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GAO-13-870CG entitled 'Data Analytics for Government Oversight: 
Predictive Analytics World for Government: 3rd Annual Conference' 
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GAO-13-870CG:  

Data Analytics for Government Oversight:  

Predictive Analytics World for Government: 
3rd Annual Conference 

Thursday, September 19, 2013: 

Gene L. Dodaro: 
Comptroller General of the United States: 
U.S. Government Accountability Office:  

Agenda: 
* About GAO; 
* Why analytics are important for oversight; 
* How analytics can be used; 
* Challenges and opportunities;
* Legislation can help.  

U.S. Government Accountability Office:  

* Independent, nonpartisan congressional watchdog 
* Advise Congress and executive agencies to help improve government 
performance and ensure accountability; 
* Work comes from Congressional mandates and requests and the 
Comptroller General’s authority.  

GAO strategic planning goals: 

Goal: Provide timely, quality service to the Congress and the Federal 
Government to address current and emerging challenges to the well-
being and financial security of the American people, related to the 
following objectives: 
Objectives: 
* Health care needs; 
* Lifelong learning; 
* Benefits and protections for workers, families, and children; 
* Financial security; 
* Effective system of justice; 
* Viable communities; 
* Stable financial system and consumer protection; 
* Stewardship of natural resources and the environment; 
* Infrastructure. 

Goal: Provide timely, quality service to the Congress and the Federal 
Government to respond to changing seecurity threats and challenges of 
global interdependence, involving the following objectives: 
* Homeland Security; 
* Military capabilities and readiness; 
* Advancement of U.S. interests; 
* Global market forces. 

Goal: Help transform the Federal Government to address national 
challenges by assessing the following objectives: 
* Government's fiscal position and options for closing gap; 
* Fraud, waste, and abuse; 
* Major management challenges and program risks. 

[End of GAO strategic planning goals] 

Why analytics are important:  

Data analytics can be used to:  

* Identify patterns or trends, and identify when aberrations occur: 
- Data-mining and data-matching techniques can identify fraud or 
improper payments that have already been made; 
- Predictive analytic technologies can identify fraud and errors before 
payments are made, helping avoid “pay and chase” payment recovery.  

* Determine whether problems are widespread and systematic in nature.  

* Evaluate program performance and outcomes:
- For example, accessing data to verify program eligibility, thus 
improving program integrity and payment accuracy.  

How analytics can be used:  

Table: Top 10 program improper payment estimates by dollar amount:  

Program: Medicare Fee-for-Service; 
Agency: HHS; 
Reported Improper Payment Estimates: 
Dollars: $29.6; 
Error rate (percent of outlays): 8.5%.  

Program: Medicaid; 
Agency: HHS; 
Reported Improper Payment Estimates: 
Dollars: $19.2; 
Error rate (percent of outlays): 7.1%.  

Program: Medicare Advantage (Part C); 
Agency: HHS; 
Reported Improper Payment Estimates: 
Dollars: $13.1; 
Error rate (percent of outlays): 11.4%.  

Program: Medicare Prescription Drug; 
Agency: HHS; 
Reported Improper Payment Estimates: 
Dollars: $1.6; 
Error rate (percent of outlays): 3.1%.  

Program: Medicare Prescription Drug; 
Agency: HHS; 
Reported Improper Payment Estimates: 
Dollars: $1.6; 
Error rate (percent of outlays): 3.1%.  

Program: School Lunch; 
Agency: USDA; 
Reported Improper Payment Estimates: 
Dollars: $1.6; 
Error rate (percent of outlays): 15.5%.  

Program: Earned Income Tax Credit; 
Agency: Treasury; 
Reported Improper Payment Estimates: 
Dollars: $12.6; 
Error rate (percent of outlays): 22.7%.  

Program: Unemployment Insurance; 
Agency: DOL; 
Reported Improper Payment Estimates: 
Dollars: $10.3; 
Error rate (percent of outlays): 11.4%.  

Program: Supplemental Security Income; 
Agency: SSA; 
Reported Improper Payment Estimates: 
Dollars: $4.7; 
Error rate (percent of outlays): 9.2%.  

Program: Old Age, Survivors & Disability Insurance; 
Agency: SSA; 
Reported Improper Payment Estimates: 
Dollars: $3.2; 
Error rate (percent of outlays): 0.4%.  

Program: Supplemental Nutrition Assistance Program; 
Agency: USDA; 
Reported Improper Payment Estimates: 
Dollars: $2.7; 
Error rate (percent of outlays): 3.8%.  

Source: Estimates reported by OMB for FY 2012.  

[End of table]  

How analytics can be used:  

Expected growth in federal health care spending highlights need for 
oversight:  

Figure: Spending on Major Federal Health Care Programs Under GAO’s 
Spring 2013 Baseline Extended Simulation:  

[Refer to PDF for image: line graph]  

2013: 4.9%; 
2014: 5.0%; 
2015: 5.2%; 
2016: 5.5%; 
2017: 5.5%; 
2018: 5.5%; 
2019: 5.7%; 
2020: 5.8%; 
2021: 5.9%; 
2022: 6.2%; 
2023: 6.2%; 
2024: 6.3%; 
2025: 6.5%; 
2026: 6.6%; 
2027: 6.9%; 
2028: 7.1%; 
2029: 7.2%; 
2030: 7.4%; 
2031: 7.5%; 
2032: 7.6%; 
2033: 7.7%; 
2034: 7.8%; 
2035: 7.9%; 
2036: 8.1%; 
2037: 8.2%; 
2038: 8.3%; 
2039: 8.4%; 
2040: 8.4%;  

Source: GAO analysis.  

[End of figure]  

How analytics can be used: 

Analytics can help with the tax gap-—the difference between taxes owed 
and paid.  

Figure: Tax Gap Components:  

[Refer to PDF for image: pie-chart and subchart]  

Nonfiling: $6% ($28 billion); 
Underpayment: 10% ($46 billion); 
Underreporting: 84% ($365 billion): 
* Individual income tax, business income: 48% ($179 billion); 
* Employment tax: 19% ($72 billion); 
* Corporate income tax: 18% ($67 billion); 
* Individual income tax, other income: 15% ($56 billion); 
* Estate tax: 0.5% ($2 billion).  

Source: GAO Analysis of IRS data.  

[End of figure]  

How analytics can be used:  

GAO found that large federal agencies leveraged only a small fraction 
of their buying power through strategic sourcing and achieved limited 
savings.  

Figure: Selected Agencies’ Strategic Sourcing Spending and Savings 
Reported in FY 2011:  

[Refer to PDF for image: pie-chart]  

Total federal spending FY 2011: $537 billion: 
Total federal procurement spending: 95%; 
Selected agency spending through strategic sourcing: 5%.  

Source: GAO analysis of federal procurement and selected agencies 
data.  

[End of figure]  

Achieving a 10 percent savings rate would yield $50 billion in annual 
savings. 
Challenges and opportunities:  

Recent forum identified challenges in using data analytics.  

Accessing and using data: 
* Need for more awareness of data sources; 
* Lack of incentives to design systems useful for oversight 
due to differing missions; 
* Difficulties in measuring results and prioritizing resources.  

Sharing data: 
* Varying standards make interpreting and using others’ data 
difficult; 
* Intergovernmental challenges—-such as costly access to certain 
federal data and perceptions that sharing is a “one-way street.”  

Opportunities identified to enhance analytics efforts:  

* Attracting and retaining knowledgeable and skilled staff; 
* Garnering organizational support by demonstrating value and building 
credibility; 
* Supporting legislative updates to better balance privacy with data 
transparency.  

Forum next steps:  

* Compile directories of data sources, known offenders, and open-
source analytics, modules, and tools; 
* Explore and work to address any statutory issues related to data 
access and use; 
* Develop an ongoing community of practice focused on data-sharing 
challenges: 
- GovernmentDataShare@gao.gov.  

Legislation can help:  

GPRA Modernization Act of 2010:  

* Requires senior leadership involvement at the government-wide 
and agency levels: 
- Identify and prioritize key performance and management; 
- More-frequent analysis and monitoring of performance;  

* Quarterly senior-level data-driven meetings on key goals;  

* Disclosure on the reliability and accuracy of performance 
information;  

* Transparency of results achieved through web-based reporting  

Improper Payments Elimination and Recovery Improvement Act of 2012 
(IPERIA):  

* Passed in January 2013;  

* Latest in a series of laws addressing government-wide improper 
payments; 
* Requires that agencies, at a minimum, check multiple existing 
databases to verify benefit eligibility before making a payment to a 
person or entity.  

Digital Accountability and Transparency Act (DATA Act):  

* Introduced in the House and Senate in May 2013;  

* Both bills would expand requirements for federal spending data: 
- Government-wide financial data standards; 
- OMB reviews of federal agencies’ financial reporting to reduce 
duplicative reporting; 
- Inspector General of each agency to report on the timeliness and 
accuracy of each agency’s spending data, with GAO to assess and 
report on the information reported by each agency; 
- Recovery Accountability and Transparency Board to develop and test 
IT and oversight systems to enhance transparency and reduce fraud, 
waste, and abuse.  

GAO on the Web:  

Web site: [hyperlink, http://www.gao.gov/]. 

Congressional Relations: 
Katherine Siggerud, Managing Director, siggerudk@gao.gov: 
(202) 512-4400, U.S. Government Accountability Office:  

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

Copyright:  

This is a work of the U.S. government and is not subject to copyright 
protection in the United States. The published product may be 
reproduced and distributed in its entirety without further permission 
from GAO. However, because this work may contain copyrighted images or 
other material, permission from the copyright holder may be necessary 
if you wish to reproduce this material separately.  

[End of presentation]