Recommendation: The Commandant of the Coast Guard should work with Congress to include in the Coast Guard's annual 5-year CIP a discussion of the acquisition programs it prioritized that describes how trade-off decisions made could affect other acquisition programs, such as by delaying recapitalization efforts or needing to conduct Service Life Extension Projects for legacy assets. (Recommendation 1)

Agency: Department of Homeland Security: United States Coast Guard
Status: Open

Comments: The Coast Guard agreed with this recommendation and in August 2019 officials reported that the Coast Guard is working with DHS to include additional information that addresses how trade-off decisions made could affect other major acquisition programs in future CIP reports. It anticipates including this information in the FY 2021-2025 CIP, which it expects to release in late summer 2020.

Recommendation: The Commandant of the Coast Guard should require the Executive Oversight Council, in its role to facilitate a balanced and affordable acquisition portfolio, to annually review the acquisition portfolio collectively, specifically for long-term affordability. (Recommendation 2)

Agency: Department of Homeland Security: United States Coast Guard
Status: Open

Comments: The Coast Guard disagreed with this recommendation stating that other bodies within the Coast Guard--such as the Investment Board, Deputies Council, and Investment Review Board--are responsible for making decisions regarding out-year funding, while the Executive Oversight Council works outside of the annual budget process. DHS also stated that, to meet the spirit of our recommendation, the Coast Guard will update the Executive Oversight Council's charter to require a review of the collective acquisition portfolio, specifically evaluating long-term planning. We believe that updating the Executive Oversight Council's charter to include long-term-planning is a positive step. However, we continue to believe that in addition to long-term planning, the Executive Oversight Council should include the major acquisition portfolio's budget realities faced by the Coast Guard in its reviews, or long-term affordability. If the planning accounts for long-term funding considerations to achieve the Coast Guard's acquisition goals and objectives, we believe the intent of our recommendation would be met. The Coast Guard expects to complete the update of the EOC charter by by late summer 2020.

Recommendation: The Chief Investment Officer of the Federal Retirement Thrift Investment Board should use key practices as appropriate to increase opportunities for MWO asset managers if and when implementing its mutual fund window platform. Specifically, the Chief Investment Officer should take actions to demonstrate top leadership commitment, remove potential barriers, conduct outreach to MWO firms, and communicate its priorities and expectations for an inclusive selection process to its staff and consultants if and when it begins to search for a mutual fund window platform. (Recommendation 2)

Agency: Federal Retirement Thrift Investment Board
Status: Open

Comments: The Federal Retirement Thrift Investment Board (FRTIB) did not concur with this recommendation. In July 2020, FRTIB officials told us they expect to award the mutual fund window contract in the last quarter of 2020 and that one of the goals in offering the mutual fund window is to ensure that Thrift Savings Plan participants have a variety of funds from which to choose. However, FRTIB has not changed its position on the recommendation. We continue to believe that the recommendation is valid and will monitor FRTIB's efforts to address it.

Recommendation: The Secretary of the Navy should develop a comprehensive plan for shipyard capital investment that establishes (1) the desired goal for the shipyards' condition and capabilities; (2) an estimate of the full costs to implement the plan, addressing all relevant requirements, external risk factors, and associated planning costs; and (3) metrics for assessing progress toward meeting the goal that include measuring the effectiveness of capital investments. (Recommendation 1)

Agency: Department of Defense: Department of the Navy
Status: Open
Priority recommendation

Comments: The Navy concurred with this recommendation and said it would take steps to develop and implement a comprehensive plan. Naval Sea Systems Command produced a Shipyard Infrastructure Optimization Plan in February 2018 to guide the overhaul and improvement of the naval shipyards. This plan includes some of the recommended elements but not others. (1) The plan includes some goals for the desired shipyard condition and capabilities including to: recover almost 70 maintenance periods over the next 20 years, modernize capital equipment to industry standards, optimize facilities, and reduce travel time and movement for personnel and materiel during the maintenance process. Navy officials stated the program office is in the process of creating digital maps of the yards to use in modeling facility layouts to identify the optimal layout. The Navy states that the optimal layout will recover 328,000 man days per year, a 65 percent reduction of travel and movement. (2) The report includes a preliminary cost estimate, but work is underway to determine the full costs to address all relevant requirements, risk factors, and planning costs. The plan identifies risks that could increase costs, but does not identify solutions to address those risks. Program officials said they will develop plans to address the risks in subsequent phases of the planning effort. The risks Navy officials identified included historical preservation, environmental regulations, and the need for extra capacity. (3) The plan did not include metrics for assessing progress toward meeting each of the goals. Navy officials stated that they intend to develop metrics to meet this element during a second phase that will be complete in fiscal year 2020.To fully implement this recommendation, the Navy should complete its optimization plan, develop a reliable cost estimate addressing all relevant requirements, risks, and planning costs, and develop metrics to help it assess progress towards meeting its goal that include measuring the effectiveness of capital investments.

Recommendation: The Secretary of the Navy should conduct regular management reviews that include all relevant stakeholders to oversee implementation of the plan, review metrics, assess the progress made toward the goal, and make adjustments, as necessary, to ensure that the goal is attained. (Recommendation 2)

Agency: Department of Defense: Department of the Navy
Status: Open
Priority recommendation

Comments: The Navy concurred with this recommendation and said it would take steps to conduct regular management reviews. To address this recommendation, the Navy issued NAVSEA Notice 5450 in June 2018. This notice established a new program management office responsible for planning, developing, scheduling, budgeting, and sustaining the replacement of shipyard facilities and equipment. By creating this office, the Navy has taken a first step toward establishing a result-oriented management approach and toward implementing our recommendation to conduct regular management reviews. In addition, the Assistant Secretary of the Navy for Research, Development, and Acquisition, in September 2018, required this new program office to provide regular updates to an Executive Oversight Council. These updates could serve as a foundation to address this recommendation. However, as noted in GAO-20-64, the Navy has faced challenges involving all the relevant stakeholders in the plan's implementation, namely the shipyards. In the absence of clear direction, the shipyards have worked with the program office to develop several informal collaboration mechanisms. For example, the program office and the shipyards have begun several shipyard-specific working groups and hold regular telephone calls. However, until the shipyards are formally involved in the implementation and assessment of the plan, the Navy will be unable to fully meet the direction of this recommendation to involve "all relevant stakeholders."

Recommendation: The Secretary of the Navy should provide regular reporting to key decision makers and Congress on the progress the shipyards are making to meet the goal of the comprehensive plan, along with any challenges that hinder that progress, such as cost. This may include reporting on progress to reduce their facilities restoration and modernization backlogs, improve the condition and configuration of the shipyards, and recapitalize capital equipment. (Recommendation 3)

Agency: Department of Defense: Department of the Navy
Status: Open
Priority recommendation

Comments: The Navy concurred with this recommendation and said it would take steps to provide regular reporting to key decision makers and Congress. DOD officials stated in October 2018 that the Shipyard Infrastructure Optimization Plan, along with the creation of the Readiness Reform Oversight Council, address this recommendation. While the Readiness Reform Oversight Council does appear to involve some of the key stakeholders who should be receiving the regular reporting, the Navy has already made clear that it sees the shipyard optimization process as a 20-year-long effort. Given that, regular reporting on progress cannot be achieved with a single disclosure at the beginning of the effort. Both Congress and DOD decision makers need to receive regular updates on the implementation of the shipyard optimization plan, and while it is possible that the newly created Shipyard Program Management Office will be able to provide such reporting, that organization is still being developed and, as of August 2019, no progress reporting has yet begun.

Recommendation: To assist IRA owners in addressing challenges associated with investing their retirement savings in unconventional assets, the Commissioner of Internal Revenue should provide guidance to IRA owners and custodians on how to determine and document fair market value (FMV) for certain categories of hard-to-value unconventional assets. For example, IRS could consider updating Form 5498 instructions to custodians on how to document FMV for hard-to-value assets (e.g., last-known FMV based on independent appraisal, acquisition price) and provide guidance directed at account owners that provides examples of how to ascertain FMV for different types of unconventional assets.

Agency: Department of the Treasury: Internal Revenue Service
Status: Open

Comments: IRS agreed that guidance should be provided to IRA owners and custodians. In 2018, IRS stated that it had discussed this issue with Counsel and Treasury, and it was agreed that fair market value would be a part of the IRA guidance project under the 2017 Priority Guidance Plan. IRS officials said that these new regulations would address FMV for certain categories of hard-to-value unconventional assets. IRS further noted that it would be premature to modify instructions and guidance to custodians on how to determine and document FMV for hard-to- value assets until the new regulations are issued. In their October 2019 update of planned guidance projects, Treasury's Office of Tax Policy and IRS still listed planned IRA regulations. GAO will not close this recommendation as implemented until the new valuation guidance is issued.

Recommendation: To enhance the budget process and to improve transparency, the Commissioner of Internal Revenue, to the extent feasible, should ensure that the CJ includes data by appropriation account on the amount of funding requested to maintain current services for each future state theme.

Agency: Department of the Treasury: Internal Revenue Service
Status: Open

Comments: In its fiscal year 2017 congressional justification, IRS modified how its budget data were organized, including linking requested increases to future state themes, but did not clarify how current spending by themes relates to appropriation accounts. Information on current spending by theme and account is important to ensure transparency on the current funding levels to assist Congress in making informed budget decisions. As reported in October 2018 in GAO-19-108R, the themes under the Future State vision are now being pursued as part of IRS's strategic plan for fiscal years 2018 to 2022-issued in May 2018. IRS has been phasing out the use of the term Future State and did not include it in its fiscal year 2020 congressional justification. Including data on the themes in the strategic plan would provide additional transparency and improve the quality of the information available to Congress for budget deliberations.

Recommendation: As Treasury works with IRS to improve the quality and accuracy of budget data, the Secretary of the Treasury should ensure sufficient controls are in place to make certain that the information technology investment reports generated from the SharePoint Investment Knowledge Exchange are accurate. This includes, for example, taking steps to reduce the need for manual corrections to the data.

Agency: Department of the Treasury
Status: Open

Comments: As of November 2017, Treasury Department officials took steps to address the need to manually correct budget data for the fiscal year 2017 budget request. However, as of October 2019, we have not received documentation that they have done so for future budget years. Improved information would help Treasury and IRS better account for information technology resources. We will continue to monitor Treasury's progress.

Recommendation: To improve the department's IT savings reinvestment plans, the Secretary of Agriculture should direct the CIO to ensure that the department's integrated data collection submission to OMB includes, for all reported initiatives, complete plans to reinvest any resulting cost savings and avoidances from OMB-directed IT reform-related efforts.

Agency: Department of Agriculture
Status: Open

Comments: The Department of Agriculture agreed with our recommendation and has taken initial steps to implement it. Specifically, as of May 2020, the department's integrated data collection submission to the Office of Management and Budget included reinvestment plans for 37 of 68 reported cost savings and avoidance initiatives. However, the department reported about $122.8 million in cost savings and avoidances in the 31 initiatives that did not include plans regarding how these savings would be reinvested. The department expects to provide an update in June 2020. We will continue to evaluate the department's progress in implementing this recommendation.

Recommendation: To improve the department's IT savings reinvestment plans, the Secretary of Housing and Urban Development should direct the CIO to ensure that the department's integrated data collection submission to OMB includes, for all reported initiatives, complete plans to reinvest any resulting cost savings and avoidances from OMB-directed IT reform-related efforts.

Agency: Department of Housing and Urban Development
Status: Open

Comments: The Department of Housing and Urban Development agreed with, and has taken initial steps to implement, our recommendation. Specifically, as of May 2020, the department's integrated data collection submission included reinvestment plans for one of the eight cost savings and avoidance initiatives reported. However, the seven remaining initiatives, with savings and avoidances totaling approximately $6.3 million, did not include reinvestment plans. The department expects to provide an update in June 2020. We will continue to evaluate the department's progress in implementing this recommendation.

Recommendation: To improve the department's IT savings reinvestment plans, the Secretary of the Treasury should direct the CIO, as part of any future update to the department's IRM strategic plan or equivalent document, to include information regarding the approach to reinvesting savings from the consolidation of commodity IT resources (including data centers) in accordance with OMB's guidance.

Agency: Department of the Treasury
Status: Open

Comments: The Department of the Treasury has not yet taken steps to implement our recommendation. Specifically, as of May 2020, the department had not yet updated its Information Resources Management (IRM) Strategic Plan to include information regarding the approach to reinvesting savings from the consolidation of commodity IT resources. In addition, in an April 2020 e-mail, the department's GAO liaison stated that Treasury had not yet updated its IRM strategic plan, but might have other, more current, strategic documents that described its reinvestment plans. The department expects to provide an update in June 2020. We will continue to evaluate the department's progress in implementing this recommendation.

Recommendation: To improve the department's IT savings reinvestment plans, the Secretary of the Treasury should direct the CIO to ensure that the department's integrated data collection submission to OMB includes, for all reported initiatives, complete plans to use any resulting cost savings and avoidances from OMB-directed IT reform-related efforts.

Agency: Department of the Treasury
Status: Open

Comments: The Department of the Treasury has not yet taken steps to implement our recommendation. Specifically, as of May 2020, the department's quarterly integrated data collection submission to the Office of Management and Budget did not include reinvestment plans for 15 of the 27 reported cost savings and avoidance initiatives. For example, the department reported about $100 million in cost avoidances from its data center consolidation and optimization initiatives, but did not provide information regarding how it plans to reinvest these avoidances. The department expects to provide an update in June 2020. We will continue to evaluate the department's progress in implementing this recommendation.

Recommendation: To improve the department's IT savings reinvestment plans, the Secretary of Veterans Affairs should direct the CIO to ensure that the department's integrated data collection submission to OMB includes, for all reported initiatives, complete plans to reinvest any resulting cost savings and avoidances from OMB-directed IT reform-related efforts.

Agency: Department of Veterans Affairs
Status: Open

Comments: The Department of Veterans Affairs agreed with, and took initial steps to implement, our recommendation. Specifically, in November 2015, the department's Chief of Staff stated that the Office of Information and Technology was working to establish an office to close monitor program performance, deliver, cost, schedule, return on investment, and total cost of ownership, which will enable reinvestment opportunities. However, as of May 2020, the department's quarterly integrated data collection submission to the Office of Management and Budget did not include reinvestment plans for five of the 10 reported cost savings and avoidance initiatives. For example, the department reported about $229 million in cost avoidances associated with renegotiating an enterprise license agreement with Microsoft, but did not provide information regarding how it plans to reinvest these avoidances. The department expects to provide an update in June 2020. We will continue to evaluate the department's progress in implementing this recommendation.

Recommendation: To improve the agency's IT savings reinvestment plans, the Administrator of the Environmental Protection Agency should direct the CIO to ensure that the agency's integrated data collection submission to OMB includes, for all reported initiatives, complete plans to reinvest any resulting cost savings and avoidances from OMB-directed IT reform-related efforts.

Agency: Environmental Protection Agency
Status: Open

Comments: The Environmental Protection Agency agreed with our recommendation, but has not yet taken steps to implement it. Specifically, as of May 2020, the agency's quarterly integrated data collection submission to the Office of Management and Budget did not include reinvestment plans for any of the 12 reported cost savings and avoidance initiatives. For example, the agency reported about $34.0 million in cost savings and avoidances in 2019 related to data center, commodity IT, and software licensing initiatives, but did not provide information regarding how it plans to reinvest these savings and avoidances. The agency expects to provide an update in June 2020. We will continue to evaluate the agency's progress in implementing this recommendation.

Recommendation: To improve the agency's IT savings reinvestment plans, the Director of the Office of Personnel Management should direct the CIO, as part of any future update to the agency's IRM strategic plan or equivalent document, to include information regarding the approach to reinvesting savings from the consolidation of commodity IT resources (including data centers) in accordance with OMB's guidance.

Agency: Office of Personnel Management
Status: Open

Comments: The Office of Personnel Management (OPM) agreed with our recommendation, but has not yet taken action to implement it. Specifically, in November 2015, OPM's Acting Director stated that information regarding the approach to reinvesting savings from the consolidation of commodity IT resources (including data centers) would be included in future updates to OPM's Strategic IT Plan. In August 2019, OPM's GAO liaison stated that the agency intended to update its Strategic IT Plan in fiscal year 2020 and intended to include reinvestment language as part of the update. However, as of May 2020, the agency had not yet updated its strategic plan to include this information. The agency expects to provide an update in June 2020. We will continue to evaluate the OPM's progress in implementing this recommendation.

Recommendation: To improve DOD's use of portfolio management for its weapon system investments and ensure that its investment plans are affordable, strategy-driven, balance near- and long-term needs, and leverage efforts across the military services, as well as to provide a solid foundation for future portfolio management efforts at the enterprise-level, the Secretary of Defense should revise DOD Directive 7045.2 on Capability Portfolio Management in accordance with best practices and promote the development of better tools to enable more integrated portfolio reviews and analyses of weapon system investments. Key elements of this recommendation would include (1) designating the Deputy Secretary of Defense or some appropriate delegate responsibility for implementing the policy and overseeing portfolio management in DOD; (2) requiring annual enterprise-level portfolio reviews that incorporate key portfolio review elements, including information from the requirements, acquisition, and budget processes; (3) directing the Joint Staff, AT&L, and CAPE to collaborate on their data needs and develop a formal implementation plan for meeting those needs either by building on the database the Joint Staff is developing for its analysis or investing in new analytical tools; and (4) incorporating lessons learned from military service portfolio reviews and portfolio management activities, such as using multiple risk and funding scenarios to assess needs and re-evaluate priorities.

Agency: Department of Defense
Status: Open

Comments: DOD partially concurred with our recommendation. DOD agreed with the need to further develop portfolio management tools, ensure access to authoritative data, and incorporate lessons learned by others performing portfolio management. However, DOD stated that other aspects of our recommendation were redundant to, and would conflict with other processes and activities in place to perform portfolio management. As of January 2020, DOD has taken steps to implement parts of this recommendation. In January 2019, responsibility for DOD Directive 7045.20 was transferred to the Office of the Under Secretary of Defense for Acquisition and Sustainment from the Office of the Under Secretary of Defense for Policy, which sponsored the directive when it was issued. This office began revising DOD Directive 7045.2 in summer 2019, and plans to update the directive by the end of fiscal year 2020. In addition, in October 2016 and September 2017, the Joint Staff informed GAO that they had been updating two of their databases on military capabilities and capability requirements to provide DOD with better analytical tools to support portfolio management. They also reported that they completed a crosscutting study in collaboration with the acquisition community to improve the information sharing and analytical tools for their capability requirements database. In July 2020, the Joint Staff completed an update one of these databases. Joint Staff officials said they anticipated the database update would increase speed and provide a better search engine to help the Joint Staff more effectively conduct portfolio reviews, assess potential redundancy, and collect and analyze the information needed prioritize capabilities across DOD. However, a Joint Staff official stated that it is too soon to tell if the Joint Staff has experienced any improvements with regard to portfolio management as a result of the update. DOD has not taken action on the other aspects of this recommendation.

Recommendation: To improve DOD's use of portfolio management for its weapon system investments and ensure that its investment plans are affordable, strategy-driven, balance near- and long-term needs, and leverage efforts across the military services, and to help ensure the military services' portfolio reviews are conducted regularly and effectively integrate information from the requirements, acquisition, and budget communities, the Secretary of Defense should direct the Secretaries of the Army, Navy, and Air Force to update or develop policies that require them to conduct annual portfolio reviews that incorporate key portfolio review elements, including information from the requirements, acquisition, and budget processes.

Agency: Department of Defense
Status: Open

Comments: DOD partially concurred with our recommendation. However, DOD did not indicate that it would take any action to address it. Instead, DOD responded that the services' budget processes and Office of the Secretary of Defense's review of the services' budgets meet the intent of our recommendation. Our report findings showed otherwise. As of July 2020, DOD has not taken any actions to implement this recommendation, but an ongoing update of the department's portfolio management guidance (DOD Directive 7045.20) could lead to further actions on this recommendation.

Recommendation: To encourage plan sponsors to continue efforts to improve plan participation and overall retirement savings through the use of Qualified Default Investment Alternatives, the Secretary of Labor should direct the Assistant Secretary for the Employee Benefits Security Administration to assess the challenges that plan sponsors and stakeholders reported, including the extent to which these challenges can be addressed, and implement corrective actions through clarifying guidance or regulations, as appropriate.

Agency: Department of Labor
Status: Open

Comments: In 2015, DOL noted that the agency would assess the challenges that plan sponsors and stakeholders had reported to GAO, decide in FY 2016 whether a broader public comment process (such as a Request for Information) or a research project would aid that assessment, and determine whether other actions, such as issuing clarifying guidance or regulations, would be beneficial to its stakeholders. In 2016, DOL confirmed that the agency continues to plan to take the above action. As of July 2017, DOL had not added a public comment process to EBSA's 2017 regulatory agenda, and had no specific timeline for any next action. In an April 2018 update, DOL responded that it had convened the 2018 ERISA Advisory Council (EAC) to study lifetime income solutions in the context of QDIAs with a focus on decumulation issues and rollovers. Among other recommendations, the EAC recommended to DOL that it clarify that sponsors may default participants into different options based on participant demographics because plan populations may not be sufficiently similar for a single default to be universally appropriate. However, DOL noted that it has not added a public comment process on QDIA issues to EBSA's regulatory agenda, and had no specific timeline for any next action.

Recommendation: To better protect plan sponsors and participants who use managed account services, the Secretary of Labor should direct the Assistant Secretary for the EBSA to consider the fiduciary status of managed account providers when they offer services on an opt-in basis and, if necessary, make regulatory changes or provide guidance to address any issues.

Agency: Department of Labor
Status: Open

Comments: DOL concurred with this recommendation and agreed to review existing guidance and consider whether additional guidance is needed in light of the various business models we described. On April 8, 2016, DOL issued a final rule that clarified that anyone providing advice that is individualized or specifically directed to a participant pertaining to a decision to take, or refrain from taking, a distribution from the plan is a fiduciary. According to DOL, this final rule will better protect plan participants by requiring service providers who provide investment advice to act in their clients' best interest, preventing the erosion of their retirement savings by fees and substandard performance attributable to conflicts of interest. In 2018, a court ruling vacated this regulation; there is legal uncertainty surrounding the regulation and its effect regarding fiduciary duties,

Recommendation: To help sponsors who offer managed account services or who are considering doing so better protect their 401(k) plan participants, the Secretary of Labor should direct the Assistant Secretary for EBSA to require plan sponsors to request from record keepers more than one managed account provider option, and notify the Department of Labor if record keepers fail to do so.

Agency: Department of Labor
Status: Open

Comments: DOL agreed to consider this recommendation in connection with a regulatory project on standards for brokerage windows in participant-directed individual account plans. However, in Spring 2017, DOL removed this project as an active project on its regulatory agenda. GAO believes requiring plan sponsors to ask for more than one choice of a provider may be an effective method of broadening plan sponsors' choices of managed account providers. In April 2018, DOL reported that it was not able to allocate staff time and resources to this recommendation and does not yet have a specific timeline for any next action.

Recommendation: To help sponsors and participants more effectively assess the performance of managed accounts, the Secretary of Labor should direct the Assistant Secretary for EBSA to amend participant disclosure regulations to require that sponsors furnish standardized performance and benchmarking information to participants. To accomplish this, EBSA could promulgate regulations that would require sponsors who offer managed account services to provide their participants with standardized performance and benchmarking information on managed accounts. For example, sponsors could periodically furnish each managed account participant with the aggregate performance of participants' managed account portfolios and returns for broad-based securities market indexes and applicable customized benchmarks, based on those benchmarks provided for the plan's designated investment alternatives.

Agency: Department of Labor
Status: Open

Comments: DOL agreed to consider this recommendation in connection with (1) its regulatory project on standards for brokerage windows in participant directed individual account plans and (2) open proposed rulemaking project involving the qualified default investment alternative and participant-level fee disclosure regulations. In Spring 2017, the project on brokerage windows was removed as an active project on DOL's regulatory agenda, and the project on qualified default investment alternatives was moved to the long-term action category. In April 2018, DOL reported that it was not able to allocate staff time and resources to this recommendation and does not yet have a specific timeline for any next action.

Recommendation: To help sponsors and participants more effectively assess the performance of managed accounts, the Secretary of Labor should direct the Assistant Secretary for EBSA to amend service provider disclosure regulations to require that providers furnish standardized performance and benchmarking information to sponsors. To accomplish this, EBSA could promulgate regulations that would require service providers to disclose to sponsors standardized performance and benchmarking information on managed accounts. For example, providers could, prior to selection and periodically thereafter, as applicable, furnish sponsors with aggregated returns for generalized conservative, moderate, and aggressive portfolios, actual managed account portfolio returns for each of the sponsor's participants, and returns for broad-based securities market indexes and applicable customized benchmarks, based on those benchmarks provided for the plan's designated investment alternatives.

Agency: Department of Labor
Status: Open

Comments: DOL agreed to consider this recommendation in connection with (1) its regulatory project on standards for brokerage windows in participant directed individual account plans and (2) open proposed rulemaking project involving the qualified default investment alternative and participant-level fee disclosure regulations. In Spring 2017, the project on brokerage windows was removed as an active project on DOL's regulatory agenda, and the project on qualified default investment alternatives was moved to the long-term action category of DOL's regulatory agenda. In April 2018, DOL reported that it was not able to allocate staff time and resources to this recommendation and does not yet have a specific timeline for any next action.

Recommendation: To help sponsors who offer managed account services or who are considering doing so better protect their 401(k) plan participants, the Secretary of Labor should direct the Assistant Secretary for EBSA to provide guidance to plan sponsors for selecting and overseeing managed account providers that addresses: (1) the importance of considering multiple providers when choosing a managed account provider, (2) factors to consider when offering managed accounts as a Qualified Default Investment Alternative or on an opt-in basis, and (3) approaches for evaluating the services of managed account providers.

Agency: Department of Labor
Status: Open

Comments: DOL agreed to consider this recommendation in connection with a regulatory project on standards for brokerage windows in participant-directed individual account plans. However, in Spring 2017, DOL removed this project as an active project on its regulatory agenda. GAO continues to believe that plan sponsors would benefit from additional guidance for selecting and overseeing managed account providers. In April 2018, DOL reported that it was not able to allocate staff time and resources to this recommendation and does not yet have a specific timeline for any next action.

Recommendation: To improve IRS's enforcement and compliance efforts, decrease the administrative and financial burden of maintaining both electronic and paper-based form processing systems, and reduce plan reporting costs, Congress should consider providing the Department of the Treasury with the authority to require that the Form 5500 series be filed electronically.

Agency: Congress
Status: Open

Comments: As of 05/01/2019, Congress has taken no action.

Recommendation: To improve the usefulness, reliability, and comparability of Form 5500 data for all stakeholders while limiting the burden on the filing community, the Secretaries of DOL and Treasury, and the Director of PBGC should consider implementing the findings from our panel when modifying plan investment and service provider fee information, including: (1) revising Schedule H plan asset categories to better match current investment vehicles and provide more transparency into plan investments; (2) revising the Schedule of Assets attachments to create a standard searchable format; (3) developing a central repository for EIN and PN numbers for filers and service providers to improve the comparability of form data across filings; (4) clarifying Schedule C instructions for direct, eligible indirect, and reportable indirect compensation so plan fees are reported more consistently and, as we recommended in the past, better align with the 408(b)(2) fee disclosures; and (5) simplifying and clarify Schedule C service provider codes to increase reporting consistency.

Agency: Department of Labor
Status: Open

Comments: As August 2018, DOL continues to accept meetings with interested stakeholders on issues related to its 5500 Modernization Project. However, EBSA does not at this time have an expected next action date for this project. The decision was made in the development and clearance of its Spring 2018 regulatory agenda to classify this project as a long-term action.

Recommendation: To improve the usefulness, reliability, and comparability of Form 5500 data for all stakeholders while limiting the burden on the filing community, the Secretaries of DOL and Treasury, and the Director of PBGC should consider implementing the findings from our panel when modifying plan investment and service provider fee information, including: (1) revising Schedule H plan asset categories to better match current investment vehicles and provide more transparency into plan investments; (2) revising the Schedule of Assets attachments to create a standard searchable format; (3) developing a central repository for EIN and PN numbers for filers and service providers to improve the comparability of form data across filings; (4) clarifying Schedule C instructions for direct, eligible indirect, and reportable indirect compensation so plan fees are reported more consistently and, as we recommended in the past, better align with the 408(b)(2) fee disclosures; and (5) simplifying and clarify Schedule C service provider codes to increase reporting consistency.

Agency: Department of the Treasury
Status: Open

Comments: In 2016, DOL in coordination with IRS and PBGC has implemented cross-year edit checks into EFAST in an effort to improve the consistency in key identifying information, such as the EIN, Plan Number and Plan Name. These checks aim to verify identifying information submitted on the Form 5500 and to notify the filer and government agencies of inconsistencies, which affords filers the ability to review and modify crucial identifying information prior to submission. Additionally, if the filer chooses to submit data that may contain inconsistent information, the edit test indicators provide government users with the ability to more readily detect filings containing potential errors in the identifying information for further review and correction. IRS has also collaborated with DOL and PBGC in issuing proposed revisions to the Form 5500 Series in a Notice of Proposed Forms Revisions. The deadline for public comment ended December 5, 2016. The proposed revisions in the Notice reflect efforts of DOL, IRS, and PBGC to improve the Form 5500 reporting for filers, the public, and the agencies by among other things, (1) modernizing financial information filed by regarding plans; (2) updating fee and expense information on plan service providers with a focus on harmonizing annual reporting requirement with DOL's 408(b)(2); financial disclosure requirements; (3) enhancing the ability to mine data files on annual returns/reports; and (4) improving compliance with ERISA and the Code through selected new questions regarding plan operation, service provider relationships, and financial management of plans. Specifically, in the Notice the agencies propose that Schedule H report assets held and assets disposed of during the plan year to provide more transparency and a more complete report of plan's annual investments and that that the Schedule of Assets be revised to require reporting of assets held through direct filing entities. Additionally, the agencies are proposing revisions to the Schedule H, Schedule of Assets that require filers to complete standardized Schedules in a format enabling data to captured electronically. This requirement would enable importation of information from the Schedules of Assets into structured databases that DOL would make available to the public from each year's Form 5500 Series filing. The agencies are also proposing to add clarifying definitions and instructions to improve the consistency of Form 5000 responses. This includes clarification of conventions to identify filers by name and identifying numbers to help mitigate confusion about legal identities with which plans transact and improve comparability of form data across filings. In addition, the agencies also propose revisions to Schedule C to require reporting of indirect compensation for service provider subject to 408(b)(2) requirements and for all compensation that is required to be disclosed. Further, the Schedule C instructions would be clarified to track more closely with the language of the 408(b)(2) regulations. The agencies are also proposing to limit the codes for Schedule C and requiring the filer to more simply indicate all types of services for each provider identified. Additionally, they propose a requirement to indicate all the types of fees/compensation separately when reporting sources of compensation from parties other than plan and plan sponsor. The agencies are reviewing the public comments and expect the process to continue through 2017. While the Agencies have made considerable efforts to address our recommendation in the proposed revisions to the Form 5500, they have not made any decisions on whether to make changes to the forms or DOL regulations, and have not decided on a timeline for implementation of any changes to the form or DOL regulations that the Agencies ultimately may decide to adopt. We will close this recommendation once the revision is final.

Recommendation: To improve the usefulness, reliability, and comparability of Form 5500 data for all stakeholders while limiting the burden on the filing community, the Secretaries of DOL and Treasury, and the Director of PBGC should consider implementing the findings from our panel when modifying plan investment and service provider fee information, including: (1) revising Schedule H plan asset categories to better match current investment vehicles and provide more transparency into plan investments; (2) revising the Schedule of Assets attachments to create a standard searchable format; (3) developing a central repository for EIN and PN numbers for filers and service providers to improve the comparability of form data across filings; (4) clarifying Schedule C instructions for direct, eligible indirect, and reportable indirect compensation so plan fees are reported more consistently and, as we recommended in the past, better align with the 408(b)(2) fee disclosures; and (5) simplifying and clarify Schedule C service provider codes to increase reporting consistency.

Agency: Pension Benefit Guaranty Corporation
Status: Open

Comments: In 2016, DOL in coordination with IRS and PBGC has implemented cross-year edit checks into EFAST in an effort to improve the consistency in key identifying information, such as the EIN, Plan Number and Plan Name. These checks aim to verify identifying information submitted on the Form 5500 and to notify the filer and government agencies of inconsistencies, which affords filers the ability to review and modify crucial identifying information prior to submission. Additionally, if the filer chooses to submit data that may contain inconsistent information, the edit test indicators provide government users with the ability to more readily detect filings containing potential errors in the identifying information for further review and correction. PBDC has also collaborated with DOL and IRS in issuing proposed revisions to the Form 5500 Series in a Notice of Proposed Forms Revisions. The deadline for public comment ended December 5, 2016. The proposed revisions in the Notice reflect efforts of DOL, IRS, and PBGC to improve the Form 5500 reporting for filers, the public, and the agencies by among other things, (1) modernizing financial information filed by regarding plans; (2) updating fee and expense information on plan service providers with a focus on harmonizing annual reporting requirement with DOL's 408(b)(2); financial disclosure requirements; (3) enhancing the ability to mine data files on annual returns/reports; and (4) improving compliance with ERISA and the Code through selected new questions regarding plan operation, service provider relationships, and financial management of plans. Specifically, in the Notice the agencies propose that Schedule H report assets held and assets disposed of during the plan year to provide more transparency and a more complete report of plan's annual investments and that that the Schedule of Assets be revised to require reporting of assets held through direct filing entities. Additionally, the agencies are proposing revisions to the Schedule H, Schedule of Assets that require filers to complete standardized Schedules in a format enabling data to captured electronically. This requirement would enable importation of information from the Schedules of Assets into structured databases that DOL would make available to the public from each year's Form 5500 Series filing. The agencies are also proposing to add clarifying definitions and instructions to improve the consistency of Form 5000 responses. This includes clarification of conventions to identify filers by name and identifying numbers to help mitigate confusion about legal identities with which plans transact and improve comparability of form data across filings. In addition, the agencies also propose revisions to Schedule C to require reporting of indirect compensation for service provider subject to 408(b)(2) requirements and for all compensation that is required to be disclosed. Further, the Schedule C instructions would be clarified to track more closely with the language of the 408(b)(2) regulations. The agencies are also proposing to limit the codes for Schedule C and requiring the filer to more simply indicate all types of services for each provider identified. Additionally, they propose a requirement to indicate all the types of fees/compensation separately when reporting sources of compensation from parties other than plan and plan sponsor. The agencies are reviewing the public comments and expect the process to continue through 2017. While the Agencies have made considerable efforts to address our recommendation in the proposed revisions to the Form 5500, they have not made any decisions on whether to make changes to the forms or DOL regulations, and have not decided on a timeline for implementation of any changes to the form or DOL regulations that the Agencies ultimately may decide to adopt. We will close this recommendation once any revision are made final.

Recommendation: To ensure effective management and modernization of HUD's IT environment, the Secretary of Housing and Urban Development should direct the department's Chief Information Officer to define the scope, implementation strategy, and schedule of its overall modernization approach, with related goals and measures for effectively overseeing the effort.

Agency: Department of Housing and Urban Development
Status: Open
Priority recommendation

Comments: In July 2018, the Office of the Chief Information Officer (OCIO) reported that the goal of the Chief Technology Officer's technical assessment of HUD's IT environment was to identify gaps and develop an implementation strategy and approach to establish a modernization roadmap. As of March 2020, OCIO reported that it had completed the technical assessment to identify gaps in IT. The department has also taken action to define an overall modernization approach, including the scope, implementation strategy, and schedule for modernizing its IT environment and systems. However, as of March 2020, HUD had not yet established measures for overseeing its modernization efforts.

Recommendation: The Commissioner of Internal Revenue should direct the appropriate officials to define and implement a process, including defined criteria, for reselecting ongoing projects.

Agency: Department of the Treasury: Internal Revenue Service
Status: Open

Comments: In March, 2017, IRS issued its Portfolio Investment Plan Process Description Manual for selecting and prioritizing new and ongoing operations support activities. The manual includes criteria for prioritizing selections; and provides for comparing assets against one another to create a prioritized portfolio; and ensuring executives' funding decisions are based upon the process for selecting and prioritizing activities. In March 2018, IRS updated the manual and also issued related detailed procedures. In May 2019, IRS stated that its Information Technology/Strategy and Planning group had developed a prioritization process and associated scoring criteria to help facilitate decision making for business systems modernization programs, projects, and capabilities. The agency noted that improvements were being made to the process and full implementation was anticipated for June 2019.In April 2020, IRS informed us that it had moved its target for fully implementing the recommendation to November 2020. We will continue to monitor IRS's efforts to implement the recommendation.

Recommendation: To ensure that the Department of Defense is taking full advantage of the cost savings that can be achieved by implementing CPC projects, the Secretary of Defense should direct the Under Secretary of Defense (Acquisition, Technology and Logistics) to update applicable guidance, such as DOD Instruction 5000.67, Prevention and Mitigation of Corrosion on DOD Military Equipment and Infrastructure or the DOD Corrosion Prevention and Mitigation Strategic Plan to further define the responsibilities of the military departments' Corrosion Executives, to include more specific oversight and review of the project proposals before and during the project selection process.

Agency: Department of Defense
Status: Open

Comments: DOD has not updated DOD Instruction 5000.67 - Prevention and Mitigation of Corrosion on DOD Military Equipment and Infrastructure, the DOD Corrosion Prevention and Mitigation Strategic Plan, or other applicable guidance since the publication of our report. DOD did not concur with this recommendation at the time of our report but as of March 2019, has since decided to take action to implement it. Corrosion Office officials agree that Corrosion Executives' responsibilities in the Corrosion Prevention Project selection process have to be further defined. They plan to clearly document the selection procedures and participation of the Corrosion Executive in an update to DOD Instruction 5000.67 (Prevention and Mitigation of Corrosion on DOD Military Equipment and Infrastructure) and in the new DOD manual on corrosion. The Corrosion Office's goal is to complete this instruction update and create the new manual by the end of calendar year 2020. We will monitor the extent to which DOD implements this recommendation.