DOD High-Risk Areas:

Eliminating Underlying Causes Will Avoid Billions of Dollars in Waste

T-NSIAD/AIMD-97-143: Published: May 1, 1997. Publicly Released: May 1, 1997.

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GAO discussed Department of Defense (DOD) programs and operations that GAO has identified as high risk because of vulnerabilities to waste, fraud, abuse, and mismanagement, focusing on the: (1) high-risk areas of financial management, information technology, weapon systems acquisition, contract management, infrastructure, and inventory management; (2) underlying causes of these high-risk areas; and (3) overall strategy GAO believes is needed to eliminate them.

GAO noted that: (1) to avoid the risk of waste, fraud, abuse, and mismanagement, GAO has made hundreds of recommendations to DOD over the last few years to help correct problems in high-risk areas, and the Congress has held oversight hearings and enacted specific legislative initiatives; (2) DOD has taken GAO's suggestions and congressional direction seriously and has initiated actions that resulted in some progress in each of the high-risk areas; (3) however, eliminating these problems requires that their underlying causes be addressed; (4) effectively attacking the underlying causes will require congressional support and a commitment by senior-level DOD managers to a multilevel strategy that: (a) implements GAO's recommendations to correct specific problems in each of the high-risk areas; and (b) develops and implements a strategic plan that addresses actions for eliminating the six high-risk areas; (5) this strategic plan should: (a) include goals, performance measures, and time frames for completing corrective actions; (b) identify organizations and individuals accountable for accomplishing specific goals; and (c) fully comply with legislative requirements of the Chief Financial Officers Act, Government Performance and Results Act, Paperwork Reduction Act, and the Clinger-Cohen Act; (6) to help ensure the success of the multilevel strategy, top level management within DOD needs to be held accountable and have the authority and flexibility to achieve the desired results; (7) if DOD is successful in attacking the underlying causes of the problems, the Congress should expect to see positive outcomes, including: (a) the successful completion of full-scale financial audits; (b) reductions in operation and support costs; and (c) the fielding of major weapon and computer systems that meet cost, schedule, and performance estimates; and (8) if DOD's multilevel strategy does not result in the elimination of high-risk areas, the Congress may wish to consider the need for incentives to reach that goal.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: On May 1, 1997 the Committee on Governmental Affairs, U.S. Senate held a hearing on the DOD programs which GAO has identified as vulnerable to waste, fraud, abuse and mismanagement. The hearing focused on the need to find lasting solutions to systemic problems in DOD. As part of that hearing, the Committee discussed the need for incentives to stimulate change within DOD.

    Recommendation: If DOD does not make progress in eliminating the underlying causes of high-risk areas, the Congress may wish to consider the need for incentives to stimulate change.

    Agency Affected: Department of Defense


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