This speech was given by the Comptroller General at the release of GAO's 2005 High Risk Update on January 25, 2005. GAO began issuing its High Risk List in 1990 under the leadership of my predecessor, Chuck Bowsher. GAO began bi-annual updates of the list in 1993. In the early years GAO's High Risk List focused more on areas that were subject to increased risk of fraud, waste, abuse or mismanagement. In addition, the list focused on actions required by the Executive Branch to address the applicable high-risk areas. In recent years and under my tenure as Comptroller General of the United States, GAO has added a number of key transformation issues that present a range of economy, efficiency, effectiveness and accountability challenges. In addition, the High Risk List now includes items that may require action by both the Congress and the Executive Branch in order to achieve success. The purpose of GAO's High Risk list is to bring light to areas that need special attention. History has shown that with light comes heat and with heat comes action. And action is what it will take to get the real and sustainable results necessary to have an item removed from our High Risk list. GAO's 2005 High Risk List update involves good news, bad news and an emerging challenge. On the good news front, some progress was made on every high-risk area although the degree of progress ranged widely.

Three high-risk areas are being removed from GAO's list. They are: 1) Student Financial Aid Programs; 2) FAA Financial Management, and 3) Forest Service Financial Management. Removal from GAO's High Risk list does not mean that things are perfect in these areas. Rather it means that enough actions have been taken to demonstrate to GAO that the agencies are both committed and on a sustainable path to effectively address the related challenges. On the other side of the ledger, we added four new areas to this year's list: (1) Information Sharing-- Recent events and changes in the overall security environment have served to re-enforce the importance of having appropriate and effective information and knowledge sharing mechanisms in place that cross organizational, geographic and sectoral boundaries. Progress has been made since the tragic events of 9/11 but much remains to be done. Achieving success in this area will involve the combined efforts of many agencies in the federal government and as well as a range of other key players. (2) DOD Business Transformation-- Our military capabilities are unparalleled in today's world. At the same time, achieving national security in today's challenging and rapidly changing times requires a lot more than military might. In addition, DOD transformation must address both our military capabilities and a range of long standing key business challenges in order to be successful and sustainable. This includes changes in DOD's business policies, processes and systems as well as its organizational alignment, culture and accountability mechanisms. (3) DOD Personnel Security-- Increased delays and growing backlogs of security clearances for DOD personnel, contractors and others presents a range of risks in today's security environment. While the Administration has announced it's intention to transfer this function to OPM, only time will tell if this will change get the job done. (4) Management of Interagency Contracting-- Recent acquisition reforms have served to improve the timeliness and achieve certain economies of scale in connection with certain government contracting activities. At the same time, certain reforms are proving to have some unintended consequences. This is the case in connection with the need to enhance management and oversight activities in connection with the rapidly growing area of interagency contacting, especially in connection with the contracting for services. This is a government-wide challenge that will require action by a variety of parties.