program: Small and 
Mid-Size Farms Topic Area; 
Fiscal year 2011 obligation specifically related to wind: $0. 

Agency: Natural Resources Conservation Service; 
Program name: Conservation Innovation Grant Program; 
Fiscal year 2011 obligation specifically related to wind: $93,458. 

Program name: Conservation Security Program; 
Fiscal year 2011 obligation specifically related to wind: [A]. 

Program name: Conservation Stewardship Program; 
Fiscal year 2011 obligation specifically related to wind: [A]. 

Program name: Environmental Quality Incentives Program; 
Fiscal year 2011 obligation specifically related to wind: [A]. 

Agency: Office of the Chief Economist; 
Program name: Energy and Bioenergy Research; 
Fiscal year 2011 obligation specifically related to wind: $56,000[B]. 

Agency: Office of the Secretary; 
Program name: U.S. Department of Agriculture/Navy Memorandum of 
Understanding Project; 
Fiscal year 2011 obligation specifically related to wind: $0. 

Agency: Rural Business-Cooperative Service; 
Program name: Business and Industry Guaranteed Loan Program; 
Fiscal year 2011 obligation specifically related to wind: $0. 

Program name: Rural Energy for America Program (formerly the Renewable 
Energy Systems and Energy Efficiency Improvements Program); 
Fiscal year 2011 obligation specifically related to wind: $3,872,127. 

Agency: Rural Utilities Service; 
Program name: Direct and Guaranteed Electric Loan Program; 
Fiscal year 2011 obligation specifically related to wind: $0. 

Program name: High Energy Cost Grant Program; 
Fiscal year 2011 obligation specifically related to wind: $0. 

Department of Commerce: 

Agency: Economic Development Administration; 
Program name: Environmentally-Sustainable Development Investment 
Priority; 
Fiscal year 2011 obligation specifically related to wind: [A]. 

Program name: Global Climate Change Mitigation Incentive Fund; 
Fiscal year 2011 obligation specifically related to wind: [A]. 

Agency: International Trade Association; 
Program name: International Buyer Program; 
Fiscal year 2011 obligation specifically related to wind: $25,000[B]. 

Program name: Market Development Cooperator Program; 
Fiscal year 2011 obligation specifically related to wind: [A]. 

Program name: Renewable Energy and Energy Efficiency Export Initiative; 
Fiscal year 2011 obligation specifically related to wind: [A]. 

Agency: National Institute of Standards and Technology; 
Program name: National Institute of Standards and Technology Smart 
Grid Program; 
Fiscal year 2011 obligation specifically related to wind: [A]. 

Agency: National Oceanic and Atmospheric Administration; 
Program name: Joint Wind Energy Program: Atmospheric Velocity 
Gradients; 
Fiscal year 2011 obligation specifically related to wind: $390,462[B]. 

Program name: Program Development; 
Fiscal year 2011 obligation specifically related to wind: $149,538. 

Program name: Renewable Energy Research; 
Fiscal year 2011 obligation specifically related to wind: $2,182,500. 

Program name: MarineCadastre.gov; 
Fiscal year 2011 obligation specifically related to wind: [A]. 

Agency: United States Patent and Trademark Office; 
Program name: Green Technology Pilot Program; 
Fiscal year 2011 obligation specifically related to wind: [A]. 

Department of Energy: 

Agency: Advanced Research Projects Agency--Energy; 
Program name: Agile Delivery of Electrical Power Technology; 
Fiscal year 2011 obligation specifically related to wind: [A]. 

Program name: Advanced Research Projects Agency--Energy Funding 
Opportunity Announcement 1; 
Fiscal year 2011 obligation specifically related to wind: $2,420,802. 

Program name: Grid-Scale Rampable Intermittent Dispatchable Storage; 
Fiscal year 2011 obligation specifically related to wind: [A]. 

Agency: Office of Energy Efficiency and Renewable Energy; 
Program name: Energy Efficiency and Conservation Block Grants; 
Fiscal year 2011 obligation specifically related to wind: 
$50,267,968[B]. 

Program name: Hydrogen and Fuel Cell Technologies Crosscutting 
Activities; 
Fiscal year 2011 obligation specifically related to wind: $150,000. 

Program name: Hydrogen Fuel R&D; 
Fiscal year 2011 obligation specifically related to wind: $425,000. 

Program name: State Energy Program; 
Fiscal year 2011 obligation specifically related to wind: [A]. 

Program name: Tribal Energy Program; 
Fiscal year 2011 obligation specifically related to wind: [A]. 

Program name: Wind Energy - Offshore Wind; 
Fiscal year 2011 obligation specifically related to wind: $17,140,518. 

Program name: Wind Energy - Technology Application; 
Fiscal year 2011 obligation specifically related to wind: $0. 

Program name: Wind Energy - Technology Viability; 
Fiscal year 2011 obligation specifically related to wind: $1,116,820. 

Agency: Loan Programs Office; 
Program name: Title XVII Section 1703 Loan Guarantee Program; 
Fiscal year 2011 obligation specifically related to wind: $0. 

Program name: Title XVII Section 1705 Loan Guarantee Program; 
Fiscal year 2011 obligation specifically related to wind: $50,800,000. 

Agency: Multiple; 
Program name: Small Business Innovation Research/Small Business 
Technology Transfer - Wind Energy Technology Development Topic Area; 
Fiscal year 2011 obligation specifically related to wind: $1,887,441. 

Agency: Office of Electricity Delivery & Energy Reliability; 
Program name: Clean Energy Transmission and Reliability; 
Fiscal year 2011 obligation specifically related to wind: 
$20,400,000[B]. 

Program name: Funding of five interconnection-wide transmission 
planning & associated projects; 
Fiscal year 2011 obligation specifically related to wind: $0. 

Program name: Office of Electricity Delivery & Energy Reliability 
Energy Storage; 
Fiscal year 2011 obligation specifically related to wind: $0. 

Program name: Office of Electricity Delivery & Energy Reliability 
Permitting, Siting, and Analysis--Various projects; 
Fiscal year 2011 obligation specifically related to wind: 
$2,294,000[B]. 

Agency: Office of Indian Energy Policy and Programs; 
Program name: Strategic Technical Assistance Response Team Program; 
Fiscal year 2011 obligation specifically related to wind: $200,000[B]. 

Agency: Power Marketing Administrations; 
Program name: Bonneville Power Administration Wind Integration; 
Fiscal year 2011 obligation specifically related to wind: $0. 

Program name: Western Area Power Administration--Operations; 
Fiscal year 2011 obligation specifically related to wind: $0. 

Program name: Western Area Power Administration--Transmission Services; 
Fiscal year 2011 obligation specifically related to wind: $0. 

Department of the Interior: 

Agency: Bureau of Land Management; 
Fiscal year 2011 obligation specifically related to wind: 
Program name: Recovery Act Renewable Energy Efforts; 
Fiscal year 2011 obligation specifically related to wind: $0. 

Program name: Renewable Energy Coordination Offices Implementation; 
Fiscal year 2011 obligation specifically related to wind: 
$2,536,750[B]. 

Program name: Wind Energy Authorizations and Operations on Bureau of 
Land Management Public Lands; 
Fiscal year 2011 obligation specifically related to wind: 
$6,009,500[B]. 

Agency: Bureau of Ocean Energy Management, Regulation and Enforcement; 
Program name: Environmental Studies Program ; 
Fiscal year 2011 obligation specifically related to wind: 
$5,143,589[B]. 

Program name: Renewable Energy Program Development and Implementation; 
Fiscal year 2011 obligation specifically related to wind: $8,279,720. 

Program name: Renewable Energy Program: Ensure Fair Return for 
Renewable Energy Resources; 
Fiscal year 2011 obligation specifically related to wind: $169,800. 

Program name: Renewable Energy Program: Environmental Compliance; 
Fiscal year 2011 obligation specifically related to wind: 
$1,600,000[B]. 

Program name: Renewable Energy Program: Multipurpose Marine Cadastre; 
Fiscal year 2011 obligation specifically related to wind: [A]. 

Program name: Renewable Energy Program: Safety Program and Inspections; 
Fiscal year 2011 obligation specifically related to wind: $0. 

Program name: Resource Evaluation Program: Economic Analysis; 
Fiscal year 2011 obligation specifically related to wind: $182,300. 

Program name: Resource Evaluation Program: Resource Evaluation; 
Fiscal year 2011 obligation specifically related to wind: $206,017. 

Program name: Technology Assessment and Research Program; 
Fiscal year 2011 obligation specifically related to wind: $910,940. 

Agency: Bureau of Reclamation; 
Program name: Desalination and Water Purification Research and 
Development Program; 
Fiscal year 2011 obligation specifically related to wind: $0. 

Program name: Science and Technology Program; 
Fiscal year 2011 obligation specifically related to wind: $457,393. 

Agency: Bureau of Indian Affairs; 
Program name: Minerals & Mining Program: Renewable Energy Projects; 
Fiscal year 2011 obligation specifically related to wind: $488,500. 

Agency: Office of Insular Affairs; 
Program name: Insular Plan for Alternative and Renewable Energy; 
Fiscal year 2011 obligation specifically related to wind: $0. 

Department of the Treasury: 

Agency: Office of Domestic Finance; 
Program name: Payments for Specific Energy Property in Lieu of Tax 
Credits; 

Environmental Protection Agency: 

Agency: Office of Air and Radiation; 
Program name: Green Power Partnership; 
Fiscal year 2011 obligation specifically related to wind: [A]. 

Agency: Office of Research and Development; 
Program name: People, Prosperity, and the Planet Award Program; 
Fiscal year 2011 obligation specifically related to wind: $30,000. 

Agency: Office of Solid Waste and Emergency Response; 
Program name: Re-Powering America's Land; 
Fiscal year 2011 obligation specifically related to wind: $210,000[B]. 

Federal Energy Regulatory Commission: 

Agency: Not applicable; 
Program name: Integration of Variable Energy Resources - Market and 
Regulatory Reforms to Remove Unduly Discriminatory Practices and 
Ensure Just and Reasonable Rates; 
Fiscal year 2011 obligation specifically related to wind: 0. 

National Science Foundation: 

Agency: Directorate for Engineering; 
Program name: Energy for Sustainability Program; 
Fiscal year 2011 obligation specifically related to wind: [A]. 

Program name: Energy, Power, and Adaptive Systems; 
Fiscal year 2011 obligation specifically related to wind: $1,604,537. 

Agency: Directorate for Engineering --Directorate for Mathematical and 
Physical Sciences; 
Program name: Emerging Frontiers in Research and Innovation; 
Fiscal year 2011 obligation specifically related to wind: $500,007. 

Small Business Administration: 

Agency: Office of Capital Access; 
Program name: Certified Development Company/Section 504 Loans; 
Fiscal year 2011 obligation specifically related to wind: [A]. 

Agency: Office of Investment; 
Program name: Energy Saving Debenture; 
Fiscal year 2011 obligation specifically related to wind: [A]. 

Source: GAO analysis of agency data. 

[A] Agencies could not provide obligations data specifically related 
to wind for this initiative. 

[B] Obligations data specifically related to wind were estimated for 
this initiative. 

[End of table] 

Table 4: Renewable Energy Initiatives: List of Federal Wind Energy Tax 
Expenditures and Related Budgetary Information: 

Department of the Treasury: 

Agency: Internal Revenue Service; 
Program name: Department of the Treasury: Accelerated Depreciation 
Recovery Periods for Specific Energy Property; 
Fiscal year 2011 estimated revenue losses specifically related to 
wind: [A]. 

Program name: Department of the Treasury: Credit for Holding New Clean 
Renewable Energy Bonds; 
Fiscal year 2011 estimated revenue losses specifically related to 
wind: [A]. 

Program name: Department of the Treasury: Credit for Holding Qualified 
Energy Conservation Bonds; 
Fiscal year 2011 estimated revenue losses specifically related to 
wind: [A]. 

Program name: Department of the Treasury: Credit for Residential 
Energy Efficient Property; 
Fiscal year 2011 estimated revenue losses specifically related to 
wind: [A]. 

Program name: Department of the Treasury: Direct Payment in Lieu of a 
Credit for Holding New Clean Renewable Energy Bonds; 
Fiscal year 2011 estimated revenue losses specifically related to 
wind: [A]. 

Program name: Department of the Treasury: Direct Payment in Lieu of a 
Credit for Holding Qualified Energy Conservation Bonds; 
Fiscal year 2011 estimated revenue losses specifically related to 
wind: [A]. 

Program name: Department of the Treasury: Energy Investment Credit; 
Fiscal year 2011 estimated revenue losses specifically related to 
wind: Less than $50 million for small wind properties--properties 
using wind turbines of 100 kilowatts or less. 

Program name: Department of the Treasury: Energy Production Credit; 
Fiscal year 2011 estimated revenue losses specifically related to 
wind: $1,100,000,000. 

Program name: Department of the Treasury: Qualifying Advanced Energy 
Project Credit; 
Fiscal year 2011 estimated revenue losses specifically related to 
wind: [A]. 

Source: GAO analysis of Office of Management and Budget data and Joint 
Committee on Taxation documentation. 

[A] Treasury could not provide revenue loss data specifically related 
to wind for this initiative. 

Note: For descriptions of these wind energy initiatives, see 
[hyperlink, http://www.gao.gov/products/GAO-13-136], Appendix II. For 
a complete listing and descriptions of renewable energy initiatives, 
including those that support energy sources other than wind, see 
[hyperlink, http://www.gao.gov/products/GAO-12-259SP]. 

[End of table] 

Table 5: Medicaid Program Integrity: Program and Related Budgetary 
Information: 

Department of Health and Human Services: 

Agency or subagency: Centers for Medicare & Medicaid Services; 
Program name: Department of Health and Human Services: Medicaid 
Integrity Program; 
Program description: The Medicaid Integrity Program was created by the 
Deficit Reduction Act of 2005 and provides federal support for and 
oversight of state Medicaid program integrity activities; 
Annual appropriation: $75,000,000[A]. 

Source: Deficit Reduction Act of 2005 as amended by the Health Care 
Education Reconciliation Act of 2010. 

[A] For each fiscal year since 2010, the amount appropriated has been 
the previous year's appropriation adjusted for inflation According to 
HHS, the fiscal year 2013 appropriation is expected to be 
approximately $80 million. 

[End of table] 

Table 6: Department of Homeland Security Research and Development: 
Components and Related Budgetary Information: 

Department of Homeland Security: 

Agency or component: Science and Technology Directorate; 
FY 2011 budget authority: $486,000,000; 
FY 2011 outlays: $730,000,000. 

Agency or component: Domestic Nuclear Detection Office; 
FY 2011 budget authority: $56,000,000; 
FY 2011 outlays: $80,000,000. 

Agency or component: United States Coast Guard; 
FY 2011 budget authority: $26,000,000; 
FY 2011 outlays: $22,000,000. 

Agency or component: Total; 
FY 2011 budget authority: $568,000,000; 
FY 2011 outlays: $832,000,000. 

Source: GAO analysis of OMB data: 

Notes: 

Table does not include spending on R&D facilities. 

Outlays are actual expenditure of funds and may occur many years after 
the funds were authorized and obligated. 

S&T, DNDO, and Coast Guard are the only DHS components that report 
budget authority, obligations, and outlays to the Office of Management 
and Budget (OMB) as part of the budget process. However, in our 
September 2012 report, we identified an additional $255 million in R&D 
obligations in fiscal year 2011 by other DHS components that were not 
reported to OMB as part of the budget process. These obligations 
included DHS components providing S&T with funding to conduct R&D on 
their behalf, awarding R&D contracts, and entering into agreements 
with the Department of Energy's national laboratories to conduct R&D. 

[End of table] 

Table 7: Field-Based Information Sharing: List of Entities and Related 
Funding Information: 

Department of Justice: 

Agency or subagency: Federal Bureau of Investigation; 
Entity name: Joint Terrorism Task Forces; 
Joint Terrorism Task Forces are funded and managed by the FBI and aim 
to prevent, preempt, deter, and investigate terrorism and related 
activities affecting the United States and to apprehend terrorists; 
FY 2011 funding: [A]. 

Entity name: Field Intelligence Groups; 
Field Intelligence Groups are funded and managed by the FBI and assist 
the FBI and its partners through the collection and analysis of 
intelligence that is used to create a variety of analytical products 
to support ongoing investigations, including those related to 
terrorism; 
FY 2011 funding: [A]. 

Agency or subagency: Bureau of Justice Assistance; 
Entity name: Regional Information Sharing Systems Centers; 
Regional Information Sharing Systems centers are funded through grants 
administered by Bureau of Justice Assistance and support regional law 
enforcement efforts to, among other things, combat major crimes and 
terrorist activity to promote officer safety by linking federal, 
state, local, and tribal criminal justice agencies through secure 
communications and providing information-sharing resources and 
investigative support; 
FY 2011 funding: $36,500,000[B]. 

Department of Homeland Security: 

Agency or subagency: Office of Intelligence and Analysis; 
Entity name: State and Major Urban Area Fusion Centers (fusion 
centers); 
Fusion centers are funded through a variety of sources, including DHS 
grants, and are state and locally owned and operated to serve as 
intermediaries for sharing terrorism and other threat-related 
information between the federal government and state, local, tribal, 
territorial, and private sector homeland security partners; 
FY 2011 funding: $52,700,000[C]. 

Executive Office of the President: 

Agency or subagency: Office of National Drug Control Policy; 
Entity name: High Intensity Drug Trafficking Areas (HIDTA) 
Investigative Support Centers; 
HIDTA Investigative Support Centers are funded through grants 
administered by ONDCP and aim to support the disruption and 
dismantlement of drug-trafficking and money-laundering organizations 
through the prevention or mitigation of associated criminal activity; 
FY 2011 funding: $40,200,000[D]. 

Source: GAO analysis of DOJ, DHS, ONDCP, and NFCA data. 

[A] Funding estimates from DOJ for Joint Terrorism Task Forces and 
Field Intelligence Groups are not presented in this table because the 
data are classified. 

[B] The six Regional Information Sharing System centers received 
approximately $36.5 million in grant funding from Bureau of Justice 
Assistance. 

[C] The National Fusion Center Association (NFCA) reported that fusion 
centers received approximately $52.7 million in DHS Homeland Security 
Grant Program and Urban Areas Security Initiative grants. The survey 
was based on self-reported responses from 55 of 77 fusion centers. 

[D] HIDTAs dedicated approximately $40.2 million to support their 
respective Investigative Support Centers. 

[End of table] 

Table 8: Justice and Treasury Asset Forfeiture: List of Programs and 
Related Budgetary Information: 

Agency: Department of Justice (Justice); 
Program name: Justice Asset Forfeiture Program; 
Program description: The purpose of the program is to prevent and 
reduce crime through the use of the forfeiture sanction. It removes 
assets that are essential to the operation of criminal organizations 
and punishes criminals involved by denying them the use of proceeds of 
their crimes; 
FY 2011 obligation: $1,625,268,000. 

Agency: Department of the Treasury (Treasury); 
Program name: Treasury Asset Forfeiture Program; 
Program description: The purpose of the program is to prevent and 
reduce crime through the use of the forfeiture sanction. It removes 
assets that are essential to the operation of criminal organizations 
and punishes criminals involved by denying them the use of proceeds of 
their crimes; 
FY 2011 obligation: $590,415,000. 

Source: GAO analysis of Justice and Treasury data. 

[End of table] 

Table 9: Export Promotion: List of Agencies and Related Budgetary 
Information: 

Agency: Export-Import Bank; 
Export Promotion Program description: The Export-Import Bank provides 
export financing assistance to U.S. exporters in the form of loan 
guarantees, direct loans to foreign buyers of U.S. goods, and export-
credit insurance; 
FY 2011 budget request[A]: [B]. 

Agency: Small Business Administration (SBA); 
Export Promotion Program description: SBA provides financing 
assistance through loan guarantees and SBA partner entities, known as 
Small Business Development Centers, provide one-on-one export 
counseling to U.S. small businesses; 
FY 2011 budget request[A]: $6,000,000. 

Agency: Department of Commerce (Commerce); 
Export Promotion Program description: Historically the lead U.S. trade 
agency with both a domestic and an overseas presence, Commerce 
provides a variety of services directly to U.S. exporters, including 
one-on-one counseling and assistance identifying trade opportunities; 
FY 2011 budget request[A]: $339,000,000. 

Source: Trade Promotion Coordinating Committee (TPCC) Secretariat. 

[A] TPCC member agencies may define trade promotion differently. For 
example, SBA's budget amount only includes funding for the Office of 
International Trade even though other SBA entities may also devote 
substantial amounts of time to export promotion. Therefore, the 
reported budget figures may not reflect each agency's total level of 
activity relating to export promotion or each agency's actual 
contributions toward increasing U.S. exports. 

[B] Since fiscal year 2008, the Export-Import Bank has been self-
sustaining for appropriations purposes, financing its operations from 
receipts collected from its borrowers. The fees charged by the Export-
Import Bank have covered its program subsidy and administrative costs 
in recent years. The program subsidy refers to budgetary resources 
that the Export-Import Bank must allocate annually as capital 
reserves. Congress retains oversight of the Export-Import Bank's 
budget by setting annual limits on the Export-Import Bank's use of its 
funds for program subsidy and administrative expenses. For fiscal year 
2011, the Export-Import Bank requested $105.6 million for 
administrative expenses. 

[End of table] 

Table 10: International Broadcasting: List of Programs and Related 
Budgetary Information: 

Agency: Broadcasting Board of Governors; 

Program: Voice of America (VOA); 
Program description: VOA, founded in 1942, provides global, U.S., and 
local news, as well as information on U.S. policies, to people living 
in closed societies; 
FY 2011 obligation: $205,104,000. 

Program: Office of Cuba Broadcasting (OCB); 
Program description: Radio and TV Marti, the components of OCB, 
created in 1983 and 1990, provide the people of Cuba with information 
they would not ordinarily receive because of the censorship practices 
of the Cuban government; 
FY 2011 obligation: $28,416,000. 

Program: Radio Free Europe/Radio Liberty (RFE/RL); 
Program description: Established in 1950, RFE/RL was created to 
provide radio programming to, and about, Eastern Europe and the former 
Soviet Union; 
FY 2011 obligation: $92,660,000. 

Program: Radio Free Asia (RFA); 
Program description: RFA, established in 1996, provides news and 
information to Asian countries whose governments prohibit access to a 
free press; 
FY 2011 obligation: $37,438,000. 

Program: Middle East Broadcasting Networks (MBN); 
Program description: MBN, created to manage Radio Sawa--established in 
2002--and Alhurra TV--established in 2004--provides news and 
information about the Middle East region, as well as about the world 
and the United States, to the people of the Middle East; 
FY 2011 obligation: $111,073,000. 

Source: GAO analysis of Broadcasting Board of Governors data. 

[End of table] 

Table 11: Rural Water Infrastructure: List of Programs and Related 
Budgetary Information: 

Agency or subagency: Environmental Protection Agency[A]; 

Program name: Clean Water State Revolving Fund Program; 
Program description: Provides capitalization grants to state revolving 
fund programs to finance various water quality projects, including 
wastewater treatment plants; 
FY 2011 obligation: $1,863,903,700. 

Program name: Drinking Water State Revolving Fund Program; 
Program description: Provides capitalization grants to state revolving 
fund programs to finance the infrastructure projects needed to comply 
with federal drinking water regulations and to protect public health, 
including constructing, replacing, or upgrading publicly owned 
municipal drinking water treatment plants and distribution systems; 
FY 2011 obligation: $1,102,751,800. 

Agency or subagency: United States Department of Agriculture, Rural 
Utilities Service; 

Program name: Water and Waste Disposal Program; 
Program description: Provides loan and grant funding for both drinking 
water and wastewater projects in low-income rural communities of 
10,000 or less; 
FY 2011 obligation: $1,379,439,679. 

Source: GAO analysis of Environmental Protection Agency and United 
States Department of Agriculture data. 

[A] A state may only obligate funds from a capitalization grant during 
the fiscal year for which the funds are authorized and during the 
following fiscal year. 

[End of table] 

Table 12: Drug Abuse Prevention and Treatment Programs: List of 
Programs and Related Budgetary Information: 

Agency or subagency: Department of Defense (DOD); 
Program name: Drug Demand Reduction Program; 
Program description: [B]; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: $118,078,000[B]. 

Agency or subagency: DOD civilian agencies; 
Program name: Civilian Employee Drug-Free Workplace Program; 
Program description: Prevention; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: [B]. 

Agency or subagency: National Guard Bureau; 
Program name: National Guard Bureau Prevention, Treatment, and 
Outreach Program; 
Program description: Prevention; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: [B]. 

Agency or subagency: U.S. Air Force; 
Program name: Air Force Drug Demand Reduction; 
Program description: Prevention; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: [B]. 

Agency or subagency: U.S. Army; 
Program name: Army Substance Abuse Program; 
Program description: Prevention and treatment; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: [B]. 

Agency or subagency: U.S. Marine Corps; 
Program name: Marine Corps Community Services Substance Abuse Program; 
Program description: Prevention; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: [B]. 

Agency or subagency: U.S. Navy; 
Program name: Navy Alcohol and Drug Abuse Prevention; 
Program description: Prevention; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: [B]. 

Program name: Substance Abuse Rehabilitation Program; 
Program description: Treatment; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: Not available[C]. 

Agency or subagency: Department of Justice; 

Agency or subagency: Bureau of Prisons; 
Program name: Community Transitional Drug Abuse Treatment; 
Program description: Treatment; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: [D]. 

Program name: Drug Abuse Education; 
Program description: Prevention and treatment; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: [D]. 

Program name: Non-residential Drug Abuse Treatment; 
Program description: Treatment; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: [D]. 

Program name: Residential Drug Abuse Treatment; 
Program description: Treatment; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: [D]. 

Agency or subagency: Drug Enforcement Administration; 
Program name: Demand Reduction Program; 
Program description: Neither a prevention nor a treatment program, but 
may include prevention or treatment activities; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: $2,085,000[E]. 

Agency or subagency: Office of Justice Programs; 

Program name: Drug Courts; 
Program description: Treatment; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: Not available[C]. 

Program name: Enforcing Underage Drinking Laws; 
Program description: Prevention; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: $16,968,000. 

Program name: Justice and Mental Health Collaboration Program; 
Program description: Neither a prevention nor a treatment program, but 
may include prevention or treatment activities; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: Not available[C]. 

Program name: Residential Substance Abuse Treatment; 
Program description: Treatment; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: Not available[C]. 

Program name: Second Chance Act Adult Offenders with Co-Occurring 
Substance Abuse and Mental Health Disorders; 
Program description: Treatment; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: Not available[C]. 

Program name: Second Chance Act Family-Based Adult Offender Substance 
Abuse Treatment Program, Planning, and Demonstration Projects; 
Program description: Treatment; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: Not available[C]. 

Agency or subagency: Department of Transportation; 

Agency or subagency: Federal Aviation Administration; 
Program name: Employee Drug and Alcohol Testing Program; 
Program description: Neither a prevention nor a treatment program, but 
may include prevention or treatment activities; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: $469,241. 

Program name: Flight Attendant Drug And Alcohol Program; 
Program description: Neither a prevention nor a treatment program, but 
may include prevention or treatment activities; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: $269,241. 

Program name: Human Intervention Motivation Study; 
Program description: Neither a prevention nor a treatment program, but 
may include prevention or treatment activities; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: $200,000. 

Agency or subagency: Drug Impaired Driving Program; 
Program description: Neither a prevention nor a treatment program, but 
may include prevention or treatment activities; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: $2,688,000. 

Agency or subagency: Department of Education; 

Program name: 21st Century Community Learning Centers; 
Program description: Neither a prevention nor a treatment program, but 
may include prevention or treatment activities[F]; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: Not available[C]. 

Program name: Safe and Supportive Schools[G]; 
Neither a prevention nor a treatment program, but may include 
prevention or treatment activities[F]; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: Not available[C]. 

Program name: Safe Schools/Healthy Students[G]; 
Program description: Prevention; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: Not available[C]. 

Executive Office of the President; 

Agency or subagency: Office of National Drug Control Policy; 
Program name: Anti-Doping Activities; 
Program description: Prevention; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: $8,982,000. 

Program name: High Intensity Drug Trafficking Areas; 
Program description: Neither a prevention nor a treatment program, but 
may include prevention or treatment activities; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: $2,848,424. 

Program name: Youth Drug Prevention Media Program; 
Program description: Prevention; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: $39,000,000[E]. 

Federal Judiciary; 

Agency or subagency: Administrative Office of the United States Courts; 
Program name: Court Ordered Substance Abuse Testing and Treatment; 
Program description: Treatment; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: $48,053,914. 

Department of Health and Human Services: 

Agency or subagency: Health Resources and Services Administration; 
Program name: Health Center Program; 
Program description: Neither a prevention nor a treatment program, but 
may include prevention or treatment activities; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: Not available[C]. 

Program name: Ryan White HIV/AIDS; 
Program description: Neither a prevention nor a treatment program, but 
may include prevention or treatment activities; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: Not available[C]. 

Agency or subagency: Indian Health Service; 
Program name: Urban Indian Health Program Title V 4-in-1 grants; 
Program description: Prevention and treatment; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: $4,500,000. 

Program name: Alcohol and Substance Abuse Self Determination Contracts; 
Program description: Prevention and treatment; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: $194,409,000. 

Program name: Methamphetamine and Suicide Prevention Initiative; 
Program description: Prevention and treatment; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: $16,358,000. 

Program name: Youth Regional Treatment Centers; 
Program description: Prevention and treatment; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: $18,450,189[E]. 

Program name: Tele-behavioral Health Activities; 
Program description: Prevention and treatment; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: Not available[C]. 

Agency or subagency: Substance Abuse and Mental Health Services 
Administration (SAMHSA); 
Program name: Access to Recovery; 
Program description: Treatment; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: $98,954,000. 

Program name: Assertive Adolescent and Family Treatment; 
Program description: Prevention and treatment; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: $4,198,000. 

Program name: Capacity Building Initiative; 
Program description: Prevention; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: $8,097,080. 

Program name: Center for the Application of Prevention Technologies; 
Program description: Prevention; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: $10,977,264. 

Program name: Community-based Coalition Enhancement Grants; 
Program description: Prevention; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: $4,912,052. 

Program name: Drug Free Communities Mentoring Program; 
Program description: Prevention; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: $2,391,168. 

Program name: Drug Free Communities Support Program; 
Program description: Prevention; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: $83,845,306. 

Program name: Ex-Offender Reentry; 
Program description: Treatment; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: $16,373,000. 

Program name: Fetal Alcohol Spectrum Disorders Center for Excellence; 
Program description: Prevention; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: $9,830,206. 

Program name: Grants to Serve Young Children and Families Affected by 
Methamphetamine; 
Program description: Prevention and treatment; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: $4,148,000. 

Program name: Historically Black Colleges and Universities Grant; 
Program description: Neither a prevention nor a treatment program, but 
may include prevention or treatment activities; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: $300,000. 

Program name: Homeless Grants for the Benefit of Homeless Individuals; 
Program description: Treatment; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: $35,946,000. 

Program name: Minority AIDS Initiative Targeted Capacity Expansion; 
Program description: Prevention and treatment; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: $53,934,000. 

Program name: Minority HIV Prevention; 
Program description: Prevention; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: $20,048,037. 

Program name: National Adult Oriented Media Public Service Campaign; 
Program description: Prevention; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: $1,096,735. 

Program name: Native American Center for Excellence; 
Program description: Prevention; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: $1,031,475. 

Program name: Partnership for Success; 
Program description: Prevention; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: $11,500,000. 

Program name: Physician Clinical Support System Project - 
Buprenorphine; 
Program description: Neither a prevention nor a treatment program, but 
may include prevention or treatment activities; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: $494,000. 

Program name: Physician Clinical Support System Project - Opioid; 
Program description: Neither a prevention nor a treatment program, but 
may include prevention or treatment activities; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: $500,000. 

Program name: Residential Treatment for Pregnant and Post Partum Women; 
Program description: Prevention and treatment; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: $14,377,000. 

Program name: Ready to Respond; 
Program description: Prevention; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: $10,435,218. 

Program name: Recovery Community Services Program; 
Program description: Treatment; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: $5,236,000. 

Program name: Screening, Brief Intervention, and Referral to 
Treatment - Medical Schools/Residency; 
Program description: Neither a prevention nor a treatment program, but 
may include prevention or treatment activities; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: $6,152,000. 

Program name: State Screening, Brief Intervention and Referral to 
Treatment; 
Program description: Prevention and treatment; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: $44,141,000. 

Program name: Strategic Prevention Framework State Incentive Grants; 
Program description: Prevention; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: $53,872,449. 

Program name: Substance Abuse Prevention and Treatment Block Grant; 
Program description: Prevention and treatment; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: $1,441,962,000. 

Program name: Targeted Capacity Expansion General - Grants to Expand 
Care Coordination Using Health Information Technology; 
Program description: Neither a prevention nor a treatment program, but 
may include prevention or treatment activities; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: $8,033,000. 

Program name: Targeted Capacity Expansion General - Recovery Oriented 
Systems of Care; 
Program description: Treatment; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: $4,380,000. 

Program name: Targeted Capacity Expansion General - Technology 
Assisted Care; 
Program description: Treatment; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: $2,291,000. 

Program name: Treatment Drug Courts - Adults (SAMHSA only); 
Program description: Treatment; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: $4,897,000. 

Program name: Treatment Drug Courts - Juvenile (SAMHSA only); 
Program description: Treatment; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: $3,355,000. 

Program name: Treatment Drug Courts - Adult (joint with the Bureau of 
Justice Assistance); 
Program description: Treatment; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: $7,282,000. 

Program name: Treatment Drug Courts - Juvenile (joint with the Office 
of Juvenile Justice and Delinquency Prevention); 
Program description: Treatment; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: $398,000. 

Program name: Underage Drinking Prevention Education Initiative; 
Program description: Prevention; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: $3,039,738. 

Department of Housing and Urban Development: 

Program name: Emergency Solutions Grants; 
Program description: Neither a prevention nor a treatment program, but 
may include prevention or treatment activities; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: Not available[C]. 

Program name: Supportive Housing Program; 
Program description: Neither a prevention nor a treatment program, but 
may include prevention or treatment activities; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: Not available[C]. 

Program name: Housing Opportunities for Persons with AIDS; 
Program description: Neither a prevention nor a treatment program, but 
may include prevention or treatment activities; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: Not available[C]. 

Department of Labor: 

Employment Training Administration; 
Program name: Job Corps; 
Program description: Neither a prevention nor a treatment program, but 
may include prevention or treatment activities; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: $6,600,000. 

Department of Veterans Affairs: 

Veterans Health Administration; 
Program name: Substance Use Disorder Outpatient Program; 
Program description: Treatment; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: $581,646. 

Program name: Substance Use Disorder Residential Program; 
Program description: Treatment; 
Fiscal year 2011 obligations for drug abuse prevention and treatment 
activities: $68,132. 

Source: GAO analysis of agency data. 

[A] For the purpose of this review, GAO identified a drug abuse 
prevention program as a federal program that provides services, 
allocates funding, or allows for activities focused on discouraging 
the first-time use of controlled substances--specifically illicit 
drugs and the problematic use of alcohol--and encouraging those who 
have begun to use controlled substances to cease their use. GAO 
defined a drug abuse treatment program as a federal program that 
provides services, allocates funding, or allows for activities focused 
on identifying and assisting users of controlled substances--
specifically illicit drugs and the problematic use of alcohol--to 
become drug-free and remain drug-free. 

[B] The Drug Demand Reduction program funds, at least in part; the 
National Guard Bureau Prevention, Treatment, and Outreach program; the 
Air Force Drug Demand Reduction program; the Army Substance Abuse 
Program; the Marine Corps Substance Abuse Program; and the Navy 
Alcohol and Drug Abuse Prevention program, as well as drug testing for 
the department's civilian employees. The military services use Drug 
Demand Reduction program funds to provide drug abuse prevention 
services, including drug testing, education, and outreach. The Drug 
Demand Reduction program does not fund drug abuse treatment services 
or services related to the prevention or treatment of alcohol abuse. 
However, the military services may use other funding sources to 
provide those services. For example, the U.S. Army uses funds from its 
Operations and Maintenance Account to provide some drug abuse 
treatment services. 

[C] GAO requested that surveyed programs provide the total amount of 
federal funds obligated specifically for drug abuse prevention and 
treatment activities in fiscal year 2011. For those agencies that were 
unable to provide this information, GAO reported that this information 
was "not available." Program officials reported to GAO that they were 
unable to provide the total amount of federal funds obligated 
specifically for their program's drug abuse prevention or treatment 
activities in fiscal year 2011 for a variety of reasons, such as that 
the programs do not collect this type of budgetary data. 

[D] The Bureau of Prisons reported obligations for their drug abuse 
prevention and treatment programs in total, but was not able to report 
obligations for individual programs. 

[E] Agency officials reported these figures as estimated obligations. 

[F] Under 20 U.S.C. § 7164, funds may not be used for medical 
services, drug treatment or rehabilitation, except for pupil services 
or referral to treatment for students who are victims of, or witnesses 
to, crime or who illegally use drugs with regard to Safe and Drug-Free 
Schools and Communities. Under 20 U.S.C. § 7175, with regard to 21st 
Century Community Learning Centers, each eligible entity that receives 
an award may use the award funds to carry out a broad array of before 
and after school activities that advance student academic achievement 
that are listed in the statute. 

[G] For the purpose of this analysis, GAO reviewed the activities of 
the Department of Education's Safe and Supportive Schools and Safe 
Schools/Healthy Students programs separately; according to Department 
of Education officials, they are considered to be activities within a 
single program-the Safe and Drug-Free Schools and Communities National 
Activities. 

[End of table] 

Table 13: Higher Education Assistance: List of Select Programs and 
Related Budgetary Information: 

Agency: U.S. Department of Education: 

Program name: Federal Supplemental Educational Opportunity Grants; 
Program description: Schools administer grant funds, which are awarded 
to undergraduate students with exceptional financial need, with a 
priority given to students who receive Pell Grants. Schools are 
generally required to match at least 25 percent of the federal funds 
allocated; 
Fiscal year 2011 funds available: $931,633,000. 

Program name: Federal Work Study; 
Program description: Schools administer federal funds and make part-
time employment available to undergraduate, graduate, and professional 
students with federally defined financial need. Participating schools 
or nonprofit employers generally contribute at least 25 percent of the 
student's earnings (50 percent in the case of for-profit employers); 
Fiscal year 2011 funds available: $1,168,428,000. 

Program name: Federal Perkins Loans; 
Program description: Loans are made to undergraduate, graduate, and 
professional students, with priority given to those with exceptional 
financial need. Schools administer funds for the low-interest (5 
percent) loans, composed of federal capital contributions and school 
matching funds (at least one-third of federal contributions). 
Repayment is made to the school; 
Fiscal year 2011 funds available: $970,705,000. 

Program name: Subsidized Direct Stafford Loans; 
Program description: Loans are made on the basis of financial need to 
undergraduate, graduate, and professional students who are enrolled at 
least half-time. The federal government pays the interest costs on 
subsidized loans while the student is in school, for a grace period of 
6 months after the student leaves school, and during subsequent 
periods if needed; 
Fiscal year 2011 funds available: $41,774,526,000. 

Program name: Unsubsidized Direct Stafford Loans; 
Program description: Loans are made to undergraduate, graduate, and 
professional students who are enrolled at least half-time. Unlike the 
case with subsidized Stafford Loans, students are responsible for 
interest costs throughout the life of the loan. Annual and aggregate 
borrowing limits for unsubsidized Stafford Loans include any 
subsidized Stafford Loans taken by the student; 
Fiscal year 2011 funds available: $48,081,625,000. 

Program name: Parent Loans for Undergraduate Students (PLUS) Loans; 
Program description: Loans are made to parents of dependent 
undergraduates and to graduate and professional students who are 
enrolled at least half-time. Borrowers are subject to a credit check 
for adverse credit history and may be denied a loan. Borrowers are 
responsible for paying all interest on the loan; 
Fiscal year 2011 funds available: Agency: $19,070,152,000. 

Agency: Department of Veterans Affairs; 

Program name: Post-9/11 Veterans Educational Assistance Act of 2008 
(Post-9/11 GI Bill); 
Program description: Provides benefits to veterans and service members 
who served on active duty for at least 90 days after September 10, 
2001. The program is designed to provide individuals who served on 
active duty for a full 36 months with the full cost of attendance at a 
public school and up to $17,500 for private nonprofit and private for-
profit schools; 
Fiscal year 2011 obligations: $7,656,490,000. 

Program name: Montgomery GI Bill-Active Duty; 
Program description: Provides a fixed monthly allowance primarily to 
veterans who enter active duty after June 30, 1985. In fiscal year 
2011, the benefit was $1,426 per month for full-time study; 
Fiscal year 2011 obligations: $1,385,943,000. 

Program name: Montgomery GI Bill-Selected Reserve; 
Program description: Provides a monthly benefit payment for 
Reservists, including the National Guard, who agree to serve for 6 
years. In fiscal year 2011, the benefit was $337 per month for full-
time study; 
Fiscal year 2011 obligations: $201,433,000. 

Program name: Survivors' and Dependents' Educational Assistance 
Program; 
Program description: Provides education and training opportunities to 
eligible dependents of certain veterans that were disabled or died 
during active duty service; 
Fiscal year 2011 obligations: $462,877,000. 

Program name: Reserve Educational Assistance Program; 
Program description: Provides benefits to Reservists with at least 90 
days of consecutive active-duty service after September 10, 2001. In 
fiscal year 2011, the benefit was $1,141 per month for full-time 
study, with at least 2 years of consecutive active-duty service; 
Fiscal year 2011 obligations: $95,324,000. 

Agency: Department of Defense; 
Program name: Military Tuition Assistance; 
Program description: Provides tuition assistance to service members in 
order to help them fulfill their academic goals and enhance their 
professional development. In order to participate in the program, the 
Department of Defense (DOD) requires that postsecondary institutions 
be accredited by an accrediting agency recognized by the U.S. 
Department of Education; 
Fiscal year 2011 obligations: $711,241,164[A]. 

Source: GAO analysis of agency data. 

Notes: Loan amounts reflect the amount actually loaned to borrowers, 
not the federal cost of the loans. We selected Title IV programs that 
served more than 500,000 recipients in school year 2007-2008, with the 
exception of programs set to expire at the end of fiscal year 2011. 

[A] The DOD figure represents the sum of actual obligations for active 
duty and reserve personnel where applicable across services. However, 
the fiscal year 2011 data available for the U.S. Marine Corps are 
composed of estimated obligations. 

[End of table] 

Table 14: Higher Education Assistance: List of Select Tax Expenditures 
and Total Estimated Benefits, Tax Year 2009: 

Agency: Internal Revenue Service; Tax expenditure: American 
Opportunity Credit; 

Tax expenditure description: Provides a credit up to $2,500 for 
qualified education expenses paid to each eligible student. Forty 
percent of the credit may be refundable; 
Total estimated benefits, tax year 2009: $16,000,000,000. 

Tax expenditure: Lifetime Learning Credit; 
Tax expenditure description: Provides a credit up to $2,000 per 
return. It is a nonrefundable credit limited to the amount of tax paid 
on taxable income; 
Total estimated benefits, tax year 2009: $2,400,000,000. 

Tax expenditure: Tuition and Fees Deduction; 
Tax expenditure description: Provides a deduction up to $4,000 per 
return; 
Total estimated benefits, tax year 2009: $628,900,000. 

Tax expenditure: Student Loan Interest Deduction; 
Tax expenditure description: Provides a deduction up to $2,500 for 
interest paid on eligible education loans; 
Total estimated benefits, tax year 2009: $1,300,000,000. 

Tax expenditure: Parental personal exemption for students ages 19-23; 
Tax expenditure description: Tax filers with eligible dependents aged 
19-23 who are full-time students are allowed an exemption of $3,650 
per dependent; 
Total estimated benefits, tax year 2009: $5,300,000,000. 

Tax expenditure: Earned Income Tax Credit for students ages 19-23; 
Tax expenditure description: Provides a refundable credit up to $5,666 
to eligible filers depending on their income and number of qualifying 
children; 
Total estimated benefits, tax year 2009: $3,300,000,000. 

Source: GAO analysis of Internal Revenue Service data. 

Note: For details on eligibility requirements for each tax 
expenditure, see GAO-12-560. Estimates have 95 percent confidence 
intervals within plus or minus 10 percent of the estimate itself. We 
selected tax expenditures that (1) are designed to assist students and 
their families save for, pay current expenses, or repay expenses for 
higher education; (2) have eligibility requirements that are not based 
on criteria other than income or higher education expenses; (3) were 
available in tax years 2006-2009; and (4) had more than 50,000 tax 
filers claim the benefit in 2009. Our estimates for the number of 
filers claiming an education tax benefit include only those filers 
that reduced their tax liability by claiming these expenditures. We 
did not include estimates for qualified tuition programs or Coverdell 
education savings accounts in this table because we were unable to 
analyze the accounts separately. 

[End of table] 

Table 15: Veterans' Employment and Training: List of Programs and 
Related Budgetary Information: 

Department of Labor: 

Program name: Disabled Veterans' Outreach Program; 
Program description: Formula grants to states to fund staff positions 
in the state workforce agencies. These staff provide employment 
services to eligible veterans. The law requires that--to the greatest 
extent possible--Labor hire qualified veterans to fill these 
positions.[B]; 
2011 funding[A]: $85,000,000; 

Program name: Local Veterans' Employment Representative Program; 
Program description: Formula grants to states to fund staff positions 
in the state workforce agencies. These staff reach out to employers to 
find jobs for veterans. The law requires that--to the greatest extent 
possible--Labor hire qualified veterans or eligible persons to fill 
these positions[C]; 
2011 funding[A]: $72,000,000; 

Program name: Homeless Veterans' Reintegration Program; 
Program description: Competitive grants to state and local agencies, 
for profit/commercial entities, and nonprofit organizations to provide 
employment and supportive services to homeless veterans; 
2011 funding[A]: $36,000,000; 

Program name: Transition Assistance Program; 
Program description: Provides workshops to help service members 
prepare for civilian employment; 
2011 funding[A]: $7,000,000; 

Program name: Veterans' Workforce Investment Program; 
Program description: Competitive grants to state and local agencies, 
for profit/commercial entities, and nonprofit organizations to provide 
employment and supportive services to veterans; 
2011 funding[A]: $9,000,000[D]; 

Department of Veterans Affairs: 

Agency: Department of Veterans Affairs; 
Program name: Vocational Rehabilitation Program; 
Program description: Provides funding for staff located in field 
offices and subsistence allowances to veterans and pays for tuition, 
books, and supplies; 
2011 funding[A]: $973,000,000[E]. 

Source: GAO analysis of Department of Labor and Department of Veterans 
Affairs annual budget justifications, performance reports, and fact 
sheets. 

[A] The Homeless Veterans' Reintegration Program and Veterans' 
Workforce Investment Program numbers represent program year 2010, 
which began on July 1, 2010, and ended on June 30, 2011, rather than 
in fiscal year 2011. Funding for the other programs listed represents 
fiscal year 2011. 

[B] 38 U.S.C. § 4103A(b). 

[C] 38 U.S.C. § 4104(c). 

[D] In fiscal year 2013, the Department of Labor is requesting that 
Congress defund the Veterans' Workforce Investment Program, because of 
the increasingly high cost per placement in employment for program 
participants. 

[E] This number includes administrative cost and readjustment benefits 
such as tuition, books, and supplies. 

[End of table] 

Table 16: Crop Insurance: Program and Related Budgetary Information: 

U.S. Department of Agriculture: 

Agency or subagency: Risk Management Agency; 
Program name: Federal Crop Insurance Program; 
Program description: Through the federal crop insurance program, 
farmers insure against losses on more than 100 crops including major 
crops--such as corn, cotton, soybeans, and wheat--as well as nursery 
crops and certain fruits and vegetables; 
Fiscal year 2011 obligation: $4,600,900,000[A]. 

Source: GAO analysis of USDA documents. 

[A] This figure includes the federal government's subsidy costs for 
crop insurance premiums, but does not include other expenses, such as 
administrative expenses. 

[End of table] 

Table 17: Department of Energy's Isotope Program: Program and Related 
Budgetary Information: 

Department of Energy: 

Agency or subagency: Office of Science; 
Program name: Isotope Program; 
Program description The Isotope Program develops, produces, and sells 
isotopes, byproducts, surplus materials, and related services 
worldwide to commercial, research, and medical communities; 
Fiscal year 2012 obligation: $47,022,978. 

Source: GAO summary of Department of Energy information. 

[End of table] 

Table 18: Medicare Prepayment Controls: Program and Related Budgetary 
Information: 

Department of Health and Human Services: 

Agency or subagency: Centers for Medicare & Medicaid Services; 
Program name: Medicare; 
Program description: Department of Health and Human Services: Medicare 
is the federal health insurance program for individuals aged 65 or 
over, certain individuals with disabilities, and individuals with end-
stage renal disease; 
Fiscal 2011 outlays: $408,000,000,000[A]. 

Source: The President's Budget for Fiscal Year 2013. 

[A] The $408 billion represents outlays for the entire Medicare 
program. The President's Budget does not separately report outlays for 
the Medicare fee-for-service program. 

[End of table] 

Table 19 Medicaid Supplemental Payments: Non-Disproportionate Share 
Hospital Supplemental Payments and Related Budgetary Information: 

Agency or subagency: Centers for Medicare & Medicaid Services; 
Program name: Non-disproportionate share hospital supplemental 
payments; 
Program description: Payments separate from and in addition to the 
state's regular Medicaid payments; 
FY 2011 estimated cost: $25,925,500,000[A]. 

Source: Medicaid and CHIP Payment and Access Commission analysis of 
Centers for Medicare & Medicaid Services data. 

Notes: Medicaid and CHIP Payment and Access Commission, Report to the 
Congress on Medicaid and CHIP: March 2012 (Washington, D.C.: 2012). 

[A] The $25,925,500,000 represents total federal and state 
expenditures. 

[End of table] 

Table 20: Checked Baggage Screening: Budget Activities and Related 
Budgetary Information: 

Department of Homeland Security: 

Agency: Transportation Security Administration (TSA); 
Budget activity: Department of Homeland Security: Explosives Detection 
System Procurement and Installation; 
Description: Funds available in fiscal year 2011 for the procurement 
and installation of explosives detection systems (EDS) and explosives 
trace detection (ETD) machines. Generally, EDS is used in conjunction 
with ETD to identify and resolve threats in checked baggage; 
FY 2011 funding: $290,800,000. 

Budget activity: Department of Homeland Security: Agency: Aviation 
Security Capital Fund; 
Description: The first $250 million collected in air passenger 
security fees is deposited into the Aviation Security Capital Fund, 
which is available to support airport facility modification projects 
primarily related to the installation of checked baggage screening 
equipment. See 49 U.S.C. §§ 44923, 44940(a)(1); 
FY 2011 funding: $250,000,000. 

Budget activity: Department of Homeland Security: Screening Technology 
Maintenance and Utilities; 
Description: Funds available in fiscal year 2011 for the maintenance 
of EDS and ETD machines, related utilities to operate the machines, 
and expenses related to the disposal of old screening machines; 
FY 2011 funding: $240,000,000. 

Agency: Total; 
FY 2011 funding: $780,800,000. 

Source: GAO analysis of TSA information. 

Note: Amounts available as reported by TSA for activities related to 
the Electronic Baggage Screening Program's planning, procurement, 
installation (including facility modification), and maintenance and 
utilities. 

[End of table] 

Table 21: Information Technology Operations and Maintenance: Steady 
State Information Technology Investments and Related Budgetary 
Information: 

Agency: Department of Defense; 
Steady state information technology investments[A]: 4; 
Investments with an operational analysis[B]: 0; 
FY 2011 investment costs: $381,000,000. 

Agency: Department of Homeland Security; 
Steady state information technology investments[A]: 44; 
Investments with an operational analysis[B]: 16; 
FY 2011 investment costs: $2,186,000,000. 

Agency: Department of Health and Human Services; 
Steady state information technology investments[A]: 8; 
Investments with an operational analysis[B]: 7; 
FY 2011 investment costs: $284,000,000. 

Agency: Department of the Treasury; 
Steady state information technology investments[A]: 16; 
Investments with an operational analysis[B]: 0; 
FY 2011 investment costs: $152,000,000. 

Agency: Department of Veterans Affairs; 
Steady state information technology investments[A]: 3; 
Investments with an operational analysis[B]: 0; 
FY 2011 investment costs: $1,590,000,000. 

Agency: Total; 
FY 2011 investment costs: $4,600,000,000. 

Source: GAO analysis based on agency data. 

[A] Steady state information technology investments are investments 
that are strictly in the operations and maintenance phase (excluding 
mixed cycle investments). 

[B] An operational analysis examines the ongoing performance of 
existing information technology investments to measure, among other 
things, that the investment is continuing to meet business and 
customer needs and is contributing to meeting the agency's strategic 
goals. 

[End of table] 

Table 22: Tobacco Taxes: List of Products and Related Budgetary 
Information: 

Department of the Treasury: 

Agency: Alcohol and Tobacco Tax and Trade Bureau; 
Tobacco product: Roll-your-own tobacco; 
Current tax rate: $24.78 per pound; 
FY 2011 federal excise tax revenue: $281,177,772. 

Tobacco product: Pipe tobacco; 
Current tax rate: $2.83 per pound; 
FY 2011 federal excise tax revenue: $145,334,870. 

Tobacco product: Large cigars; 
Current tax rate: 52.75 percent of sales price, but not to exceed 
$402.60 per thousand sticks; 
FY 2011 federal excise tax revenue: $1,286,679,674. 

Tobacco product: Small cigars; 
Current tax rate: $50.33 per thousand sticks; 
FY 2011 federal excise tax revenue: $86,172,159. 

Source: GAO analysis of Treasury and Bureau of Labor Statistics data. 

[End of table] 

Footnote: 

[1] GAO, Opportunities to Reduce Potential Duplication in Government 
Programs, Save Tax Dollars, and Enhance Revenue, [hyperlink, 
http://www.gao.gov/products/GAO-11-318SP] (Washington, D.C.: Mar. 1, 
2011); and GAO, 2012 Annual Report: Opportunities to Reduce 
Duplication, Overlap, and Fragmentation, Achieve Savings, and Enhance 
Revenue, [hyperlink, http://www.gao.gov/products/GAO-12-342SP]. 

[End of Appendix III] 

[End of document]