2013 Annual Report: 

Actions Needed to 

Reduce Fragmentation, 

Overlap, and 

Duplication and 

Achieve Other 

Financial Benefits

Report to Congressional Addressees

April 2013 

GAO-13-279SP 

United States Government Accountability Office

GAO 
Page 1 GAO-13-279SP 2013 Annual Report 

United States Government Accountability Office

Washington, DC 20548 

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.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.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. 

 

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. 

 
 

Page 2 GAO-13-279SP 2013 Annual Report 

Figure 1: Definitions of Fragmentation, Overlap, and Duplication 

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 
 

Page 3 GAO-13-279SP 2013 Annual Report 

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. 

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 

Opportunities Exist to 

Improve Efficiency 

and Effectiveness 

across the Federal 

Government 
 

Page 4 GAO-13-279SP 2013 Annual Report 

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. 
 

Page 5 GAO-13-279SP 2013 Annual Report 

For example, we identified duplication in the Medicaid Integrity Program, 

which provides federal support and oversight of state programs.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) 

 

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. 
 

Page 6 GAO-13-279SP 2013 Annual Report 

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.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. 

 

4

GAO, Tax Gap: IRS Could Significantly Increase Revenues by Better Targeting 

Enforcement Resources, GAO-13-151 (Washington, D.C.: Dec. 5, 2012). 
 

Page 7 GAO-13-279SP 2013 Annual Report 

 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.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. 

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 

 

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. 

Suggested Actions to 

Achieve Greater 

Efficiency or 

Effectiveness in 

Government 
 

Page 8 GAO-13-279SP 2013 Annual Report 

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.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.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 

 

6

GAO, Managing for Results: A Guide for Using the GPRA Modernization Act to Help 

Inform Congressional Decision Making, 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. 
 

Page 9 GAO-13-279SP 2013 Annual Report 

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.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 

 

8

Our review included major information technology investments at DOD, HHS, DHS, 

Treasury, and VA. 
 

Page 10 GAO-13-279SP 2013 Annual Report 

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.9

 

 

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. 
 

Page 11 GAO-13-279SP 2013 Annual Report 

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 publicprivate partnerships and hosting government capabilities on 

commercial spacecraft.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. 

 

10Several 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. 
 

Page 12 GAO-13-279SP 2013 Annual Report 

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.11 

We evaluated progress by determining an “overall assessment” rating for 

each area and an individual rating for each action within an area (see fig. 

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.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.13

 

11An 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. 

12In 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. 

13In 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. 

The Executive Branch 

and Congress Have 

Made Some Progress 

in Addressing the 

Areas That We 

Previously Identified 
 

Page 13 GAO-13-279SP 2013 Annual Report 

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

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. 
 

Page 14 GAO-13-279SP 2013 Annual Report 

Consolidated areas and actions were not assessed this year due to additional work or other 

information GAO considered. See appendix II for more information. 

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. 
 

Page 15 GAO-13-279SP 2013 Annual Report 

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

Reports 

Annual 

report 

Areas identified Overall assessment of 

2011 – 2012 actionsa

2011 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. ○

2011 Federal Data (Area 15): Consolidating federal data centers provides an opportunity to 

improve government efficiency. ◐

2011 Competition for Federal Contracts (Area 47): Promoting competition for the over $500 

billion in federal contracts could potentially save billions of dollars over time. ◐

2012 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. ○

2011 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. ○

2011 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. ◐

2012 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. ○

2011 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.

◐

2011 Federal Facility Ownership and Leasing (Area 51): Improved cost analyses used for 

making federal facility ownership and leasing decisions could save millions of dollars. ○

2012 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.

◐

2012 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.

○ 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.
 

Page 16 GAO-13-279SP 2013 Annual Report 

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. 

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. 

Over 3 Years, GAO 

Has Identified 162 

Areas Where Federal 

Programs Could 

Achieve Greater 

Efficiency or Increase 

Effectiveness 
 

Page 17 GAO-13-279SP 2013 Annual Report 

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

2013 Annual Reports 

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. 
 

Page 18 GAO-13-279SP 2013 Annual Report 

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 2010.14

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. 

 

14Our 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. 
 

Page 19 GAO-13-279SP 2013 Annual Report 

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

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. 

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 
 

Page 20 GAO-13-279SP 2013 Annual Report 

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.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. 

 

15Our examination did not include the fiscal year 2014 President’s budget because of the 

timing of its release. 
 

Page 21 GAO-13-279SP 2013 Annual Report 

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. 

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.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 

 

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

GPRA Modernization 

Act Can Help Address 

Challenges in 

Identifying and 

Addressing 

Fragmentation, 

Overlap, or 

Duplication 
 

Page 22 GAO-13-279SP 2013 Annual Report 

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.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.18 OMB expects 24 large federal agencies to publish an initial 

 

17In 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. 

18OMB, Circular No. A-11, Preparation, Submission, and Execution of the Budget, 

Aug. 3, 2012. 
 

Page 23 GAO-13-279SP 2013 Annual Report 

inventory of federal programs by May 2013.19 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, 

 

19These 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. 
 

Page 24 GAO-13-279SP 2013 Annual Report 

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.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.21 As we reported in May 2012, the President’s 

2013 budget submission included the first list of 14 interim crosscutting 

priority goals.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 

 

20These 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, GAO-13-228 (Washington, D.C.: Feb. 27, 2013). 

2131 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, 

GAO-12-620R (Washington, D.C.: May 31, 2012). 

22GAO-12-620R. 
 

Page 25 GAO-13-279SP 2013 Annual Report 

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.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 shortterm and long-term efficiency initiatives, that they could use to improve 

efficiency.24 In addition, we have identified key questions that agencies 

should consider when evaluating whether to consolidate physical 

infrastructure or management functions.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 

 

23GAO, Results-Oriented Government: Practices That Can Help Enhance and Sustain 

Collaboration among Federal Agencies, GAO-06-15 (Washington, D.C.: Oct. 21, 2005) 

and Managing for Results: Key Considerations for Implementing Interagency Collaborative 

Mechanisms, GAO-12-1022 (Washington, D.C.: Sept. 27, 2012). 

24GAO, Streamlining Government: Key Practices from Select Efficiency Initiatives Should 

Be Shared Governmentwide, GAO-11-908 (Washington, D.C.: Sept. 30, 2011). 

25GAO, Streamlining Government: Questions to Consider When Evaluating Proposals to 

Consolidate Physical Infrastructure and Management Functions, GAO-12-542 

(Washington, D.C.: May 23, 2012). 
 

Page 26 GAO-13-279SP 2013 Annual Report 

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.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.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 

2014.28 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. 

 

26GAO-12-621SP. 

27GAO-12-621SP and GAO, Managing for Results: Opportunities for Congress to Address 

Government Performance Issues, 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. 

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

(2012). 
 

Page 27 GAO-13-279SP 2013 Annual Report 

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. 

Gene L. Dodaro 

Comptroller General 

of the United States 
 

Page 28 GAO-13-279SP Abbreviations 

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 
 

Page 29 GAO-13-279SP Abbreviations 

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 
 

Page 30 GAO-13-279SP Report at a Glance 

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 Areas Identified Page

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 

could save taxpayers millions of dollars annually without affecting the safety of catfish intended for 

human consumption. 

34

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 development and acquisition cost savings through increased collaboration among the 

military services.

37

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. 

45

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. 

51

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. 

60

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.

66

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. 

71

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 fieldbased 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.

77

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.

90

Information 

technology 

10. Dissemination of Technical Research Reports: Congress may wish to consider whether the feebased 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.

96
 

Page 31 GAO-13-279SP Report at a Glance 

Mission Areas Identified Page

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.

103

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. 111

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.

117

Science and the 

environment 

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.

121

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.

128

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. 138

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.

145

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 Areas Identified Page 

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 U.S. Customs and Border Protection’s annual Salaries and Expenses appropriations used for 

agricultural inspection services. 

152 

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. 

158 

Defense 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.

163 

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.

170 

 
 

Page 32 GAO-13-279SP Report at a Glance 

Mission Areas Identified Page 

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. 

174 

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. 

181

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. 

186 

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. 

195 

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. 

200 

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. 

205 

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. 

210 

Information 

technology 

29. Cloud Computing: Better planning of cloud-based computing solutions provides an opportunity 

for potential savings of millions of dollars. 217 

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. 

222 

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. 

227 

Table 3: Appendixes 

Appendixes Page

Appendix I: List of Congressional Addressees 232

Appendix II: Objectives, Scope, and Methodology 233

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

Appendix IV: Lists of Programs Identified 251
 

Page 33 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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. 
Page 34 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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 could save taxpayers millions of dollars annually 

without affecting the safety of catfish intended for human consumption. 

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. 

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 

Why This Area Is 

Important 

What GAO Found 
 

Page 35 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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. 

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 the 

following action: 

 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. 

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. 

Actions Needed and 

Potential Financial or 

Other Benefits 

Agency Comments 

and GAO’s Evaluation 
 

Page 36 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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. 

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 1 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. 

Seafood Safety: Responsibility for Inspecting Catfish Should Not Be 

Assigned to USDA. GAO-12-411. Washington, D.C.: May 10, 2012. 

For additional information about this area, contact J. Alfredo Gómez at 

(202) 512-3841 or gomezj@gao.gov. 

How GAO Conducted 

Its Work 

Related GAO Product 

Contact Information 
Page 37 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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 development and acquisition cost 

savings through increased collaboration among the military services. 

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. 

Why This Area Is 

Important 
 

Page 38 GAO-13-279SP Fragmentation, Overlap, and Duplication 

Services’ Camouflage Uniforms, Dates of Initiation and Fielding, and Development Costs, 2000 through 2012 

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 
 

Page 39 GAO-13-279SP Fragmentation, Overlap, and Duplication 

service-unique proprietary arrangements.1 The Secretaries of the military 

departments were to establish the joint criteria by February 22, 2011.2

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.3

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.4

 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.5

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 

 

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. 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.). 

2

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. 

3

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). 

4

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). 

5

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. 

What GAO Found 
 

Page 40 GAO-13-279SP Fragmentation, Overlap, and Duplication 

military operations in different uniforms, potentially exposing them to 

increased risk on the battlefield.6

 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;7

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.8

 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 

 

6

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. 

7

DOD, Report on Requirements for Standard Ground Combat Uniforms (Washington, 

D.C.: February 2012). 

8

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. 
 

Page 41 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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.9

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.10 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.11 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 

 

9

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). 

10See Department of Defense Regulation 4140.1-R, DOD Supply Chain Materiel 

Management Regulation, chapter 8 (May 23, 2003). 

11The 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. 
 

Page 42 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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. 

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 

Actions Needed and 

Potential Financial or 

Other Benefits 
 

Page 43 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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. 

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 e-mail 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. 

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. 

Agency Comments 

and GAO’s Evaluation 

How GAO Conducted 

Its Work 
 

Page 44 GAO-13-279SP Fragmentation, Overlap, and Duplication 

Warfighter Support: DOD Should Improve Development of Camouflage 

Uniforms and Enhance Collaboration Among the Services. 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. GAO-11-682R. Washington, D.C.: 

June 30, 2011.

Warfighter Support: Observations on DOD’s Ground Combat Uniforms. 

GAO-10-669R. Washington, D.C.: May 28, 2010. 

For additional information about this area, contact Cary B. Russell at 

202-512-5431 or e-mail russellc@gao.gov. 

Related GAO 

Products 

Contact Information 
 

Page 45 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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. 

In recent years, the Department of Defense (DOD) has invested billions of 

dollars to provide foreign language support to U.S. military personnel.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.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. 

 

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). 

Why This Area Is 

Important 
 

Page 46 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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.3

 In addition, exemptions for other types of contracts may 

be established by memorandum of agreement between the contracting 

entity and the executive agent.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.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 

 

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). 

What GAO Found 
 

Page 47 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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.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 languageenabled 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 

 

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. 
 

Page 48 GAO-13-279SP Fragmentation, Overlap, and Duplication 

agencies in determining what products and services warrant a more 

coordinated acquisition approach.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. 

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 

 

7

GAO, Best Practices: Using Spend Analysis to Help Agencies Take a More Strategic 

Approach to Procurement, GAO-04-870 (Washington, D.C.: Sept. 16, 2004). 

Actions Needed and 

Potential Financial or 

Other Benefits 
 

Page 49 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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. 

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. 

Agency Comments 

and GAO’s Evaluation 
 

Page 50 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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 2 in appendix IV 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. 

Defense Contracting: Actions Needed to Explore Additional Opportunities 

to Gain Efficiencies in Acquiring Foreign Language Support. 

GAO-13-251R. Washington. D.C.: February 25, 2013. 

Annual Report: Opportunities to Reduce Duplication, Overlap and 

Fragmentation, Achieve Savings, and Enhance Revenue, 

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. 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. 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. 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. GAO-09-568. Washington, D.C.: June 19, 2009. 

For additional information about this area, contact Sharon Pickup at (202) 

512-9619 or pickups@gao.gov. 

How GAO Conducted 

Its Work 

Related GAO 

Products 

Contact Information 
Page 51 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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. 

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, thirdWhy This Area Is 

Important 
 

Page 52 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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. 

GAO reported in February 2012 that 23 agencies and their 130 

subagencies implemented 679 renewable energy initiatives in fiscal year 

2010.1

 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. 

Number of Federal Renewable Energy-Related Initiatives by Agency, in Fiscal Year 

2010 

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. 

 

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. 

What GAO Found 
 

Page 53 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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.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 2011.3

GAO found that the 82 wind-related initiatives were fragmented across 

multiple agencies. Additionally, most of the 82 initiatives had overlapping 

 

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. 
 

Page 54 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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.4

 These seven 

initiatives included tax expenditures, as well as grant, loan, and loan 

guarantee programs implemented by Treasury, DOE, or USDA.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.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.7

In addition, duplication of financial support among these initiatives may 

 

4

All of these initiatives were specifically established by Congress, as opposed to agencycreated 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. 
 

Page 55 GAO-13-279SP Fragmentation, Overlap, and Duplication 

not be limited to wind projects because the initiatives also provided 

support to projects involving a range of other renewable energy sources.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.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: 

 

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. 
 

Page 56 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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.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. 

 

10The 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. 
 

Page 57 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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. 

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 e-mail 

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 its 

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 this report section to include language from the March 2013 

Actions Needed and 

Potential Financial or 

Other Benefits 

Agency Comments 

and GAO’s Evaluation 
 

Page 58 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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. 

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 1990.11 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 

2011.12 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 

 

11GAO 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. 

12Among 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. 

How GAO Conducted 

Its Work 
 

Page 59 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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. 

Wind Energy: Additional Actions Could Help Ensure Effective Use of 

Federal Financial Support. GAO-13-136. Washington, D.C.: 

March 11, 2013. 

Renewable Energy: Federal Agencies Implement Hundreds of Initiatives. 

GAO-12-260. Washington, D.C.: February 27, 2012. 

Renewable Energy: An Inventory of Fiscal Year 2010 Federal Initiatives 

(GAO-12-259SP, February 2012), an E-supplement to GAO-12-260. 

GAO-12-259SP. Washington, D.C.: February 27, 2012. 

For additional information about this area, contact Frank Rusco at 

(202) 512-3841 or ruscof@gao.gov. 

Related GAO 

Products 

Contact Information 
Page 60 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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. 

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 costeffectiveness 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 

Why This Area Is 

Important 
 

Page 61 GAO-13-279SP Fragmentation, Overlap, and Duplication 

patient health information.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.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. 

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.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 

 

1

GAO, Opportunities to Reduce Potential Duplication in Government Programs, Save Tax 

Dollars, and Enhance Revenue, 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, 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, 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, GAO-06-15 (Washington, D.C.: Oct. 21, 2005). 

What GAO Found 
 

Page 62 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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.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.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 

 

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, GAO-09-904SP (Washington, D.C.: Sept. 25, 2009); National Security: Key 

Challenges and Solutions to Strengthen Interagency Collaboration, 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, 

GAO-12-342SP (Washington, D.C.: Feb. 28, 2012). 
 

Page 63 GAO-13-279SP Fragmentation, Overlap, and Duplication 

achievement of projected cost savings.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. 

 

6

See GAO-06-15, 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, 

GAO-08-399 (Washington, D.C.: Mar. 28, 2008). 
 

Page 64 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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. 

In commenting on the September 2012 report on which this analysis is 

based, VA and DOD generally agreed with GAO’s recommendations. 

GAO also provided a draft of this report section to VA and DOD for review 

and comment. In e-mails received on January 23, 2013, VA and DOD 

indicated they had no comments on the draft.

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 

Actions Needed 

Agency Comments 

How GAO Conducted 

Its Work 
 

Page 65 GAO-13-279SP Fragmentation, Overlap, and Duplication 

practices for federal agency collaboration efforts and for establishing 

evaluation criteria to assess federal programs.7

VA and DOD Health Care: Department-Level Actions Needed to Assess 

Collaboration Performance, Address Barriers, and Identify Opportunities. 

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. 

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. GAO-11-570. 

Washington, D.C.: July 19, 2011. 

VA Health Care: Additional Efforts to Better Assess Joint Ventures 

Needed. GAO-08-399. Washington, D.C.: March 28, 2008. 

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. 

 

7

See GAO-06-15; GAO, Limitations in DOD’s Evaluation Plan for EEO Complaint Pilot 

Program Hinder Determination of Pilot Results, 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, GAO-09-45 (Washington, D.C.: Nov. 7, 2008). 

Related GAO 

Products 

Contact Information 
 

Page 66 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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. 

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.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.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.3

 The following year, 

CMS established the Medicaid Integrity Group (integrity group) to 

implement this program. 

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 

 

1

See GAO, Major Management Challenges and Program Risks: Department of Health and 

Human Services, 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. 

Why This Area Is 

Important 

What GAO Found 
 

Page 67 GAO-13-279SP Fragmentation, Overlap, and Duplication 

another to audit such aberrant claims.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.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.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 

 

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. 
 

Page 68 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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.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 2011.8

 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 

 

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. 
 

Page 69 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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.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. 

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. 

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 

 

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. 

Actions Needed and 

Potential Financial or 

Other Benefits 

Agency Comments 

and GAO’s Evaluation 
 

Page 70 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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. 

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. 

Medicaid Integrity Program: CMS Should Take Steps to Eliminate 

Duplication and Improve Efficiency. GAO-13-50. Washington, D.C.: 

November 13, 2012. 

National Medicaid Audit Program: CMS Should Improve Reporting and 

Focus on Audit Collaboration with States. GAO-12-627. Washington, 

D.C.: June 14, 2012. 

Medicaid Program Integrity: Expanded Federal Role Presents Challenges 

to and Opportunities for Assisting States. GAO-12-288T. Washington, 

D.C.: December 7, 2011. 

For additional information about this area, contact Carolyn L. Yocom at 

(202) 512-7114 or yocomc@gao.gov. 

How GAO Conducted 

Its Work 

Related GAO 

Products 

Contact Information 
Page 71 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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. 

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. 

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 

Why This Area Is 

Important 

What GAO Found 
 

Page 72 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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.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 

 

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. 
 

Page 73 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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 
 

Page 74 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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.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. 

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 wellunderstood 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. 

 

2

GAO-11-318SP and GAO-12-342SP. 

Actions Needed and 

Potential or Other 

Financial Benefits 
 

Page 75 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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. 

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. 

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,3 Standards for 

 

3

GAO, 2012 Annual Report: Opportunities to Reduce Duplication, Overlap and 

Fragmentation, Achieve Savings, and Enhance Revenue, 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, 

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, 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, GAO-12-517 (Washington, D.C.: June 12, 2012). 

Agency Comments 

and GAO’s Evaluation 

How GAO Conducted 

Its Work 
 

Page 76 GAO-13-279SP Fragmentation, Overlap, and Duplication 

Internal Control in the Federal Government,

4

 and prior work related to 

federal collaboration to assess DHS’s coordination of R&D across the 

department.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. 

Department of Homeland Security: Oversight and Coordination of 

Research and Development Should Be Strengthened. GAO-12-837. 

Washington, D.C.: September 12, 2012. 

For additional information about this area, contact David C. Maurer at 

(202) 512-9627, or maurerd@gao.gov. 

 

4

GAO/AIMD-00-21.3.1. 

5

GAO, Results-Oriented Government: Practices That Can Help Enhance and Sustain 

Collaboration among Federal Agencies, GAO-06-15 (Washington, D.C.: Oct. 21, 2005); 

Cybersecurity: Key Challenges Need to Be Addressed to Improve Research and 

Development, 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, GAO-04-653 (Washington, D.C.: 

May 24, 2004). 

Related GAO Product 

Contact Information 
 

Page 77 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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. 

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.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 informationsharing 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 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; 

 

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)). 

Why This Area Is 

Important 
 

Page 78 GAO-13-279SP Fragmentation, Overlap, and Duplication 

 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;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 following figure 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 2011.3

 (Data on funding estimates for Joint Terrorism Task 

Forces and Field Intelligence Groups are classified.) 

 

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. 
 

Page 79 GAO-13-279SP Fragmentation, Overlap, and Duplication 

Nationwide Locations of Five Types of Field-Based Information-Sharing Entities in GAO’s Review 

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

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. Because 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 

What GAO Found 
 

Page 80 GAO-13-279SP Fragmentation, Overlap, and Duplication 

activities are uncoordinated, as well as if opportunities to leverage 

resources across entities are not fully exploited.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.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).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 

 

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 highrisk threats as well as other types of crimes. 
 

Page 81 GAO-13-279SP Fragmentation, Overlap, and Duplication 

below shows instances of overlap in analytical activities and services in 

each of the eight urban areas in GAO’s review. 

Analytical Activities and Services Conducted in the Same Mission Areas for Similar Customers in the Eight Urban Areas in 

Our Review 

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. 
 

Page 82 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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. 

g

Urban area 1 includes two regional fusion centers, a fusion center that covers a region within its 

state and a fusion center that serves state and local partners. 
 

Page 83 GAO-13-279SP Fragmentation, Overlap, and Duplication 

Analytical Activities and Services Conducted in the Same Mission Areas for Similar Customers in the Eight Urban Areas in 

Our Review (continued) 

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. 
 

Page 84 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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. 

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.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.8

 However, officials from four of 

these seven customer agencies stated that receiving redundant 

information is burdensome.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 

 

7

Link analysis is the analysis of information that shows relationships among varied 

subjects suspected of being involved in criminal activity. Telephone toll analysis is the 

analysis of incoming and outgoing telephone calls, which can help investigators to 

establish ties between suspects. 

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. 
 

Page 85 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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.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.11

 

10GAO, Results-Oriented Cultures: Creating a Clear Linkage between Individual 

Performance and Organizational Success, GAO-03-488 (Washington, D.C.: 

Mar. 14, 2003). 

11GAO, Managing for Results: Key Considerations for Implementing Interagency 

Collaborative Mechanisms, GAO-12-1022 (Washington, D.C.: Sept. 27, 2012). 
 

Page 86 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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.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 colocated entities should be pursued. 

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 

 

12The 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. 

Actions Needed and 

Potential or Other 

Financial Benefits 
 

Page 87 GAO-13-279SP Fragmentation, Overlap, and Duplication 

 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. 

In commenting on the April 2013 report on which this analysis was based, 

DOJ stated that the Department generally agreed with the two 

recommendations in the report; however, 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 

measureable outcomes, and document these decisions. ONDCP 

concurred with both recommendations. DHS and DOJ also provided 

technical comments, which were incorporated as appropriate. 

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, crossentity participation or colocation in circumstances where appropriate and 

efficient. However, DOJ stated that what is appropriate and efficient is 

Agency Comments 

and GAO’s Evaluation 
 

Page 88 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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. 

GAO provided a draft of this report section to DOJ, DHS, and ONDCP for 

review and comment. DOJ, DHS, and ONDCP provided no additional 

comments. 

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 

How GAO Conducted 

Its Work 
 

Page 89 GAO-13-279SP Fragmentation, Overlap, and Duplication 

customers.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. 

Information Sharing: Agencies Could Better Coordinate to Reduce 

Overlap in Field-Based Activities. GAO-13-471. Washington, D.C.: 

April 4, 2013. 

For additional information about this area, contact Eileen Larence at 

(202) 512-8777 or larencee@gao.gov. 

 

13GAO, 2012 Annual Report: Opportunities to Reduce Duplication, Overlap and 

Fragmentation, Achieve Savings, and Enhance Revenue, GAO-12-342SP (Washington, 

D.C.: Feb. 28, 2012); and Follow-up on 2011 Report: Status of Actions Taken to Reduce 

Duplication, Overlap, and Fragmentation, Save Tax Dollars, and Enhance Revenue, 

GAO-12-453SP (Washington, D.C.: Feb. 28, 2012). 

Related GAO Product 

Contact Information 
 

Page 90 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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. 

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.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.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 Fund3

 and the Treasury Forfeiture Fund Act of 1992 

established the Treasury Forfeiture Fund4

 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. 

 

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. 

Why This Area Is 

Important 
 

Page 91 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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.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. 

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.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.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 

 

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. 

What GAO Found 
 

Page 92 GAO-13-279SP Fragmentation, Overlap, and Duplication 

consolidation proposals and activities.8 For example, from 2001 to 2009, the 

federal payroll consolidation initiative consolidated 26 payroll systems to four 

shared-service centers.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.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.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 2011.12 Similarly, Treasury uses one national contract, which 

 

8

GAO, Streamlining Government: Questions to Consider When Evaluating Proposals to 

Consolidate Physical Infrastructure and Management Functions, 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. GAO-12-542. 

10GAO, Asset Forfeiture: Historical Perspective on Asset Forfeiture Issues, 

GAO/T-GGD-96-40 (Washington, D.C.: Mar. 19, 1996). 

11In 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? 

12There 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. 
 

Page 93 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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 2011.13 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.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 

 

13According 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. 

14GAO-12-542. 
 

Page 94 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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.15 For example, when VA and DOD 

were determining whether to consolidate their facilities, they used a costbenefit analysis to determine that the fully integrated facility would lead to 

an annual recurring savings of approximately $19.7 million. 

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. 

 

15GAO-12-542. 

Actions Needed and 

Potential Financial or 

Other Benefits 
 

Page 95 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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. 

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. 

Asset Forfeiture Programs: Justice and Treasury Should Determine Costs 

and Benefits of Potential Consolidation. GAO-12-972. Washington, D.C.: 

September 12, 2012. 

For additional information about this area, contact David C. Maurer, 

(202) 512-9627 or maurerd@gao.gov. 

Agency Comments 

and GAO’s Evaluation 

How GAO Conducted 

Its Work 

Related GAO Product 

Contact Information 
Page 96 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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. 

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.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, 

 

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. 

Why This Area Is 

Important 
 

Page 97 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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. 

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.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).3

 The source that most often had 

 

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. 

What GAO Found 
 

Page 98 GAO-13-279SP Fragmentation, Overlap, and Duplication 

the reports GAO was searching for was another website located at 

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. 

Estimated Availability of Reports by Year of Publicationa 

a

The percentage shown inside each bar is the actual estimate. 

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.4

 The remaining 5 percent were 

available from the public sources for a fee.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: 

 

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. 
 

Page 99 GAO-13-279SP Fragmentation, Overlap, and Duplication 

 Hazardous Waste Characteristics Scoping Study, November 1996, 

Environmental Protection Agency, 278 pages. (At NTIS, print on 

demand6

 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.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. 

 

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. 
 

Page 100 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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 selffinancing 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. 

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. 

In commenting on the November 2012 report on which this analysis is 

based, Commerce 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. Commerce also 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 

Actions Needed and 

Potential or Other 

Financial Benefits 

Agency Comments 

and GAO’s Evaluation 
 

Page 101 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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, Commerce stated 

that it believes 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. 

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.8

 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—http://www.gpo.gov/fdsys; (3) 

the federal government Internet portal, USA.gov—http://www.USA.gov; 

and (4) a web search conducted using the commercial search engine 

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.9

 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 

 

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. 

How GAO Conducted 

Its Work 
 

Page 102 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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. 

Information Management: National Technical Information Service’s 

Dissemination of Technical Reports Needs Congressional Attention. 

GAO-13-99. Washington, D.C.: November 19, 2012. 

Information Management: Dissemination of Technical Reports.

GAO-01-490. Washington, D.C.: May 19, 2001. 

Information Policy: NTIS’s Financial Position Provides an Opportunity to 

Reassess Its Mission. GAO/GGD-00-147. Washington, D.C.: 

June 30, 2000. 

For additional information about this area, contact Valerie C. Melvin at 

(202) 512-6304 or melvinv@gao.gov. 

Related GAO 

Products 

Contact Information 
 

Page 103 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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. 

The federal government collects, maintains, and uses geospatial 

information—information linked to specific geographic locations1

—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.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.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.4

 

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. 

Why This Area Is 

Important 
 

Page 104 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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.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.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 

 

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. A16, 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. 

What GAO Found 
 

Page 105 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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.7

Status of Federal Departments’ Implementation of Geospatial Activities, 

November 2012 

Activity Commerce Interior Transportation

Designate a senior official with departmentwide 

responsibility for geospatial information issues ◐  ◐

Prepare and implement a strategy for advancing 

geospatial data activities appropriate to the 

mission 

  

Develop a policy to make metadata available on 

the clearinghouse ◐  

Make the department’s metadata available on 

the clearinghouse   

Adopt procedures for accessing the 

clearinghouse before expending funds to collect 

or produce new data 

  

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 

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 

 

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). 
 

Page 106 GAO-13-279SP Fragmentation, Overlap, and Duplication 

data themes, as shown in the following table.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. 

Status of Agencies’ Implementation of Geospatial Activities, November 2012 

Activity NOAA USGS BTS 

Designate a point of contact responsible for the development, 

maintenance, and dissemination of theme-related data   

Prepare goals and analyze user needs in support of the NSDI 

strategy  ◐ ◐

Develop and implement a plan for the nationwide population 

of the data theme  ◐ ◐

Create a plan to develop and implement theme standards   

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 

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.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 

 

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. 
 

Page 107 GAO-13-279SP Fragmentation, Overlap, and Duplication 

taxpayer dollars.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.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. 

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: 

 

10U.S. Department of Transportation, Transportation for the Nation Strategic Plan, 

May 2011. 

11National 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. 

Actions Needed and 

Potential or Other 

Financial Benefits 
 

Page 108 GAO-13-279SP Fragmentation, Overlap, and Duplication 

 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. 
 

Page 109 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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. 

Agency Comments 

and GAO’s Evaluation 
 

Page 110 GAO-13-279SP Fragmentation, Overlap, and Duplication 

The information contained in this analysis is based on findings from the 

products in the related GAO products section. GAO looked at 

government-wide 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-16.12 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. 

Geospatial Information: OMB and Agencies Need to Make Coordination a 

Priority to Reduce Duplication. GAO-13-94. Washington, D.C.: 

November 26, 2012. 

Information Technology: OMB Needs to Improve Its Guidance on IT 

Investments. GAO-11-826. Washington, D.C.: September 29, 2011. 

Geospatial Information: Better Coordination Needed to Identify and 

Reduce Duplicative Investments. GAO-04-703. Washington, D.C.: 

June 23, 2004. 

For additional information about this area, contact David A. Powner at 

(202) 512-9286, or pownerd@gao.gov. 

 

12OMB, 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. 

How GAO Conducted 

Its Work 

Related GAO 

Products

Contact Information 
Page 111 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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. 

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. 

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. 

Why This Area Is 

Important 

What GAO Found 
 

Page 112 GAO-13-279SP Fragmentation, Overlap, and Duplication 

Select Features and Limitations of SBA and Export-Import Bank Working Capital 

Loan Guarantees 

Program features and 

limitations 

SBA Export Working Capital 

program 

Export-Import Bank 

Working Capital 

Guarantee program 

Product Loan guarantee Loan guarantee 

Type Single order or revolving line of 

credit, but allows for advances 

against purchase orders 

Single order or revolving line 

of credit 

Eligibility Small business operating for at 

least 1 year (can be waived 

based on management 

experience) 

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 

Collateral Export-related inventory and 

accounts receivable from the 

export sales 

Personal or corporate guarantee 

of the owner 

Export-related inventory and 

accounts receivable from the 

export sales 

Personal or corporate 

guarantee of the owner 

Content requirements None Must contain more than 50 

percent U.S. content 

Cannot be used to finance 

defense articles or services, 

with limited exceptions 

Loan percentage 

guaranteed 

Up to 90 percent Up to 90 percent 

Loan amount 

guaranteed 

$5 million No limit 

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

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’ 
 

Page 113 GAO-13-279SP Fragmentation, Overlap, and Duplication 

resources.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.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 newto-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. 

 

1

GAO, Results-Oriented Government: Practices That Can Help Enhance and Sustain 

Collaboration among Federal Agencies, GAO-06-15 (Washington, D.C.: Oct. 21, 2005). 

2

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. 
 

Page 114 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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,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. 

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. 

 

3

See 15 U.S.C. § 648(a)(7)(A). 

Actions Needed and 

Potential Financial or 

Other Benefits 
 

Page 115 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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. 

The information contained in this analysis is based on findings from the 

product in the related GAO product section. GAO analyzed governmentwide 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. 

Agency Comments 

and GAO’s Evaluation 

How GAO Conducted 

Its Work 
 

Page 116 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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. 

Export Promotion: Small Business Administration Needs to Improve 

Collaboration to Implement Its Expanded Role. GAO-13-217. 

Washington, D.C.: January 30, 2013. 

For additional information about this area, contact Loren Yager at 

(202) 512-4347 or yagerl@gao.gov. 

Related GAO Product 

Contact Information 
 

Page 117 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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. 

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. 

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 following shows the extent of overlap 

among BBG language services as of June 2012. 

Why This Area Is 

Important 

What GAO Found 
 

Page 118 GAO-13-279SP Fragmentation, Overlap, and Duplication 

Overlap of BBG Entities’ Language Services, as of June 2012 

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 2011.1

 This amount represents the sum of 

the total cost for all overlapping language services as reported in BBG’s 

Annual 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. 

 

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. 
 

Page 119 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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.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. 

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 

 

2

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

Actions Needed and 

Potential Financial or 

Other Benefits 
 

Page 120 GAO-13-279SP Fragmentation, Overlap, and Duplication 

variety of factors, including whether staff and other resources from an 

eliminated service were transferred to the remaining services. 

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 e-mail 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. 

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. 

GAO, Broadcasting Board of Governors: Additional Steps Needed to 

Address Language Service Overlap. GAO-13-172. Washington, D.C.: 

January 29, 2013. 

For additional information about this area, contact Timothy J. DiNapoli at 

(202) 512-3665, or dinapolit@gao.gov. 

Agency Comments 

and GAO’s Evaluation 

How GAO Conducted 

Its Work 

Related GAO Product 

Contact Information 
Page 121 GAO-13-279SP Fragmentation, Overlap, and Duplication 

Science and the Environment 

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. 

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 

Why This Area Is 

Important 
 

Page 122 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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. 

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 

What GAO Found 
 

Page 123 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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. 
 

Page 124 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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. 

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 

Actions Needed and 

Potential Financial or 

Other Benefits 
 

Page 125 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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. 

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 statelevel, 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 

Agency Comments 

and GAO’s Evaluation 
 

Page 126 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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. 

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. 

Rural Water Infrastructure: Additional Coordination Can Help Avoid 

Potentially Duplicative Application Requirements. GAO-13-111. 

Washington, D.C.: October 16, 2012. 

Annual Special Report: Opportunities to Reduce Duplication, Overlap and 

Fragmentation, Achieve Savings, and Enhance Revenue. 

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. 

GAO-11-318SP. Washington, D.C.: March 1, 2011. 

How GAO Conducted 

Its Work 

Related GAO 

Products 
 

Page 127 GAO-13-279SP Fragmentation, Overlap, and Duplication 

Rural Water Infrastructure: Improved Coordination and Funding 

Processes Could Enhance Federal Efforts to Meet Needs in the U.S.-

Mexico Border Region. GAO-10-126. Washington, D.C.: 

December 18, 2009. 

For additional information about this area, contact J. Alfredo Gómez at 

(202) 512-3841 or gomezj@gao.gov. Contact Information 
Page 128 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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. 

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 2007.1

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.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.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, 

 

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. 

Why This Area Is 

Important 
 

Page 129 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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.4

 ONDCP 

reported that about $10.1 billion was provided for drug abuse prevention 

and treatment programs in fiscal year 2012. 

GAO reported in March 2013 that federal drug abuse prevention and 

treatment programs are fragmented across 15 federal agencies.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.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 

 

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. 

What GAO Found 
 

Page 130 GAO-13-279SP Fragmentation, Overlap, and Duplication 

prevention or treatment services to support other program objectives, 

such as promoting housing stability within low-income communities.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.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.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 9 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 stateand 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: 

 

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, GAO-12-53 (Washington, D.C.: Dec. 9, 2011). 
 

Page 131 GAO-13-279SP Fragmentation, Overlap, and Duplication 

 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.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 4 

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 

 

10These 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. 
 

Page 132 GAO-13-279SP Fragmentation, Overlap, and Duplication 

minimize the risk of potential duplication.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 courtordered 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.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.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) 

 

11These 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. 

12See for example GAO, Managing for Results: Key Considerations for Implementing 

Interagency Collaborative Mechanisms, GAO-12-1022 (Washington, D.C.: 

Sept. 27, 2012), 

13See GAO, Homelessness: Fragmentation and Overlap in Programs Highlight the Need 

to Identify, Assess, and Reduce Inefficiencies, GAO-12-491 (Washington, D.C.: 

May 10, 2012). 
 

Page 133 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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.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.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 

 

14ONDCP 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. 

15GAO 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, 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. 
 

Page 134 GAO-13-279SP Fragmentation, Overlap, and Duplication 

22 more program evaluations were under way or planned.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.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.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.19 This can include such efforts as mapping 

out how various activities across organizations will achieve the desired 

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. 

 

16Three 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. 

17Evidence-based interventions are approaches to drug abuse prevention or treatment 

that are based in theory and have previously undergone scientific evaluation. 

18GAO, Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1

(Washington, D.C.: November 1999). 

19Project Management Institute, The Standard for Program Management (Newtown 

Square, Pa.: 2008). 

Actions Needed and 

Potential Financial or 

Other Benefits 
 

Page 135 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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. 

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. 

Agency Comments 

and GAO’s Evaluation 
 

Page 136 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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.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 evaluations21 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 2007.22 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.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. 

 

20See GAO, Opportunities to Reduce Potential Duplication in Government Programs, 

Save Tax Dollars, and Enhance Revenue, 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, GAO-12-342SP (Washington, 

D.C.: Feb. 28, 2012). 

21GAO defines program evaluations as individual, systematic studies to assess how well a 

program or programs are working. 

22GAO 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. 

23See GAO, Results-Oriented Government: Practices That Can Help Enhance and 

Sustain Collaboration among Federal Agencies, GAO-06-15 (Washington, D.C.: 

Oct. 21, 2005) and GAO-12-1022. 

How GAO Conducted 

Its Work 
 

Page 137 GAO-13-279SP Fragmentation, Overlap, and Duplication 

Office of National Drug Control Policy: Office Could Better Identify 

Opportunities to Increase Program Coordination. GAO-13-333. 

Washington, D.C.: March 26, 2013. 

Drug Control: Initial Review of the National Strategy and Drug Abuse 

Prevention and Treatment Programs. GAO-12-744R. Washington, D.C.: 

July 6, 2012. 

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. 

Related GAO 

Products 

Contact Information 
Page 138 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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. 

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.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.2

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 Post9/11 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.3

 Moreover, 

 

1

GAO, Higher Education: Improved Tax Information Could Help Families Pay for College, 

GAO-12-560 (Washington, D.C.: May 18, 2012). 

2

GAO, 21st Century Challenges: Reexamining the Base of the Federal Government, 

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. 

Why This Area Is 

Important 

What GAO Found 
 

Page 139 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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 fig. below and table 13 in app. IV).4

Federal Higher Education Assistance 

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. 

Providing federal financial assistance in these varied ways presents 

students and their families with multiple tools to help them pay higher 

 

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 GAO-12-560. 
 

Page 140 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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.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.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 

 

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 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. 
 

Page 141 GAO-13-279SP Fragmentation, Overlap, and Duplication 

million, or 8 percent of the total outlay, in fiscal year 2010.7 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. 

 

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. 
 

Page 142 GAO-13-279SP Fragmentation, Overlap, and Duplication 

Considering these factors can help inform the need to make 

improvements to current programs, consolidate programs, eliminate 

programs, or design features of new programs. 

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 

Actions Needed and 

Potential Financial or 

Other Benefits 
 

Page 143 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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. 

In commenting on the May 2012, May 2011, and March 2011 reports on 

which this analysis is based, Defense, Education, IRS, and VA 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 e-mails 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. 

In an e-mail received on January 22, 2013, a VA official stated that the 

agency did not object to the language in this report section. 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. 

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. 

Agency Comments 

and GAO’s Evaluation 

How We Conducted 

Our Work 
 

Page 144 GAO-13-279SP Fragmentation, Overlap, and Duplication 

Higher Education: Improved Tax Information Could Help Families Pay for 

College. GAO-12-863T. Washington, D.C.: July 25, 2012. 

Higher Education: Improved Tax Information Could Help Families Pay for 

College. 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.

GAO-11-356R. Washington, D.C.: May 5, 2011.

DOD Education Benefits: Further Actions Needed to Improve Oversight of 

Tuition Assistance Program. GAO-11-389T. Washington, D.C.: 

March 2, 2011.

DOD Education Benefits: Increased Oversight of Tuition Assistance 

Program Is Needed. GAO-11-300. Washington, D.C.: March 1, 2011. 

VA Education Benefits: Actions Taken, but Outreach and Oversight Could 

Be Improved. 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. GAO-10-29. Washington, D.C.: 

October 29, 2009.

Higher Education: Multiple Higher Education Tax Incentives Create 

Opportunities for Taxpayers to Make Costly Mistakes. 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. 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. 

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. 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. GAO-02-751. 

Washington, D.C.: September 13, 2002. 

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. 

Related GAO 

Products 

Contact Information 
 

Page 145 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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. 

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. 

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.1

The remaining three programs serve a broader population of veterans. 

Labor’s Veterans’ Workforce Investment Program serves veterans with 

 

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. 

Why This Area Is 

Important 

What GAO Found 
 

Page 146 GAO-13-279SP Fragmentation, Overlap, and Duplication 

significant barriers to employment, among others.2 Labor is currently 

requesting that Congress defund this program.3

 Of the two remaining 

programs, the Local Veterans’ Employment Representative Program and 

the Disabled Veterans’ Outreach Program can serve all eligible veterans.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,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),6

 but Labor’s data indicate that nationally 28 percent of participants 

received such services in 2011. In explaining this statistic, Labor officials 

 

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. 
 

Page 147 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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.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, 

 

7

The law generally requires that program staff provide participants with intensive services 

(e.g., case management). 
 

Page 148 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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. 

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. 

Actions Needed and 

Potential Financial or 

Other Benefits 
 

Page 149 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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 that 

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. 

 

The information contained in this analysis is based on findings from the 

December 2012 report listed in the related GAO products section.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 

 

8

GAO, Veterans’ Employment and Training: Better Targeting, Coordinating, and Reporting 

Needed to Enhance Program Effectiveness, GAO-13-29 (Washington, D.C.: 

Dec. 13, 2012.) 

Agency Comments 

and GAO’s Evaluation 

How GAO Conducted 

Its Work 
 

Page 150 GAO-13-279SP Fragmentation, Overlap, and Duplication 

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. 

Veterans’ Employment and Training Programs: Better Targeting, 

Coordinating, and Reporting Needed to Enhance Program Effectiveness. 

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. GAO-11-92. Washington, D.C.: 

January 13, 2011. 

For additional information about this area, contact Andrew Sherrill at 

(202) 512-7215 or sherrilla@gao.gov. 

Related GAO 

Products 

Contact Information 
 

Page 151 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

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. 
Page 152 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

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 U.S. Customs and Border Protection’s annual Salaries and Expenses appropriations used for 

agricultural inspection services. 

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 arriving vessels, trucks, railcars, aircraft, and international 

passengers subject to inspection and in part with funds 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 

Why This Area Is 

Important 
 

Page 153 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

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.1

 Since 2007, GAO has 

examined a variety of federal user fees—including the Agricultural 

Quarantine Inspection fees—in the context of this framework. 

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 

 

1

GAO, Federal User Fees: A Design Guide, GAO-08-386SP (Washington, D.C.: 

May 29, 2008). 

What GAO Found 
 

Page 154 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

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 
 

Page 155 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

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. 

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; 

Actions Needed and 

Potential Financial or 

Other Benefits 
 

Page 156 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

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. 

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. 

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, 

Agency Comments 

and GAO’s Evaluation 

How We Conducted 

Our Work 
 

Page 157 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

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 Inspectionrelated work conducted by APHIS in the field. 

Agricultural Quarantine Inspection Fees: Major Changes Needed to Align 

Fee Revenues with Program Costs. GAO-13-268. Washington, D.C.: 

March 1, 2013. 

Homeland Security: Agriculture Inspection Program Has Made Some 

Improvements, but Management Challenges Persist. GAO-12-885. 

Washington, D.C.: September 27, 2012. 

Federal User Fees: A Design Guide. 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. 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. 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.

GAO-06-644. Washington, D.C.: May 19, 2006. 

For more information about this area, contact Susan J. Irving at 

(202) 512-6806, or irvings@gao.gov. 

Related GAO 

Products 

Contact Information 
 

Page 158 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

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. 

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 

Why This Area Is 

Important 
 

Page 159 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

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.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.2

 For a 2008 farm bill disaster assistance program, 

the annual payment limit is $100,000 per person or legal entity. 

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 2011.3

 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 

 

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. 

What GAO Found 
 

Page 160 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

federal government.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 

 

4

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. 
 

Page 161 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

able to self-insure through a variety of risk management methods, such 

as crop and other types of diversification. 

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. 

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 e-mail received on January 30, 2013, USDA reaffirmed 

its comments on the March 2012 report. 

Actions Needed and 

Potential Financial or 

Other Benefits 

Agency Comments 

and GAO’s Evaluation 
 

Page 162 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

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. 

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. 

For additional information about this area, contact Anne-Marie Fennell at 

(202) 512-3841 or fennella@gao.gov. 

How GAO Conducted 

Its Work 

Related GAO 

Products 

Contact Information 
Page 163 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

Defense 

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. 

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.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 2011.2

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. 

 

1

Force management provides funding, equipment, and personnel for the management and 

operation of all major military command headquarters. 

2

Department of Defense, Base Closure and Realignment Report, Vol. 1 (Washington, 

D.C.: May 2005). 

Why This Area Is 

Important 
 

Page 164 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

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. 

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 

What GAO Found 
 

Page 165 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

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.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 

 

3

These figures are expressed in 2005 dollars to facilitate comparison with the original 

20-year savings estimates developed in 2005. 
 

Page 166 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

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. 

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 

Actions Needed and 

Potential or Other 

Financial Benefits 
 

Page 167 GAO-13-279SP Cost Savings and Revenue Enhancement 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. 

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. 

Agency Comments 

and GAO’s Evaluation 
 

Page 168 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

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. 

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. 

High-Risk Series: An Update. GAO-13-283. Washington, D.C.: 

February 14, 2013. 

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. 

How GAO Conducted 

Its Work 

Related GAO 

Products 
 

Page 169 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

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. 

For additional information about this area, contact Brian J. Lepore, 

(202) 512-4523 or leporeb@gao.gov. Contact Information 
Page 170 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

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. 

Overall, approximately 20 million medical procedures are performed each 

year in the United States using isotopes.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.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, 

 

1

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. 

2

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. 

Why This Area Is 

Important 
 

Page 171 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

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). 

The Six Top-Selling Isotopes of DOE’s Isotope Program, Fiscal Year 2012 

Isotope 2012 revenue 

Strontium-82 $10,982,000 

Californium-252 6,866,000a

Helium-3 3,015,000

Germanium-68 2,214,000

Strontium-90 618,000

Nickel-63 526,000

Total $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. 

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 

What GAO Found 
 

Page 172 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

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 

this 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. 

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 

Actions Needed and 

Potential or Other 

Financial Benefits 
 

Page 173 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

Program to examine the prices it sets for commercial isotopes could 

present opportunities for cost savings by generating additional revenues. 

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. 

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 program GAO identified that 

might have opportunities for cost savings or revenue enhancement. 

Managing Critical Isotopes: DOE’s Isotope Program Needs Better 

Planning for Setting Prices and Managing Production Risks. 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. 

GAO-11-472. Washington, D.C.: May 12, 2011. 

For additional information about this area, contact David Trimble at 

(202) 512-3841, or trimbled@gao.gov.

Agency Comments 

and GAO’s Evaluation 

How GAO Conducted 

Its Work 

Related GAO 

Products 

Contact Information 
Page 174 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

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. 

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.1

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 

 

1

For the most current high-risk report, see GAO, High-Risk Series: An Update, 

GAO-13-283 (Washington, D.C.: Feb. 14, 2013). 

Why This Area Is 

Important 

What GAO Found 
 

Page 175 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

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 2008.2

 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.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 

 

2

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. 

3

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. 
 

Page 176 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

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 2010.4

 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 

 

4

Pub. L. No. 111-147, Title V, subtitle A, 124 Stat. 71, 97 (2010). 
 

Page 177 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

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, 
 

Page 178 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

GAO reported that the complexity of tax rules for derivatives and other 

financial instruments makes proper reporting of taxes difficult.5

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. 

 

5

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, GAO-05-1009SP (Washington, D.C.: 

September 2005), and Tax Expenditures: Background and a Guide for Evaluation Criteria 

and Questions, GAO-13-167SP (Washington, D.C.: Nov. 29, 2012). 

Actions Needed and 

Potential Financial or 

Other Benefits 
 

Page 179 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

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. 

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. 

2012 Tax Filing: IRS Faces Challenges Providing Service to Taxpayers 

and Could Collect Balances Due More Effectively. GAO-13-156. 

Washington, D.C.: December 18, 2012.

Tax Gap: IRS Could Significantly Increase Revenues by Better Targeting 

Enforcement Resources. 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. GAO-12-603. 

Washington, D.C.: June 8, 2012. 

Agency Comments 

and GAO’s Evaluation 

How GAO Conducted 

Its Work 

Related GAO 

Products 
 

Page 180 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

Higher Education: Improved Tax Information Could Help Families Pay for 

College. GAO-12-560. Washington, D.C.: May 18, 2012. 

Small Employer Health Tax Credit: Factors Contributing to Low Use and 

Complexity. GAO-12-549. Washington, D.C.: May 14, 2012.

Tax Gap: Sources of Noncompliance and Strategies to Reduce It. 

GAO-12-651T. Washington, D.C.: April 19, 2012. 

Foreign Account Reporting Requirements: IRS Needs to Further Develop 

Risk, Compliance, and Cost Plans. GAO-12-484. Washington, D.C.: 

April 16, 2012. 

Financial Derivatives: Disparate Tax Treatment and Information Gaps 

Create Uncertainty and Potential Abuse. GAO-11-750. Washington, D.C.: 

September 20, 2011. 

For additional information about this area, contact James R. White at 

(202) 512-9110, or whitej@gao.gov Contact Information 
 

Page 181 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

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. 

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 topspending agencies. 

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 highestspending areas such as services, which may provide opportunities for 

Why This Area Is 

Important 

What GAO Found 
 

Page 182 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

additional savings.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. 

 

1

Examples of high-spend services procured by selected agencies included engineering 

and technical assistance, management support services, and data processing and 

telecommunication services. 
 

Page 183 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

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. 

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. 

Actions Needed and 

Potential Financial or 

Other Benefits 
 

Page 184 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

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 previous comment. DHS and GSA also provided technical 

comments that were incorporated as appropriate. 

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. 

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. 

Agency Comments 

and GAO’s Evaluation 

How GAO Conducted 

Its Work 

Related GAO 

Products 
 

Page 185 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

Best Practices: Improved Knowledge of DOD Service Contracts Could 

Reveal Significant Savings. GAO-03-661. Washington, D.C.: 

June 9, 2003. 

For additional information about this area, contact Cristina Chaplain at 

(202) 512-4841, or chaplainc@gao.gov. Contact Information 
 

Page 186 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

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. 

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.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.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 

sensors3

 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.4

 Moreover, these 

systems are put in orbit by rockets that can cost from $80 million to $200 

 

1

See GAO, Global Positioning System: Challenges in Sustaining and Upgrading 

Capabilities Persist, 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, GAO-12-604 (Washington, 

D.C.: June 15, 2012) and Environmental Satellites: Strategy Needed to Sustain Critical 

Climate and Space Weather Measurements, 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. 

Why This Area Is 

Important 
 

Page 187 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

million per launch. DOD, in particular, plans to spend about $19 billion5 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.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,7

 hosting government capabilities on commercial spacecraft, 

and purchasing scientific or operational data products from commercial 

satellite operators in support of government missions.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.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.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.11

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 

 

5

During the agency review and comment period for this report section, DOD officials told 

us that this amount 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 had 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). 

10A payload is a system, sensor, or instrument that is to be launched on a satellite. 

11A 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. 

What GAO Found 
 

Page 188 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

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.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.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.

 

12Exec. Order No. 13589, Promoting Efficient Spending, 76 Fed. Reg. 70,863 

(Nov. 9, 2011). 

13The 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. 
 

Page 189 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

 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.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 

 

14The 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. 
 

Page 190 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

U.S. and foreign satellite operators and manufacturers.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.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 orbits17) 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 

 

15As 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. 

16Under 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. 

17Geostationary 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. 
 

Page 191 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

from commercial providers that are new to DOD.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.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.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 

 

18See GAO, Space Acquisitions: Challenges in Commercializing Technologies Developed 

under the Small Business Innovation Research Program, GAO-11-21 (Washington, D.C.: 

Nov. 10, 2010). 

19With 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). 

20See 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. 
 

Page 192 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

plan to rely on foreign companies’ launch vehicles because of 

limitations in U.S. companies’ launch capacity and the cost of these 

launches.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,22 that agencies need to consider when determining whether 

it is cost effective to use hosted payloads or ride sharing. 

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.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 

 

21A 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, GAO-12-207SP (Washington, D.C.: 

Mar. 1, 2012). 

22According 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. 

23See GAO, 2012 Annual Report: Opportunities to Reduce Duplication, Overlap and 

Fragmentation, Achieve Savings, and Enhance Revenue, GAO-12-342SP (Washington, 

D.C.: Feb. 28, 2012). 

Actions Needed and 

Potential Financial or 

Other Benefits 
 

Page 193 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

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. 

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. 

Agency Comments 

and GAO’s Evaluation 
 

Page 194 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

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. 

Evolved Expendable Launch Vehicle: DOD Is Addressing Knowledge 

Gaps in Its New Acquisition Strategy. GAO-12-822. Washington, D.C.: 

July 26, 2012. 

Polar-Orbiting Environmental Satellites: Changing Requirements, 

Technical Issues, and Looming Data Gaps Require Focused Attention.

GAO-12-604. Washington, D.C.: June 15, 2012. 

NASA: Assessments of Selected Large-Scale Projects. GAO-12-207SP. 

Washington, D.C.: March 1, 2012. 

Additional Cost Transparency and Design Criteria Needed for NASA 

Projects. GAO-11-364R. Washington, D.C.: March 3, 2011. 

Space Acquisitions: Challenges in Commercializing Technologies 

Developed under the Small Business Innovation Research Program.

GAO-11-21. Washington, D.C.: November 10, 2010.

Global Positioning System: Challenges in Sustaining and Upgrading 

Capabilities Persist. GAO-10-636. Washington, D.C.: 

September 15, 2010.

Environmental Satellites: Strategy Needed to Sustain Critical Climate and 

Space Weather Measurements. GAO-10-456. Washington, D.C.: 

April 27, 2010. 

Briefing on Commercial and Department of Defense Space System 

Requirements and Acquisition Practices. GAO-10-315R. Washington, 

D.C.: January 10, 2010. 

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. 

How GAO Conducted 

Its Work 

Related GAO 

Products 

Contact Information 
Page 195 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

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. 

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 feefor-service program in 2012 were improper.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”2

 and 

therefore covered in the geographic area in which that contractor 

processes claims, as long as these policies do not conflict with national 

 

1

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). 

2

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. 

Why This Area Is 

Important 
 

Page 196 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

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.3

 In November 2012, GAO examined further 

opportunities for CMS to improve and expand upon prepayment controls. 

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.4

 The latter payments 

were not necessarily improper, because 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 

 

3

These weaknesses were reported in GAO, Opportunities to Reduce Potential Duplication 

in Government Programs, Save Tax Dollars, and Enhance Revenue, 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, GAO-12-453SP (Washington, D.C.: Feb. 28, 2012) as 

part of an overall examination of cost-saving efforts involving claim reviews. 

4

These local coverage determinations were unrelated to the national coverage and coding 

policies that GAO analyzed. 

What GAO Found 
 

Page 197 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

the Federal Government,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 

 

5

GAO, Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1

(Washington, D.C.: November 1999). 
 

Page 198 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

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. 

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 

Actions Needed and 

Potential Financial or 

Other Benefits 
 

Page 199 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

 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. 

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. 

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. 

Medicare Program Integrity: Greater Prepayment Control Efforts Could 

Increase Savings and Better Ensure Proper Payment. GAO-13-102. 

Washington, D.C.: November 13, 2012. 

High-Risk Series: An Update. GAO-13-283. Washington, D.C.: 

February 14, 2013. 

Medicare: Improvements Needed to Address Improper Payments for 

Medical Equipment and Supplies. GAO-07-59. Washington, D.C.: 

January 31, 2007. 

For additional information about this area, contact Kathleen M. King at 

(202) 512-7114 or kingk@gao.gov. 

Agency Comments 

and GAO’s Evaluation 

How GAO Conducted 

Its Work 

Related GAO 

Products 

Contact Information 
 

Page 200 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

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. 

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 lowincome 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 

Why This Area Is 

Important 
 

Page 201 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

amount Medicare, the federal program covering individuals age 65 and 

older and certain others, would pay for the same group of services.1

 NonDSH 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 

 

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 nonDSH 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. 
 

Page 202 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

Medicaid payment principles, in particular, that payments to providers are 

consistent with economy, efficiency, and quality of care. 

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.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.3

 Such requirements do not currently exist for non-DSH 

 

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. 

What GAO Found 
 

Page 203 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

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. 

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 of 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. 

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. 

Actions Needed and 

Potential or Other 

Financial Benefits 

Agency Comments 

and GAO’s Evaluation 
 

Page 204 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

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. 

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. 

High-Risk Series: An Update. GAO-13-283. Washington, D.C.: 

February 14, 2013. 

Medicaid: More Transparency of and Accountability for Supplemental 

Payments Are Needed. GAO-13-48. Washington, D.C.: 

November 26, 2012. 

Medicaid: States Reported Billions More in Supplemental Payments in 

Recent Years. GAO-12-694. Washington, D.C.: July 20, 2012. 

Opportunities to Reduce Potential Duplication in Government Programs, 

Save Tax Dollars, and Enhance Revenue. GAO-11-318SP. Washington, 

D.C.: March 1, 2011.

Medicaid: Ongoing Federal Oversight of Payments to Offset 

Uncompensated Hospital Care Costs Is Warranted. GAO-10-69. 

Washington, D.C.: November 20, 2009.

Medicaid: Improved Federal Oversight of State Financing Schemes Is 

Needed. GAO-04-228. Washington, D.C.: February 13, 2004. 

For additional information about this area, contact Katherine Iritani at 

(202) 512-7114 or iritanik@gao.gov. 

How GAO Conducted 

Its Work 

Related GAO 

Products 

Contact Information 
 

Page 205 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

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. 

GAO has designated Medicare as a high-risk program in part because of 

major payment challenges involving the Medicare Advantage (MA) 

program.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.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.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 

 

1

See GAO, Medicare Advantage: Quality Bonus Payment Demonstration Undermined by 

High Estimated Costs and Design Shortcomings, 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). 

Why This Area Is 

Important 
 

Page 206 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

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. 

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.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-

 

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. 

What GAO Found 
 

Page 207 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

performance demonstrations in that it is implemented nationwide and 

allows all eligible entities to participate.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. 

 

5

The Medicare Part D program provides voluntary, outpatient prescription drug coverage 

for eligible individuals. 
 

Page 208 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

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 GAO’s analysis of CMS 

actuaries’ estimates—if it cancels the demonstration for 2014.6

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’ 

 

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. 

Actions Needed and 

Potential Financial or 

Other Benefits 

Agency Comments 

and GAO’s Evaluation 
 

Page 209 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

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 nonMA 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. 

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. 

Medicare Advantage: Quality Bonus Payment Demonstration Has Design 

Flaws and Raises Legal Concerns. GAO-12-964T. Washington, D.C.: 

July 25, 2012. 

Medicare Advantage Quality Bonus Payment Demonstration. B-323170. 

Washington, D.C.: July 11, 2012. 

Medicare Advantage: Quality Bonus Payment Demonstration Undermined 

by High Estimated Costs and Design Shortcomings. GAO-12-409R. 

Washington, D.C.: March 21, 2012. 

For additional information about this area, contact James C. Cosgrove at 

(202) 512-7114 or cosgrovej@gao.gov. 

How GAO Conducted 

Its Work 

Related GAO 

Products 

Contact Information 
Page 210 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

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. 

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.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.2

 

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. 

Why This Area Is 

Important 
 

Page 211 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

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 2007.3

 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.4

 

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. 

What GAO Found 
 

Page 212 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

Based on data provided by TSA for GAO’s April 2012 report, we reported 

that 76 percent of all TSA regulated airports were complete.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.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.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.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.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 

 

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, 

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, GAO-11-318SP (Washington, D.C.: 

Mar. 1, 2011). 

9

See Pub. L. No. 108-458, § 4019, 118 Stat. 3638, 3721-22 (2004). 
 

Page 213 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

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.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.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.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.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 

 

10Whether 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. 

11The 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). 

12See H.R. Rep. No. 112-492, at 63-64 (May 23, 2012) (accompanying H.R. 5855, 112th 

Cong. (2d Sess. 2012)). 

13Two airports had no comments. 
 

Page 214 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

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. 

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. 

GAO provided a draft of this report section to the Department of 

Homeland Security (DHS) for review and comment. 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. 

Actions Needed and 

Potential Financial or 

Other Benefits 

Agency Comments 

and GAO’s Evaluation 
 

Page 215 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

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 
 

Page 216 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

2007 as being a definitive statement by Congress on the issue.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. 

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. 

Checked Baggage Screening: TSA Has Deployed Optimal Systems at the 

Majority of TSA-Regulated Airports, but Could Strengthen Cost 

Estimates. GAO-12-266. Washington, D.C.: April 27, 2012. 

Aviation Security: Systematic Planning Needed to Optimize the 

Deployment of Checked Baggage Screening Systems. GAO-05-365. 

Washington, D.C.: March 15, 2005. 

For additional information about this area, contact Stephen M. Lord at 

(202) 512-4379 or lords@gao.gov. 

 

14See Pub. L. No. 110-53, §§ 1603-04, 121 Stat. 266, 480-81 (2007) (relating to in-line 

baggage screening systems). 

How GAO Conducted 

Its Work 

Related GAO 

Products 

Contact Information 
Page 217 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

Information Technology 

29. Cloud Computing 

Better planning of cloud-based computing solutions provides an opportunity for potential savings of millions 

of dollars. 

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 costeffective cloud option exists. Each agency was also required to migrate 

three IT services1

 to a cloud solution by June 20122 and retire the 

associated legacy systems. 

In July 2012, GAO reported that seven federal agencies GAO reviewed 

had made progress implementing OMB’s Cloud First policy.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 

 

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. 

Why This Area Is 

Important 

What GAO Found 
 

Page 218 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

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 2012.4

 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,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. 

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 

 

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. 

Actions Needed and 

Potential or Other 

Financial Benefits 
 

Page 219 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

 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. 

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 

Agency Comments 

and GAO’s Evaluation 
 

Page 220 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

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. 

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. 

How GAO Conducted 

Its Work 
 

Page 221 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

Information Technology Reform: Progress Made but Future Cloud 

Computing Efforts Should be Better Planned. 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. GAO-12-461. Washington, 

D.C.: April 26, 2012. 

Information Security: Additional Guidance Needed to Address Cloud 

Computing Concerns. GAO-12-130T. Washington, D.C.: October 6, 2011. 

Information Security: Governmentwide Guidance Needed to Assist 

Agencies in Implementing Cloud Computing. GAO-10-855T. Washington, 

D.C.: July 1, 2010. 

Information Security: Federal Guidance Needed to Address Control 

Issues with Implementing Cloud Computing. GAO-10-513. Washington, 

D.C.: May 27, 2010. 

For additional information about this area, contact David A. Powner at 

(202) 512-9286, or pownerd@gao.gov. 

Related GAO 

Products 

Contact Information 
 

Page 222 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

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. 

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.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. 

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.

 

1

OMB, Capital Programming Guide, Supplement to OMB Circular A-11, Part 7 

(Washington, D.C.: July 2012). 

Why This Area Is 

Important 

What GAO Found 
 

Page 223 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

Total Steady State IT Investments, and Number of Investments for Five Agencies That Had Operational Analyses and Did Not 

Have Operational Analyses with Cost 

(Dollars in millions) 

Source: GAO analysis based on OMB data. 

Note: Costs by agency may not add to total due to rounding. 

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 

Agency (total investments 

in steady state) 

Total investments with an 

operational analysis

Fiscal year 

2011 cost

Total investments without 

an operational analysis

Fiscal year 

2011 cost

DOD (4) 0 — 4 $381 

DHS (44) 16 1,175 28 1,011 

HHS ( 8) 7 207 1 77 

Treasury (16) 0 — 16 152 

VA (3) 0 — 3 1,600 

Total (75) 23 $1,400 52 $3,200 
 

Page 224 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

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, GAO’s 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.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 

 

2

GAO, Information Technology: Departments of Defense and Energy Need to Address 

Potentially Duplicative Investments, GAO-12-241 (Washington, D.C.: Feb. 17, 2012). 
 

Page 225 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

agencies are taking steps to implement recommendations GAO 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. 

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. 

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 report section to OMB and the five agencies 

for review and comment. Overall, OMB and two agencies (DOD and 

Treasury) agreed with the report section, 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 e-mail 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 e-mail 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 e-mail received on 

January 28, 2013, Treasury officials stated that they agreed with GAO’s 

Actions Needed and 

Potential or Other 

Financial Benefits 

Agency Comments 

and GAO’s Evaluation 
 

Page 226 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

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 GAO OAs that it had performed on 3 additional 

investments in fiscal year 2011.3

 Finally, in an e-mail received on January 

24, 2013, HHS officials stated they had no comment on the report section 

and in an e-mail received on January 22, 2013, VA officials stated they 

had no objection to the report section. 

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. 

Information Technology: Agencies Need to Strengthen Oversight of 

Billions of Dollars in Operations and Maintenance Investments. 

GAO-13-87. Washington, D.C.: October 16, 2012. 

For additional information about this area, contact David A. Powner at 

(202) 512-9286, or pownerd@gao.gov. 

 

3

The three investments were the Automated Targeting System, Transportation Worker 

Identification Credential, and Computer-Linked Application Information Management 

System 4.0. 

How GAO Conducted 

Its Work 

Related GAO 

Products 

Contact Information 
Page 227 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

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. 

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. 

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-yourown 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 GAO’s 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. 

Why This Area Is 

Important 

What GAO Found 
 

Page 228 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

Examples of Cigarette and Cigar Products 

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 rollyour-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. 
 

Page 229 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

Monthly Sales for Roll-Your-Own and Pipe Tobacco, and for Small and Large 

Cigars, Fiscal Years 2001 through 2011 

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 
 

Page 230 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

cigars. In addition, Treasury faces added complexity in monitoring and 

enforcing tax payments due to the change in large cigar tax rates. 

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. 

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 report section 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. 

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 

Actions Needed and 

Potential or Other 

Financial Benefits 

Agency Comments 

and GAO’s Evaluation 

How GAO Conducted 

Its Work 
 

Page 231 GAO-13-279SP Cost Savings and Revenue Enhancement Opportunities 

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. 

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. 

For additional information about this area, contact David Gootnick at 

(202) 512-3149, or gootnickd@gao.gov. 

Related GAO Product 

Contact Information 
 

Page 232 GAO-13-279SP List of Congressional Addressees 

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 
 

Page 233 GAO-13-279SP Objectives, Scope, and Methodology 

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 government-wide. 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.1

 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.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 longterm fiscal imbalances that the federal government faces, and consistent 

with our approach for the first annual report, we also highlighted 14 

opportunities for potential cost saving or revenue enhancements. 

While the areas identified in our annual reports 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 

 

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. 

GAO’s Approach 
 

Page 234 GAO-13-279SP Objectives, Scope, and Methodology 

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 System3

 data to 

identify and analyze which federal agencies obligated funds for 

budget functions and subfunctions, representing nearly all 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 practical 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 

 

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 

government-wide management and budgeting activities and can also be used as an 

information sharing and communication portal between government organizations. 
 

Page 235 GAO-13-279SP Objectives, Scope, and Methodology 

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. 

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,4

 and evaluating performance and results achieving 

efficiencies.5

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 

 

4

GAO, Results-Oriented Government: Practices That Can Help Enhance and Sustain 

Collaboration among Federal Agencies, 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, GAO-12-621SP (Washington, D.C.: 

June 15, 2012). 

Identifying Actions 
 

Page 236 GAO-13-279SP Objectives, Scope, and Methodology 

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. 

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 

Assessing Status of 

Areas and Actions 
 

Page 237 GAO-13-279SP Objectives, Scope, and Methodology 

reports.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 

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” 

 

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. 
 

Page 238 GAO-13-279SP Objectives, Scope, and Methodology 

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. 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. 

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. Copies of agency comment letters associated with 

previous reports can be found in those reports, if applicable. 
 

Page 239 GAO-13-279SP Selected Tables 

Appendix III: Areas Identified in 2011-2013 

Annual Reports, by Mission 

This appendix 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 131 areas that we identified in our 2011 and 

2012 annual reports1

 in which Congress and the executive branch could 

take actions to reduce or eliminate potential fragmentation, overlap, and 

duplication or achieve other potential financial benefits. We have not yet 

made any assessments of progress for the 2013 areas. Table 1 presents 

our assessment of the overall progress made in implementing the actions 

needed in the areas related to fragmentation, overlap, and duplication. 

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. 

 

1

GAO, Opportunities to Reduce Potential Duplication in Government Programs, Save Tax 

Dollars, and Enhance Revenue, 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, GAO-12-342SP.
 

Page 240 GAO-13-279SP Selected Tables 

Table 1: GAO Identified Areas of Duplication, Overlap, and Fragmentation in 2011-2013 Annual Reports 

Mission 

Annual 

report Areas identified 

Overall 

assessment 

Agriculture 2011 Area 1: Fragmented food safety system has caused inconsistent oversight, ineffective 

coordination, and inefficient use of resources. ◐ 2012 Area 1: Protection of Food and Agriculture: Centrally coordinated oversight is 

needed to ensure more than 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.

◐ 2013 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. 

a 

Defense 2011 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. ◐

2011 Area 3: Opportunities exist for consolidation and increased efficiencies to maximize 

response to warfighter urgent needs. ◐ 2011 Area 4: Opportunities exist to avoid unnecessary redundancies and improve the 

coordination of counter-improvised explosive device efforts. ◐

2011 Area 5: Opportunities exist to avoid unnecessary redundancies and maximize the 

efficient use of intelligence, surveillance, and reconnaissance capabilities. ◐

2011 Area 6: A departmentwide acquisition strategy could reduce DOD’s risk of costly 

duplication in purchasing Tactical Wheeled Vehicles. ◐

2011 Area 7: Improved joint oversight of DOD’s propositioning programs for equipment 

and supplies may reduce unnecessary duplication. ◐ 2011 Area 8: DOD’s business systems modernization: opportunities exist for optimizing 

business operations and systems. ◐ 2012 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. ◐

2012 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. ◐

2012 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. ◐

2012 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. ◐
 

Page 241 GAO-13-279SP Selected Tables 

Mission 

Annual 

report Areas identified 

Overall 

assessment 

2012 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.

◐

2013 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 development and acquisition cost savings 

through increased collaboration among the military services. 

a 

2013 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. 

a

Economic 

Development 

2011 Area 9: The efficiency and effectiveness of fragmented economic development 

programs are unclear. ◐

2011 Area 10: The federal approach to surface transportation is fragmented, lacks clear 

goals, and is not accountable for results. ●

2011 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. ○

2012 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. 

◐

2012 Area 8: Surface Freight Transportation: Fragmented federal programs and funding 

structures are not maximizing the efficient movement of freight. ◐

Energy 2011 Area 12: Resolving conflicting requirements could more effectively achieve federal 

fleet energy goals. ○

2011 Area 13: Addressing duplicative federal efforts directed at increasing domestic 

ethanol production could reduce revenue losses by more than $5.7 billion annually. ●

2012 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 contractormanaged laboratory and nuclear production and testing sites, in light of contractors’ 

historically fragmented approach to providing these functions.

●

2012 Area 10: Nuclear Nonproliferation: Comprehensive review needed to address 

strategic planning limitations and potential fragmentation and overlap concerns among 

programs combating nuclear smuggling overseas. ○

2013 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.

a

 
 

Page 242 GAO-13-279SP Selected Tables 

Mission 

Annual 

report Areas identified 

Overall 

assessment 

General 

government 

2011 Area 14: Enterprise architectures: key mechanisms for identifying potential overlap 

and duplication. ◐

2011 Area 15: Consolidating federal data centers provides opportunity to improve 

government efficiency. ◐

2011 Area 16: Collecting improved data on interagency contracting to minimize duplication 

could help the government leverage its vast buying power. ◐

2011 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. ◐

2012 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. ○

2012 Area 12: Cybersecurity Human Capital: Government-wide initiatives to enhance 

cybersecurity workforce in the federal government need better structure, planning, 

guidance, and coordination to reduce duplication. ◐

2012 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). 

◐

Health 2011 Area 18: Opportunities exist for DOD and the U.S. Department of Veterans Affairs

(VA) to jointly modernize their electronic health records systems. ◐

 2011 Area 19: VA and DOD need to control drug costs and increase joint contracting

wherever it is cost-effective. ◐

2011 Area 20: The U.S. Department of Health and Human Services (HHS) needs an overall 

strategy to better integrate nationwide public health information systems. ○

 2012 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. ◐

2012 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. ◐

2013 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. 

a

2013 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. 

a

Homeland 

security/law 

enforcement 

2011 Area 21: Strategic oversight mechanisms could help integrate fragmented interagency 

efforts to defend against biological threats. ◐

2011 Area 22: DHS oversight could help eliminate potential duplicating efforts of interagency 

forums in securing the northern border. ○

2011 Area 23: The Department of Justice (DOJ) plans actions to reduce overlap in 

explosives investigations, but monitoring is needed to ensure successful 

implementation. ●
 

Page 243 GAO-13-279SP Selected Tables 

Mission 

Annual 

report Areas identified 

Overall 

assessment 

2011 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. ◐

2011 Area 25: DHS could streamline mechanisms for sharing security-related information

with public transit agencies to help address overlapping information. ◐

2011 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. ◐

2012 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. ◐

 2012 Area 17: Homeland Security Grants: DHS needs better project information and 

coordination among four overlapping grant programs. ◐

2012 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. ◐

2013 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. 

a

2013 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. 

a

2013 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. 

a

Information 

technology 

2012 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. ◐

 2013 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. 

a 

2013 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. 

a

International 

affairs 

2011 Area 27: Lack of information sharing could create the potential for duplication of efforts 

between U.S. agencies involved in development efforts in Afghanistan. ◐

2011 Area 28: Despite restructuring, overlapping roles and functions still exist at State’s 

Arms Control and Nonproliferation Bureaus. ●

 2012 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.

◐
 

Page 244 GAO-13-279SP Selected Tables 

Mission 

Annual 

report Areas identified 

Overall 

assessment 

2012 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.

○

2013 Area 12: Export Promotion: Enhanced collaboration between the Small Business 

Administration (SBA) and two other agencies could help to limit overlapping exportrelated services for small businesses. 

a

2013 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.

a

Science and 

the 

environment 

2012 Area 22: Coordination of Space System Organizations: Fragmented leadership has 

led to program challenges and potential duplication in developing multibillion-dollar 

space systems. ◐

 2012 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. ◐

2012 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.

○

2012 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. ◐

2012 Area 26: Green Building: To evaluate the potential for overlap or fragmentation 

among federal green building initiatives, the Department of Housing and Urban 

Development, 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.

◐

2013 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. 

a

Social services 2011 Area 29: Actions needed to reduce administrative overlap among domestic food 

assistance programs. ○

2011 Area 30: Better coordination of federal homelessness programs may minimize 

fragmentation and overlap. ◐

2011 Area 31: Further steps needed to improve cost-effectiveness and enhance services for 

transportation-disadvantaged persons. ◐

2012 Area 27: Social Security Benefit Coordination: Benefit offsets for related programs 

help reduce the potential for overlapping payments but pose administrative challenges. ◐

 2012 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.

○

 2013 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.. 

a
 

Page 245 GAO-13-279SP Selected Tables 

Mission 

Annual 

report Areas identified 

Overall 

assessment 

Training, 

employment, 

and education 

2011 Area 32: Multiple employment and training programs: providing information on 

colocating services and consolidating administrative structures could promote 

efficiencies. ◐

2011 Area 33: Teacher quality: proliferation of programs complicates federal efforts to 

invest dollars effectively. ◐

2011 Area 34: Fragmentation of financial literacy efforts makes coordination essential. ●

2012 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.

◐

2012 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.

◐

 2012 Area 31: Science, Technology, Engineering, and Mathematics Education:

Strategic planning is needed to better manage overlapping programs across multiple 

agencies ◐

2012 Area 32: Financial Literacy: Overlap among financial literacy activities makes 

coordination and clarification of roles and responsibilities essential, and suggests 

potential benefits of consolidation. ●

2013 Area 16: Higher Education Assistance: Federal agencies providing assistance for 

higher education should better coordinate to improve program administration and help 

reduce fragmentation. 

a

2013 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. 

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 
 

Page 246 GAO-13-279SP Selected Tables 

Table 2: GAO Identified Areas of Cost-Savings and Revenue-Enhancement Opportunities in 2011-2013 Annual Reports 

Mission 

Annual 

Report Areas identified 

Overall 

assessment 

Agriculture 2011 Area 35: Reducing farm program direct payments could result in savings from $800 

million over 10 years to up to $5 billion annually. ○

2013 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. 

a 

2013 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 highincome farmers participating in the program, or some combination of limiting and 

reducing these subsidies. 

a

Defense 2011 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. 

◐

2011 Area 37: Total compensation approach is needed to manage significant growth in 

military personnel costs. ◐

2011 Area 38: Employing best management practices could help DOD save money on its 

weapon systems acquisition programs. ◐

2011 Area 39: More efficient management could limit future costs of DOD’s spare parts

inventory. ◐

2011 Area 40: More comprehensive and complete cost data can help DOD improve the 

cost-effectiveness of sustaining weapons systems. ◐

2011 Area 41: Improved corrosion prevention and control practices could help DOD avoid 

billions in unnecessary costs over time. ◐

2012 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. ●

2012 Area 34: Defense Headquarters: DOD should review and identify further 

opportunities for consolidating or reducing the size of headquarters organizations. ◐

2012 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.

◐

 2012 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.

◐

 2012 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.

◐

 2012 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. ○

2013 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. 

a
 

Page 247 GAO-13-279SP Selected Tables 

Mission 

Annual 

Report Areas identified 

Overall 

assessment 

Economic 

development 

2011 Area 42: Revising the essential air service program could improve efficiency. ◐

2011 Area 43: Improved design and management of the universal service fund as it 

expands to support broadband could help avoid cost increases for consumers. ◐

2011 Area 44: The U.S. Army Corps of Engineers should provide Congress with projectlevel information on unobligated balances. ●

2012 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. 

○

Energy 2011 Area 45: Improved management of federal oil and gas resources could result in 

approximately $2 billion in revenues over 10 years. ◐

 2012 Area 40: Excess Uranium Inventories: Marketing the Department of Energy’s excess 

uranium could provide substantial revenue for the government. ○

2013 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. 

a

General 

government 

2011 Area 46: Efforts to address government-wide improper payments could result in 

significant costs savings. ◐

2011 Area 47: Promoting competition for the over $500 billion in federal contracts could 

potentially save billions of dollars over time. ◐

2011 Area 48: Applying strategic sourcing best practices throughout the federal 

procurement system could saves billions of dollars annually. ◐

2011 Area 49: Adherence to guidance on award fee contracts could improve agencies’ use 

of award fees to produce savings. ●

2011 Area 50: Agencies aimed to save at least $3 billion by continued disposal of 

unneeded federal real property. 

Consolidated or 

other 

2011 Area 51: Improved cost analyses used for making federal facility ownership and 

leasing decisions could save millions of dollars. ○

2011 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. ●

2011 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. ◐

2011 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 $3.8 billion. 

◐

2011 Area 55: Better management of tax debt collection may resolve cases faster with 

lower IRS costs and increase debt collected. ◐

2011 Area 56: Broadening IRS’s authority to correct simple tax return errors could 

facilitate correct tax payments and help IRS avoid costly, burdensome audits. ○

2011 Area 57: Enhancing mortgage interest information reporting could improve tax 

compliance. ○

2011 Area 58: More information on the types and uses of canceled debt could help IRS limit 

revenue losses of forgiven mortgage debt. ◐
 

Page 248 GAO-13-279SP Selected Tables 

Mission 

Annual 

Report Areas identified 

Overall 

assessment 

2011 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. ◐

2011 Area 60: Revisions to content and use of Form 1098-T could help IRS enforce higher 

education requirements and increase revenues. ◐

2011 Area 61: Many options could improve the tax compliance of sole proprietors and 

begin to reduce their $68 billion portion of the tax gap. ◐

2011 Area 62: IRS could find additional businesses not filing tax returns by using thirdparty data, which show such businesses have billions of dollars in sales. ◐

2011 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. 

◐

2011 Area 64: IRS needs an agencywide approach for addressing tax evasion among the at 

least 1 million networks of businesses and related entities. ◐

2011 Area 65: Opportunities exist to improve the targeting of the $6 billion research tax 

credit and reduce forgone revenue. ○

2011 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. 

○

2011 Area 67: Limiting the tax-exempt status of certain governmental bonds could yield 

revenue. ○

2011 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. 

◐

2011 Area 69: IRS may be able to systematically identify nonresident aliens reporting 

unallowed tax deductions or credits. ●

2011 Area 70: Tracking undisbursed balances in expired grant accounts could facilitate 

the reallocation of scarce resources or the return of funding to the Treasury. ●

2012 Area 41: General Services Administration Schedules Contracts Fee Rates: Reevaluating fee rates on the General Services Administration’s Multiple Award 

Schedules contracts could result in significant cost savings government-wide. ●

2012 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. ○

 2012 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.

○

2012 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.

◐

2013 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. 

a

2013 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. 

a
 

Page 249 GAO-13-279SP Selected Tables 

Mission 

Annual 

Report Areas identified 

Overall 

assessment 

2013 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. 

a

Health 2011 Area 71: Preventing billions in Medicaid improper payments requires sustained 

attention and action by CMS. ◐

2011 Area 72: Federal oversight of Medicaid supplemental payments needs 

improvement, which could lead to substantial cost savings. ○

2011 Area 73: Better targeting of Medicare’s claims review could reduce improper 

payments. ◐

2011 Area 74: Potential savings in Medicare’s payment for health care. ◐

2012 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.

◐

2012 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.

◐

2013 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. 

a

2013 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 of providers for which data are available 

suggests that savings could be in the hundreds of millions, or billions, of dollars. 

a

2013 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. 

a

Homeland 

security/law 

enforcement 

2011 Areas 75 and 76: DHS’s management of acquisitions could be strengthened to 

reduce cost overruns and schedule and performance shortfalls. ◐

2011 Area 77: Validation of TSA’s behavior-based screening program is needed to justify 

funding or expansion. ◐

2011 Area 78: More efficient baggage screening systems could result in about $470 

million in reduced TSA personnel costs over the next 5 years. ◐

2011 Area 79: Clarifying availability of certain customs fee collections could produce a 

one-time savings of $640 million. ●

2012 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.

◐
 

Page 250 GAO-13-279SP Selected Tables 

Mission 

Annual 

Report Areas identified 

Overall 

assessment 

2012 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.

○

2012 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.

◐

2013 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. 

a

Income 

security 

2011 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. ○

Information 

technology 

2013 Area 29: Cloud Computing: Better planning of cloud-based computing solutions 

provides an opportunity for potential savings of millions of dollars. a

2013 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. 

a

International 

affairs 

2011 Area 81: Congress could pursue several options to improve collection of antidumping 

and countervailing duties. ○

2012 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.

●

2013 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. 

a

Social Services 2012 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.

○ 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 
 

Page 251 GAO-13-279SP Lists of Programs Identified 

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 2011 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 fragmentation, overlap, and duplication, 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. 
 

Page 252 GAO-13-279SP Lists of Programs Identified 

Table 1: Catfish Inspection: List of Federal Programs 

Agency Program name Program description 

Department of Health and Human Services, 

Food and Drug Administration (FDA), Center 

for Food Safety and Applied Nutrition 

Imported Seafood Safety Program 

and 

Enhanced Aquaculture and Seafood 

Inspection Program 

Under the authority of the Federal Food, 

Drug and Cosmetic Act and 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. 

Department of Agriculture (USDA), Food 

Safety Inspection Service, Office of Catfish 

Inspection Programs 

Catfish Inspection Program 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. 

Department of Commerce, National Oceanic 

and Atmospheric Administration (NOAA), 

National Marine Fisheries Service 

Seafood Inspection Program 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.
 

Page 253 GAO-13-279SP Lists of Programs Identified 

Table 2: Defense Foreign Language Support Contracts: List of Contracting 

Organizations and Related Contract Obligation Information 

Agency or component Contracting organization 

Fiscal years 

2008 through 

2012 obligations 

(nominal 

dollars)a

Department of Defense 

(DOD) Executive Agent 

Army Intelligence and Security 

Command 

$5,247,931,000

Army 80 distinct contracting organizations 642,501,000

Marine Corps 9 distinct contracting organizations 463,031,000

Air Force 29 distinct contracting organizations 31,044,000

Defense Legal Services 

Agency 

Washington Headquarters Services 27,561,000

Defense Security 

Cooperation Agency 

2 distinct contracting organizations 8,698,000

Navy 33 distinct contracting organizations 8,578,000

Other Department of 

Defense Agencies 

5 distinct contracting organizations 573,000

Total $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. 
 

Page 254 GAO-13-279SP Lists of Programs Identified 

Table 3: Renewable Energy Initiatives: List of Federal Wind Energy Initiatives and Related Budgetary Information 

Agency Program name 

Fiscal year 2011 

obligation specifically 

related to wind

U.S. Department of Agriculture 

Agricultural Research 

Service 

Bioenergy National Program $225,000 

US Forest Service Landownership Management Program a

National Institute of Food and 

Agriculture 

Small Business Innovation Research Program: Rural Development Topic 

Area 

659,954 

 Small Business Innovation Research Program: Small and Mid-Size Farms 

Topic Area 

0 

Natural Resources 

Conservation Service 

Conservation Innovation Grant Program 93,458 

 Conservation Security Program a

 Conservation Stewardship Program a

 Environmental Quality Incentives Program a

Office of the Chief Economist Energy and Bioenergy Research 56,000b

Office of the Secretary U.S. Department of Agriculture / Navy Memorandum of Understanding 

Project 

0 

Rural Business-Cooperative 

Service 

Business and Industry Guaranteed Loan Program 0 

 Rural Energy for America Program (formerly the Renewable Energy 

Systems and Energy Efficiency Improvements Program) 

3,872,127 

Rural Utilities Service Direct and Guaranteed Electric Loan Program 0 

 High Energy Cost Grant Program 0 

Department of Commerce 

Economic Development 

Administration 

Environmentally-Sustainable Development Investment Priority a

 Global Climate Change Mitigation Incentive Fund a

International Trade 

Association 

International Buyer Program 25,000b

 Market Development Cooperator Program a

 Renewable Energy and Energy Efficiency Export Initiative a

National Institute of 

Standards and Technology 

National Institute of Standards and Technology Smart Grid Program a

National Oceanic and 

Atmospheric Administration 

Joint Wind Energy Program: Atmospheric Velocity Gradients 390,462b

 Program Development 149,538 

 Renewable Energy Research 2,182,500 

 MarineCadastre.gov a

United States Patent and 

Trademark Office 

Green Technology Pilot Program a

Department of Energy 

Advanced Research Projects 

Agency—Energy 

Agile Delivery of Electrical Power Technology a

 Advanced Research Projects Agency—Energy Funding Opportunity 

Announcement 1 

2,420,802 

 Grid-Scale Rampable Intermittent Dispatchable Storage a
 

Page 255 GAO-13-279SP Lists of Programs Identified 

Agency Program name 

Fiscal year 2011 

obligation specifically 

related to wind

Office of Energy Efficiency 

and Renewable Energy 

Energy Efficiency and Conservation Block Grants 50,267,968b

 Hydrogen and Fuel Cell Technologies Crosscutting Activities 150,000 

 Hydrogen Fuel R&D 425,000 

 State Energy Program a

 Tribal Energy Program a

 Wind Energy - Offshore Wind 17,140,518 

 Wind Energy - Technology Application 0 

 Wind Energy - Technology Viability 1,116,820 

Loan Programs Office Title XVII Section 1703 Loan Guarantee Program 0 

 Title XVII Section 1705 Loan Guarantee Program 50,800,000 

Multiple Small Business Innovation Research/Small Business Technology 

Transfer - Wind Energy Technology Development Topic Area 

1,887,441 

Office of Electricity Delivery 

& Energy Reliability 

Clean Energy Transmission and Reliability 20,400,000b

 Funding of five interconnection-wide transmission planning & associated 

projects 

0 

 Office of Electricity Delivery & Energy Reliability Energy Storage 0 

 Office of Electricity Delivery & Energy Reliability Permitting, Siting, and 

Analysis—Various projects 

2,294,000b

Office of Indian Energy 

Policy and Programs 

Strategic Technical Assistance Response Team Program 200,000b

Power Marketing 

Administrations 

Bonneville Power Administration Wind Integration 0 

 Western Area Power Administration—Operations 0 

 Western Area Power Administration—Transmission Services 0 

Department of the Interior 

Bureau of Land Management Recovery Act Renewable Energy Efforts 0 

 Renewable Energy Coordination Offices Implementation 2,536,750b

 Wind Energy Authorizations and Operations on Bureau of Land 

Management Public Lands 

6,009,500b

Bureau of Ocean Energy 

Management, Regulation 

and Enforcement 

Environmental Studies Program 5,143,589b

 Renewable Energy Program Development and Implementation 8,279,720 

 Renewable Energy Program: Ensure Fair Return for Renewable Energy 

Resources 

169,800 

 Renewable Energy Program: Environmental Compliance 1,600,000b

 Renewable Energy Program: Multipurpose Marine Cadastre a

 Renewable Energy Program: Safety Program and Inspections 0 

 Resource Evaluation Program: Economic Analysis 182,300 

 Resource Evaluation Program: Resource Evaluation 206,017 

 Technology Assessment and Research Program 910,940 

Bureau of Reclamation Desalination and Water Purification Research and Development Program 0 

 Science and Technology Program 457,393 

Bureau of Indian Affairs Minerals & Mining Program: Renewable Energy Projects 488,500 
 

Page 256 GAO-13-279SP Lists of Programs Identified 

Agency Program name 

Fiscal year 2011 

obligation specifically 

related to wind

Office of Insular Affairs Insular Plan for Alternative and Renewable Energy 0 

Department of the Treasury 

Office of Domestic Finance Payments for Specific Energy Property in Lieu of Tax Credits 2,716,933,281 

Environmental Protection Agency 

Office of Air and Radiation Green Power Partnership a

Office of Research and 

Development 

People, Prosperity, and the Planet Award Program 30,000 

Office of Solid Waste and 

Emergency Response 

RE-Powering America’s Land 210,000b

Federal Energy Regulatory Commission 

Not applicable Integration of Variable Energy Resources - Market and Regulatory 

Reforms to Remove Unduly Discriminatory Practices and Ensure Just 

and Reasonable Rates 

0 

National Science Foundation 

Directorate for Engineering Energy for Sustainability Program a

 Energy, Power, and Adaptive Systems 1,604,537 

Directorate for Engineering 

— 

Directorate for Mathematical 

and Physical Sciences 

Emerging Frontiers in Research and Innovation 500,007 

Small Business Administration 

Office of Capital Access Certified Development Company / Section 504 Loans a

Office of Investment Energy Saving Debenture 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. 
 

Page 257 GAO-13-279SP Lists of Programs Identified 

Table 4: Renewable Energy Initiatives: List of Federal Wind Energy Tax Expenditures and Related Budgetary Information 

Agency Program name 

Fiscal year 2011 estimated 

revenue losses specifically 

related to wind

Department of the Treasury 

Internal Revenue Service Accelerated Depreciation Recovery Periods for Specific Energy 

Property 

a

 Credit for Holding New Clean Renewable Energy Bonds a

 Credit for Holding Qualified Energy Conservation Bonds a

 Credit for Residential Energy Efficient Property a

 Direct Payment in Lieu of a Credit for Holding New Clean 

Renewable Energy Bonds 

a

 Direct Payment in Lieu of a Credit for Holding Qualified Energy 

Conservation Bonds 

a

 Energy Investment Credit Less than $50 million for small wind 

properties—properties using wind 

turbines of 100 kilowatts or less 

 Energy Production Credit $1,100,000,000

 Qualifying Advanced Energy Project Credit 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 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 GAO-12-259SP. 
 

Page 258 GAO-13-279SP Lists of Programs Identified 

Table 5: Medicaid Program Integrity: Program and Related Budgetary Information 

Agency or subagency Program name Program description 

Annual

appropriation

Department of Health and Human Services 

Centers for Medicare & 

Medicaid Services 

Medicaid Integrity 

Program 

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. 

$75,000,000a

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.
 

Page 259 GAO-13-279SP Lists of Programs Identified 

Table 6: Department of Homeland Security Research and Development: 

Components and Related Budgetary Information 

Agency or component FY 2011 budget authority FY 2011 outlays

Department of Homeland Security 

Science and Technology Directorate $486,000,000 $730,000,000

Domestic Nuclear Detection Office 56,000,000 80,000,000

United States Coast Guard 26,000,000 22,000,000

Total 568,000,000 832,000,000

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. 
 

Page 260 GAO-13-279SP Lists of Programs Identified 

Table 7: Field-Based Information Sharing: List of Entities and Related Funding Information 

Agency or subagency Entity name Entity description FY 2011 funding

Department of Justice 

Federal Bureau of 

Investigation 

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. 

a

 Field Intelligence Groups Field Intelligence Groups 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. 

a

Bureau of Justice 

Assistance 

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 informationsharing resources and investigative support. 

$36,500,000b

Department of Homeland Security 

Office of Intelligence and 

Analysis 

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.

$52,700,000c

Executive Office of the President 

Office of National Drug 

Control Policy 

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 moneylaundering organizations through the 

prevention or mitigation of associated criminal 

activity. 

$40,200,000d

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 57 of 77 fusion centers. 

d

HIDTAs dedicated approximately $40.2 million to support their respective Investigative Support 

Centers. 
 

Page 261 GAO-13-279SP Lists of Programs Identified 

Table 8: Justice and Treasury Asset Forfeiture: List of Programs and Related Budgetary Information 

Agency Program name Program description FY 2011 obligation

Department of Justice 

(Justice) 

Justice Asset Forfeiture Program 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. 

$1,625,268,000

Department of the Treasury 

(Treasury) 

Treasury Asset Forfeiture Program 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. 

590,415,000

Source: GAO analysis of Justice and Treasury data. 
 

Page 262 GAO-13-279SP Lists of Programs Identified 

Table 9: Export Promotion: List of Agencies and Related Budgetary Information 

Agency Export Promotion Program description 

FY 2011 budget 

requesta

Export-Import 

Bank 

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. 

b

Small Business 

Administration 

(SBA) 

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. 

$6,000,000

Department of 

Commerce 

(Commerce) 

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. 

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 ExportImport 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. 
 

Page 263 GAO-13-279SP Lists of Programs Identified 

Table 10: International Broadcasting: List of Programs and Related Budgetary Information 

Agency Program Program description FY 2011 obligation

Broadcasting Board 

of Governors

Voice of America (VOA) 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. 

$205,104,000

Office of Cuba 

Broadcasting (OCB) 

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. 

28,416,000

Radio Free Europe/Radio 

Liberty (RFE/RL) 

Established in 1950, RFE/RL was created to provide radio 

programming to, and about, Eastern Europe and the 

former Soviet Union. 

92,660,000

Radio Free Asia (RFA) RFA, established in 1996, provides news and information 

to Asian countries whose governments prohibit access to a 

free press. 

37,438,000

Middle East Broadcasting 

Networks, Inc. (MBN) 

MBN, which manages 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. 

111,073,000

Source: GAO analysis of Broadcasting Board of Governors data. 
 

Page 264 GAO-13-279SP Lists of Programs Identified 

Table 11: Rural Water Infrastructure: List of Programs and Related Budgetary Information 

Agency or subagency Program name Program description FY 2011 obligation

Environmental Protection 

Agencya Clean Water State 

Revolving Fund 

Program 

Provides capitalization grants to state revolving fund 

programs to finance various water quality projects, 

including wastewater treatment plants. 

$1,863,903,700

Drinking Water State 

Revolving Fund 

Program 

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. 

1,102,751,800

United States Department of 

Agriculture, Rural Utilities 

Service 

Water and Waste 

Disposal Program 

Provides loan and grant funding for both drinking water 

and wastewater projects in low-income rural communities 

of 10,000 or less. 

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.
 

Page 265 GAO-13-279SP Lists of Programs Identified 

Table 12: Drug Abuse Prevention and Treatment Programs: List of Programs and Related Budgetary Information 

Agency or 

subagency Program name Program descriptiona

Fiscal year 2011 

obligations for drug 

abuse prevention and 

treatment activities

Department of 

Defense (DOD) 

Drug Demand Reduction Program b $118,078,000b

DOD civilian 

agencies 

Civilian Employee Drug-Free Workplace 

Program 

Prevention b

National Guard 

Bureau 

National Guard Bureau Prevention, 

Treatment, and Outreach Program 

Prevention b

U.S. Air Force Air Force Drug Demand Reduction Prevention b

U.S. Army Army Substance Abuse Program Prevention and treatment b

U.S. Marine Corps Marine Corps Community Services 

Substance Abuse Program 

Prevention b

U.S. Navy Navy Alcohol and Drug Abuse 

Prevention 

Prevention b

Substance Abuse Rehabilitation 

Program 

Treatment Not availablec

Department of Justice 

Bureau of Prisons 92,500,000d

Community Transitional Drug Abuse 

Treatment 

Treatment d

Drug Abuse Education Prevention and treatment d

Non-residential Drug Abuse Treatment Treatment d

Residential Drug Abuse Treatment Treatment d

Drug Enforcement 

Administration 

Demand Reduction Program Neither a prevention nor a treatment 

program, but may include prevention or 

treatment activities 

2,085,000e

Office of Justice 

Programs 

Drug Courts Treatment Not availablec

Enforcing Underage Drinking Laws Prevention 16,968,000

Justice and Mental Health Collaboration 

Program 

Neither a prevention nor a treatment 

program, but may include prevention or 

treatment activities 

Not availablec

Residential Substance Abuse 

Treatment 

Treatment Not availablec

Second Chance Act Adult Offenders 

with Co-Occurring Substance Abuse 

and Mental Health Disorders 

Treatment Not availablec

Second Chance Act Family-Based Adult 

Offender Substance Abuse Treatment 

Program, Planning, and Demonstration 

Projects 

Treatment Not availablec

Department of Transportation 

Federal Aviation 

Administration 

Employee Drug and Alcohol Testing 

Program 

Neither a prevention nor a treatment 

program, but may include prevention or 

treatment activities 

469,241

Flight Attendant Drug And Alcohol 

Program 

Neither a prevention nor a treatment 

program, but may include prevention or 

treatment activities 

269,241
 

Page 266 GAO-13-279SP Lists of Programs Identified 

Agency or 

subagency Program name Program descriptiona

Fiscal year 2011 

obligations for drug 

abuse prevention and 

treatment activities

Human Intervention Motivation Study Neither a prevention nor a treatment 

program, but may include prevention or 

treatment activities 

200,000

National Highway 

Traffic Safety 

Administration 

Drug Impaired Driving Program Neither a prevention nor a treatment 

program, but may include prevention or 

treatment activities 

2,688,000

Department of Education 

21st Century Community Learning 

Centers 

Neither a prevention nor a treatment 

program, but may include prevention or 

treatment activitiesf

Not availablec 

Safe and Supportive Schoolsg Neither a prevention nor a treatment 

program, but may include prevention or 

treatment activitiesf

Not availablec

Safe Schools/Healthy Studentsg Prevention Not availablec

Executive Office of the President 

Office of National 

Drug Control Policy 

Anti-Doping Activities Prevention 8,982,000

High Intensity Drug Trafficking Areas Neither a prevention nor a treatment 

program, but may include prevention or 

treatment activities 

2,848,424

Youth Drug Prevention Media Program Prevention 39,000,000e

Federal Judiciary 

Administrative Office 

of the United States 

Courts 

Court Ordered Substance Abuse 

Testing and Treatment 

Treatment 48,053,914

Department of Health and Human Services 

Health Resources 

and Services 

Administration 

Health Center Program Neither a prevention nor a treatment 

program, but may include prevention or 

treatment activities 

Not availablec

Ryan White HIV/AIDS Neither a prevention nor a treatment 

program, but may include prevention or 

treatment activities 

Not availablec

Indian Health 

Service 

Urban Indian Health Program Title V 4-

in-1 grants 

Prevention and treatment 4,500,000

Alcohol and Substance Abuse Self 

Determination Contracts 

Prevention and treatment 194,409,000

Methamphetamine and Suicide 

Prevention Initiative 

Prevention and treatment 16,358,000

Youth Regional Treatment Centers Prevention and treatment 18,450,189e

Tele-behavioral Health Activities Prevention and treatment Not availablec

Substance Abuse 

and Mental Health 

Services 

Administration 

(SAMHSA) 

Access to Recovery Treatment 98,954,000

Assertive Adolescent and Family 

Treatment 

Prevention and treatment 4,198,000

Capacity Building Initiative Prevention 8,097,080

Center for the Application of Prevention 

Technologies 

Prevention 10,977,264
 

Page 267 GAO-13-279SP Lists of Programs Identified 

Agency or 

subagency Program name Program descriptiona

Fiscal year 2011 

obligations for drug 

abuse prevention and 

treatment activities

 Community-based Coalition 

Enhancement Grants 

Prevention 4,912,052

Drug Free Communities Mentoring 

Program 

Prevention 2,391,168

Drug Free Communities Support 

Program 

Prevention 83,845,306

 Ex-Offender Reentry Treatment 16,373,000

Fetal Alcohol Spectrum Disorders 

Center for Excellence 

Prevention 9,830,206

Grants to Serve Young Children and 

Families Affected by Methamphetamine 

Prevention and treatment 4,148,000

Historically Black Colleges and 

Universities Grant 

Neither a prevention nor a treatment 

program, but may include prevention or 

treatment activities 

300,000

Homeless Grants for the Benefit of 

Homeless Individuals 

Treatment 35,946,000

Minority AIDS Initiative Targeted 

Capacity Expansion 

Prevention and treatment 53,934,000

Minority HIV Prevention Prevention 20,048,037

National Adult Oriented Media Public 

Service Campaign 

Prevention 1,096,735

Native American Center for Excellence Prevention 1,031,475

Partnership for Success Prevention 11,500,000

Physician Clinical Support System 

Project - Buprenorphine 

Neither a prevention nor a treatment 

program, but may include prevention or 

treatment activities 

494,000

Physician Clinical Support System 

Project - Opioid 

Neither a prevention nor a treatment 

program, but may include prevention or 

treatment activities 

500,000

Residential Treatment for Pregnant and 

Post Partum Women 

Prevention and treatment 14,377,000

Ready to Respond Prevention 10,435,218

 Recovery Community Services Program Treatment 5,236,000

Screening, Brief Intervention, and 

Referral to Treatment - Medical 

Schools/Residency 

Neither a prevention nor a treatment 

program, but may include prevention or 

treatment activities 

6,152,000

State Screening, Brief Intervention and 

Referral to Treatment 

Prevention and treatment 44,141,000

Strategic Prevention Framework State 

Incentive Grants 

Prevention 53,872,449

Substance Abuse Prevention and 

Treatment Block Grant 

Prevention and treatment 1,441,962,000

Targeted Capacity Expansion General - 

Grants to Expand Care Coordination 

Using Health Information Technology 

Neither a prevention nor a treatment 

program, but may include prevention or 

treatment activities 

8,033,000

Targeted Capacity Expansion General - 

Recovery Oriented Systems of Care 

Treatment 4,380,000

Targeted Capacity Expansion General - 

Technology Assisted Care 

Treatment 2,291,000
 

Page 268 GAO-13-279SP Lists of Programs Identified 

Agency or 

subagency Program name Program descriptiona

Fiscal year 2011 

obligations for drug 

abuse prevention and 

treatment activities

Treatment Drug Courts - Adults 

(SAMHSA only) 

Treatment 4,897,000

Treatment Drug Courts - Juvenile 

(SAMHSA only) 

Treatment 3,355,000

Treatment Drug Courts - Adult (joint 

with the Bureau of Justice Assistance) 

Treatment 7,282,000

Treatment Drug Courts - Juvenile (joint 

with the Office of Juvenile Justice and 

Delinquency Prevention) 

Treatment 398,000

Underage Drinking Prevention 

Education Initiative 

Prevention 3,039,738

Department of Housing and Urban Development 

Emergency Solutions Grants Neither a prevention nor a treatment 

program, but may include prevention or 

treatment activities 

Not availablec

Supportive Housing Program Neither a prevention nor a treatment 

program, but may include prevention or 

treatment activities 

Not availablec

Housing Opportunities for Persons with 

AIDS 

Neither a prevention nor a treatment 

program, but may include prevention or 

treatment activities 

Not availablec

Department of Labor 

Employment 

Training 

Administration 

Job Corps Neither a prevention nor a treatment 

program, but may include prevention or 

treatment activities 

6,600,000

Department of Veterans Affairs 

Veterans Health 

Administration 

Substance Use Disorder Outpatient 

Program 

Treatment 581,646

Substance Use Disorder Residential 

Program 

Treatment 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 drugfree. 

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. 
 

Page 269 GAO-13-279SP Lists of Programs Identified 

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. 
 

Page 270 GAO-13-279SP Lists of Programs Identified 

Table 13: Higher Education Assistance: List of Select Programs and Related Budgetary Information 

Agency Program name Program description 

Fiscal year 2011 

funds available

U.S. Department of 

Education 

Pell Grants Grant amounts are based on the student’s 

enrollment status and the difference between the 

expected family contribution and the cost of 

attendance, up to the maximum Pell Grant allowed 

under the Higher Education Act. 

$35,685,485,000

 Federal Supplemental 

Educational Opportunity 

Grants 

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. 

$931,633,000

Federal Work Study Schools administer federal funds and make parttime 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). 

$1,168,428,000

Federal Perkins Loans 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. 

$970,705,000

Subsidized Direct Stafford 

Loans 

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. 

$41,774,526,000

 Unsubsidized Direct Stafford 

Loans 

Loans are made to undergraduate, graduate, and 

professional students who are enrolled at least halftime. 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. 

$48,081,625,000

Parent Loans for 

Undergraduate Students 

(PLUS) Loans 

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. 

$19,070,152,000

 
 

Page 271 GAO-13-279SP Lists of Programs Identified 

Agency Program name Program description 

Fiscal year 2011 

obligations

Department of 

Veterans Affairs 

Post-9/11 Veterans 

Educational Assistance Act of 

2008 (Post-9/11 GI Bill) 

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. 

$7,656,490,000

Montgomery GI Bill-Active 

Duty 

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. 

$1,385,943,000

Montgomery GI Bill-Selected 

Reserve 

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. 

$201,433,000

Survivors’ and Dependents’ 

Educational Assistance 

Program 

Provides education and training opportunities to 

eligible dependents of certain veterans that were 

disabled or died during active duty service. 

$462,877,000

 Reserve Educational 

Assistance Program 

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. 

$95,324,000

Department of 

Defense 

Military Tuition Assistance 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. 

$711,241,164a

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. 
 

Page 272 GAO-13-279SP Lists of Programs Identified 

Table 14: Higher Education Assistance: List of Select Tax Expenditures and Total Estimated Benefits, Tax Year 2009 

Agency Tax expenditure Tax expenditure description 

Total estimated 

benefits, tax year 2009

Internal Revenue Service American Opportunity 

Credit 

Provides a credit up to $2,500 for qualified 

education expenses paid to each eligible student. 

Forty percent of the credit may be refundable. 

$16,000,000,000

Lifetime Learning Credit Provides a credit up to $2,000 per return. It is a 

nonrefundable credit limited to the amount of tax 

paid on taxable income. 

$2,400,000,000

Tuition and Fees 

Deduction 

Provides a deduction up to $4,000 per return. $628,900,000

Student Loan Interest 

Deduction 

Provides a deduction up to $2,500 for interest paid 

on eligible education loans. 

$1,300,000,000

 Parental personal 

exemption for students 

ages 19-23 

Tax filers with eligible dependents aged 19-23 who 

are full-time students are allowed an exemption of 

$3,650 per dependent. 

$5,300,000,000

Earned Income Tax Credit 

for students ages 19-23 

Provides a refundable credit up to $5,666 to 

eligible filers depending on their income and 

number of qualifying children. 

$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. 
 

Page 273 GAO-13-279SP Lists of Programs Identified 

Table 15: Veterans’ Employment and Training: List of Programs and Related Budgetary Information 

Agency Program name Program description 2011 fundinga

Department of Labor 

 Disabled Veterans’ 

Outreach Program 

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

$85,000,000 

 Local Veterans’ 

Employment 

Representative Program 

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

$72,000,000

 Homeless Veterans’ 

Reintegration Program 

Competitive grants to state and local agencies, for 

profit/commercial entities, and nonprofit organizations to 

provide employment and supportive services to 

homeless veterans. 

$36,000,000

 Transition Assistance 

Program 

Provides workshops to help service members prepare for 

civilian employment. 

$7,000,000

 Veterans’ Workforce 

Investment Program 

Competitive grants to state and local agencies, for 

profit/commercial entities, and nonprofit organizations to 

provide employment and supportive services to veterans. 

$9,000,000d

Department of Veterans Affairs 

 Vocational Rehabilitation 

Program 

Provides funding for staff located in field offices and 

subsistence allowances to veterans and pays for tuition, 

books, and supplies. 

$973,000,000e 

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. 
 

Page 274 GAO-13-279SP Lists of Programs Identified 

Table16: Crop Insurance: Program and Related Budgetary Information 

Agency or subagency Program name Program description 

Fiscal year 2011 

obligation

U.S. Department of Agriculture 

Risk Management Agency Federal Crop Insurance 

Program 

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. 

$4,600,900,000a

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. 
 

Page 275 GAO-13-279SP Lists of Programs Identified 

Table 17: Department of Energy’s Isotope Program: Program and Related 

Budgetary Information 

Agency or 

subagency Program name Program description 

Fiscal year 

2012 obligation 

Department of Energy 

Office of Science Isotope Program The Isotope Program 

develops, produces, and 

sells isotopes, byproducts, 

surplus materials, and 

related services worldwide 

to commercial, research, 

and medical communities. 

$47,022,978 

Source: GAO summary of Department of Energy information. 
 

Page 276 GAO-13-279SP Lists of Programs Identified 

Table 18: Medicare Prepayment Controls: Program and Related Budgetary 

Information 

Agency or subagency Program name Program description FY 2011 outlays

Department of Health and Human Services 

Centers for Medicare & 

Medicaid Services 

Medicare Medicare is the federal 

health insurance 

program for individuals 

aged 65 or over, 

certain individuals with 

disabilities, and 

individuals with endstage renal disease. 

$408,202,000,000a

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. 
 

Page 277 GAO-13-279SP Lists of Programs Identified 

Table 19: Medicaid Supplemental Payments: Non-Disproportionate Share Hospital 

Supplemental Payments and Related Budgetary Information 

Agency or 

subagency Program name Program description

FY 2011 

estimated cost

Centers for Medicare 

& Medicaid Services 

Non-disproportionate 

share hospital 

supplemental 

payments 

Payments separate 

from and in addition to 

the state’s regular 

Medicaid payments 

$25,925,500,000a

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. 
 

Page 278 GAO-13-279SP Lists of Programs Identified 

Table 20: Checked Baggage Screening: Budget Activities and Related Budgetary Information 

Agency Budget activity Description FY 2011 funding

Department of Homeland Security 

Transportation Security 

Administration (TSA) 

Explosives Detection System 

Procurement and Installation 

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. 

$290,800,000

Aviation Security Capital Fund 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). 

250,000,000 

 Screening Technology 

Maintenance and Utilities 

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. 

240,000,000

Total 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. 
 

Page 279 GAO-13-279SP Lists of Programs Identified 

Table 21: Information Technology Operations and Maintenance: Steady State Information Technology Investments and 

Related Budgetary Information 

Agency 

Steady state information 

technology investmentsa Investments with an operational analysisb FY 2011

 investment costs

Department of Defense 4 0 $381,000,000

Department of Homeland Security 44 16 2,186,000,000

Department of Health and Human Services 8 7 284,000,000

Department of the Treasury 16 0 152,000,000

Department of Veterans Affairs 3 0 1,590,000,000

Total $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. 
 

Page 280 GAO-13-279SP Lists of Programs Identified 

Table 22: Tobacco Taxes: List of Products and Related Budgetary Information 

Agency Tobacco product Current tax rate 

FY 2011 federal 

excise tax revenue

Department of the Treasury 

Alcohol and Tobacco Tax and Trade Bureau Roll-your-own tobacco $24.78 per pound $281,177,772

Pipe tobacco $2.83 per pound 145,334,870

Large cigars 52.75 percent of sales price, but 

not to exceed $402.60 per 

thousand sticks 

1,286,679,674

Small cigars $50.33 per thousand sticks 86,172,159

Source: GAO analysis of Treasury and Bureau of Labor Statistics data. 

(250674)
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