Report to Congressional Addressees

April 2014

GAO-14-343SP

United States Government Accountability Office

2014 Annual Report: 

Additional 

Opportunities to 

Reduce

Fragmentation,

Overlap, and

Duplication and 

Achieve Other 

Financial Benefits

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Page 1 GAO-14-343SP 2014 Annual Report 

441 G St. N.W.

Washington, DC 20548

April 8, 2014

Congressional Addressees

The federal government faces an unsustainable fiscal path.1 Changing 

this path will likely require difficult fiscal policy decisions to alter both longterm federal spending and revenue. Yet, in the near-term, executive 

branch agencies and Congress can act to improve the efficiency and 

effectiveness of government programs and activities. Opportunities to 

take action exist in areas where federal programs or activities are 

fragmented, overlapping, or duplicative. To highlight these opportunities, 

GAO is statutorily mandated 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.2 In addition, we identify additional opportunities to achieve 

greater efficiency and effectiveness that result in cost savings or 

enhanced revenue collection.

In our first three annual reports issued from 2011 through 2013, we 

presented 162 areas where opportunities existed for executive branch 

agencies or Congress to reduce, eliminate, or better manage

fragmentation, overlap, or duplication; achieve cost savings; or enhance 

revenue.3 Figure 1 outlines the definitions we use for fragmentation, 

overlap, and duplication for this work. In these first three reports, we 

identified approximately 380 actions that executive branch agencies and 

Congress could take to address the opportunities for greater efficiency 

and effectiveness that we identified.

 

1

See GAO, The Federal Government’s Long-Term Fiscal Outlook, Spring 2013 Update, 

GAO-13-481SP (Washington, D.C.: Apr. 11, 2013), Congressional Budget Office, The 

2013 Long-Term Budget Outlook (Washington, D.C.: September 2013), and 

Congressional Research Service, Reducing the Budget Deficit: The President’s Fiscal 

Commission and Other Initiatives, (Washington, D.C.: June 8, 2011).

2

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.

3

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

Dollars, and Enhance Revenue, GAO-11-318SP (Washington, D.C.: Mar. 1, 2011), 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 

2013 Annual Report: Actions Needed to Reduce Fragmentation, Overlap, and Duplication 

and Achieve Other Financial Benefits, GAO-13-279SP (Washington, D.C.: Apr. 9, 2013). 

 
 

Page 2 GAO-14-343SP 2014 Annual Report 

Figure 1: Definitions of Fragmentation, Overlap, and Duplication

This report is our fourth in the series, and it identifies additional areas 

where a broad range of federal agencies may be able to achieve greater 

efficiency or effectiveness. For each area, we suggest actions that the 

executive branch or Congress could take to reduce, eliminate, or better 

manage fragmentation, overlap, or duplication, or achieve other financial 

benefits. 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 updating GAO’s Action Tracker, a publicly 

accessible website containing the status of actions suggested in this 

series of 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 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 

nature or magnitude of the federal effort, the instances of fragmentation, 
 

Page 3 GAO-14-343SP 2014 Annual Report 

overlap, or duplication we describe in Section I occur in areas where 

multiple programs and activities may be creating inefficiencies. Section II 

describes 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 present 64 actions that the executive branch and 

Congress could take to improve efficiency and effectiveness across 26 

areas that span a broad range of government missions and functions. We 

suggest 19 actions to address 11 new areas in which we found evidence 

of fragmentation, overlap, or duplication in government missions such as 

defense, health, income security, information technology, and 

international affairs. In addition, we present 45 opportunities for executive 

branch agencies or Congress to take actions to reduce the cost of 

government operations or enhance revenue collections for the Treasury 

across 15 areas of government.

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, which may result in 

inefficiencies in how the government delivers services. We identified 

fragmentation in multiple programs we reviewed, including the following:

• Contracting for Defense Health Care Professionals: The Department 

of Defense (DOD) does not have a consolidated agency-wide strategy 

to contract for health care professionals, resulting in a contracting 

approach that is largely fragmented. Although some of the military 

departments have attempted to consolidate their health care staffing 

requirements through joint-use contracts, such contracts only 

accounted for approximately 8 percent of the $1.14 billion in 

obligations for health care professionals in fiscal year 2011.4

Moreover, in May 2013 we identified several instances in which 

numerous task orders were awarded by a single military department 

for the same type of health care professional in the same area or 

 

4

A joint-use contract is a contract used by more than one military department or used at 

joint military facilities.

New Opportunities to 

Improve Efficiency 

and Effectiveness 

Identified across the 

Federal Government

19 Suggested Actions to 

Address New Evidence of 

Fragmentation, Overlap, 

or Duplication in 11 Areas
 

Page 4 GAO-14-343SP 2014 Annual Report 

facility. For example, we identified 24 separate task orders for 

contracted medical assistants at the same military treatment facility. 

By not consolidating its requirements, this facility missed the

opportunity to achieve potential cost savings and other efficiencies. To 

reduce fragmentation and achieve greater efficiencies, DOD should 

develop a consolidated agency-wide strategy to contract for health 

care professionals.

• Interoperable Radio Communications Systems: The Departments of 

Justice, Homeland Security, and the Treasury have decided to 

independently modernize their own wireless communications systems 

rather than pursuing a joint development project. As a result, their 

communications systems, which represent hundreds of millions of 

dollars in investment, may not be interoperable and may not enable 

the most effective response to natural disasters, criminal activities, 

and domestic terrorism. Collaboration on a joint communications 

solution has not been successful because the departments could not 

agree on a common outcome or purpose. They have not established 

a collaborative governance structure with a process for decision 

making and resolving disputes, and they have not developed a joint 

strategy for moving forward. A coordinated communications approach 

could improve effectiveness and help the federal government realize 

potential savings.

Fragmentation can also be a harbinger for overlap or duplication. 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, including the following:

• Disability and Unemployment Benefits: We found that 117,000 

individuals received concurrent cash benefit payments, in fiscal year 

2010, from the Disability Insurance and Unemployment Insurance 

programs totaling more than $850 million because current law does 

not preclude the receipt of overlapping benefits. Individuals may be 

eligible for benefit payments from both Disability Insurance and 

Unemployment Insurance due to differences in the eligibility 

requirements; however, in such cases, the federal government is 

replacing a portion of lost earnings not once, but twice. The 

President’s Fiscal Year 2015 Budget submission proposes to 

eliminate these overlapping benefits, and during the 113th Congress, 

bills have been introduced in both the U.S. House of Representatives 

and the Senate containing language to reduce Disability Insurance 

payments to individuals for the months they collect Unemployment 
 

Page 5 GAO-14-343SP 2014 Annual Report 

Insurance benefits. According to the Congressional Budget Office 

(CBO), this action could save $1.2 billion over 10 years in the Social 

Security Disability Insurance program. Congress should consider 

passing legislation to offset Disability Insurance benefit payments for 

any Unemployment Insurance benefit payments received in the same 

period. 

• Minority AIDS Initiative: We found that 10 different agencies and 

offices within the Department of Health and Human Services (HHS) 

are providing assistance through multiple funding streams and 

programs designed to address the impact of human 

immunodeficiency virus (HIV) and acquired immunodeficiency 

syndrome (AIDS) on racial and ethnic minorities. In addition, we found 

that the grantees funded through this fragmented system are 

providing overlapping services, meaning that the grantees are 

providing similar services to similar populations. The fragmented 

nature of the funding has often required grantees to manage grants 

from several sources. Consequently, grantees must complete multiple 

similar administrative requirements, increasing administrative costs for 

those grantees and deterring others from applying for grants to serve 

racial and ethnic minorities with HIV/AIDS. To address the identified 

fragmentation and overlap, HHS should consolidate the disparate 

funding streams and seek legislation as necessary to achieve a

consolidated approach. 

In other aspects of our work, 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. 

Examples of duplicative, or potentially duplicative, federal efforts include 

the following:

• POW/MIA Mission: We found that the roles and responsibilities 

among eight DOD organizations that account for persons missing in 

military conflicts are not clearly articulated in existing DOD directives 

or instructions. Disagreements over roles and responsibilities have led 

to discord and lack of collaboration among the entities that account for 

missing persons and have impeded DOD’s ability to establish a 

community-wide plan for achieving the mandated goal of providing 

funds, personnel, and other resources to account for 200 missing 

persons a year by 2015.

In addition, lack of clear roles and responsibilities may lead to 

duplicative efforts. For example, two of DOD’s laboratories have 

employees with responsibilities for analyzing equipment and artifacts 
 

Page 6 GAO-14-343SP 2014 Annual Report 

that may be associated with a specific missing person, such as pieces 

of uniforms and parachutes, but the memorandum of agreement 

governing work between these two entities does not establish clear 

roles and responsibilities. As a result, we found that one laboratory 

had requested duplicate analyses by referring cases that had already 

been resolved to another laboratory for analysis and reporting. In 

another example, we found that two different organizations conduct 

investigations for missing persons from World War II in Europe and 

have asserted operational responsibilities for performing these 

investigations. To avoid such duplicative or potentially duplicative 

efforts, DOD should help unify the community’s fragmented 

organizational structure and provide a more centralized chain of 

command, among other things.

• Defense Satellite Control Operations: We reported in April 2013 that 

DOD has increasingly deployed dedicated satellite control operations 

networks as opposed to shared networks that support multiple kinds 

of satellites. For example, at one Air Force base in 2013, eight 

separate control centers operated 10 satellite programs. While 

dedicated networks can offer some benefits to programs, they can 

also be more costly to maintain and have led to a fragmented, and 

potentially duplicative, approach that requires more infrastructure and 

personnel to manage when compared to shared networks. 

While opportunities exist to improve DOD satellite control operations, 

we identified certain barriers that hinder DOD’s ability to increase the 

use of shared networks, such as the inability to quantify all spending 

on satellite ground control operations and the absence of DOD-wide 

guidance or plan that supports the implementation of alternative 

methods for performing satellite control operations. These barriers 

also have hindered DOD’s ability to achieve optimal satellite control 

systems that would result in cost savings in this area. To address the 

duplication and inefficiencies that arise from dedicated satellite control 

operations networks, DOD should take actions to improve its ability to 

identify and then assess the appropriateness of a shared versus 

dedicated satellite control system.

We suggest 45 actions that the executive branch and Congress can take 

to reduce the cost of government operations and enhance revenue 

collections for the Treasury in 15 new areas. Examples of these actions 

include rescinding unused funds, ensuring that only intended program 

participants receive benefits, improving data to identify potential 

efficiencies, conducting comprehensive analyses of program options, 

enhancing taxpayer services, and increasing tax revenue collections.

45 New Actions to Reduce 

Costs or Enhance 

Revenues Identified in 15 

Areas
 

Page 7 GAO-14-343SP 2014 Annual Report 

• Rescinding unused funds: Congress may wish to consider rescinding 

all or part of the remaining credit subsidy appropriations to the 

Advanced Technology Vehicles Manufacturing (ATVM) loan program, 

unless the Department of Energy (DOE) can demonstrate demand for 

new ATVM loans and viable applications. We reported in March 2013 

that DOE last issued a loan under this program in March 2011 and 

was not actively considering any applications for the remaining $4.2 

billion in credit subsidy appropriations under the ATVM loan program. 

Also, most applicants and manufacturers we had spoken to indicated 

that the costs of participating outweigh the benefits to their companies 

and that problems with other DOE programs have tarnished the 

ATVM loan program, which may have led to a deficit of applicants. 

Since our March 2013 report, DOE has received one application 

seeking approximately $200 million.

DOE recently stated that it has begun new outreach efforts to 

potential applicants that will increase awareness and interest in the 

program and lead to additional applications in 2014. However, DOE 

has not further demonstrated a demand for ATVM loans, such as new 

applications that meet all the program eligibility requirements and

involve amounts sufficient to justify retaining the remaining credit 

subsidy appropriations, nor has it explained how it plans to address 

challenges cited by previous applicants including a burdensome 

review process. Determining whether program funds will be used is 

important, particularly in a constrained fiscal environment, as unused 

appropriations could be rescinded or directed toward other 

government priorities.

• Ensuring only intended participants receive benefits: To ensure that 

only those in financial need are granted Department of Veterans 

Affairs’ (VA) pension benefits, Congress should consider passing 

legislation that would establish a look-back review and penalty period 

for claimants who transfer assets for less than fair market value prior 

to applying for pension benefits. According to the Congressional 

Budget Office, taking this action could reduce VA’s direct spending by 

an average of about $4 million annually. VA’s pension program is 

intended to provide economic benefits to wartime veterans with 

financial need. It is available to low-income wartime veterans who are 

age 65 and older or who are under age 65 but are permanently and 

totally disabled as a result of conditions unrelated to their military 

service. 
 

Page 8 GAO-14-343SP 2014 Annual Report 

In other means-tested programs like Medicaid, a look-back review is 

conducted to determine if the applicant transferred assets for less 

than fair market value prior to applying. Individuals who transfer 

assets for less than fair market value during the months prior to 

applying may be denied eligibility for the benefit for a period of time, 

known as the penalty period. We found that despite being a meanstested program, the VA pension program permitted claimants to 

transfer assets and reduce their net worth prior to applying for pension 

benefits.

• Improving data to identify potential efficiencies: To more fully 

understand the strengths and risks of foreclosure mitigation actions 

and help homeowners avoid preventable foreclosures, the Federal 

Housing Administration (FHA), VA, and the Department of Agriculture 

(USDA) should periodically analyze the effectiveness and long-term 

costs and benefits of their foreclosure mitigation strategies and 

actions. Taking this action could potentially save taxpayers millions of 

dollars on an annual and recurring basis.5 Specifically, agencies 

should use analysis results to re-evaluate their mitigation approaches 

and provide additional guidance to servicers to effectively target 

mitigation actions. Further, if FHA, VA, and USDA do not maintain 

data needed to consider this information, they should require 

servicers to provide the information. 

In our review of agencies’ foreclosure mitigation efforts, we found that 

FHA, VA, and USDA had not incorporated analyses of long-term costs 

into their foreclosure loss-mitigation efforts. Evaluating the costs of 

various loan modification actions would enable agencies to more 

effectively help borrowers keep their homes and protect taxpayers’ 

interests. For example, we estimated that if changes to FHA’s loss 

mitigation program reduced claims related to defaults by 1 percent, 

FHA could save about $176 million annually.

• Conducting comprehensive analyses of program options: To help 

DOD ensure that the geographic combatant commands are properly 

sized and resourced to meet their assigned missions, DOD should 

take actions to improve the transparency of the commands’ 

authorized manpower, assigned personnel, and mission- and 

 

5

Since 2009, FHA, VA, and USDA—which collectively insured or guaranteed about $248 

billion in single-family home mortgages in fiscal year 2012—have expanded their 

foreclosure mitigation efforts to help homeowners avoid preventable foreclosures.
 

Page 9 GAO-14-343SP 2014 Annual Report 

headquarters-support costs and to help meet its Africa-related 

missions at substantially reduced cost. In May 2013, we found four 

primary weaknesses in DOD’s management of combatant command 

resources that challenge the department’s ability to make informed 

decisions about command size and efficient use of resources. 

Furthermore, in September 2013, we reported that DOD could 

potentially achieve cost savings of tens of millions of dollars or more 

annually by considering options to move the location of U.S. Africa 

Command’s headquarters from overseas to the United States and that 

DOD’s decision to maintain the headquarters for the U.S. Africa 

Command in Germany was not well-supported by DOD’s analysis. 

• Enhancing online taxpayer services: To improve services to taxpayers 

and encourage greater tax law compliance, the Commissioner of the

Internal Revenue Service (IRS) should take actions designed to 

improve interactive web services provided to taxpayers. In its 2012 

online strategy document, IRS estimated that enhancing online 

services, such as providing taxpayers with the ability to access 

account information, would produce hundreds of millions of dollars 

through improved operational efficiencies. In April 2013, we reported 

that IRS does not offer dynamic account access, which is the ability 

for users to make account changes after confirming their identity 

online. 

Other federal and state taxing authorities provide a broader range of 

online services to their customers, including dynamic interactive 

account access. For example, the Social Security Administration 

allows users to start or change direct deposit benefit payments online. 

The New York and California state tax agencies provide dynamic 

account access allowing taxpayers to view tax account balances and 

recent payments, to respond to notices, and to edit addresses. Such 

advancements to IRS online services would improve service to 

taxpayers and encourage greater tax law compliance.

• Increasing tax revenue collections: We identify three actions that the 

federal government should take to increase tax revenue collections by 

hundreds of millions of dollars over a 5-year period by denying certain 

privileges or payments to individuals with delinquent federal tax debt. 

For example, Congress should consider enabling and requiring the 

Secretary of State to screen and prevent individuals who owe federal 

taxes from receiving passports. We found that in fiscal year 2008, 

passports were issued to about 16 million individuals; of these, over 1 

percent collectively owed over $5.8 billion in unpaid federal taxes as 

of September 30, 2008. According to a 2012 CBO estimate, the 
 

Page 10 GAO-14-343SP 2014 Annual Report 

federal government can save about $500 million over a 5-year period 

on the revocation or denial of passports in case of certain federal tax 

delinquencies.

The Commissioner of the IRS should explore further opportunities to 

enhance the collection of unpaid federal taxes from Medicaid 

providers. For example, IRS should seek legislation to modify existing 

law to allow for more efficient collection of outstanding tax debts from 

Medicaid providers. In July 2012, we found that a small percentage of 

Medicaid providers that had about $791 million of unpaid federal taxes 

during fiscal year 2009 received a total of about $6.6 billion in 

Medicaid reimbursements in the year. Current federal law does not 

allow the recovery of reimbursement payments to Medicaid providers 

because they are not considered federal payments. We also reported 

that IRS could have collected between $22 million and $330 million 

from Medicaid providers with unpaid taxes in three states (New York, 

Texas, and Florida) in 2009 if it had been authorized to recoup 

reimbursement payments.

Among eight other actions directed to the Commissioner of the IRS to 

enhance tax revenue collection, we recommend that the 

Commissioner conduct an analysis designed to measure the extent of 

continued offshore tax evasion and take appropriate action based on 

the analysis. As of February 2014, IRS’s four offshore voluntary 

disclosure programs, which offered incentives for taxpayers to 

disclose their offshore accounts and pay delinquent taxes, interest, 

and penalties, have resulted in more than 43,000 disclosures by 

taxpayers and over $6 billion in revenue collected. However, based on 

reviews of IRS data, in March 2013, we reported that IRS may be 

missing attempts by taxpayers to circumvent the programs, because 

we identified more than 200,000 instances where it appeared that 

taxpayers with unreported foreign accounts may have chosen not to 

participate in one of IRS’s offshore programs.
 

Page 11 GAO-14-343SP 2014 Annual Report 

In addition to the new actions identified for this report, we have continued 

to monitor the progress that executive branch agencies and Congress 

have made in addressing the issues we identified in our last three reports. 

In these reports, we identified approximately 380 actions that the 

executive branch and Congress could take to reduce, eliminate, or better 

manage fragmentation, overlap, or duplication or achieve other potential 

financial benefits.6

We evaluated progress by determining an overall assessment rating for 

each area and an individual assessment rating for each action within an 

area (see fig. 2). We found that the executive branch agencies and 

Congress have generally made progress in addressing the 162 areas we 

previously identified. In total, as of March 6, 2014, the date we completed 

our audit work, 30 of the 162 areas (19 percent) were addressed, 99 (61

percent) were partially addressed, and 25 (15 percent) were not 

addressed.7 We also found that, of the approximately 380 actions needed 

in these areas, 124 (32 percent) were addressed, 172 (44 percent) were 

partially addressed, and 74 (19 percent) were not addressed.

8

 

6

An additional 19 actions we identified in 2011 and 2012 were not assessed this year due 

to additional audit work or other information we considered, and we have categorized 

those actions as “consolidated or other.” 

7

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 addition, four areas reported in 2011 and one area reported in 

2012 were not assessed this year due to additional audit work or other information we 

considered, and we have categorized those areas as “consolidated or other.” 

8

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.

Executive Branch and 

Congress Continue to 

Make Progress in 

Addressing 

Previously Identified 

Issues

Congress and Executive 

Branch Agencies Have 

Addressed Several 

Previously Identified 

Actions
 

Page 12 GAO-14-343SP 2014 Annual Report 

Figure 2: Assessment of 2011, 2012, and 2013 Areas and Actions Needed, as of March 6, 2014

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.

Actions and areas assessed as “consolidated or other” were not assessed this year due to additional 

work or other information we considered. Additionally, we did not provide an overall assessment for 

two areas reported in 2011 and one area reported in 2012 because we added new actions to those areas 

that have not yet been assessed.

Congress and executive branch agencies have made progress toward 

addressing our identified actions, as shown in figure 3. An additional 59 

actions have been assessed as addressed over the past year. These 

addressed actions include 19 actions identified in 2011, 21 actions 

identified in 2012, and 19 actions identified in 2013.
 

Page 13 GAO-14-343SP 2014 Annual Report 

Figure 3: Progress in Addressing 2011, 2012, and 2013 Actions as of the 2013 and 2014 Annual Reports

Note: 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. Actions assessed as “consolidated or other” 

were not assessed this year due to additional work or other information we considered. Additionally, 

2013 actions were not assessed in 2013 since that was the year that the actions were identified.

The following examples illustrate the progress that has been made over 

the past year:

• Farm Program Payments: In our 2011 annual report, we stated that 

Congress could save up to $5 billion annually by reducing or 

eliminating direct payments. Direct payments are fixed annual 

payments to farmers based on a farm’s history of crop production. 

Farmers received them regardless of whether they grew crops and 

even in years of record income. The Agricultural Act of 2014 

eliminated direct payments and should save approximately $4.9 billion 
 

Page 14 GAO-14-343SP 2014 Annual Report 

annually from fiscal year 2015 through fiscal year 2023, according to 

CBO.9

• Passenger Aviation Security Fees: In our 2012 annual report, we 

presented options for adjusting the Transportation Security 

Administration’s (TSA) passenger security fee—a uniform fee on 

passengers of U.S. and foreign air carriers originating at airports in 

the United States—to offset billions of dollars in civil aviation security 

costs. The Bipartisan Budget Act of 2013, enacted December 26, 

2013, modifies the passenger security fee from its current per 

enplanement structure ($2.50 per enplanement with a maximum oneway-trip fee of $5.00) to a structure that increases the passenger 

security fee to a flat $5.60 per one-way-trip, effective July 1, 2014.10

Pursuant to the act, collections under this modified fee structure will 

contribute to deficit reduction as well as to offsetting TSA’s aviation 

security costs.11 

Specifically, the act identifies $12.6 billion in fee collections that, over 

a 10-year period beginning in fiscal year 2014 and continuing through 

fiscal year 2023, will contribute to deficit reduction.12 Fees collected 

beyond those identified for deficit reduction are available, consistent 

with existing law, to offset TSA’s aviation security costs. According to 

the House of Representatives and Senate Committees on the Budget, 

and notwithstanding amounts dedicated for deficit reduction, 

collections under the modified fee structure will offset about 43 

 

9

In February 2014, CBO estimated the reduction in spending to be about $4.5 billion 

annually from 2015 through 2023. However, according to a CBO representative, this 

amount included an assumption that automatic spending cuts, known as sequestration, 

continued indefinitely into the future. The Bipartisan Budget Act of 2013 established new 

discretionary spending limits that reduced the level of automatic spending reductions for 

2014 and 2015. Pub. L. No. 113-67, 127 Stat. 1165 (2013). Without sequestration, CBO 

estimated the elimination of direct payments would save approximately $4.9 billion 

annually from 2015 through 2023.

10See Pub. L. No. 113-67, § 601(b), 127 Stat. at 1187 (amending 49 U.S.C. § 44940(c)). 

11In addition, the first $250 million in fees collected each fiscal year are, consistent with 

existing law, to be deposited in the Aviation Security Capital Fund for use in supporting 

aviation security-related airport capital improvement projects or for other purposes 

specified in statute. See 49 U.S.C. §§ 44923(h), 44940(i). 

12See 49 U.S.C. § 44940(i) (identifying, among other things, the specific amount to be 

credited as offsetting receipts and deposited in the general fund of the Treasury each 

fiscal year, 2014 through 2023).
 

Page 15 GAO-14-343SP 2014 Annual Report 

percent of aviation security costs, compared to the approximately 30 

percent currently offset under the existing fee structure.13 

• Combat Uniforms: In our 2013 annual report, we noted that DOD 

employed a fragmented approach for acquiring combat uniforms and 

could improve efficiency, better protect servicemembers, and realize 

cost savings through increased collaboration among the military 

services. Over the past year DOD and Congress addressed all three 

actions that we identified. In September 2013, DOD developed and 

issued guidance on joint criteria that will help to ensure that future 

service-specific uniforms will provide equivalent levels of performance 

and protection. 

A provision in the National Defense Authorization Act for Fiscal Year 

2014 established as policy that the Secretary of Defense will eliminate 

the development and fielding of service-specific combat and 

camouflage utility uniforms in order to adopt and field common 

uniforms for specific environments to be used by all members of the 

armed forces. Subject to certain exceptions, the provision also 

prohibits the military departments from adopting new pattern designs 

or uniform fabrics unless they will be adopted by all services or the 

uniform is already in use by another service.14 In addition, DOD must 

issue implementing guidance requiring the military departments to, 

among other things, ensure that new uniforms meet commanders of 

combatant command’s geographic and operational requirements and 

continually work together to assess and develop new uniform 

technologies to improve warfighter survivability.15

We estimate that executive branch and congressional efforts to address 

these and other actions from fiscal year 2011 through fiscal year 2013 

have resulted in over $10 billion in realized cost savings to date, and 

projections of these efforts have estimated that billions of dollars more in 

 

13In addition to the passenger security fee, TSA also currently imposes a fee on air 

carriers—the Aviation Security Infrastructure Fee—to further offset the costs of aviation 

security. See 49 U.S.C. § 44940(a)(2). Pursuant to the Bipartisan Budget Act, TSA’s 

authority to collect this fee will expire effective October 1, 2014. See Pub. L. No. 113-67, § 

601(a), 127 Stat. at 1187. 

14See Pub. L. No. 113-66, § 352(a), (b) (2013).

15See Pub. L. No. 113-66, § 352(f).
 

Page 16 GAO-14-343SP 2014 Annual Report 

savings will accrue over the next ten years.16 Table 1 highlights 

addressed actions that result in or lead to cost savings or enhanced 

revenues. In addition to these addressed actions, implementing our other 

suggested actions could result in tens of billions of dollars more in cost 

savings and enhanced revenues.

Table 1: Selected Addressed Actions with Associated Cost Savings and Enhanced Revenues

Annual report Addressed actions

2011 Domestic Ethanol Production (Area 13): Congress allowed the Volumetric Ethanol Excise Tax Credit to 

expire at the end of 2011, which eliminated duplicative federal efforts directed at increasing domestic ethanol 

production and reduced revenue losses by $4.5 billion in fiscal year 2012 and $6.1 billion in fiscal year 2013. 

2011 Farm Program Payments (Area 35): The Agricultural Act of 2014 eliminated direct payments to farmers and 

should save approximately $4.9 billion annually from fiscal year 2015 through fiscal year 2023, according to 

CBO. 

2011 Baggage Screening Systems (Area 78): The Transportation Security Administration estimates that the agency 

saved a cumulative $104.5 million in personnel costs from fiscal years 2011 through 2013 from its efforts to 

replace or modify older checked baggage screening systems with more efficient in-line systems, as GAO 

suggested.

2012 Air Force Food Service (Area 33): In 2011, the Air Force issued a memorandum to the Major Commands 

directing a review of existing food service contracts. As a result, the Air Force reviewed and renegotiated the 

food service contracts at eight installations for a total savings of over $2.5 million per year. In addition, 

according to Air Force officials, all food service contracts were validated again during fiscal year 2012 for 

additional savings of over $2.2 million per year. Air Force officials said that the Air Force will review contracts 

annually for areas where costs can be reduced. 

2012 Overseas Defense Posture (Area 37): The United States Forces Korea conducted a series of consultations 

with the military services to evaluate the costs and benefits associated with tour normalization, as GAO 

suggested, and decided not to move forward with the full tour normalization initiative because it was not 

affordable. DOD’s decision to not move forward with this initiative resulted in a cost avoidance of $3.1 billion

from fiscal years 2012 through 2016. 

2012 Auto Recovery Office (Area 39): The Department of Labor did not systematically track, measure, or assess 

the Auto Recovery Office’s assistance to auto communities, and the office is going through an orderly winddown in fiscal year 2014, thereby saving up to $1.2 million per year.

 

16Our estimate of about $10.7 billion in realized savings to date includes savings from the 

Domestic Ethanol Production, Baggage Screening Systems, and Air Force Food Service 

areas. It does not include projected savings, revenue enhancements, or cost avoidances 

from the Farm Program Payments, Overseas Defense Posture, Auto Recovery Office, or 

Passenger Aviation Security Fees areas because those financial benefits have not yet 

been fully realized. 
 

Page 17 GAO-14-343SP 2014 Annual Report 

Annual report Addressed actions

2012 Passenger Aviation Security Fees (Area 48): The Bipartisan Budget Act of 2013 modifies the passenger 

security fee from its current per enplanement structure ($2.50 per enplanement with a maximum one-way-trip 

fee of $5.00) to a structure that increases the passenger security fee to a flat $5.60 per one-way-trip, effective 

July 1, 2014.a Pursuant to the act, collections under this modified fee structure will contribute to deficit reduction 

as well as to offsetting TSA’s aviation security costs.b Specifically, the act identifies $12.6 billion in fee 

collections that, over a 10-year period beginning in fiscal year 2014 and continuing through fiscal year 2023, will 

contribute to deficit reduction.c Fees collected beyond those identified for deficit reduction are available, 

consistent with existing law, to offset TSA’s aviation security costs. According to the House of Representatives 

and Senate Committees on the Budget, and notwithstanding amounts dedicated for deficit reduction, collections 

under the modified fee structure will offset about 43 percent of aviation security costs, compared to the 

approximate 30 percent currently offset under the existing fee structure.d

Source: GAO.

 

a

See Pub. L. No. 113-67, § 601(b), 127 Stat. at 1187 (2013), amending 49 U.S.C. § 44940(c). 

b

In addition, the first $250 million in fees collected each fiscal year are, consistent with existing law, to 

be deposited in the Aviation Security Capital Fund for use in supporting aviation security-related 

airport capital improvement projects or for other purposes specified in statute. See 49 U.S.C. §§ 

44923(h), 44940(i).

c

See 49 U.S.C. § 44940(i) (identifying, among other things, the specific amount to be credited as 

offsetting receipts and deposited in the general fund of the Treasury each fiscal year, 2014 through 

2023).

d

 

In addition to the passenger security fee, TSA also currently imposes a fee on air carriers—the 

Aviation Security Infrastructure Fee—to further offset the costs of aviation security. See 49 U.S.C. § 

44940(a)(2). Pursuant to the Bipartisan Budget Act, TSA’s authority to collect this fee will expire 

effective October 1, 2014. See Pub. L. No. 113-67, § 601(a), 127 Stat. at 1187 (2013). 

The 188 areas and approximately 440 actions that we identified from 

2011 to 2014 span a wide range of activities and programs and touch 

virtually all major federal departments and agencies. Specifically, the 

reports collectively identify opportunities to reduce, eliminate, or better 

manage fragmentation, overlap, and duplication or achieve other financial 

benefits within all 15 cabinet-level executive departments and at least 17 

other federal entities. As figure 4 shows, many of our actions are directed 

to those departments and agencies that make up a majority of federal 

obligations. For example, we have directed 108 actions to DOD, 49 

actions to HHS, and 65 actions to Treasury, which, combined, 

represented 53 percent of federal obligations in fiscal year 2012.

Identified Actions Span the 

Federal Government
 

Page 18 GAO-14-343SP 2014 Annual Report 

Figure 4: Fiscal Year 2012 Obligations and Number of Actions by Agency

Notes: Individual actions needed are counted multiple times, when they are directed to more than one 

federal department or agency. Percentages are rounded to the nearest whole percent for items 

greater than 1 percent. 

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 2012 obligations includes interest on the national debt.

c

The judicial branch represented 0.2 percent of federal obligations in fiscal year 2012. 

d

Actions have also been directed to agencies and other federal entities that each represented less 

than 0.2 percent of federal obligations in fiscal year 2012. 

To help maintain attention on these issues, in 2013, we released GAO’s 

Action Tracker, a publicly accessible, online website of the areas and 

actions presented in this series of annual reports. GAO’s Action Tracker

includes progress updates and assessments of the actions we have 

suggested for Congress and executive branch agencies. Going forward, 
 

Page 19 GAO-14-343SP 2014 Annual Report 

GAO’s Action Tracker will continue to report progress on the 188 areas 

and approximately 440 suggested actions presented in our 2011, 2012, 

2013, and 2014 annual reports. We plan to 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.

Although Congress and executive branch agencies have made notable 

progress toward addressing the actions we have identified, further steps 

are needed to fully address the remaining actions, as shown in table 2. 

More specifically, 64 percent of actions directed to Congress and 63 

percent of actions directed to executive branch agencies identified in 

2011, 2012, and 2013 remain partially addressed or not addressed.

Table 2: Status of 2011, 2012, and 2013 Actions Directed to Congress and the Executive Branch, as of March 6, 2014 

Status 

Congressa Executive branch

Number of actions

b

Percentage Number of actions Percentage

Addressed 18 27% 106 33% 

Partially addressed 11 17 161 50 

Not addressed 31 47 43 13 

Consolidated or other 6 9 13 4 

Source: GAO. 

Note: 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. Actions assessed as “consolidated or other” 

were not assessed this year due to additional work or other information we considered.

a

Congress took steps that fully addressed one action and partially addressed another action directed 

to executive branch agencies.

b

Executive branch agencies took steps that addressed three actions directed to Congress.

Sustaining momentum and making significant progress on our suggested 

actions for reducing, eliminating, or better managing fragmentation, 

overlap, or duplication or achieving other potential financial benefits 

cannot occur without demonstrated commitment by executive branch 

leaders and continued oversight by Congress. A number of the issues 

Sustained Leadership 

Attention Is Critical to 

Advancing and 

Maintaining Progress 

on Suggested Actions
 

Page 20 GAO-14-343SP 2014 Annual Report 

that we have identified are complex, and implementing many of the 

actions will take time and sustained leadership. As our work has shown, 

committed leadership is needed to overcome the many barriers to 

working across agency boundaries, such as agencies’ concerns about 

protecting jurisdiction over missions and control over resources or 

incompatible procedures, processes, data, and computer systems.17

However, securing the leadership support necessary to address issues 

that span multiple agencies can be particularly challenging and can take 

time. For example, 37 percent of our prior fragmentation, overlap, and 

duplication actions directed to one agency are now addressed. In 

contrast, 26 percent of prior fragmentation, overlap, and duplication 

actions directed to more than one agency are now fully addressed.

Sustained leadership commitment at executive branch agencies and 

within Congress has contributed to meaningful progress in some areas. 

For example, DOD leadership attention has led to significant progress 

toward addressing several suggested actions, including integrating 

department-wide intelligence, surveillance, and reconnaissance 

investment decisions to avoid unnecessary redundancies and realigning 

and establishing a new agency to oversee and begin consolidating 

common military health care functions. In particular, in 2011 we reported 

that the responsibilities and authorities for DOD’s military health system 

were distributed among several organizations within DOD with no central 

command authority or single entity accountable for reducing costs and 

achieving efficiencies. In part in response to our recommendation that 

DOD assess alternatives for restructuring the military health care 

governance structure, DOD assessed alternatives and, in October 2013, 

established the new Defense Health Agency, which it anticipates will 

achieve greater system integration and increase accountability for health 

outcomes and costs.

Without sustained leadership attention, the executive branch and 

Congress may miss opportunities to improve the efficiency and 

effectiveness of government programs and activities at a time when 

 

17In addition, 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 and work to address these actions. See 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 Managing for Results: Key Considerations for Implementing Interagency Collaborative 

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

Page 21 GAO-14-343SP 2014 Annual Report 

federal resources are constrained. For example, in March 2012, we 

recommended that HHS cancel the Medicare Advantage (MA) Quality 

Bonus Payment Demonstration given that most of the bonuses would be 

paid to plans with average performance and that the demonstration’s 

design precludes a credible evaluation of its effectiveness.18 However, 

because all MA contracts for the demonstration’s last year, 2014, are now 

in place, canceling the demonstration is no longer possible. By continuing 

the demonstration, HHS missed an opportunity to achieve significant cost 

savings in 2014—approximately $2 billion, based on GAO’s analysis of 

estimates by actuaries at the Centers for Medicare & Medicaid Services

(CMS). 

Although the executive branch agencies and Congress have made some 

progress in addressing some suggested actions, many other actions 

require leadership attention to ensure that they are fully addressed. 

Without increased or renewed leadership focus, agencies may miss 

opportunities to improve the efficiency and effectiveness of their programs 

and save taxpayers’ dollars. The following are examples of areas where 

additional leadership attention could potentially promote progress:

• Information Technology: Several significant actions remain to be 

addressed in the area of information technology, many of which 

require agencies to work together to improve systems. For example, 

progress by DOD and VA to put in place key management capabilities 

to jointly improve their electronic health records systems has slowed 

over the past year, and the departments have continued to pursue 

separate modernization efforts. In February 2014, we reported that 

DOD and VA abandoned their plans to develop a single, integrated 

electronic health record system for both departments and based their 

decision to do so on the assertion that pursuing separate systems 

would be less expensive and faster. However, we found that they had 

not developed cost and schedule analyses that compared the 

departments’ separate efforts, as well as an effort to make the two 

systems interoperable, with estimates for the original single system 

approach to support this assertion. Through continued duplication of 

these efforts, the departments may be incurring higher-than-

 

18We reported that the demonstration’s design precluded a credible evaluation of its 

effectiveness because it lacked a 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.
 

Page 22 GAO-14-343SP 2014 Annual Report 

necessary system development and operation costs and missing 

opportunities to support higher-quality health care for servicemembers 

and veterans.

• Medicaid Program: Both Congress and the administration have 

demonstrated commitment to making the fiscal and program integrity

of Medicaid a priority, but sustained oversight is necessary to fully 

address many of the actions we have identified. In 2013, CMS took 

steps to reduce duplication in reviewing and auditing states’ Medicaid 

claims, resulting in cost savings for the Medicaid Integrity Program 

and more efficiently using resources. 

However, several of our previously identified actions relating to 

Medicaid financing have not been fully addressed. In 2011, we 

recommended that CMS take steps to improve oversight of certain 

high-risk Medicaid supplemental payments—known as nondisproportionate-share-hospital, or non-DSH, payments—that are 

above and beyond regular Medicaid payments states make to 

providers, and are often made to hospitals and other providers who, 

for example, serve high-cost Medicaid beneficiaries. These payments 

have increased significantly in recent years and, unlike other 

supplemental payments, non-DSH 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. 

CMS had stated that it had no plans to impose reporting and auditing 

requirements that we recommended on states because, in its view, 

legislation had been crucial to implementing similar requirements for 

other payments. Therefore, in 2012, we suggested that Congress 

require CMS to improve state reporting, clarify permissible methods of

calculating, and require states to submit annual audits of these 

supplemental payments. We noted that doing so could save hundreds 

of millions, or billions, of dollars. CMS took some initial steps to 

improve guidance to states, but further efforts by CMS and Congress 

could improve oversight of these payments and potentially result in 

financial savings to Medicaid.

• DOD Joint Basing: In our 2013 annual report, we noted that by 

adopting a more rigorous and comprehensive department-wide 

approach to managing the implementation of joint basing, DOD may 

be able to achieve millions of dollars of cost savings and efficiences. 

We also found that DOD leadership had not provided clear direction to 

joint basing officials on achieving the cost savings and efficiency goals 

of joint basing. Therefore, we recommended that DOD develop and 
 

Page 23 GAO-14-343SP 2014 Annual Report 

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 for cost savings 

and efficiencies. 

DOD disagreed with this recommendation and stated that senior DOD 

leaders had decided against savings targets because of the 

complexity involved in establishing the joint bases. DOD also stated 

that no action is required because the joint bases were increasingly 

meeting installation service standards with resources below planned 

levels. However, because DOD does not have a method to determine 

if these reductions in installation support costs are a result of joint 

basing initiatives rather than due to department-wide budget cuts, it is 

not clear to what extent DOD has saved money specifically from joint 

basing initiatives. As of March 6, 2014, DOD had taken no action to 

implement this recommendation. Without a plan that outlines 

measurable goals, DOD will continue to miss opportunities to achieve 

cost savings associated with joint basing.

• Environmental Labs: In 2012, we reported that the Environmental 

Protection Agency’s (EPA) 37 laboratories operated under the 

direction of 15 different senior officials using 15 different 

organizational and management structures. We attributed EPA’s 

uncoordinated approach in part to the lack of a top science official 

with the responsibility or authority to coordinate, oversee, and make 

management decisions regarding major scientific activities—including 

the work of all 37 laboratories—throughout the agency and 

recommended that EPA establish a top-level science official with such 

authority. As of March 6, 2014, EPA had taken steps toward 

establishing a top-level science official with some responsibility to 

coordinate and oversee the laboratories, but it had not given this 

official the authority to make management decisions regarding 

scientific activities for the laboratories. Without doing so, the 

laboratories’ activities will likely remain fragmented and largely 

uncoordinated.

By providing sustained leadership attention, executive branch agencies 

and Congress could improve the efficiency and effectiveness of federal 

programs. As we have previously reported, addressing the issues 

identified in our annual reports could lead to tens of billions of dollars of 

savings annually. Table 3 highlights selected opportunities that could 

result in cost savings or enhanced revenues.
 

Page 24 GAO-14-343SP 2014 Annual Report 

Table 3: Selected Areas with Associated Cost-Savings and Revenue-Enhancement Opportunities in 2011 – 2013 Annual 

Reports

Annual report Areas identified 

2011 Enterprise Architecture (Area 14): Well-defined and implemented enterprise architectures in federal agencies 

can lead to consolidation and reuse of shared services and elimination of antiquated and redundant mission 

operations, which can result in significant cost savings. For example, the Department of the Interior 

demonstrated that it had used enterprise architecture to modernize agency information technology operations 

and avoid costs through enterprise software license agreements and hardware procurement consolidation, 

resulting in financial savings of at least $80 million. In addition, Health and Human Services will achieve 

savings and cost avoidance of over $150 million between fiscal years 2011 to 2015 by leveraging its enterprise 

architecture to improve its telecommunications infrastructure. 

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

government efficiency and achieve cost savings of up to $3 billion 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 additional revenue over 10 years. 

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. 

2012 Medicare and Medicaid Fraud Detection Systems (Area 46): The Centers for Medicare & Medicaid Services 

need to ensure widespread use of its fraud detection systems to better position itself to determine and measure 

progress toward achieving the $21 billion in financial benefits that the agency projected as a result of 

implementing these systems. 

2012 Immigration Inspection Fee (Area 49): The air and sea passenger immigration inspection user fee should be 

reviewed and adjusted to fully recover the cost of the air and sea 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; In 2012 this could have resulted 

in a reduction of about $175 million in appropriated funds used for inspection services. 

2012 Domestic Disaster Assistance (Area 51): The Federal Emergency Management Agency (FEMA) 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. For fiscal years 2004 through 2011, had FEMA adjusted the indicator for 

increases in inflation or personal income since 1986, fewer jurisdictions would have met the eligibility criteria for 

federal assistance and federal costs could have been as much as $3.59 billion lower.

2013 Agricultural Quarantine Inspection Fees (Area 18): 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. 

2013 Crop Insurance (Area 19): 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 high-income farmers participating in the program, or some combination of 

limiting and reducing these subsidies.

2013 Checked Baggage Screening (Area 28): 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 of up to $300 million by 2030 

and be positioned to install a greater number of optimal baggage screening systems than it currently anticipates. 
 

Page 25 GAO-14-343SP 2014 Annual Report 

Annual report Areas identified 

2013 Tobacco Taxes (Area 31): 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. 

Source: GAO.

Addressing fragmentation, overlap, and duplication within the federal 

government is challenging. Even with sustained leadership, these are 

difficult issues to address because they may require agencies and 

Congress to re-examine within and across various mission areas the 

fundamental structure, operation, funding, and performance of a number 

of long-standing federal programs or activities with entrenched 

constituencies. As we have previously reported, these challenges are 

compounded by a lack of reliable budget and performance information 

and a comprehensive list of federal programs.

In particular, we have found that federal budget information is often not 

available or sufficiently reliable to identify the level of funding provided to 

programs or activities, making it difficult to assess and address potential 

duplication. In our prior annual reports, we have reported instances where 

agencies could not isolate budgetary information for some programs 

because the data were aggregated at higher levels. For example, in 2012, 

we reported that agencies were not able to provide complete and reliable 

funding information on many of the 94 nonfederal sector green building 

initiatives; according to agency officials, many of the initiatives are part of 

broader programs and, as such, the agencies do not track green building 

funds separately from other activities. 

Without knowing the full cost of implementing programs, it is difficult for 

executive branch agencies or Congress to gauge the magnitude of the 

federal commitment to a particular area of activity or the extent to which 

associated federal programs are effectively and efficiently achieving

shared goals. Moreover, the lack of reliable, detailed budget information 

makes it difficult to estimate the cost savings that could be achieved 

should Congress or agencies take certain actions to address identified 

fragmentation, overlap, and duplication. Absent this information, 

Congress and agencies cannot make fully informed decisions on how 

federal resources should be allocated and the potential budget trade-offs.

In addition, we have called attention to the need for improved and regular 

performance information. The regular collection and review of 

Better Data and a 

Focus on Outcomes 

Are Essential to 

Improving Efficiency 

and Effectiveness
 

Page 26 GAO-14-343SP 2014 Annual Report 

performance information, both within and among federal agencies, could 

also help executive branch agencies and Congress determine whether 

the return on federal investment is adequate and make informed 

decisions about future resource allocations. However, as we previously 

noted, our annual reports on fragmentation, overlap, and duplication 

highlight several instances in which executive branch agencies do not 

collect necessary performance data. 

For example, in our 2013 annual report, we reported that VA and DOD 

did not require that all of their health care collaboration sites—locations 

where the departments share health resources—develop and use 

performance measures to assess their effectiveness and efficiency,

including any cost savings achieved from their collaborative efforts. We 

noted that without comprehensive measures, the agencies 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. 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 help ensure that their performance 

information will be both useful and used by decision makers, agencies 

must consider the differing information needs of various users—including 

those in Congress.

We have also noted that the lack of a comprehensive list, or inventory, of 

all federal programs makes it more difficult for executive branch agencies 

and Congress to determine whether proposed or existing programs are 

duplicative. The GPRA Modernization Act of 2010 (GPRAMA) requires 

the Office of Management and Budget (OMB) to compile and make 

publicly available a comprehensive list of all federal programs identified 

by agencies, and to include the purposes of each program, how it 

contributes to the agency’s mission, and recent funding information.19

OMB began implementing this provision by directing 24 large federal 

agencies to develop and publish inventories of their programs in May 

2013. 

 

19Pub. L. No. 111-352, 124 Stat. 3866 (2011). The acronym "GPRA" in the act's title refers 

to the Government Performance and Results Act of 1993, Pub. L. No. 103-62, 107 Stat. 

285 (1993). 
 

Page 27 GAO-14-343SP 2014 Annual Report 

Our preliminary review of these initial inventories identified concerns 

about the usefulness of the information being developed and the extent to 

which it might be able to assist executive branch and congressional 

efforts to identify and address fragmentation, overlap, and duplication. 

OMB’s guidance for developing the inventories provided agencies with 

flexibility to define their programs by such factors as outcomes, 

customers, products/services, organizational structure, and budget 

structure. As a result, agencies took various approaches to define their 

programs. Many used their budget structure while others used different 

approaches, such as identifying programs by related outcomes or 

customer focus. The variation in definitions across agencies limits 

comparability among similar programs. 

OMB also identified 12 different program types (e.g., block grants, 

regulatory, credit) for agencies to assign to their programs to enable 

sorting in the future; however, the list of program types does not include 

tax expenditures, which represent a substantial federal commitment.20 In 

addition, OMB does not yet have definitive plans on when this effort will 

be expanded beyond the current 24 agencies to cover all other agencies 

and programs. We plan to further explore these issues and report later 

this spring on potential ways that the federal program inventory might be 

improved going forward.

Despite these challenges, effective implementation of the framework 

originally put into place by GPRA and significantly enhanced by GPRAMA 

could help clarify desired outcomes, address program performance 

spanning multiple organizations, and facilitate future actions to reduce, 

eliminate, or better manage fragmentation, overlap, and duplication. In 

particular, GPRAMA establishes a framework aimed at taking a more 

crosscutting and integrated approach to focusing on results and 

improving government performance. 

 

20Tax expenditures are reductions in a taxpayer’s tax liability that are the result of special 

exemptions and exclusions from taxation, deductions, credits, deferrals of tax liability, or 

preferential tax rates. If the Department of the Treasury estimates are summed, an 

estimated $1 trillion in revenue was forgone from the 169 tax expenditures reported for 

fiscal year 2012, nearly the same as discretionary spending that year. Since 1994, we 

have recommended greater scrutiny of tax expenditures, as periodic reviews could help 

determine how well specific tax expenditures work to achieve their goals and how their 

benefits and costs compare to those of spending programs with similar goals. For more 

information, see our key issues page on tax expenditures at 

http://www.gao.gov/key_issues/tax_expenditures. 
 

Page 28 GAO-14-343SP 2014 Annual Report 

As we have previously reported, many of the critical outcomes our nation 

seeks to achieve require the contribution of more than one federal 

agency, level of government, or organization. Moreover, as our annual 

reports on fragmentation, overlap, and duplication have shown, in many 

cases a range of federal programs and activities—such as grants, 

regulations, and tax expenditures—spanning multiple agencies contribute 

to an outcome. Against this backdrop of complexity, executive branch 

agencies and Congress need to be able to review and compare the 

effectiveness of various strategies used to achieve outcomes, in terms of 

both implementation and impact.

In one example of how GPRAMA could help facilitate a more crosscutting 

approach focused on results, the act 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. In March 2014, OMB released an 

updated list of cross-agency priority goals and plans to track progress in 

achieving these goals on a quarterly basis on Performance.gov.21 The 

crosscutting approach required by the act will provide a much needed 

basis for more fully integrating a wide array of federal activities as well as 

a cohesive perspective on the long-term goals of the federal government 

that is focused on priority policy areas. It could also be a valuable tool for

re-examining existing programs government-wide and for considering 

proposals for new programs.

In addition, OMB’s 2013 guidance implementing GPRAMA directs 

agencies, beginning in 2014, to conduct annual reviews of progress

towards strategic objectives—the outcomes or impacts the agency is 

intending to achieve.

22

 

21The cross-agency priority goals address the following areas: (1) cybersecurity; (2) 

climate change; (3) insider threat and security clearance; (4) job-creating investment; (5) 

infrastructure permitting modernization; (6) science, technology, engineering, and 

mathematics education; (7) servicemembers and veterans mental health; (8) customer 

service; (9) smarter information technology delivery; (10) strategic sourcing; (11) shared 

services; (12) benchmark and improve mission-support operations; (13) open data; (14) 

lab-to-market; and (15) people and culture. 

Agency leaders are responsible for assessing 

progress on each strategic objective established in the agency’s strategic 

plan. Effective implementation could help identify and address 

fragmentation, overlap, and duplication issues because as part of the 

22OMB, Circular No. A-11, Performance Plans, Performance Reviews, and Annual 

Program Performance Reports (July 2013).
 

Page 29 GAO-14-343SP 2014 Annual Report 

strategic reviews, agencies are to identify the various organizations, 

programs, regulations, tax expenditures, policies, and other activities that 

contribute to each objective both within and outside the agency. 

Where progress in achieving an objective is lagging, the reviews are 

intended to identify strategies for improvement, such as strengthening 

collaboration to better address crosscutting challenges. If successfully 

implemented in a way that is open, inclusive, and transparent—to 

Congress, delivery partners, and a full range of stakeholders—this 

approach could help decision makers assess the relative contributions of 

various programs that contribute to a given objective. Successful strategic 

reviews could also help decision makers identify and assess the interplay 

of public policy tools that are being used, to ensure that those tools are 

effective and mutually reinforcing, and results are being efficiently 

achieved.

Finally, we are developing a framework to help executive branch 

agencies and Congress work through issues of fragmentation, overlap, 

and duplication. The framework is intended to provide federal leaders a 

roadmap to help them identify and address fragmentation, overlap, and 

duplication among existing or proposed programs and assess possible 

solutions. For example, the framework will outline the types of information 

needed and present a range of policy options available to address 

identified fragmentation, overlap, and duplication. We plan to issue the 

framework later this year.

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 30 GAO-14-343SP Abbreviations

Abbreviations 

AFRICOM U.S. Africa Command

AFSCN Air Force Satellite Control Network

AIDS acquired immunodeficiency syndrome

AMC Army Materiel Command

ATVM Advanced Technology Vehicles Manufacturing

AWPS Army Workload and Performance System

CAA Combating Autism Act of 2006

CAP Compliance Assurance Process

CDC Centers for Disease Control and Prevention

CIO chief information officer

CMS Centers for Medicare & Medicaid Services

CBO Congressional Budget Office

CPC Countries of Particular Concern

CPO Cash Product Office

DHA Defense Health Agency

DHS Department of Homeland Security

DI Disability Insurance

DOD Department of Defense

DOE Department of Energy

DOJ Department of Justice

DOL Department of Labor 

DPMO Defense Prisoner of War/Missing Personnel Office

DSH disproportionate-share-hospital

EISA Energy Independence and Security Act

EPA Environmental Protection Agency

FAR Federal Acquisition Regulation

FECA Federal Employees’ Compensation Act

FEMA Federal Emergency Management Agency

FHA Federal Housing Administration

GPRA Government Performance and Results Act of 1993

GPRAMA GPRA Modernization Act of 2010

GSA General Services Administration 

HHS Department of Health and Human Services

HIV human immunodeficiency virus

HRSA Health Resources and Services Administration

HUD Department of Housing and Urban Development

IACC Interagency Autism Coordinating Committee

IRS Internal Revenue Service

IT information technology

JPAC Joint Prisoner of War/Missing in Action Accounting Command

JPME Joint Professional Military Education

LMP Logistics Modernization Program

MA Medicare Advantage

MAI Minority AIDS Initiative

NDNH National Directory of New Hires

NIH National Institutes of Health

NSF National Science Foundation

OARC Office of Autism Research Coordination
 

Page 31 GAO-14-343SP Abbreviations

ODNI Office of the Director of National Intelligence

OHAIDP Office of HIV/AIDS and Infectious Disease Policy

OMB Office of Management and Budget

OPM Office of Personnel Management

PACOM U.S. Pacific Command

POW/MIA Prisoner of War/Missing in Action

QW quarterly wage

REO real estate-owned

RHS Rural Housing Service 

SSA Social Security Administration

SMAIF Secretary’s MAI Fund

TSA Transportation Security Administration

UI Unemployment Insurance

USAID U.S. Agency for International Development

USCIRF United States Commission for International Religious Freedom

USDA Department of Agriculture

VA Department of Veterans Affairs
 

Page 32 GAO-14-343SP Report at a Glance

Report at a Glance

Section I of this report presents 11 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 

Defense 1. Army Workforce Planning: To address potential overlap between two Army information systems 

that support workforce planning for weapon system maintenance, manufacturing, and other 

industrial operations, the Army should increase leadership attention to the issue and establish a 

fully developed and documented approach for completing a timely assessment of unnecessary 

overlap, which could lead to millions of dollars in annual savings.

36

2. Contracting for Defense Health Care Professionals: The Department of Defense should 

develop a consolidated agency-wide strategy to contract for health care professionals to reduce 

fragmentation and achieve greater efficiencies.

41

3. Defense Satellite Control Operations: Increased use of shared satellite control networks and 

leading practices within the Department of Defense could reduce fragmentation and potential 

duplication associated with dedicated systems, resulting in millions of dollars in savings annually.

45

4. Defense Studies and Analysis Research: To address fragmentation in the processes used 

across the department to request studies and analysis research and limit the potential for overlap 

and duplication in research activities, the Department of Defense should establish a mechanism 

that requires the military services and other departmental offices to formally coordinate their annual 

research requests.

52

5. POW/MIA Mission: The Department of Defense should minimize overlapping and duplicative 

efforts by examining options to reduce fragmentation and clarify guidance on roles and 

responsibilities among the eight organizations that account for missing persons and improve the 

effectiveness of the mission.

60

Health 6. Federal Autism Research: Because much of the $1.2 billion that federal agencies spent on 

autism research from fiscal years 2008 through 2012 had the potential to be duplicative, the 

Interagency Autism Coordinating Committee and federal agencies should improve coordination 

and monitoring of autism research to help avoid unnecessary duplication.

68

7. Minority AIDS Initiative: Consolidating the fragmented funding of the Department of Health and 

Human Services’ Minority AIDS Initiative into core HIV/AIDS funding would likely reduce grantees’ 

administrative burden and help the agency more efficiently and effectively provide services to 

minority populations who are disproportionally affected by HIV/AIDS, with the approximately $3 

billion used for this purpose. In addition to fragmentation, we found that the services provided by 

Minority AIDS Initiative grantees overlapped with those provided by core HIV/AIDS grantees and 

were provided to similar populations; this overlap increases the administrative costs associated 

with participating in the programs.

75

Income security 8. Disability and Unemployment Benefits: Congress should consider passing legislation to prevent 

individuals from collecting both full Disability Insurance benefits and Unemployment Insurance 

benefits that cover the same period, which could save $1.2 billion over 10 years in the Social 

Security Disability Insurance program according to the Congressional Budget Office.

81

9. Federal Employees’ Compensation and Unemployment Benefits: Changes to enhance the 

sharing of compensation and wage information between state and federal agencies could improve 

the Department of Labor’s ability to identify potentially improper payments, including 

inappropriately overlapping payments from the Federal Employees’ Compensation Act program 

and the Unemployment Insurance program administered by the states.

84

Information 

technology

10. Interoperable Radio Communications Systems: Better collaboration among agencies that rely 

on radio communications solutions for mission-critical operations would help to address 

fragmentation in their approach to improving the interoperability of radio communications systems 

and has the potential to achieve savings.

89
 

Page 33 GAO-14-343SP Report at a Glance

Section II of this report summarizes 15 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 

Defense 12. Combatant Command Headquarters Costs: The Department of Defense could potentially 

achieve tens of millions or more in cost savings annually if it (1) more systematically evaluates 

the sizing and resourcing of its combatant commands and (2) conducts a more comprehensive 

analysis of options for the location of U.S. Africa Command’s headquarters.

100

Energy 13. Advanced Technology Vehicles Manufacturing Loan Program: Unless the Department of 

Energy can demonstrate demand for new Advanced Technology Vehicles Manufacturing loans 

and viable applications, Congress may wish to consider rescinding all or part of the remaining 

$4.2 billion in credit subsidy appropriations.

108

General 

government

14. Coin Inventory Management: The Federal Reserve should develop a process to assess factors 

influencing coin management costs and identify practices that could potentially lead to millions of 

dollars in revenue enhancement.

112

15. Collection of Unpaid Federal Taxes: The federal government can increase tax revenue 

collections by hundreds of millions of dollars over a 5-year time period by identifying and taking 

actions to limit issuance of passports to applicants, levy payments to Medicaid providers, or 

identify security-clearance applicants with unpaid federal taxes. 

115

16. Federal Real Property Ownership and Leasing: The General Services Administration could 

potentially achieve millions of dollars in savings by using capital-planning best practices to 

create a long-term strategy for targeted ownership investments to replace some high-value 

leases.

122

17. Online Taxpayer Services: The Internal Revenue Service could potentially realize hundreds of 

millions of dollars in cost savings and increased revenues by enhancing its online services, 

which would improve service to taxpayers and encourage greater tax law compliance.

128

18. Real Estate-Owned Properties: Improvements to the Department of Housing and Urban 

Development’s Federal Housing Administration’s disposition and oversight practices for 

foreclosed properties could produce increased sales proceeds and savings from maintenance 

and other expenses from holding properties totaling hundreds of millions of dollars per year.

132

19. Reverse Auctions in Government Contracting Including Commercial Items: Due to 

increasing government use of reverse auctions—with over $1 billion awarded in contracts in 

fiscal year 2012—additional guidance may help maximize opportunities to increase competition 

and improve the accuracy of estimated cost savings.

139

20. Tax Policies and Enforcement: The Internal Revenue Service can realize cost savings and 

increase revenue by, among other things, identifying continued offshore tax evasion and 

evaluating whether the agency’s streamlined corporate audit process is meeting its goals.

143

Health 21. Medicaid Demonstration Waivers: Federal spending on Medicaid demonstrations could be 

reduced by billions of dollars if the Department of Health and Human Services were required to 

improve the process for reviewing, approving, and making transparent the basis for spending 

limits approved for Medicaid demonstrations. GAO’s work between 2002 and 2013 has shown 

that HHS approved several demonstrations without ensuring that they would be budget neutral 

to the federal government.

149

Income security 22. Disability Insurance: The Social Security Administration could prevent significant potential cash 

benefit overpayments in the Disability Insurance program by obtaining more-timely earnings data 

to identify beneficiaries’ work activity that is beyond program limits and suspend benefits 

154

International 

affairs 

11. International Religious Freedom: To promote international religious freedom more effectively, the 

Department of State and the U.S. Commission on International Religious Freedom should define 

how they are to interact in their efforts; the lack of defined roles has at times created tensions with 

foreign government officials.

95
 

Page 34 GAO-14-343SP Report at a Glance

appropriately.

23. Veterans’ and Survivors’ Benefits: The Department of Veterans Affairs’ direct spending could 

be reduced—by an average of about $4 million annually, according to the Congressional Budget 

Office—if new statutory provisions were enacted, namely, a look-back review and penalty period 

for claimants who transfer assets for less than fair market value prior to applying for pension 

benefits that are available to low-income wartime veterans who are at least 65 years old or have 

disabilities unrelated to their military service. This action would help to ensure that only those in 

financial need receive benefits and make the program more consistent with other federal 

programs for low-income individuals.

159

Information 

technology 

24. Information Technology Investment Portfolio Management: The Office of Management and 

Budget and multiple agencies could help the federal government realize billions of dollars in 

savings by taking steps to better implement PortfolioStat, a process to help agencies manage 

their information technology investments.

163

Social services 25. Better Data to Mitigate Foreclosures: The Department of Housing and Urban Development’s 

Federal Housing Administration and the Departments of Veterans Affairs and Agriculture could 

improve outcomes and better manage the costs associated with foreclosure mitigation efforts 

with additional data collection and analysis, potentially saving taxpayers millions of dollars on an 

annual and recurring basis.

171

26. Housing Choice Vouchers Rent Reform: By improving data collection and analysis efforts 

under the Moving to Work demonstration program, the Department of Housing and Urban 

Development would provide Congress with information to determine which rent reform option 

should be implemented program-wide and thereby potentially reduce program funding by 

millions of dollars or extend housing assistance to additional low-income households or some 

combination of these outcomes.

176

Table 3: Appendixes 

Appendixes Page 

Appendix I: List of Congressional Addressees 185

Appendix II: Objectives, Scope, and Methodology 186

Appendix III: List of Areas Identified in 2011-2014 Annual Reports, by Mission 191

Appendix IV: Lists of Programs Identified 205
 

Page 35 GAO-14-343SP Fragmentation, Overlap, and Duplication

Section I: Areas in Which GAO Has Identified 

Fragmentation, Overlap, or Duplication 

This section presents 11 areas in which we found evidence of 

fragmentation, overlap, or duplication among federal government 

programs.
Page 36 GAO-14-343SP Fragmentation, Overlap, and Duplication

Defense

1. Army Workforce Planning 

To address potential overlap between two Army information systems that support workforce planning for 

weapon system maintenance, manufacturing, and other industrial operations, the Army should increase 

leadership attention to the issue and establish a fully developed and documented approach for completing a 

timely assessment of unnecessary overlap, which could lead to millions of dollars in annual savings.

Both the Army Workload and Performance System (AWPS) and the

Logistics Modernization Program (LMP) are information systems that 

support various industrial operations within the Army Materiel Command 

(AMC).1 The Army has spent over $90 million on AWPS from its inception 

in 1996 through fiscal year 2013 and plans to spend approximately $35.6 

million to maintain the system between fiscal years 2014 and 2018. 

AWPS was developed to address systemic deficiencies in the Army’s 

civilian manpower requirements determination process.2 The system 

produces management reports and decision support tools intended to 

assist the Army in linking its industrial workload demands to its workforce 

requirements at AMC industrial sites. To produce management reports, 

AWPS relies primarily on data from LMP. 

LMP, an enterprise resource planning system that supports AMC 

industrial operations, was deployed to industrial sites during three phases 

beginning in 2003. LMP was developed to replace two major AMC legacy 

information systems—the Commodity Command Standard System and 

the Standard Depot System. By providing a single source of data and 

integrated decision-making tools, LMP was expected to increase 

efficiencies in AMC operations, such as buying and managing spare and 

repair parts and conducting depot-level maintenance. The Army spent 

approximately $1.4 billion on LMP through fiscal year 2012, and its total 

life-cycle cost from fiscal years 2000 through 2026 is expected to be more 

than $4 billion. Development for a major upgrade to LMP is currently 

under way.

The Army has begun to assess whether unnecessary overlap exists 

between AWPS and LMP and has begun its assessment by initiating data 

 

1

AMC is the Army's principal provider of materiel readiness—technology, acquisition 

support, materiel development, logistics power projection, and sustainment—to Army 

forces. AMC oversees Army industrial activities, such as maintenance depots and 

manufacturing arsenals, that overhaul, modernize, upgrade, and produce weapons

systems.

2

The Army Audit Agency reported in 1992 and 1994 that the Army did not know its 

workload and thus could neither justify personnel needs and budgets nor improve 

productivity and efficiency. The Army subsequently determined that it had a material 

weakness, under the Federal Managers’ Financial Integrity Act, with determining 

institutional personnel requirements without an analysis of the workload. AWPS was part 

of the Army's plans for addressing this material weakness.

Why This Area Is 

Important

What GAO Found
 

Page 37 GAO-14-343SP Fragmentation, Overlap, and Duplication

collection and analysis efforts. However, its overall progress—including 

the development of a business case analysis—has been limited, due 

primarily to the absence of senior-level leadership involvement and 

attention and the lack of a fully developed and documented approach for 

conducting the assessment, including an established milestone for 

completing it. GAO has found that overlap among government programs 

or activities can lead to unnecessary duplication and can result in 

unnecessary costs and less efficient and effective services.3

 

GAO reported in February 2014 that the AMC Commanding General and 

Deputy Commanding General directed in December 2012 that a plan be 

developed to "sunset," or retire, AWPS and transition its functionality to 

another system, such as LMP. According to officials, AMC initiated this 

effort as a result of feedback provided by industrial sites indicating that 

overlap existed between LMP and AWPS. In response, a project team 

was established within AMC and started meeting in February 2013.4 The 

project team is determining the extent to which software functionality 

currently provided by AWPS could be provided by LMP—either through 

LMP’s existing functionality or through the expansion of functionality in 

the planned major upgrade of LMP. Also included in the assessment is 

the use of locally developed tools that some industrial sites have 

developed on their own to carry out AWPS functions. Project team 

members told GAO that their efforts could result in a recommendation to 

reduce AWPS usage or eliminate the system. 

GAO also reported in February 2014 that the project team (1) identified 

specific actions that were needed to complete the assessment, such as 

holding a design workshop to determine what AWPS functionality can be 

provided by LMP or another tool, and developing a business case 

analysis; (2) received a demonstration on the current functionality 

provided by AWPS and LMP; and (3) conducted a survey of Army 

personnel with an AWPS account to collect information on how they use 

the system. GAO reviewed consolidated survey responses from 7 of 15 

AMC sites collected by the project team and found there was potential for 

some overlap between AWPS and LMP. Army officials plan to conduct 

further analysis of the survey responses. GAO's February 2014 findings 

are consistent with its past work, which has also shown the potential for 

overlap between the AWPS and LMP systems.

 

3

See GAO, Government Operations: Opportunities to Reduce Potential Duplication in 

Government Programs, Save Tax Dollars, and Enhance Revenue, GAO-11-318SP

(Washington, D.C.: Mar. 1, 2011).

4

According to the draft charter for the project team, the team was tasked to prepare a plan 

to sunset AWPS but the functionality of the system must remain available to users. The 

AWPS project team’s efforts will include determining the feasibility of implementing AWPS 

requirements into an existing enterprise resource planning tool, determining budgetary 

needs and legislative change requirements, and identifying a funding source.
 

Page 38 GAO-14-343SP Fragmentation, Overlap, and Duplication

Although the project team has made progress in some areas, its overall 

progress has been limited. For example, the project team’s charter to 

guide its operations remains incomplete, team meetings have not been 

held regularly, milestones for some key actions—such as developing a 

business case analysis—have not been established, and some 

milestones for other actions have been missed. Progress on the Army's 

assessment of AWPS has been limited due to the absence of senior-level 

leadership attention and involvement. The project team leader works in 

the AMC personnel office and has provided management from that office 

with updates on the team’s progress; however, other team members work 

in other AMC offices and do not officially report to either the team leader 

or the personnel office. Team members cited this existing leadership 

structure as a factor contributing to the team’s limited progress. Project 

team members stated that other than an update provided in June 2013 to 

an AMC committee overseeing LMP implementation, no senior-level AMC 

manager or committee has requested an update on the team’s progress 

in conducting its assessment. Best practices have shown that sustained 

leadership attention and involvement can help organizations make lasting 

changes and achieve positive results. In addition, these best practices 

indicate that a strong and stable team responsible for managing change 

is also essential to ensure that the effort receives the attention it needs to 

be sustained and successful.5

Additionally, the team’s progress has been limited due to the lack of a 

fully developed and documented approach, including an established 

milestone for completing the assessment. GAO reported in February 

2014 that the project team had not fully developed and documented its 

assessment approach. In addition, neither the original December 2012 

tasking nor the project team itself had established a completion date for 

the assessment. Standards for Internal Controls call for proper 

documentation of evaluation processes.6 In addition, GAO’s prior work on 

best practices for project schedules has shown that a well-planned 

schedule—with milestones for completing activities—is a fundamental 

management tool that can help government programs use public funds 

effectively by specifying when work will be performed in the future and 

measuring program performance against an approved plan.7

The absence of senior-level AMC leadership involvement and attention, 

as well as the lack of a fully developed and documented approach for 

conducting the assessment, including an established milestone for 

completing it, increases the risk that the Army will not complete its efforts 

 

5

GAO, Results-Oriented Cultures: Implementation Steps to Assist Mergers and 

Organizational Transformations, GAO-03-669 (Washington, D.C.: July 2, 2003).

6

GAO, Internal Control Management and Evaluation Tool, GAO-01-1008G (Washington, 

D.C.: Aug. 2001).

7

GAO, GAO Schedule Assessment Guide: Best Practices for Project Schedules, 

GAO-12-120G (Washington, D.C.: May 2012).
 

Page 39 GAO-14-343SP Fragmentation, Overlap, and Duplication

to identify and eliminate potentially unnecessary overlap between AWPS 

and LMP. 

To complete the Army’s assessment of potential unnecessary overlap 

between AWPS and LMP and to ensure that a sound business decision is 

made on how to most cost-effectively provide AWPS functionality, GAO 

recommended in February 2014 that the Secretary of the Army direct the 

Commanding General, AMC, take the following two actions:

• Identify a senior-level AMC manager or committee to provide 

increased leadership involvement and attention of the project team’s 

efforts, to include ensuring that a strong and stable team exists for 

managing change. 

• Establish a fully developed and documented approach for the team’s 

assessment, including a milestone for completing it.

Timely and effective actions on these recommendations should improve 

the Army’s ability to support industrial operations in the most efficient and 

cost-effective manner by minimizing unnecessary overlap between these 

two information systems. Furthermore, implementation of these 

recommendations may enable the Army to avoid spending millions of 

dollars annually on AWPS.

GAO requested comments from the Army on the February 2014 report on 

which this analysis is based, but none were provided. In addition, GAO 

provided a draft of this report section to the Army for review and 

comment. The Army did not provide comments on this issue. 

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

products listed in the related GAO products section. GAO reviewed prior 

GAO reports that discuss AWPS and LMP and that outline best practices 

to effectively manage change, achieve positive results, and establish 

project schedules. GAO also met with officials from AMC headquarters 

and the AWPS program management office to discuss the efforts of the 

AMC project team in the assessment of potential overlap. GAO obtained 

and analyzed documentation, including survey responses from AWPS 

users, related to these efforts. GAO reviewed some aspects of the 

project team’s methodology for conducting its assessment—such as 

preliminary data collection efforts—but did not evaluate other aspects 

because the Army had not yet fully developed and documented them at 

the time of GAO’s February 2014 review.

Table 1 in appendix IV lists the programs GAO identified that might have 

opportunities for cost savings.

Actions Needed and 

Potential Financial or 

Other Benefits

Agency Comments 

and GAO’s Evaluation

How GAO Conducted 

Its Work
 

Page 40 GAO-14-343SP Fragmentation, Overlap, and Duplication

Army Workload and Performance System: Actions Needed to Sustain 

Progress on the Army’s Assessment of Potential Overlap with Logistics 

Modernization Program. GAO-14-266. Washington, D.C.: Feb. 28, 2014.

Defense Logistics: Army Should Track Financial Benefits Realized from 

its Logistics Modernization Program. GAO-14-51. Washington, D.C.: Nov. 

13, 2013.

Defense Logistics: Oversight and a Coordinated Strategy Needed to 

Implement the Army Workload and Performance System. GAO-11-566R. 

Washington, D.C.: July 14, 2011. 

For additional information about this area, contact Zina D. Merritt at (202) 

512-5257 or merrittz@gao.gov.

Related GAO 

Products

Contact Information
Page 41 GAO-14-343SP Fragmentation, Overlap, and Duplication

2. Contracting for Defense Health Care 

Professionals

The Department of Defense should develop a consolidated agency-wide strategy to contract for health care 

professionals to reduce fragmentation and achieve greater efficiencies.

The Department of Defense (DOD) operates a large and complex health 

care system that employs more than 150,000 military, civilian, and 

contract personnel working in military hospitals and clinics, commonly 

referred to as military treatment facilities. Each military department 

operates its own facilities, and each generally contracts separately for 

health care professionals such as nurses, family practice doctors, and 

medical assistants to supplement care provided within these facilities. In 

fiscal year 2011, DOD spent about $1.14 billion contracting for health 

care professionals.1

 

DOD does not have a consolidated agency-wide strategy to contract for 

health care professionals, resulting in a contracting approach that is 

largely fragmented. In the absence of a DOD-wide strategy, the military 

departments have attempted to consolidate some health care staffing 

requirements, but these efforts have been limited. For example, according 

to DOD data, joint-use contracts among military departments accounted 

for approximately 8 percent of the $1.14 billion in obligations for health 

care professionals in fiscal year 2011.2 Other efforts have involved 

actions within the departments, such as using contracts for health care 

professionals awarded to multiple health care staffing companies, to 

consolidate intraservice staffing requirements. These contracts, known as 

multiple-award contracts, are generally set up in the Army and Navy by 

U.S. geographical region and by provider type to meet the requirements 

of more than one facility.3 For example, the Army and the Navy each have 

regional multiple-award contracts for nurses, and one in each region for 

doctors. In 2012, the Navy had six multiple-award contracts on the West 

Coast and five on the East Coast, involving many types of health care 

professionals. In contrast, the Air Force uses multiple-award contracts 

that are set up nationally to be used by all of its military treatment facilities 

 

1

Fiscal year 2011 was the latest year for which complete data were available when GAO 

began its review.

2

DOD has not estimated the amount of savings achieved via these joint-use contracts 

because the data are not readily available to calculate savings. 

3

A joint-use contract is a multiple award contract used by more than one military 

department or used at joint military facilities and a multiple-award contract is an indefinitedelivery, indefinite-quantity contract that is awarded to two or more sources under the 

same solicitation. Section 16.504(c) of the Federal Acquisition Regulation provides 

requirements and guidance on the award and use of multiple-award contracts. 

Why This Area Is 

Important

What GAO Found
 

Page 42 GAO-14-343SP Fragmentation, Overlap, and Duplication

for many types of health care professionals.4 The Army awarded national 

contracts for health care professionals in fiscal year 2003, but officials 

said this approach was unsuccessful because not enough companies 

were able to compete to provide health care staffing services on a 

national scale. DOD officials stated that multiple award contracts have 

facilitated the streamlining of acquisitions and the standardization of 

contract requirements, which saves time and contract administration 

costs. 

Although each of the military departments has been using multiple-award 

contracts to acquire the services of health care professionals, the 

potential remains for consolidation of task orders issued under these 

contracts.5 For example, in May 2013, GAO identified several instances 

where numerous task orders were awarded by a single military 

department for the same type of provider in the same area or facility, such 

as 24 task orders in fiscal year 2011 for medical assistants, 16 separate 

task orders for licensed practical nurses, 8 for clinical psychologists, and 

6 for family practitioners—all at the same military treatment facility.

Over the last decade, various DOD groups as well as GAO have 

recommended that DOD take steps toward a more consolidated strategy, 

including a DOD Inspector General report on reducing duplication and 

fragmentation in medical services contracts, and a DOD-wide council 

which was tasked to develop a strategy for sourcing key health care labor 

categories.6

 But DOD still does not have an agency-wide acquisition 

strategy to consolidate these types of requirements. Such a strategy 

would involve a shift away from numerous individual procurements to a 

broader aggregate approach, reduce fragmentation, and could provide 

cost savings. In March 2011, GAO reported on opportunities to reduce 

duplication, overlap, and fragmentation in government programs and 

noted that consolidating common administrative, management, and 

clinical functions within the Military Health System could increase 

efficiencies and significantly reduce costs, but that DOD had taken only 

limited actions in this area. Further, as GAO reported in 2013, DOD does 

not collect and maintain standardized data on health care professionals, 

which hampers efforts to develop a joint and strategic approach to 

contracting for health care professionals. For example, labor categories 

are not standardized across DOD. Also, DOD’s 2007 Task Force report 

on the Future of Military Health Care concluded that there were significant 

issues with the Military Health System cost accounting that affect the 

correct calculation of unit costs, specifically characterizing the data as 

 

4

In fiscal year 2011, Army obligations for health care professionals totaled $286 million, 

Navy fiscal year 2011 obligations totaled $293 million, and Air Force fiscal year obligations 

totaled $454 million. 

5

A task order is an order for services placed against an existing contract. 

6

DOD Inspector General, Acquisition: Direct Care Medical Services Contracts, D-2004-

094 (Arlington, Va.: June 2004).
 

Page 43 GAO-14-343SP Fragmentation, Overlap, and Duplication

unreliable.7 DOD and military department officials who spoke with GAO 

confirmed this assessment during GAO’s 2013 review.

Each military department continues to take a fragmented approach to 

contracting for medical professionals without considering the collective 

needs of the Military Health System. On October 1, 2013, DOD 

established a new Defense Health Agency (DHA) to assume 

management responsibility of numerous functions of its medical health 

care system, including some contracting functions.8

 While DOD is moving 

forward incrementally with its plans to transform the Military Health 

System structure and set up the Defense Health Agency, decisions about 

contracting for health care staffing requirements remain outstanding. Prior 

to the establishment of DHA, DOD created a medical services contracting 

subworking group, which, according to DOD officials, is in the process of 

examining issues related to contracting for health care professionals. As 

of March 2014, the group had not completed its work. As a part of the 

medical governance restructuring, DOD has an opportunity to revisit the 

need for a DOD-wide strategic sourcing strategy with both near-term and 

long-term dimensions, including reliable and detailed agency-wide data. 

Without such a strategy, the Military Health System may be missing 

opportunities to contract for health care professionals in the most costeffective manner. 

GAO recommended in May 2013 that the Secretary of Defense take the 

following action:

• Develop and implement a DOD-wide strategy to contract for health 

care professionals. The strategy should identify specific responsible 

organizations and time frames, and should consist of both near-term 

and long-term components. In the near term, and to enable DOD to 

assess the efficacy and impact of such a strategy, DOD should 

identify a category of health care professionals or a multiservice 

market to pilot an approach to consolidating health care staffing 

requirements. Over the longer term, such a strategy should include an 

analysis of spending based on reliable and detailed agency-wide data, 

and should enable DOD to identify opportunities to consolidate 

requirements and reduce costs.

Due to the lack of reliable and detailed agency-wide data, it is not 

possible to estimate the extent of potential cost savings associated with 

DOD-wide contracting for health care professionals. 

 

7

DOD, Task Force Report on the Future of Military Health Care, December 2007.

8

For additional information on DOD’s plans to reform its Military Health System, see GAO, 

Defense Health Care Reform: Additional Implementation Details Would Increase 

Transparency of DOD’s Plans and Enhance Accountability, GAO-14-49 (Washington, 

D.C.: Nov. 6, 2013). 

Actions Needed and 

Potential Financial or 

Other Benefits
 

Page 44 GAO-14-343SP Fragmentation, Overlap, and Duplication

In commenting on the May 2013 report on which this analysis is based, 

DOD concurred with GAO’s recommendation. The department agreed 

that it is at an opportune time to revisit a Military Health System strategic 

sourcing strategy due to the organizational transformation that is 

occurring in the formation of the new Defense Health Agency. DOD 

stated that a Shared Services Contracting subworking group would 

include GAO’s findings and recommendation in their comprehensive 

review of contracting strategies, governance, and processes. 

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

comment. DOD did not provide comments on this issue.

The information contained in this analysis is based on findings from 

products listed in the related GAO products section. To address health 

care contracting practices, GAO analyzed data obtained from the Federal 

Procurement Data System-Next Generation on medical services 

contracts funded in fiscal year 2011, the latest year for which complete 

data were available when GAO began its review. To assess the 

consolidation of health care staffing requirements, GAO obtained data 

from the military departments on the number and dollar value of contracts 

for health care professionals. GAO also interviewed and obtained 

documentation from officials within organizations in each military 

department responsible for contracting for professional health care 

services, as well as 11 military treatment facilities and DOD’s TRICARE 

Management Activity. 

Table 2 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.

Defense Health Care: Department of Defense Needs a Strategic 

Approach to Contracting for Health Care Professionals. GAO-13-322. 

Washington, D.C.: May 28, 2013. 

Opportunities to Reduce Potential Duplication in Government Programs, 

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

D.C.: March 1, 2011.

For additional information about this area, contact William T. Woods at 

(202) 512-4841 or woodsw@gao.gov. 

Agency Comments 

and GAO’s Evaluation

How GAO Conducted 

Its Work

Related GAO 

Products

Contact Information
Page 45 GAO-14-343SP Fragmentation, Overlap, and Duplication

3. Defense Satellite Control Operations

Increased use of shared satellite control networks and leading practices within the Department of Defense 

could reduce fragmentation and potential duplication associated with dedicated systems, resulting in millions of 

dollars in savings annually. 

The Department of Defense (DOD) uses both shared and dedicated 

satellite control networks located around the world to manage the nation’s 

defense satellites—satellites worth at least $13.7 billion. Satellite control 

networks are used to track and monitor the health of a satellite and to 

command it to ensure it performs its mission.1 A shared control network 

can support several satellite systems and is able to share its antennas 

and software among different kinds of satellites. In contrast, a dedicated 

control network can operate only a single satellite system, and its assets 

are generally not shared with other satellite systems. Over the past 50 

years, and especially in the last decade, DOD’s decision to increasingly 

deploy dedicated satellite control networks in lieu of integrating them into 

a larger shared satellite control network reflects more of a preference by 

satellite program managers than a need. DOD is currently operating at 

least a dozen dedicated satellite control networks that typically do not 

share assets or personnel with other dedicated or shared networks. While 

dedicated networks offer advantages to the specific satellite systems they 

serve, shared networks offer potential advantages DOD-wide in 

leveraging hardware, software, and personnel. 

As GAO reported in April 2013, DOD satellite control networks are 

fragmented and potentially duplicative, yet DOD continues to increasingly 

deploy dedicated satellite control operations networks as opposed to 

shared systems that support multiple kinds of satellites. Dedicated 

networks can offer some benefits to programs, including potential 

reduced risks, e.g., ensuring continuous contact with a satellite, and

greater customization for a particular program’s needs. However, they 

can also be more costly to maintain and have led to a fragmented, and 

potentially duplicative, approach that requires more infrastructure and 

personnel to manage than shared ground operations. The figure below 

shows that DOD’s share of satellite programs using dedicated networks 

has increased since 1960.

 

1

Satellite control operations essentially consist of (1) tracking—determining the satellite’s 

location based on position and range measurements to receive commands from the 

ground, (2) telemetry—collecting health and status reports that are transmitted from the 

satellite to the ground, and (3) commanding—transmitting signals from the ground to the 

satellite to control satellite subsystems.

Why This Area Is 

Important

What GAO Found
 

Page 46 GAO-14-343SP Fragmentation, Overlap, and Duplication

Proportions of Satellite Programs Using Shared or Dedicated Infrastructure by 

Decade since 1960

DOD’s use of dedicated networks has resulted in fragmented and 

potentially duplicative operations and inefficiencies across its satellite 

control operations. For example, one Air Force base has 10 satellite 

programs operated by eight separate control centers. Further, the Air 

Force alone funded about $2.1 billion in fiscal year 2011 on satellite 

operations.2 As of February 2013, Air Force officials stated that the Air 

Force had not worked to move its current dedicated operations to a 

shared satellite control network, which could better leverage investments. 

DOD officials recognize the value of reducing fragmented and potentially 

duplicative operations, and stated that they are working on a path 

forward.

Regarding DOD’s largest shared satellite control network, the Air Force 

Satellite Control Network (AFSCN), DOD has described this network, 

originally fielded in 1959, as fragmented and lacking standardization and 

interoperability. The AFSCN provides support for launch, command, and 

control of various space programs managed primarily by DOD and other 

national security space organizations. For example, DOD’s Defense 

Satellite Communications System, a communications satellite, is 

supported by the AFSCN. The Air Force has budgeted approximately 

$400 million to sustain the AFSCN at its current level of capability over 

 

2

This total includes Research, Development, Test, and Evaluation; Operation and 

Maintenance (O&M); Personnel; and, Other Procurement funds. Air Force officials could 

provide only 1 fiscal year of funding for satellite operations. 
 

Page 47 GAO-14-343SP Fragmentation, Overlap, and Duplication

the next 5 years to extend the network’s life by replacing obsolete

equipment. However, these efforts do not apply a decade of research 

recommending more significant improvements that would increase the 

AFSCN capabilities and interoperability. In May 1999, GAO reported that 

DOD, including the AFSCN, had made minimal progress in integrating 

and improving its satellite control operations capabilities in accordance 

with the then-existing national space policy.3 More recently, in 2008, the 

Commander of the Air Force Space Command issued a memorandum

describing the need for increased satellite control operations efficiencies, 

improved interoperability, and consolidated functions. Despite these 

recommendations, which were made over the course of almost two

decades, no department-wide long-term plan currently exists for 

modernizing DOD’s Air Force Satellite Control Network and any future 

shared satellite control services and capabilities.

In addition to finding fragmented and potentially duplicative systems, we 

also found DOD has not adopted practices that could vastly increase the 

efficiency of its networks. Commercial satellite companies incorporate 

varying degrees of interoperability, automation, and other practices into 

their satellite control operations networks to decrease program costs and 

increase efficiencies. While commercial satellites and DOD satellites can 

differ greatly in their missions, and to some extent may differ in their need 

for information security, basic satellite control operations functions of 

most of these satellites are generally the same. Air Force satellite control 

officials have stated that some or all of the following practices from the 

commercial sector could be applied to many DOD satellite programs, 

resulting in increased efficiencies and reduced costs. 

• Interoperability: Interoperable satellite control operations networks 

allow a single operator to control multiple satellites from one terminal 

with one software interface, regardless of the satellite’s age or 

manufacturer. 

• Automation: Use of automation for routine functions, such as 

downloading telemetry data, allows companies to reduce the number 

of operators, which may reduce the risk of human errors. 

• Commercial-off-the-shelf products: Commercial-off-the-shelf products 

are less expensive than custom products and easier to replace when 

needed, and they can be tailored to meet each company’s or user’s 

needs. 

• Hybrid network: A hybrid network arrangement allows a company to 

augment its ground network of antennas and control stations by 

 

3

The current policy (National Space Policy of the United States of America [June 28, 

2010]) does not specifically direct DOD to integrate and improve its satellite control 

operations. 
 

Page 48 GAO-14-343SP Fragmentation, Overlap, and Duplication

leasing antenna time on another company’s network.4 Using 

preexisting antennas from other providers, according to one company 

we spoke with, is typically less costly than building and maintaining all 

of the ground assets they use. 

While opportunities exist to improve DOD satellite control operations, 

certain barriers hinder DOD’s ability to increase the use of shared 

networks or incorporate trusted practices, including the following:

• DOD is unable to quantify all spending on satellite ground control 

operations across DOD programs. The lack of cost data means that 

DOD cannot perform a cost-benefit analysis to determine the proper 

mix of shared and dedicated networks and whether the potential 

benefits of individual programs using dedicated networks outweigh the 

potential drawbacks of continued or increased systemic fragmentation 

and inefficiency. 

• Satellite programs are not required to present a business case for 

proceeding with a dedicated or shared network, or to validate their 

network’s requirements.5 Without the requirement to weigh potential 

trade-offs in performance with potential reductions in cost, DOD 

cannot strategically determine if its current options of shared and 

dedicated networks are the best option or whether other options, such 

as hybrid networks, might be better suited to meet its satellite control 

operational needs. 

• There is no DOD-wide guidance or long-term plan that directs or 

supports the implementation of alternative methods for performing 

satellite control operations. DOD’s current array of satellite control 

networks favors dedicated systems that have been largely shaped by 

past practices and complicates DOD’s ability to effectively implement 

improvements across its varied satellite control operations. 

These barriers have hindered DOD’s ability to achieve optimal satellite 

control systems that would result in cost savings in this area. At the 

moment, DOD also lacks the incentive to change its current practices, in 

part because it does not know the total cost associated with its satellite 

control operations. 

 

4

Currently, the Universal Space Network is the only U.S. company that operates a satellite 

control network as a leased, pay-as-you-go arrangement for customers. 

5

While business case analyses are required for milestone B certification of major defense 

acquisition programs, which is approval to enter system development, there is not a 

specific requirement or policy to analyze whether or not to use a shared satellite control 

operations network. 10 U.S.C. § 2366b(a); Interim DOD Instruction 5000.02, Operation of 

the Defense Acquisition System, Encl. 1, Table 2 (Nov.25, 2013). Major defense 

acquisition programs are those estimated by DOD to require an eventual total expenditure 

for research, development, test, and evaluation of more than $480 million, or for 

procurement of more than $2.79 billion, including all planned increments or spirals, in 

fiscal year 2014 constant dollars. 
 

Page 49 GAO-14-343SP Fragmentation, Overlap, and Duplication

To better facilitate the conduct of satellite control operations and 

accountability for the estimated millions of dollars in satellite control 

investments, and to reduce fragmentation, GAO recommended in April 

2013 that the Secretary of Defense take the following two actions:

• Conduct an analysis at the beginning of a new satellite acquisition to 

determine a business case for proceeding with either a shared or a 

dedicated satellite control system, to include its associated ground 

antenna network. The analysis should include a comparison of total 

dedicated network costs to the incremental cost of integrating onto a 

shared network to determine applicable cost savings and efficiencies.

• Develop a department-wide long-term plan for modernizing DOD’s Air 

Force Satellite Control Network and any future shared satellite control 

services and capabilities. This plan should identify methods that can 

capture or estimate satellite control costs as well as authorities that 

can be given to the program managers to give them the flexibility 

needed to ensure ground systems are built to a common network 

when the business case analysis shows doing so to be beneficial. 

This plan should also identify which trusted practices from the 

commercial sector, if any, can improve DOD satellite control 

operations in the near and long terms and, as appropriate, develop a 

plan of action for implementing them.

Estimating the extent of potential cost savings is difficult because of the 

lack of both cost data and analysis completed by the Air Force. 

Furthermore, DOD lacks the information to determine the extent and 

appropriateness of pursuing a shared satellite control operations network, 

which would be necessary in order to estimate cost savings. However, 

GAO’s analysis of cost savings for which data are available suggests that 

savings could be in the millions or hundreds of millions of dollars 

annually. GAO’s two recommendations are intended to improve DOD’s 

ability to identify and then assess the appropriateness of a shared versus 

dedicated satellite control system, the feasibility of incorporating 

commercial practices in current and future satellite programs for 

increased efficiencies and cost reductions, and to focus these decisions 

on developing a long-term plan for all systems. 

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

DOD concurred with GAO’s two recommendations. DOD further stated 

that it will work with the military services to identify resources to initiate a 

comprehensive Satellite Operations Enterprise Architectural Analysis to 

provide a foundation for defining requirements for new satellite program 

acquisitions with the objective to reduce duplication, foster consolidation, 

and improve interoperability. 

Subsequent to GAO’s 2013 report, the President signed into law the 

National Defense Authorization Act for Fiscal Year 2014 on December 26, 

2013 which includes GAO’s recommendations on the conduct of DOD’s 

satellite control operations. Specifically, section 822 of the Act directs 

DOD to:

Actions Needed and 

Potential Financial or 

Other Benefits

Agency Comments 

and GAO’s Evaluation
 

Page 50 GAO-14-343SP Fragmentation, Overlap, and Duplication

• perform a cost benefit analysis for any new or follow-on satellite 

system using a dedicated ground control system instead of a shared 

ground control system; and,

• develop a DOD-wide long-term plan for satellite ground control 

systems, to include the Air Force Satellite Control Network.6

 

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

comment. On February 10, 2014, the Director of Cyber and Space 

Programs, within the Office of the Under Secretary of Defense for 

Acquisition, Technology and Logistics stated that the DOD will comply 

with the enacted law. 

 

The information contained in this analysis is based on GAO’s April 2013 

report in the related GAO products section and additional work GAO 

conducted. To assess the status of modernization efforts and the costs 

associated with current and planned upgrades and sustainment efforts for 

the AFSCN, GAO analyzed budget documents and program 

documentation to determine how the Air Force defined and was 

proceeding with its modernization efforts for the AFSCN. To determine 

which commercial practices could benefit the Air Force’s satellite control 

operations, GAO selected a nongeneralizable sample of 13 commercial 

companies that are known in the space community to operate satellites 

and have knowledge of satellite control operations and based on their 

satellite constellation size, orbits, and capabilities. To identify any 

potential barriers to DOD of implementing these commercial practices, 

GAO analyzed documentation such as DOD and other government 

studies on the organization of satellite control operations, and interviewed 

DOD and commercial officials. GAO used the information to assess any 

barriers affecting the funding, cost, schedule, and performance of satellite 

control operations. 

Satellite Control: Long-Term Planning and Adoption of Commercial 

Practices Could Improve DOD’s Operations. GAO-13-315. Washington, 

D.C.: April 18, 2013.

Space Acquisitions: DOD Faces Challenges in Fully Realizing Benefits of 

Satellite Acquisition Improvements. GAO-12-563T. Washington, D.C.: 

March 21, 2012. 

Space Acquisitions: Development and Oversight Challenges in Delivering 

Improved Space Situational Awareness Capabilities. GAO-11-545. 

Washington, D.C.: May 27, 2011. 

 

6 Pub. L. No. 113-66, § 822 (2013).

How GAO Conducted 

Its Work

Related GAO 

Products
 

Page 51 GAO-14-343SP Fragmentation, Overlap, and Duplication

Space Acquisitions: DOD Delivering New Generations of Satellites, but 

Space System Acquisition Challenges Remain. GAO-11-590T. 

Washington, D.C.: May 11, 2011. 

Satellite Control Systems: Opportunity for DOD to Implement Space 

Policy and Integrate Capabilities. GAO/NSIAD-99-81. Washington, D.C.: 

May 17, 1999.

For additional information about this area, contact Cristina Chaplain at Contact Information (202) 512-4841 or chaplainc@gao.gov. 
 

Page 52 GAO-14-343SP Fragmentation, Overlap, and Duplication

4. Defense Studies and Analysis Research

To address fragmentation in the processes used across the department to request studies and analysis 

research and limit the potential for overlap and duplication in research activities, the Department of Defense 

should establish a mechanism that requires the military services and other departmental offices to formally 

coordinate their annual research requests.

The Department of Defense (DOD) funds several types of research. This 

includes studies and analysis research, which DOD characterizes as 

research conducted in support of policy development, decision making, 

and alternative approaches on issues of importance to the DOD 

community. Various organizations conduct studies and analysis research 

for DOD. For example, DOD’s colleges and universities throughout the 

country provide academic instruction in Joint Professional Military 

Education (JPME) and also conduct studies and analysis research at 

specifically dedicated research institutions.1 In fiscal year 2013, DOD 

provided $40.6 million in funding to these JPME research institutions for 

their operations, including their research activities. Additionally, other 

DOD-funded research organizations, such as Federally Funded Research 

and Development Centers, conduct studies and analysis research for 

DOD.2

 

In a March 2014 report, GAO identified a total of 34 organizations—20 

JPME research institutions and 14 other DOD-funded organizations—that 

conduct studies and analysis research to support the annual research 

requirements of the military services or other departmental offices. 

Managing and coordinating the studies and analysis research requests 

sent to these multiple research organizations represents one of the 

challenges DOD faces in reducing potential overlap and duplication in 

studies and analysis research activities.

 

1

DOD relies on joint professional military education (JPME), a subset of professional 

military education, to educate servicemembers throughout their careers, broaden their 

knowledge, improve performance during joint assignments, and foster collaboration 

across the military services. DOD’s colleges and universities that provide JPME 

certification include the Army War College, Army Command and General Staff College, 

Naval War College, Air University, Marine Corps University, and the National Defense 

University. In its March 2014 report, GAO focused on research institutions affiliated with 

DOD colleges and universities that provide JPME certification, which GAO referred to as 

JPME research institutions. GAO included in the scope of its review research institutions 

that conduct research as a primary mission and have dedicated personnel to do so. 

2

GAO is categorizing Federally Funded Research and Development Centers, serviceaffiliated research organizations such as the Center for Army Analysis, and DOD’s 

Regional Centers for Security Studies that conduct studies and analysis research as 

“other DOD-funded research organizations.” The scope of GAO’s March 2014 review 

included analyzing financial information for JPME research institutions, but GAO did not 

collect financial information from all DOD-funded organizations that conduct studies and 

analysis research. Therefore, GAO is not reporting financial information for other DODfunded research organizations.

Why This Area Is 

Important
 

Page 53 GAO-14-343SP Fragmentation, Overlap, and Duplication

GAO reported in March 2014 that DOD uses separate processes to 

request studies and analysis research and does not formally coordinate 

requests for research conducted by multiple JPME research institutions 

and other DOD-funded research organizations, even though many of 

these organizations have missions to conduct work in similar topic areas. 

This fragmentation occurs in the absence of a DOD requirement for the 

military services and other departmental offices to coordinate on research 

requests and formal mechanisms to facilitate such coordination, thereby 

exposing DOD to the risk of potential overlap and duplication of studies 

and analysis research. The figure below summarizes the results of GAO’s 

analysis of similarities in research topic areas for the 20 JPME research 

institutions and 14 other DOD-funded research organizations, according 

to 23 areas of concentration.3 A check mark indicates a research 

institution’s mission statement identified that category is a topic area in 

which it conducts research.4

 

3

The topic areas represent 23 broad categories of research activities and are based on 

the general topic areas in which JPME research institutions and other DOD-funded 

research organizations categorize their research.

4

GAO’s March 2014 report focused on assessing the similarities of research organizations 

as opposed to individual research projects. Therefore, GAO did not review the content of 

individual research projects and their respective methodologies or assess the extent to 

which individual research projects and their findings overlapped or were duplicative with 

other research projects.

What GAO Found
 

Page 54 GAO-14-343SP Fragmentation, Overlap, and Duplication

Similarities in Research Topic Areas for 34 Research Organizations, According to Mission Statements

Notes: Abbreviations are as follows: Center for Complex Operations (CCO); Center for Strategic 

Research (CSR); Center for the Study of Chinese Military Affairs (CSCMA); Center for the Study of 

Weapons of Mass Destruction (CSWMD); Conflict Records Research Center (CRRC); Center for 

Technology and National Security Policy (CTNSP); Center for Transatlantic Security Studies (CTSS); 

Air Force Research Institute, Air Force Counterproliferation Center (AFCPC); Center for Strategy and 

Technology (CSAT); Strategic Research Department (SRD); China Maritime Studies Institute (CMSI); 

International Law Department (ILD); Strategic Studies Group (SSG); History Department (HD); Middle 

East Studies (MES); Translational Research Group at Center for Advanced Operational Culture

Learning (TRG); Strategic Studies Institute (SSI); Center for Army Leadership (CAL); Combat Studies 

Institute (CSI); RAND Project Air Force (RAND PAF); RAND National Defense Research Institute 

(RAND NDRI); RAND Arroyo; Center for Naval Analyses (CNA); Institute for Defense Analyses (IDA); 

George C. Marshall European Center for Security Studies (Marshall Center); Near East South Asia 

Center for Strategic Studies (NESA); William J. Perry Center for Hemispheric Defense Studies (Perry 

Center); Africa Center for Strategic Studies (ACSS); Naval Postgraduate School Cebrowski Institute 

for Information and Innovation (NPS: CI); Naval Postgraduate School Modeling, Virtual Environments 

and Simulation Institute (NPS: MOVES); Naval Postgraduate School Center for Interdisciplinary 
 

Page 55 GAO-14-343SP Fragmentation, Overlap, and Duplication

Remotely-Piloted Aircraft Studies (NPS: CIRPAS); Center for Army Analysis (CAA); U.S. Army 

Training and Doctrine Command Analysis Center (TRAC). 

The results do not include the following three areas of concentration: (1) Public affairs and 

communication’, (2) Other; and (3) Unable to code. “Public affairs and communication” is not included 

because GAO did not code a mission statement into that area of concentration. “Other” and “Unable 

to code” were not included because these are not areas of concentration intended to show similarity. 

Rather, “Other” is intended for project titles or mission statements that do not fit into the other areas of 

concentration, and “Unable to code” is used for methodological purposes to categorize incomplete 

information.

a

Army Command and General Staff College. 

In its March 2014 report, GAO identified several separate processes used 

by JPME research institutions or DOD offices to manage requests for 

studies and analysis research. For example, JPME research institutions

individually manage their own research activities. At these institutions, 

researchers have the discretion to determine on their own whether 

research has been or is being conducted on a given topic. Officials 

representing JPME research institutions reported that while it is not a 

requirement, they may contact other subject matter experts or conduct 

literature reviews to understand the existing research on a topic as part 

of the research process to determine whether similar work is being 

conducted at another JPME research institution. These officials also 

stated that they may review completed research projects that are 

contained in the Defense Technical Information Center database to see 

whether DOD has funded past studies.5 However, that database does not 

contain information on ongoing research efforts and GAO was unable to 

identify any other formal mechanism for sharing information on ongoing 

studies and analysis research activities within DOD.

Within the Office of the Secretary of Defense, multiple offices generate 

requests annually for studies and analysis research, but these research 

requests are determined based on individual offices’ research 

requirements and are not formally coordinated with other departmental 

offices. For example, research requests for the Office of the Under 

Secretary of Defense for Acquisition, Technology, and Logistics are 

managed at the Office of the Secretary of Defense Studies and Federally 

Funded Research and Development Center Management office. Officials 

with this office explained that they do not formally coordinate with other 

DOD offices to determine whether they are funding similar research 

requests.

Similarly, the military departments’ processes for requesting studies and 

analysis research are based on their individual research needs. While the 

military departments have their own respective internal processes for 

requesting studies and analysis research, absent a DOD requirement to 

 

5

The Defense Technical Information Center manages an online database that makes past 

DOD-funded research studies available to the research community to enable future 

researchers to understand the purpose, scope, approach, results or outcomes, and 

conclusions or recommendations of prior work before undertaking new studies.
 

Page 56 GAO-14-343SP Fragmentation, Overlap, and Duplication

do so, these processes are not used to coordinate research requests 

among the military departments or with other DOD offices. For example: 

• According to a senior Air Force official, the Air Staff’s Analyses, 

Assessments and Lessons Learned directorate is responsible for 

collecting annual research requests from across the Air Force and for 

ensuring that the contracted studies are not duplicative. However, 

according to this official, the directorate generally does not formally 

coordinate with offices outside the Air Force on annual research 

requests.

• The Army Study Program Management Office within Headquarters, 

Department of the Army, issues an annual call for research requests 

from Army commands, and in turn funds the research requests 

according to Army priorities. A senior Army official in this office 

reported that its process is focused on reviewing Army-specific 

research requests and does not include other DOD offices that 

request or conduct studies and analysis research. 

• The Navy’s annual research requests are administered through the 

Office of the Chief of Naval Operations, which compiles and prioritizes 

research needs identified from across the Navy. According to an 

official in this office, the Navy generally does not coordinate with other 

DOD-funded research organizations or JPME research institutions 

with regard to these annual research requests.

DOD officials within the studies and analysis research community 

reported that there are benefits to the department’s decentralized 

approach to requesting studies and analysis research. For example, one 

official said decentralization generates creativity and diversity of thought 

in DOD’s studies and analysis community, which can prove useful in 

informing DOD decision makers. However, officials also reported there 

are risks with DOD’s current approach. For example, officials reported 

that limited coordination among the multiple offices that request studies 

and analysis research puts DOD at risk for funding overlapping research 

activities and that the current approach also makes it difficult for DOD to 

have a complete picture of how much money is being spent on studies 

and analysis research. 

In contrast to how it manages requests for studies and analysis research, 

DOD has established mechanisms to coordinate science and technology–

specific research efforts across multiple departmental offices engaged in 

similar missions.6 Specifically, the science and technology research 

community has executive committees to facilitate coordination. A senior 

 

6

According to testimony in April 2013 by the Acting Assistant Secretary of Defense for 

Defense Research & Engineering, science and technology research is funded to mitigate 

new or emerging capabilities that could degrade U.S. capabilities, enable new or extended 

capabilities in existing military systems, and develop new concepts and technologies 

through science and engineering applications to military problems.
 

Page 57 GAO-14-343SP Fragmentation, Overlap, and Duplication

official responsible for coordinating DOD’s science and technology 

research efforts explained that the executive committees do not require 

additional resources. Rather, these committees are intended to bring 

together the multiple departmental offices that sponsor research to share 

existing annual research plans and provide opportunities to leverage 

resources in a fiscally constrained environment. 

This practice is consistent with GAO’s work on results-oriented 

management practices, which states establishing a means to operate 

across organizational boundaries helps enhance and sustain 

coordination.7 Furthermore, organizations involved in similar missions 

should coordinate and share relevant information to avoid unnecessary 

duplication of work.

8

GAO’s March 2014 report recognizes that there are notable differences 

among research organizations with seemingly similar missions and that 

there may be benefits to DOD’s current approach to requesting studies 

and analysis research. Nonetheless, GAO concluded that DOD could 

improve coordination of studies and analysis research requests to better 

ensure that its resources are used efficiently at its JPME research 

institutions and other DOD-funded research organizations in support of 

department-wide priorities. In particular, the absence of a mechanism for 

bridging DOD’s multiple processes for managing requests for studies and 

analysis research exposes DOD to the risk of potential overlap and 

duplication of studies and analysis research. Furthermore, making 

information on department-wide annual research requests available to 

JPME research institutions would provide the institutions with an 

opportunity to further understand department-wide research needs and 

align some of the institutions’ research with DOD’s strategic priorities.

To improve the coordination of requests for studies and analysis research 

within the department and to reduce the risk of potential overlap and 

duplication in research activities, GAO recommended in March 2014 that 

the Secretary of Defense take the following action: 

• establish and implement a departmental mechanism that requires 

leadership from the military services and departmental offices 

responsible for managing requests for studies and analysis research 

to coordinate their annual research requests and ongoing research 

efforts.

 

7

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

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

8

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).

Actions Needed and 

Potential Financial or 

Other Benefits
 

Page 58 GAO-14-343SP Fragmentation, Overlap, and Duplication

GAO conducted the work underlying this analysis in response to the 

National Defense Authorization Act for Fiscal Year 2013.

9 In conducting 

its work, GAO reviewed the number, funding, and size of JPME research 

institutions as well as the extent to which DOD assesses JPME research 

institution performance and coordinates research requests of these and 

other DOD-funded research organizations. To address its research 

objectives and meet the reporting date specified by the law, GAO 

collected financial information from JPME research institutions and not 

from other organizations that DOD funds to conduct studies and analysis 

research. Moreover, GAO analyzed the missions of JPME research 

institutions and other DOD-funded research organizations, but not the 

costs or content of individual research projects and their respective 

methodologies. Therefore, GAO is unable to estimate the financial 

benefits associated with this action. However, implementation of this 

recommendation would help DOD ensure that its resources are used 

efficiently in support of department-wide research priorities and reduce 

the risk of requesting potentially overlapping studies and analysis 

research.

In commenting on the March 2014 report on which this analysis is based, 

DOD stated that the department agreed with GAO’s recommendation. 

DOD noted that to improve coordination of research requests, the 

department plans to establish a Studies and Analysis Executive 

Committee by the end of fiscal year 2014 with regional and topical 

“communities of interest.” The committee will be a combined effort 

organized through the Office of the Under Secretary of Defense for Policy 

and the Assistant Secretary of Defense for Research and Engineering, 

with other representation from the JPME and PME community, as 

appropriate. GAO believes the department’s plan is an important first step 

that, if effectively implemented, will establish a framework for promoting

the efficient use of DOD’s resources by allowing DOD to share 

information on department-wide research priorities and reducing the risk 

of requesting potentially overlapping studies and analysis research.

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

comment. DOD provided no additional comments on this issue.

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

products listed in the related GAO product section. GAO assessed 

similarities among the 20 JPME research institutions and 14 other DODfunded research organizations by categorizing research organizations’ 

mission statements into topical areas of concentration. GAO gathered 

DOD documentation and canvassed knowledgeable DOD officials in 

 

9

Pub. L. No. 112–239, § 547(b) (2013).

Agency Comments 

and GAO’s Evaluation

How GAO Conducted 

Its Work
 

Page 59 GAO-14-343SP Fragmentation, Overlap, and Duplication

offices responsible for requesting research, such as the military 

departments, studies and analysis research program managers, and the 

Office of the Secretary of Defense, including the offices of the Under 

Secretary of Defense for Acquisition, Technology and Logistics and the 

Under Secretary of Defense for Policy. These steps enabled GAO to 

determine the processes for requesting and coordinating studies and 

analysis research from JPME institutions and other DOD-funded research 

organizations.

Table 3 in appendix IV lists JPME research institutions 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.

Joint Professional Military Education: Opportunities Exist for Greater 

Oversight and Coordination of Associated Research Institutions. 

GAO-14-216. Washington, D.C.: March 10, 2014.

For additional information about this area, contact Johana R. Ayers at 

(202) 512-5741 or ayersj@gao.gov. 

Related GAO Product

Contact Information
Page 60 GAO-14-343SP Fragmentation, Overlap, and Duplication

5. POW/MIA Mission

The Department of Defense should minimize overlapping and duplicative efforts by examining options to 

reduce fragmentation and clarify guidance on roles and responsibilities among the eight organizations that 

account for missing persons and improve the effectiveness of the mission.

The Department of Defense (DOD) reports that more than 83,000 

persons remain missing from past conflicts in World War II, Korea, 

Vietnam, the Cold War, and the Persian Gulf. Since the early 1970s, DOD 

has accounted for approximately 1,910 persons, and it identified an 

average of 72 persons annually in the decade ending 2012. DOD policy 

calls for the department to implement timely and effective policy and 

procedures to enhance personnel accounting operations, determine and 

accurately report the status of those who are unaccounted for, and 

provide current information to appropriate family members.1

 

The missing persons accounting community within DOD includes eight 

organizations that report through different lines of authority.

2 Two key 

organizations are the Defense Prisoner of War/Missing Personnel Office 

(DPMO), whose Director reports to the Under Secretary of Defense for 

Policy; and the Joint Prisoner of War/Missing in Action Accounting 

Command (JPAC), which reports to the Commander of the U.S. Pacific 

Command (PACOM). Other organizations in the community include the 

Armed Forces DNA Identification Laboratory, which is part of an 

organization reporting to the Army Surgeon General; the Life Sciences 

Equipment Laboratory, which is part of the Air Force; and the four service 

casualty offices. 

These organizations collectively obligated about $132 million for this 

mission in fiscal year 2012. DOD has programmed additional funds from 

fiscal years 2012 through 2016 in order to meet the congressionally 

mandated goal to provide funds, personnel, and resources to increase 

significantly the capability and capacity to account for missing persons, so 

 

1

DOD Directive 2310.07E, Personnel Accounting—Losses Due to Hostile Acts (Nov. 10, 

2003, certified current as of Aug. 21, 2007).

2

Section 1509 of Title 10 of the United States Code defines the organizations in DOD’s 

Prisoner of War/Missing in Action accounting community. These organizations are: the 

Defense Prisoners of War/Missing in Action Office, the Joint Prisoner of War/Missing in 

Action Accounting Command, the Armed Forces DNA Identification Laboratory, Life 

Sciences Equipment Laboratory, and the casualty and mortuary affairs offices of the 

military departments, including the Army service casualty office, the Navy service casualty 

office, and the Air Force service casualty office. The statute also provides that other 

elements meeting certain criteria are also included in the accounting community, and 

other organizations, such as the Office of the Under Secretary of Defense for Intelligence

and the State Department, that are not officially part of the accounting community also

have roles and responsibilities in this area. 

Why This Area Is 

Important
 

Page 61 GAO-14-343SP Fragmentation, Overlap, and Duplication

that the accounting community has sufficient resources to ensure that at 

least 200 missing persons are accounted for annually by fiscal year 2015. 

In a July 2013 report, GAO found that the missing persons accounting 

community is at risk of performing overlapping and duplicative efforts due 

to a lack of clarity in its members’ roles and responsibilities and a 

fragmented organizational structure, which have impeded efforts to 

establish clear plans to meet the community’s mission. 

The roles and responsibilities of the various members of the missing 

persons accounting community are not clearly articulated in existing DOD 

directives or instructions. GAO’s prior work has shown the need for 

collaborating agencies to work together to define and agree on their roles 

and responsibilities.3 It has also shown that overarching plans can help 

agencies better align their activities, processes, and resources to 

collaborate effectively to accomplish a commonly defined outcome.4

Disagreements over roles and responsibilities where the guidance is 

broad or vague enough to support different interpretations have led to 

discord, lack of collaboration, and friction among the community’s 

members, particularly between DPMO and JPAC. Moreover, discord 

among these organizations has impeded DOD’s ability to establish a 

community-wide plan for achieving the mandated goal of providing funds, 

personnel, and other resources to increase capability and capacity to 

account for 200 missing persons a year by 2015. Further, a fragmented 

organizational structure exacerbates these weaknesses. In part, because 

the missing persons mission cuts across many operational and functional 

boundaries within DOD, no single entity currently has overarching 

responsibility for community-wide personnel and resources. As a result, 

potentially overlapping and duplicative efforts among accounting 

community members exist in the following four key areas: (1) equipment 

and artifact identification and analysis; (2) research and analysis; (3) 

investigations; and (4) family outreach and external communications.

Both JPAC’s Central Identification Laboratory and the Air Force Life 

Sciences Equipment Laboratory have the ability to analyze life support 

equipment and both employ staff members who have responsibilities for 

equipment and artifact identification and analysis.5 JPAC and the Air 

 

3

GAO, Managing for Results: Key Considerations for Implementing Interagency 

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

4

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).

5

The Life Sciences Equipment Laboratory works with equipment that may be associated 

with a specific servicemember, such as pieces of uniforms and parachutes, and remnants 

from airplane ejection seats. The analysis of this equipment is particularly important when 

there is no biological material from which to make an identification. 

What GAO Found

Equipment and Artifact 

Identification and Analysis
 

Page 62 GAO-14-343SP Fragmentation, Overlap, and Duplication

Force Life Sciences Equipment Laboratory disagree about the Life 

Sciences Equipment Laboratory’s roles and responsibilities for equipment 

and artifact identification and analysis, and relevant DOD and Pacific 

Command guidance does not specify or differentiate the roles and 

responsibilities for the two labs in this area.6 A memorandum of 

agreement governing work between JPAC and the Life Sciences 

Equipment Laboratory was negotiated in 2004, but this agreement does 

not establish clear roles and responsibilities. 

As a result of this lack of clarity, the interactions between JPAC’s Central 

Identification Laboratory and the Life Sciences Equipment Laboratory 

have been inefficient. For example, GAO found in July 2013 that about 

half of the cases that JPAC’s Central Identification Laboratory sent to the 

Life Sciences Equipment Laboratory for analysis in 2011 and 2012 had 

already been resolved. JPAC officials stated that the Life Sciences 

Equipment Laboratory’s current operational support serves as 

unnecessary overlap, and that JPAC’s life support investigators are able 

to produce reports that are adequate to support an identification. In 

contrast, Life Sciences Equipment Laboratory officials stated that their 

capabilities are complementary to those of JPAC, and they noted that 

JPAC’s field analysis reports do not have the same level of detail as their 

own laboratory analyses. Until DOD guidance is revised to more clearly 

define JPAC’s and the Life Sciences Equipment Laboratory’s 

responsibilities, these interactions between the two organizations may not 

fully utilize each organization’s capability and capacity to achieve the 

mission.

DPMO’s research and analytical capabilities to perform research and 

analysis of missing persons overlap with the capabilities of JPAC, and 

DOD guidance is unclear regarding the responsibilities of the two 

organizations. DOD Directive 2310.07E states that the responsibilities of 

the Director of DPMO include overseeing archival research; standardizing 

procedures for methodology and prioritization; conducting national and 

international archival research; and coordinating with JPAC, which also 

conducts archival research, to improve efficiency and prevent duplication 

of effort. However, neither the directive nor the October 2003 PACOM 

transition plan that established JPAC clearly delineates JPAC’s 

responsibilities with regard to research.

DPMO and JPAC officials both told GAO that the absence of defined 

responsibilities in the areas of research and analysis has been a source 

of disagreements between the two organizations, slowing progress in this 

 

6

DOD Directive 2310.07E, Personnel Accounting—Losses Due to Hostile Acts (Nov. 10, 

2003, certified current as of Aug. 21, 2007) and U.S. Pacific Command, Permanent Order 

03-01, Joint Prisoner of War (POW)/Missing in Action (MIA) Accounting Command (Oct. 

1, 2003). This order provided guidance to establish JPAC by merging the Joint Task 

Force-Full Accounting and the United States Army Central Identification Laboratory 

Hawaii.

Research and Analysis
 

Page 63 GAO-14-343SP Fragmentation, Overlap, and Duplication

area and not using resources in an efficient manner. Until DOD clarifies 

and differentiates between DPMO’s and JPAC’s respective research and 

analysis responsibilities, the two organizations will continue to have 

overlapping capabilities and functions, and disagreements are likely to 

continue, thus potentially diminishing DOD’s missing persons capabilities.

DPMO’s and JPAC’s responsibilities to perform investigations overlap, 

and DOD guidance is unclear with respect to defining investigation 

responsibilities for these two organizations.7 For example, both DPMO 

and JPAC conduct investigations for missing persons from World War II 

in Europe and have asserted operational responsibilities for performing 

these investigations. Although DPMO and JPAC officials told GAO that 

the disagreement between DPMO and JPAC regarding investigation 

responsibilities had been resolved, and that DPMO will be conducting 

investigations for World War II cases outside of PACOM’s area of 

responsibility, this resolution has not yet been documented. Until DOD 

clarifies and differentiates between DPMO’s and JPAC’s respective 

investigation responsibilities and documents this clarification, the two 

organizations will continue to have overlapping functions, and 

disagreements may continue, thus impeding efforts to perform 

investigations.

DPMO and JPAC have overlapping responsibilities for family outreach 

and external communication. DOD provides some limited guidance 

regarding family outreach and external communication roles and 

responsibilities for DPMO and the service casualty offices, but provides 

no guidance on JPAC’s roles and responsibilities in this area.8 To carry 

out its family outreach and external communication responsibilities, 

DPMO organizes periodic updates and annual government briefings to 

keep family members informed. JPAC’s 2010 annual report notes that 

JPAC conducts some family outreach activities by hosting numerous 

private tours for family members and providing operational briefings at 

nine family update events. Service casualty office officials told GAO that 

their offices serve as the primary liaison for families. They coordinate the 

 

7

DOD Directive 2310.07E states that the Deputy Assistant Secretary of Defense 

for Prisoner of War/Missing Personnel Affairs—a position that is held by the 

Director of DPMO—shall exercise policy, control, and oversight within DOD for 

the entire process of accounting for missing persons, but it does not mention 

what role, if any, DPMO should play in performing investigations. Further, the 

directive does not describe JPAC’s investigation responsibilities. In addition, 

JPAC’s 2013 operational plan states that JPAC conducts worldwide 

investigation, recovery, and laboratory operations to identify missing personnel 

from past conflicts in order to support DOD’s personnel accounting mission, and 

that JPAC’s functions include field investigations.

8

DOD Directive 5110.10, Defense Prisoner of War/Missing Personnel Office 

(DPMO) (Sept. 21, 2005). DOD Instruction 1300.18, DOD Personnel Casualty 

Matters, Policies, and Procedures (Jan. 8, 2008, incorporating change Aug. 14, 

2009). 

Investigations

Family Outreach and 

External Communications
 

Page 64 GAO-14-343SP Fragmentation, Overlap, and Duplication

briefings for the families concerning case status and developments 

through the regularly scheduled updates and annual government briefings 

organized by DPMO, as well as notify family members when an 

identification is made. None of the family organizations with which GAO 

spoke raised concerns about DOD’s having several organizations 

involved with family outreach and external communications. However, 

according to DOD officials, without clear guidance regarding the roles and 

responsibilities for each organization, there is potential for inconsistent 

communication of information to family members and external parties.

The accounting community’s initial response to 2009 direction from the 

Deputy Secretary of Defense to build the capability and capacity to 

account for 200 persons a year by 2015 was characterized by disputes 

and lack of coordination, and was illustrated by the development of 

competing proposed plans by DPMO and JPAC. Since then, the 

accounting community has begun drafting a community-wide plan to meet 

the accounting-for goal, but as of February 2014 this plan had not been 

completed, due in part to disputes among community members. 

According to both DPMO and JPAC officials, the areas of disagreement 

are primarily between JPAC and DPMO and included topics such as the

division of research and analysis responsibilities between DPMO and 

JPAC, determination of the appropriate levels of effort for each of the 

various conflicts, and agreement on a policy to address lower priority 

cases that have been on JPAC’s list of potential recovery sites for a long 

time. Without a community-wide plan, members have had varied success 

in building the capability and capacity to meet the 200 persons goal by 

2015.

The accounting community has a fragmented organizational structure, 

with each accounting community organization reporting under a different 

line of authority, and this structure exacerbates weaknesses in the 

program. GAO reported in July 2013 that, based on a questionnaire 

administered by GAO to representatives from each DOD accounting 

community organization, a majority of accounting community and DOD 

stakeholder organizations believed that an alternative organizational 

structure for the accounting community would be more effective than the 

present structure. For example, GAO found that 12 of the 13 survey 

respondents who answered the question ranked an option with a more 

centralized chain of command as the most effective of possible options in 

enabling the accounting community to achieve its mission. 

To help minimize unnecessary overlap and disagreement within the 

missing persons accounting community, in July 2013 GAO recommended 

that the Secretary of Defense take the following four actions:

• Direct the Secretary of the Air Force and direct the Commander, U.S. 

Pacific Command, to negotiate a new memorandum of agreement 

between the Life Sciences Equipment Laboratory and JPAC. The 

Community-wide Planning

Fragmented 

Organizational Structure

Actions Needed and 

Potential Financial or 

Other Benefits
 

Page 65 GAO-14-343SP Fragmentation, Overlap, and Duplication

memorandum should specify which conflicts’ artifacts JPAC should 

send to the Life Sciences Equipment Laboratory for analysis, the type 

of artifacts to be sent, and the priorities according to which the Life 

Sciences Equipment Laboratory should analyze resolved cases.

• Direct the Office of the Under Secretary of Defense (Policy) to revise 

DOD Directive 2310.07E and finalize and issue the new, related DOD 

instruction to supplement this directive. Clarification of roles and 

responsibilities should be made particularly with respect to the 

following four functions: equipment and artifact identification and 

analysis; research and analysis; investigations; and family outreach 

and external communications.

• Finalize the community-wide plan to develop the increased capability 

and capacity required by statute, with the support and participation of 

all community members. The initiatives and resources of all members 

of the accounting community should be integrated within the 

community-wide plan.

• Examine options for reorganizing the accounting community, and as 

part of that examination, consider alternative organizational options 

that would help unify the community’s fragmented organizational 

structure and provide a more centralized chain of command.

The precise potential financial benefits of implementing these actions are 

not clear because determining them would require DOD to have already 

examined options for alternative organizations, which we recommended 

as a needed step toward minimizing unnecessary overlap and 

duplication. However, taking these actions will aid DOD’s efforts to meet 

its congressionally mandated goal of significantly increasing the capability 

and capacity to account for missing persons.

In written comments to GAO’s July 2013 report, DOD largely concurred 

with GAO’s recommendations. In addition, in December 2013, the 

National Defense Authorization Act for Fiscal Year 2014 required the 

Secretary of Defense to consider our recommendations in preparing a 

report to Congress on the organizational structure of the POW/MIA 

accounting community by June 2014. According to DOD, on February 20, 

2014, the Secretary of Defense directed the Acting Undersecretary of 

Defense for Policy to provide him a plan within 30 days that would clarify 

changes needed to consolidate relevant department assets into a single 

organization with oversight and accountability for the entire mission of 

accounting for missing personnel. In addition the Secretary directed that 

the plan propose ways to increase the number of identifications, improve 

transparency for families, and expand a case file system for missing 

personnel. If completed, these actions will enable DOD to address some 

of the issues of overlap that were raised in the GAO report.

Agency Comments 

and GAO’s Evaluation
 

Page 66 GAO-14-343SP Fragmentation, Overlap, and Duplication

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

for review and comment. DOD provided technical comments and GAO 

incorporated them as appropriate.

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

July 2013 report listed in the related GAO products section. GAO 

analyzed relevant statutes and DOD directives, instructions, 

memorandums of agreement, standard operating procedures, and other 

guidance and documentation to identify potential areas of duplication, 

unnecessary overlap, or fragmentation among the activities of the 

accounting community members. GAO interviewed officials from all of the 

missing persons accounting community organizations, as well as officials 

from top-level leadership offices and other stakeholder organizations, to 

discuss the areas where roles and responsibilities were vague or 

overlapping and discussed potential benefits and drawbacks of the lack of 

clarity in roles and responsibilities and associated areas of overlapping 

responsibilities for DOD’s missing persons accounting mission. In 

addition, GAO administered a questionnaire to the universe of 17 

accounting community member organizations and several DOD 

stakeholder organizations identified within the scope of this engagement 

regarding their views on alternative options for organizing the accounting 

community. We received a total of 14 responses out of the 17 

questionnaires distributed, and followed up with all of the 

nonrespondents. The Defense Intelligence Agency and DOD’s Office of 

Cost Assessment and Program Evaluation did not provide responses to 

our questionnaire. In addition, JPAC officials told us that their response 

reflected input from JPAC’s Central Identification Laboratory. All of the 

accounting community organizations submitted survey responses. We 

qualitatively analyzed the open-ended responses and quantitatively 

analyzed the closed-ended responses from the questionnaires to identify 

trends in responses and gain insight into the accounting community 

organizations’ and DOD stakeholders’ views on the issues identified in 

the questionnaire.

Table 4 in appendix IV lists the agency responsibilities among the missing 

persons accounting community 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.

DOD’S POW/MIA Mission: Top-Level Leadership Attention Needed to 

Resolve Longstanding Challenges in Accounting for Missing Persons 

from Past Conflicts. GAO-13-619. Washington, D.C.: July 17, 2013.

DOD'S POW/MIA Mission: Capability and Capacity to Account for Missing 

Persons Undermined by Leadership Weaknesses and Fragmented 

Organizational Structure. GAO-13-810T. Washington, D.C.: August 1, 

2013.

How GAO Conducted 

Its Work

Related GAO 

Products
 

Page 67 GAO-14-343SP Fragmentation, Overlap, and Duplication

For additional information about this areas, contact Brenda S. Farrell at Contact Information (202) 512-3604 or farrellb@gao.gov. 
Page 68 GAO-14-343SP Fragmentation, Overlap, and Duplication

Health

6. Federal Autism Research

Because much of the $1.2 billion that federal agencies spent on autism research from fiscal years 2008 

through 2012 had the potential to be duplicative, the Interagency Autism Coordinating Committee and federal 

agencies should improve coordination and monitoring of autism research to help avoid unnecessary 

duplication. 

Autism is an important public health concern, according to the Centers for 

Disease Control and Prevention (CDC)—an agency within the 

Department of Health and Human Services (HHS).

1 CDC estimates 

suggest that the prevalence of autism is increasing, and that at least 1 in 

88 children in the United States have been identified as having autism.2

From fiscal year 2008 through fiscal year 2012, 11 federal agencies spent 

a combined total of approximately $1.2 billion on autism research. These 

agencies are the Department of Defense (DOD), Department of 

Education (Education), Environmental Protection Agency (EPA), National 

Science Foundation (NSF), and 7 agencies within HHS: Administration for 

Children and Families, Agency for Healthcare Research and Quality 

(AHRQ), CDC, Centers for Medicare & Medicaid Services, Health 

Resources and Services Administration, National Institutes of Health 

(NIH), and Substance Abuse and Mental Health Services Administration 

(SAMHSA).3

 

Having multiple agencies involved in autism research can be 

advantageous, as agencies may be able to tailor programs to suit their 

specific missions and needs. However, it is important that agencies 

monitor federal autism efforts and coordinate similar actions to maximize 

their effectiveness and efficiency and avoid duplication.

 

1

Autism is a complex developmental disorder that begins during early childhood, 

characterized by impaired social interactions, problems with verbal and nonverbal 

communication, and repetitive behaviors, or by severely limited activities and interests. 

What is commonly known as autism is a group of disorders known as autism spectrum 

disorder that can range from mild to more severe in their symptoms. In this report, the 

term “autism” is used to refer to autism spectrum disorder as defined in the fourth edition 

of the Diagnostic and Statistical Manual of Mental Disorders, which was effective during 

the time period covered by GAO’s review. American Psychiatric Association, Diagnostic 

and Statistical Manual of Mental Disorders, 4th Edition, Text Revision (DSM-IV-TR) 

(Arlington, VA: American Psychiatric Association, 2000).

2

According to CDC, it is unclear how much of this increase is due to a broader definition of 

autism, improvements in diagnosis, or an actual increase in the number of people with 

autism. CDC believes that the increase in the prevalence of autism is likely due to a 

combination of these factors. 

3

DOD’s fiscal year 2012 appropriation for its medical research programs, including autism, 

was available for obligation through the end of fiscal year 2013—September 30, 2013. At 

the time of GAO’s review, DOD had not submitted data on its fiscal year 2012 research 

projects. As a result, GAO’s report does not include data on DOD’s fiscal year 2012 

autism research. 

Why This Area Is 

Important
 

Page 69 GAO-14-343SP Fragmentation, Overlap, and Duplication

Most of the agencies that fund autism research, with the exception of 

EPA, NSF, and SAMHSA, are members of the Interagency Autism 

Coordinating Committee (IACC)—a federal advisory committee 

composed of federal and nonfederal members. Among other things, the 

Combating Autism Act of 2006 (CAA) required the IACC to coordinate all 

autism activities within HHS and monitor federal activities related to 

autism across the federal government.4 To accomplish this charge, the 

IACC holds meetings and has issued several reports. These reports 

include a strategic plan for autism research—which the CAA requires the 

IACC to develop and annually update—that is organized into 7 research 

areas that contain specific short- and long-term research objectives.5 At 

the time of GAO’s review, the most recent strategic plan contained 78 

objectives—for example, an objective to complete at least three 

randomized controlled trials on medications targeting core symptoms in 

people with autism and an objective to initiate studies on at least 10 

environmental factors identified as potential causes of autism. 

The IACC also issues an annual Autism Spectrum Disorder Research 

Portfolio Analysis Report. This report is organized by the same 7 research 

areas and includes information on research projects funded by federal 

and nonfederal entities related to autism, including budget information, for 

a single fiscal year.6 The IACC also has a companion database to its 

portfolio analysis—referred to as the web tool—which allows users to 

view and search projects included in the portfolio analysis. The Office of 

Autism Research Coordination (OARC), within NIH, provides 

administrative support to the IACC, such as collecting data from federal 

agencies to be used in reports published by the IACC.

In November 2013, GAO determined that of the 1,206 autism research 

projects funded by federal agencies from fiscal years 2008 through 2012, 

84 percent—1,018 projects—had the potential to be duplicative, because 

the projects were categorized to the same strategic plan objectives or 

research areas.7 GAO found that each of the 11 federal agencies that 

funded autism research during this period funded at least 1 autism 

research project in the same strategic plan objective as another agency. 

In many instances, 3 or more agencies funded research projects under 

 

4

Pub. L. No. 109-416, § 3, 120 Stat. 2821, 2827 (2006). The IACC and other autism 

activities authorized under the CAA were reauthorized through fiscal year 2014 under the 

Combating Autism Reauthorization Act of 2011. Pub. L. No. 112-32, 125 Stat. 361 (2011). 

5

The 7 research areas are diagnosis, biology, causes, treatment and interventions,

services, lifespan issues, and infrastructure and surveillance. The IACC considers all 

objectives within the infrastructure and surveillance research area to be both short- and 

long-term objectives. 

6

At the time of GAO’s review, the most recent portfolio analysis was published in July 

2012 and contained information on research funded in 2010. 

7

Thirty-one projects could not be assessed for potential duplication. GAO’s findings 

suggest potential, not actual duplication.

What GAO Found
 

Page 70 GAO-14-343SP Fragmentation, Overlap, and Duplication

the same objective. For example, 5 agencies awarded approximately 

$15.2 million for 20 autism research projects related to 1 objective. This 

objective was to test methods to improve dissemination, implementation, 

and sustainability of evidence-based interventions, services, and supports 

in diverse community settings. Four agencies awarded approximately 

$4.1 million for 8 autism research projects to develop at least 2 

individualized community-based interventions to improve quality-of-life or 

health outcomes for the spectrum of adults with autism. Funding autism 

research on the same topic may be appropriate and necessary—for 

example, for purposes of replicating or corroborating results—but in some 

instances, funding similar autism research may lead to unnecessary 

duplication and inefficient use of funds. The objectives, which represent 

broad and complex areas of research, are useful to identify the potential 

for unnecessary duplication and such identification can effectively lead to 

further review by the funding agencies to ensure funds are carefully 

spent. Agencies can review specific project information to confirm 

whether projects associated with an objective are, for example, necessary 

to replicate prior research results. This type of analysis would help 

provide assurance that agencies are not wasting federal resources due to 

duplication of effort. Further, such an analysis could help identify research 

needs—such as research that is needed to complement or follow-up prior 

research or research that requires further corroboration—and move 

autism research forward in a coordinated manner.

GAO concluded in November 2013 that the IACC may have missed 

opportunities to coordinate federal autism activities and reduce the risk of 

duplication of effort and resources. Although the CAA requires the IACC 

to coordinate HHS autism activities and monitor federal autism activities, 

OARC officials stated that the prevention of duplication among individual 

projects in agency portfolios is not specified in the CAA as one of the 

IACC’s statutory responsibilities and therefore is not a focus of the IACC. 

OARC officials stated that it was up to the individual federal agencies to 

use the information contained in the IACC’s strategic plan and portfolio 

analysis and the related web tool to prevent duplication. OARC officials 

acknowledged that the IACC could choose to use data from the portfolio 

analysis as the basis for specific recommendations regarding areas 

where interagency coordination could be increased, but to date this has 

not occurred. OARC officials stated that they do not consider it to be their 

responsibility to review the data that they collect on behalf of the IACC for 

duplication or for coordination opportunities. Instead, they said that they 

fulfill their role in assisting the IACC in its cross-agency coordination 

activities in other ways, such as by facilitating interagency communication 

and gathering information. 

Additionally, GAO found that, apart from participation on the IACC, 

instances of agencies coordinating were limited. GAO also found that 

agencies did not have robust or routine procedures for monitoring federal 

autism activities. While 5 of the 10 agencies with which GAO spoke 

stated that they monitored federal autism activities by searching 

databases or websites, these searches were narrowly focused or 

undefined, and some agencies lacked formal policies or procedures for 
 

Page 71 GAO-14-343SP Fragmentation, Overlap, and Duplication

staff to follow. For example, some agencies conducted federal database 

searches to ensure that a principle investigator was not receiving funding 

from another agency for the same project; however, these searches 

would not identify whether agencies were funding similar projects led by 

different principal investigators.8 Several agency officials also stated that 

they rely on their peer reviewers, other experts, and project officers to 

have knowledge of the current autism research environment. Per federal 

internal control standards, agencies should establish a means of 

communicating with, and obtaining information from, other agencies.9

Such communication is important to maximize the effectiveness and

efficiency of the federal autism investment and minimize the potential for 

inefficient use of federal resources due to unnecessary duplication.

To enhance the IACC’s efforts to coordinate HHS autism activities and 

monitor all federal autism activities, in November 2013 GAO 

recommended that the Secretary of Health and Human Services should 

direct the IACC and NIH, in support of the IACC, to take the following 

action:

• identify projects through its monitoring of federal autism activities—

including OARC’s annual collection of data for the portfolio analysis 

and the IACC’s annual process to update the strategic plan—that may 

result in unnecessary duplication and thus may be candidates for 

consolidation or elimination, and identify potential coordination 

opportunities among agencies. 

To promote better coordination among federal agencies that fund autism 

research and avoid the potential for unnecessary duplication before 

research projects are funded, GAO also recommended in November 

2013 that the Secretary of Health and Human Services, the Secretary of 

Defense, the Secretary of Education, and the Director of NSF each take 

action to:

 

8

Principal investigators are typically individuals designated by the applicant organization, 

such as a university, to have the appropriate level of authority and responsibility to direct 

the project or program to be supported by the award. NIH officials also stated that, before 

awarding funding, NIH program and grants management staff are to ensure that there is 

no budgetary, scientific, or commitment overlap by reviewing documentation of “other 

support” identified by the applicant (which includes all financial resources, whether federal, 

nonfederal, commercial or organizational, available in direct support of an individual’s 

research endeavors, including, but not limited to, research grants, cooperative 

agreements, contracts, or organizational awards, but not training awards, prizes, or gifts). 

Officials from AHRQ, DOD, Education, and NSF also told us they rely on similar 

disclosure from applicants. 

9

See federal internal control standard for information and communications. GAO, 

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

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

Actions Needed and 

Potential Financial or 

Other Benefits
 

Page 72 GAO-14-343SP Fragmentation, Overlap, and Duplication

• determine methods for identifying and monitoring the autism research 

conducted by other agencies, including by taking full advantage of 

monitoring data the IACC develops and makes available. 

Because GAO identified the potential for duplication in autism research, 

rather than actual duplication, the costs of any actual duplication could 

not be determined. However, given that 11 federal agencies spent a 

combined total of approximately $1.2 billion on autism research from 

fiscal years 2008 through 2012, and that multiple agencies have funded 

autism research related to the same objectives, the federal government 

may realize financial benefits from taking the actions GAO describes 

related to improved coordination and monitoring. Such actions could help 

avoid unnecessary duplication of autism research. They may also help 

identify potential opportunities for further coordination, since agencies can 

only coordinate with each other when they are aware of relevant research 

or other activities. Ultimately, improvement in coordination and monitoring 

related to autism research would help ensure that scarce federal 

resources are used as efficiently as possible.

Comments from DOD, Education, HHS, and NSF on the November 2013 

report on which this analysis is based varied. HHS did not concur with 

GAO’s recommendation that it should take action to identify projects that 

may result in unnecessary duplication, as such an analysis would not 

provide the detail needed to determine actual duplication. GAO agreed 

that further analysis would be needed to identify actual duplication, but 

maintained that the identification of such projects would be worthwhile as 

it could effectively lead to further review by the funding agencies. GAO 

also questioned the purpose of using federal resources to collect data, if 

the data are not then carefully examined to ensure federal funds are 

being used appropriately.

DOD concurred with the recommendation to improve coordination among 

federal agencies. While the comments from Education, HHS, and NSF 

suggested that these agencies view the opportunity to enhance the 

coordination of federal autism research activities positively, they also 

expressed concern with certain of the report’s conclusions. 

Education, HHS, and NSF did not agree with GAO’s conclusion that the 

majority of autism research projects had the potential to be duplicative. 

The agencies stated that strategic plan objectives and research areas are 

broad; and therefore, projects categorized under the same objective 

cannot be fairly judged as potentially duplicative without more substantial 

exposition. GAO agreed that more information on the specific projects 

funded within each objective would need to be assessed in order to 

determine actual duplication. However, the fact that research is 

categorized to the same objectives suggests that there may be 

duplicative projects being funded. GAO did not find any information during 

the course of its work that Education, HHS, or NSF had reviewed the 

autism research projects to ensure that they were not unnecessarily 

duplicative. Specific project information should routinely be compared to 

Agency Comments 

and GAO’s Evaluation
 

Page 73 GAO-14-343SP Fragmentation, Overlap, and Duplication

ensure that projects associated with an objective are, for example, 

complementary or necessary to replicate prior research results. This type 

of analysis would help provide assurance that agencies are not wasting 

federal resources due to duplication of effort. Further, such an analysis 

could help identify research needs—such as research that requires 

further corroboration—and move autism research forward in a 

coordinated manner. 

Additionally, two agencies—HHS and NSF—included comments 

suggesting that they were concerned about the report’s conclusion that 

the coordination and monitoring of federal autism activities were limited. 

Both agencies’ comments included information on their coordination and 

monitoring activities. GAO stated that, while important, these agencies’ 

activities were not sufficiently comprehensive and were limited in that they 

only looked to identify duplicative projects led by the same principal 

investigator. The agencies’ activities did not identify project applications 

led by another principal investigator that may be unnecessarily duplicative 

of a project that has already been federally funded—a project with the 

same purpose, strategies, and target population that is not necessary to, 

for example, corroborate or replicate prior research results.

GAO provided a draft of this report section to DOD, Education, HHS, and 

NSF for review and comment. HHS and NSF provided written comments. 

NSF provided similar comments to those that it provided on the 

November 2013 report on which this analysis is based. HHS, on behalf of 

NIH, also offered comments that were similar to those it made in 

response to GAO’s November 2013 report. In addition, HHS stated that 

NIH program officials use a database for detection of duplication of 

scientific content across applications to help identify similar projects led 

by either the same or different investigators. Although the use of this 

database may be helpful, HHS did not provide information indicating that 

NIH has policies in place that ensure that program officials actually 

search this database on key terms to identify similar research led by 

different principal investigators before awarding each research grant, and 

information referencing the use of this database for this purpose was not 

provided during the course of GAO’s 11 month review. NIH’s written 

policy states only that NIH will not accept similar grant applications with 

essentially the same research focus from the same applicant. Finally, in 

its comments on this report, HHS stated that, while the data collected for 

the portfolio analysis is not reviewed by the IACC to prevent duplication, 

the collection of the data is still beneficial as it can be used to evaluate 

progress on the IACC strategic plan and to identify gaps in autism 

research. 

GAO agrees that these are important uses of the data. Measuring 

progress is a key aspect of successful strategic planning. However, GAO 

believes that, while such uses are beneficial, these uses are not a 

substitute for actively searching for unnecessarily duplicative research. 

Using the data to help prevent duplication is an important step in ensuring 

scarce federal resources are used as effectively and efficiently as 
 

Page 74 GAO-14-343SP Fragmentation, Overlap, and Duplication

possible. Both NSF and HHS provided technical comments, which GAO 

incorporated as appropriate.

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

product listed in the related GAO products section. GAO identified autism 

research projects funded by 11 agencies between fiscal years 2008 

through 2012 (table 4 in appendix IV lists the number of projects GAO 

identified, by agency). GAO determined whether research was potentially 

duplicative by identifying projects that were categorized to the same 

strategic plan objectives, or in the case of projects that were not 

categorized to a specific objective, were categorized to the same strategic 

plan research areas. To assess the extent to which the IACC and 

agencies coordinate and monitor federal autism activities, GAO reviewed 

IACC documents. GAO also interviewed OARC officials, officials from 10 

federal agencies—8 of which were federal IACC members and 2 of which 

were not IACC members but funded autism-related research between 

fiscal years 2008 and 2012—and select nonfederal IACC members. GAO 

assessed the IACC’s and agencies’ coordination and monitoring activities 

against criteria established by GAO’s prior work, including key practices 

for interagency coordination and collaboration and internal control 

standards related to communicating with external entities, including other 

agencies, and measuring progress on organizational efforts, such as 

those established through strategic plans.10 

Table 5 in appendix IV lists the agencies funding autism research 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.

Federal Autism Activities: Better Data and More Coordination Needed to 

Help Avoid the Potential for Unnecessary Duplication. GAO-14-16. 

Washington, D.C.: November 20, 2013.

For additional information about this area, contact Marcia Crosse at (202) 

512-7114, or crossem@gao.gov. 

 

10See, for example, GAO, Managing for Results: Key Considerations for Implementing 

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

2012); 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/AIMD-00-21.3.1.

How GAO Conducted 

Its Work

Related GAO Product

Contact Information
 

Page 75 GAO-14-343SP Fragmentation, Overlap, and Duplication

7. Minority AIDS Initiative

Consolidating the fragmented funding of the Department of Health and Human Services’ Minority AIDS 

Initiative into core HIV/AIDS funding would likely reduce grantees’ administrative burden and help the agency 

more efficiently and effectively provide services to minority populations who are disproportionally affected by 

HIV/AIDS, with the approximately $3 billion used for this purpose. In addition to fragmentation, we found that 

the services provided by Minority AIDS Initiative grantees overlapped with those provided by core HIV/AIDS 

grantees and were provided to similar populations; this overlap increases the administrative costs associated 

with participating in the programs.

The Department of Health and Human Services (HHS) provides funding 

under numerous grant programs to address the needs of individuals 

affected by the human immunodeficiency virus (HIV) and acquired 

immunodeficiency syndrome (AIDS) in the United States. The Minority 

AIDS Initiative (MAI) was established in 1998 in response to growing 

concern about the impact of HIV/AIDS on racial and ethnic minorities in 

the United States. The Health Resources and Services Administration’s 

(HRSA) MAI program was codified into law as part of the 2006 

reauthorization of the Ryan White Comprehensive AIDS Resources 

Emergency Act of 1990 (CARE Act), which was enacted to address the 

treatment needs of uninsured and underinsured persons living with 

HIV/AIDS.1 Other HHS agencies and offices carry out MAI grant 

programs separate from the statutory MAI program that HRSA 

implements under the CARE Act. Congress has not enacted specific 

appropriations provisions applicable to all of these agencies’ and offices’ 

MAI grant programs. As a result, where a specific appropriation is absent, 

HHS exercises discretion in allocating this funding to numerous agencies 

and offices to implement separate MAI grant programs, which may be 

influenced by any applicable committee report language accompanying 

their annual appropriations acts. 

According to data from the Centers for Disease Control and Prevention 

(CDC), racial and ethnic minorities in the United States have been 

disproportionately affected by AIDS, representing 72 percent of new HIV 

infections and 74 percent of all AIDS diagnoses in 2011. HHS awards 

MAI grants to provide services for communities disproportionally affected 

 

1

Pub. L. No. 101-381, 104 Stat. 576 (1990), codified, as amended, at 42 U.S.C. §§ 300ff 

through 300ff-121. The 1990 CARE Act added title XXVI to the Public Health Service Act. 

Unless otherwise indicated, references to the CARE Act refer to current title XXVI. The 

CARE Act programs have been reauthorized by the Ryan White CARE Act Amendments 

of 1996 (Pub. L. No. 104-146, 110 Stat. 1346 (1996)), the Ryan White CARE Act 

Amendments of 2000 (Pub. L. No. 106-345, 114 Stat. 1319 (2000)), the Ryan White 

HIV/AIDS Treatment Modernization Act of 2006 (Pub. L. No. 109-415, 120 Stat. 2767

(2006)), and the Ryan White HIV/AIDS Treatment Extension Act of 2009 (Pub. L. No. 111-

87, 123 Stat. 2885 (2009)). 

Why This Area Is 

Important
 

Page 76 GAO-14-343SP Fragmentation, Overlap, and Duplication

by HIV/AIDS.2 MAI grantees include health departments, state and local 

governments, tribal governments, community health centers, hospitals 

and medical centers, community-based organizations, colleges and 

universities, AIDS Education and Training Centers, and national 

HIV/AIDS organizations such as the National Minority AIDS Council.3 In 

fiscal year 2011, 10 agencies and offices within HHS allocated a total of 

$416.5 million to MAI programs. 

In addition to MAI funds, two agencies within HHS—HRSA and CDC—

administer grant programs that provide core HIV/AIDS funding for 

HIV/AIDS services to all qualifying individuals affected by HIV/AIDS.4

HRSA awards core HIV/AIDS grants pursuant to the CARE Act. CDC 

awards core HIV/AIDS grants for prevention programs, research and 

evaluation, surveillance, and policy development to reduce the impact of 

HIV/AIDS. In fiscal year 2011, CDC’s and HRSA’s combined budget for 

core HIV/AIDS funding was $2.76 billion. Similar to MAI grants, core 

HIV/AIDS grants are awarded to health departments, state governments, 

community health centers, hospitals, community-based organizations, 

universities, and AIDS Education and Training Centers. Many grantees 

are awarded both MAI and core HIV/AIDS grants.

In November 2013, GAO reported that MAI and core HIV/AIDS funding is 

fragmented across numerous agencies and offices in HHS and that all 

grantees provide similar services to respond to the same national need. 

Ten different HHS agencies and offices awarded HIV/AIDS grants 

through multiple funding streams. In fiscal year 2011, 56 percent (596) of 

the 1,067 MAI grantees received several HIV/AIDS grants, including at 

least one MAI grant and one core HIV/AIDS grant. For these 596 

grantees, the average MAI grant was $391,225, while the average core 

HIV/AIDS grant was $3,823,102. 

In addition to fragmentation, GAO found that the services provided by 

MAI grantees overlapped, meaning that they were similar to those 

provided by grantees awarded HRSA’s and CDC’s core HIV/AIDS funding 

and that those services were being provided to similar populations. GAO 

found that MAI grantees were providing mostly support services with their 

MAI grants, similar to the types of support services grantees provided 

with core HIV/AIDS funding from CDC and HRSA. These support 

 

2

In addition to grants, some agencies may have awarded MAI funding to recipients 

through other mechanisms such as cooperative agreements, contracts, or interagency 

agreements. GAO treated all recipients as “grantees” regardless of the funding 

mechanism by which they received their funds.

3

Sixteen AIDS Education and Training Centers provide HIV/AIDS education to health 

professionals such as nurses and physicians.

4

We use the term “core funding” to refer to those funding programs administered by CDC 

and HRSA that are intended to provide services to all qualifying individuals affected by 

HIV/AIDS, as opposed to HHS’s Minority AIDS Initiative’s targeted funding programs.

What GAO Found
 

Page 77 GAO-14-343SP Fragmentation, Overlap, and Duplication

services included community outreach and education for the purpose of 

recruiting and retaining clients to HIV/AIDS services; client assistance, 

which included care coordination, case management, or referrals to care; 

and staff or provider training such as training to keep providers informed 

about HIV-related clinical service guidelines. The demographic 

information available from HHS agencies and offices, while limited, 

suggested that the majority of those served with both MAI and core 

HIV/AIDS grants are racial and ethnic minorities. This is consistent with 

the current distribution of HIV/AIDS in the United States. 

GAO’s work on duplication and fragmentation has found that the 

presence of fragmentation can lead to instances of overlap and 

duplication among government agencies or programs that have similar 

goals or activities.5

 Similarly, the National HIV/AIDS Strategy of 2010 

noted the issue of multiple funding streams as one that could complicate 

the coordination of HIV/AIDS programs. The Strategy stated that “HIV 

service providers often receive funding from multiple sources with 

different grant application processes and funding schedules, and varied 

reporting requirements.”6

 GAO also has identified approaches that 

agencies can take to improve efficiency, such as streamlining or 

consolidating management or operational processes to make them more 

cost-effective.7

 

The fragmented nature of MAI and core HIV/AIDS funding has caused 

administrative challenges for grantees by often forcing grantees to 

manage grants from several sources. These funding sources required 

them to complete multiple administrative requirements. For example, the 

city of Chicago received nine grants from HHS to provide HIV/AIDS 

services, including six MAI grants and three core HIV/AIDS grants. Each 

of these grants has administrative requirements, such as application and 

reporting requirements, associated with it. As a result, Chicago is required 

to submit a report or application for one of its HIV/AIDS grants in most 

months of the year and in some months, they are required to produce 

multiple submissions. While some of the specific services Chicago 

provided with the nine grants varied, all of the grants were used to 

provide HIV/AIDS treatment or prevention services to residents of the city 

of Chicago. Other cities with a similar array of grants include Philadelphia, 

San Francisco, Los Angeles, and New York City. Such overlap in 

 

5

Fragmentation occurs when one or more federal agencies or agency organizations are 

involved in the same broad area of national need and opportunities exist to improve 

service delivery. Overlap occurs when multiple agencies or programs have similar goals,

engage in similar activities or strategies to achieve them, or target similar beneficiaries. 

Duplication occurs when two or more agencies or programs are engaged in the same 

activities or provide the same services to the same beneficiaries. See GAO, 2013 Annual 

Report: Actions Needed to Reduce Fragmentation, Overlap, and Duplication and Achieve 

Other Financial Benefits, GAO-13-279SP (Washington, D.C.: April 2013).

6

The White House, National HIV/AIDS Strategy for the United States, July 2010, p.42. 

7

GAO-13-279SP, 3. 
 

Page 78 GAO-14-343SP Fragmentation, Overlap, and Duplication

reporting requirements increases the administrative costs associated with 

participating in the programs. 

Because of the administrative requirements associated with managing 

multiple HIV/AIDS grants, some grantees decided not to apply for MAI 

grants. In fiscal year 2011, according to information provided by HRSA, 

37 percent of state grantees chose not to apply for MAI grants. Some 

grantees that chose not to apply were states with sizeable minority 

populations. HRSA officials stated that several grantees reported that 

their reasons for not applying for MAI funds were that the small size of 

MAI grants did not provide enough funding to implement a program and 

justify the additional administrative requirements. The fragmented nature 

of the MAI and core HIV/AIDS funding and the accompanying 

administrative requirements could discourage some grantees from 

applying for this funding and divert resources from providing HIV/AIDS 

services. 

In order to reduce the administrative costs associated with a fragmented 

MAI grant structure that diminishes the effective use of HHS’s limited 

HIV/AIDS funding, and to enhance services to minority populations, GAO 

recommended in November 2013 that HHS should take the following two 

actions: 

• consolidate disparate MAI funding streams into core funding during its 

budget request and allocation process, and 

• seek legislation to amend the CARE Act or other provisions of law, as 

necessary, to achieve a consolidated approach.

Implementation of these recommendations would help the government 

more efficiently and effectively provide HIV/AIDS services to minority 

populations who are disproportionally affected by HIV/AIDS. GAO did not 

conduct an analysis of the benefits of consolidating MAI and core 

HIV/AIDS funding, but consolidating these programs would likely increase 

the efficiency of the provision of HIV/AIDS services to minority 

populations with the approximately $3 billion used for this purpose.

In commenting on GAO’s November 2013 report, on which this analysis is 

based, HHS stated that GAO’s recommendations align with the National 

HIV/AIDS Strategy and federal program accountability goals, but also 

stated that any restructuring of its HIV/AIDS funding approach must

ensure continued responsiveness to minorities who are disproportionately 

affected by HIV/AIDS. HHS said it welcomed an expanded discussion of 

strategies to more efficiently administer MAI, reduce duplicative 

requirements for grantees, and more effectively administer HIV/AIDS 

funding streams. HHS also described some of its efforts to make its 

program more efficient, responsive, and accountable since the release of 

the National HIV/AIDS Strategy in July 2010.

Actions Needed and 

Potential Financial or 

Other Benefits

Agency Comments 

and GAO’s Evaluation
 

Page 79 GAO-14-343SP Fragmentation, Overlap, and Duplication

HHS noted in its comments that it has several things to consider before it 

moves to restructure its HIV/AIDS core funding streams and consolidate 

MAI within core funding streams. HHS also noted that grantees’ 

administrative challenges are important, but aren’t the only consideration 

in assessing the merits of funding streams and the programs they 

produce. For example, HHS noted that any restructuring of core 

HIV/AIDS funding must ensure that HHS continues to be responsive to 

the needs of communities and populations disproportionately impacted by 

the HIV/AIDS epidemic. 

GAO provided a draft of this report section to HHS for its review and 

comment. HHS provided its comments in an email received on February 

27, 2014. HHS stated that it concurred with the facts presented but, in 

contrast to its comments on the 2013 report, disagreed with the 

characterization of “fragmentation, overlap and duplication” in describing 

the administration of MAI and its impact on the jurisdictions that receive 

HIV/AIDS funding. HHS also stated that it does not support consolidation 

of MAI into core funding at this time. GAO maintains that the findings in 

this report support consolidation of the disparate MAI funding streams into 

core funding to achieve administrative savings, and, as HHS noted in its 

comments on the 2013 report, align with the National HIV/AIDS Strategy 

and federal program accountability goals. 

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

product in the related GAO product section. To examine the types of 

services provided by MAI grantees, GAO reviewed services reported in 

fiscal year 2011 MAI grantee annual reports from a generalizable sample 

of 100 grantees. GAO reviewed grant administrative requirements, 

including application and reporting requirements for MAI and core 

HIV/AIDS grants in the generalizable sample. GAO also obtained, 

reviewed, and analyzed the core HIV/AIDS grant amounts that MAI 

grantees in the sample were awarded in order to understand the total 

amount of HIV/AIDS funding that MAI grantees received. GAO then 

compared the core HIV/AIDS grant amounts to their MAI grant amounts. 

To determine core HIV/AIDS grant amounts, GAO used CDC and HRSA 

funding data in addition to publicly available funding data. GAO 

interviewed all 10 HHS agencies and offices that awarded MAI grants in 

fiscal year 2011 and staff from six stakeholder organizations, including 

national HIV/AIDS organizations that represent MAI grantees, to obtain 

their perspectives on MAI. GAO also reviewed the available demographic 

data on the race and ethnicity of clients served with MAI grants. 

Table 6 in appendix IV lists the agencies 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.

How GAO Conducted 

Its Work
 

Page 80 GAO-14-343SP Fragmentation, Overlap, and Duplication

Minority AIDS Initiative: Consolidation of Fragmented HIV/AIDS Funding 

Could Reduce Administrative Challenges. GAO-14-84. Washington, D.C.: 

November 22, 2013. 

For additional information about this area, contact Marcia Crosse at (202) 

512-7114 or crossem@gao.gov. 

Related GAO Product

Contact Information
Page 81 GAO-14-343SP Fragmentation, Overlap, and Duplication

Income Security

8. Disability and Unemployment Benefits. 

Congress should consider passing legislation to prevent individuals from 

collecting both full Disability Insurance benefits and Unemployment 

Insurance benefits that cover the same period, which could save $1.2

billion over 10 years in the Social Security Disability Insurance program 

according to the Congressional Budget Office. 

Disability Insurance (DI) and Unemployment Insurance (UI) provide 

important safety nets for U.S. workers who have lost their income. DI, 

administered by the Social Security Administration (SSA), is the nation’s 

largest cash-assistance program for workers with disabilities. DI benefits 

replace lost wages due to a disability that prevents work. Benefit amounts 

are determined based on an individual’s earnings history. In fiscal year 

2010, more than 10 million beneficiaries received DI cash benefits totaling 

$121.6 billion. DI benefits are paid from the Federal Disability Insurance 

Trust Fund, and are financed by payroll taxes paid by covered workers 

and their employers, on the basis of each worker’s earnings history. 

The Department of Labor (DOL) oversees the federal-state UI program, 

which replaces wages when someone who is able to work loses a job 

through no fault of his or her own. States establish the amount of UI 

benefits based on the worker’s covered employment. UI benefits and 

administrative costs are financed primarily by taxes levied on employers

paid into a federal Unemployment Trust Fund set aside for this purpose. 

In addition, federal law provides for extending the duration of UI benefits 

in periods of high and rising unemployment. In fiscal year 2010, 11.3 

million beneficiaries received UI cash benefits totaling $156 billion, $93 

billion of which was paid by the federal government.1 Both the UI and DI 

trust funds face serious fiscal sustainability challenges, prompting the 

need to examine opportunities for potential cost savings. 

In July 2012, GAO reported that in fiscal year 2010, 117,000 individuals 

received concurrent cash benefit payments from the DI and UI programs 

of more than $850 million, which can occur because current law does not 

preclude the receipt of overlapping benefits. The 117,000 individuals 

GAO identified as receiving concurrent DI and UI benefits represented 

less than 1 percent of the total beneficiaries of both programs, but the 

cash benefits they received totaled over $281 million from DI and more 

than $575 million from UI in fiscal year 2010. These benefits represented 

less than one-quarter of 1 percent and less than one-half of 1 percent of 

 

1

The federal portion is funded through a combination of payroll taxes and appropriated 

funds. Total benefits funded by the federal government vary depending on the level of 

claims filed. 

Why This Area Is 

Important

What GAO Found
 

Page 82 GAO-14-343SP Fragmentation, Overlap, and Duplication

the total benefits provided through the DI and UI programs in fiscal year 

2010, respectively. One individual received over $62,000 in overlapping 

benefits in a year. The average weekly UI benefit was $299 in December 

2010. The weekly maximum UI benefit in January 2011 for households 

without dependent benefits ranged from $133 (Puerto Rico) to $625 

(Massachusetts).

Individuals may be eligible for concurrent cash benefit payments from 

both DI and UI due to differences in program eligibility requirements. 

Specifically, some individuals may have a disability under federal law but 

still be eligible for UI because they are able and available for work under 

state law. Further, the DI program allows disabled beneficiaries to work 

for up to 1 year while still receiving DI benefits in order to help them test 

their ability to return to the workforce. Work during this year can make the 

individual also eligible for UI benefits if they lose their job through no fault 

of their own. For DI beneficiaries receiving UI benefits, the federal 

government is replacing a portion of their lost earnings not once, but 

twice. 

GAO reported in July 2012 that although DI and UI generally provide 

separate services to separate populations—and thus are not overlapping 

programs—the concurrent cash benefit payments for individuals eligible 

for both programs are an overlapping benefit, as both replace lost 

earnings.GAO recommended that SSA and DOL evaluate this overlap 

and request congressional authority to eliminate it as appropriate. During 

the 113th Congress, several bills were introduced in both the U.S. House 

of Representatives and the Senate to eliminate concurrent DI and UI cash 

benefits; as of February 2014, none of these bills had passed.2 The 

Congressional Budget Office estimated that such a provision would save 

$1.2 billion over 10 years from fiscal year 2014 through 2023. In addition 

the President’s fiscal year 2015 budget identifies the concurrent receipt of 

DI and UI benefits as a loophole and includes a provision to close it. 

Given that several bills have subsequently been introduced in Congress 

to address the identified issues, GAO suggests that Congress should 

consider:

• passing legislation to require SSA to offset DI benefits for any UI 

benefits received in the same period.

CBO estimated that changing this law to prevent individuals from 

collecting full disability benefits and unemployment benefits that cover the 

same period of time will save $1.2 billion over 10 years.

 

2

See H.R. 1502, 113th Cong. (2013); H.R. 3885, 113th Cong. (2014); S. 1099, 113th Cong. 

(2013); S.AMDT. 2631, 113th Cong. (2014); S. 1931, 113th Cong. (2014).

Actions Needed and 

Potential Financial or 

Other Benefits
 

Page 83 GAO-14-343SP Fragmentation, Overlap, and Duplication

In commenting on the July 2012 report on which this analysis is based, 

DOL and SSA agreed with GAO’s recommendation that DOL work with 

SSA to evaluate overlapping DI and UI benefits, take appropriate action 

for any payments determined to be improper, and assess whether cost 

savings or other benefits might be achieved by reducing or eliminating 

overlapping DI and UI cash benefit payments. DOL and SSA have been 

working together to determine what information is available to assist in 

this analysis. As of February 2014 they were finalizing a report 

addressing GAO’s recommendations. 

GAO provided a draft of this report section to DOL and SSA. DOL did not 

provide comments on this issue. SSA provided written comments. In 

their comments SSA stated that under existing regulations, they do not 

have the authority to reduce or withhold DI benefits due to the receipt of 

UI benefits. SSA also stated that their fiscal year 2014 budget included a 

legislative proposal to reduce or eliminate an individual's DI benefit in any 

month in which he or she also receives a State or Federal unemployment 

benefit. Further, this proposal would eliminate dual benefit payments 

covering the same period a beneficiary is out of the workforce, while still 

providing a base level of income support.

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

product listed in the related GAO products section. GAO matched the 

National Directory of New Hires (NDNH) unemployment files with extracts 

of SSA disability files of DI beneficiaries as of December 2010. To 

determine the subset of recipients who received DI and UI benefits at the 

same time during fiscal year 2010, GAO identified individuals who 

received DI benefits in all 3 months of the quarter for which they received 

UI benefits. For example, to be considered in receipt of overlapping DI 

and UI benefits under GAO’s criteria, an individual must have records in 

SSA disability files indicating the monthly receipt of DI benefits in 

January, February, and March of 2010, and must also have records in the 

NDNH indicating the quarterly receipt of UI benefits in the corresponding 

quarter of fiscal year 2010, which is the second quarter of fiscal year 

2010. Using this methodology, GAO identified 117,000 individuals who 

received concurrent cash benefit payments from the DI and UI programs.

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.

Income Security: Overlapping Disability and Unemployment Benefits 

Should be Evaluated for Potential Savings. GAO-12-764. Washington, 

D.C.: July 31, 2012.

For additional information about this area, contact Steve Lord at (202) 

512-6722 or lords@gao.gov. 

Agency Comments 

and GAO’s Evaluation

How GAO Conducted 

Its Work

Related GAO Product

Contact Information
 

Page 84 GAO-14-343SP Fragmentation, Overlap, and Duplication

9. Federal Employees’ Compensation and 

Unemployment Benefits

Changes to enhance the sharing of compensation and wage information between state and federal agencies 

could improve the Department of Labor’s ability to identify potentially improper payments, including 

inappropriately overlapping payments from the Federal Employees’ Compensation Act program and the 

Unemployment Insurance program administered by the states. 

The Federal Employees’ Compensation Act (FECA) program provides 

workers’ compensation coverage to approximately 2.8 million federal and 

postal employees for work-related injuries and illnesses. Benefits include 

wage-loss benefits, medical benefits, vocational-rehabilitation benefits, 

and survivors’ benefits. In fiscal year 2012, the FECA program made 

more than $2.1 billion in wage-loss compensation payments to claimants. 

The program, administered by Department of Labor (DOL), provides 

benefits to federal employees who sustain injuries or illnesses while 

performing their federal duties. For those claims that are approved, 

employing agencies reimburse DOL for payments made to their 

employees, while DOL bears most of the program’s administrative costs. 

GAO and federal agencies’ Offices of the Inspector General have 

identified programmatic deficiencies at some employing departments and 

at DOL that may make the program vulnerable to fraud and abuse.1 For 

example, in a January 2012 report, GAO identified potential vulnerabilities 

in the FECA program’s design and controls both within employing 

agencies and at DOL that could increase the risk for fraud, and also 

identified promising practices that could help to reduce that risk.

Under a separate program, the Unemployment Insurance (UI) program, 

federal and state governments temporarily and partially replace the lost 

earnings of those who become unemployed through no fault of their own. 

To be eligible for UI benefits, unemployed workers must meet eligibility 

requirements established by state laws that conform to federal law, 

including that they have worked recently, are involuntarily unemployed, 

and are able and available for work. Whereas federal statutes and DOL

regulations provide broad guidelines on UI eligibility, the specific 

provisions of UI eligibility are determined by each state. In fiscal year 

2012, over $90 billion was spent in unemployment insurance benefits.

 

1

For example, see Office of the Inspector General, Social Security Administration, Federal 

Employees Receiving Both Federal Employees’ Compensation Act and Disability 

Insurance Payments, A-15-09-19008 (October 2010), and U.S. Department of Labor, 

Office of Inspector General–Office of Audit, Mechanisms Used to Identify Changes in 

Eligibility Are Inadequate at the FECA District Office in Jacksonville, Florida, 04-07-004-

04-431 (Washington, D.C.: Sept. 28, 2007).

Why This Area Is 

Important
 

Page 85 GAO-14-343SP Fragmentation, Overlap, and Duplication

While the FECA and UI programs generally serve separate populations 

and provide separate services, some individuals may be eligible for both 

programs, and the concurrent cash benefit payments made to such 

individuals are an overlapping service for the replacement of their lost 

earnings, which may or may not be allowable under UI program 

requirements. For instance, some individuals may have a disability under 

federal law but still be able and available for work under state law, and 

thus would be eligible to receive concurrent UI and FECA benefits. 

However, other claimants, especially those receiving compensation for 

total disability, may not be eligible to receive both types of payments 

because their disability may render them unable and unavailable to work.2

In some states, claimants receiving FECA benefits are required to 

disclose their FECA income to the state when applying for UI benefits. 

Failure to disclose this information or failure of states to identify FECA 

income may result in improper UI payments. 

In April 2013, GAO identified examples of claimants receiving overlapping 

FECA and UI benefits, which may be allowable under certain 

circumstances but could also be potentially improper payments. GAO 

identified 50 individuals who received concurrent FECA compensation 

and UI benefits of at least $5,000 each between July 2009 and June 2010 

in the five selected states that GAO reviewed.

3 Specifically, GAO’s review 

of a nongeneralizable sample of 19 individual cases identified claimants 

who received overlapping UI and FECA benefits totaling over $1.3 million 

from January 2008 to June 2012. Of these 19 cases, GAO identified nine 

claimants who potentially committed fraud or improperly obtained UI 

benefits because they did not properly disclose their FECA benefits to the 

state on their UI applications, as required by some states.

4 In addition, 

four claimants who resided in states that require UI payments to be offset 

by FECA payments received more income from the combined UI and 

FECA benefits than they would have received from their federal salary 

alone. At least two of these claimants were former FECA claimants who 

attempted to return to the federal agency to perform work within their 

medical restrictions. However, the claimants were subsequently 

discharged because they did not meet the federal agency requirements 

for continuing employment, at which point they resumed collecting FECA 

benefits. Accordingly, although these claimants were entitled to their 

 

2

Temporary total disability is defined as the inability to return to the position held at the 

time of injury or earn equivalent wages, or perform other gainful employment, because of 

the work-related injury. An individual who is partially disabled is not able to return to the 

position held at the time of injury or earn equivalent wages, but is not totally disabled for 

all gainful employment. 

3

GAO reviewed files from California, Florida, Maryland, New York, and Virginia. This 

nonprobability sample is not representative of all states or FECA recipients. 

4

GAO subsequently referred potential fraud cases to DOL’s Office of the Inspector 

General to investigate, as appropriate.

What GAO Found
 

Page 86 GAO-14-343SP Fragmentation, Overlap, and Duplication

FECA benefits, they also applied for and received UI benefits that were 

not offset by their respective states.

5

In April 2013, GAO reported that DOL lacks a process to share the 

necessary data with states to help the states determine whether FECA 

claimants may be improperly receiving overlapping benefits. Specifically, 

DOL does not systematically report information on claimants receiving 

FECA benefits to states, which would help states identify overlapping 

FECA and UI payments as well as UI payments that might need to be 

offset. Accordingly, states currently must rely on obtaining this information 

either directly from the UI applicant or from the UI applicant’s recent 

employers. DOL is not required to, and thus does not, report FECA 

payments to the National Directory of New Hires (NDNH), which is a 

primary mechanism that most states use to verify employee wage levels.6

Were DOL to report FECA payments to this database, states would more 

easily be able to identify such payments in their review, which could help 

reduce the risk of improper overlapping payments. 

GAO also reported in April 2013 that DOL does not have statutory 

authority to directly access private or public wage data that are reported 

to both the Social Security Administration (SSA) and the NDNH 

databases. DOL therefore relies heavily on claimants’ self-reporting of 

earnings to identify potential fraud. Data validation, such as data-sharing 

agreements between federal agencies, is a key preventive control 

identified in GAO’s framework for fraud prevention, detection, and 

prosecution.

7 Reliance on self-reported data is a vulnerability within the 

FECA program. For example, GAO compared FECA data with quarterly 

wage (QW) data from five selected states and randomly selected 32 

FECA case files for an in-depth review in a separate analysis in the April 

2013 report. Of these 32 FECA cases, eight FECA claimants had 

significantly underreported employment wages in comparison with the 

wages reported in the state’s QW reports for the same period. DOL has 

proposed legislative reforms to FECA that would enhance the agency’s 

ability to assist FECA beneficiaries and also enhance program oversight. 

As part of this reform, DOL sought authority to match SSA wage data 

directly with FECA files. Having access to wage data sources would allow 

DOL to verify claimants’ self-reported employment income and better 

position the agency to identify potential fraud. As of February 2014, DOL 

did not have the statutory ability to directly access the NDNH or SSA 

wage data. However, the President’s Fiscal Year 2015 Budget does 

 

5

Although claimants are entitled to UI benefits, certain states require the offset of UI 

benefits against certain workers’ compensation payments, including FECA.

6

NDNH was established as a depository for wage reporting that, among other things, 

enables state child-support agencies to be more effective in enforcing child-support 

orders.

7

See GAO, Individual Disaster Assistance Programs: Framework for Fraud Prevention, 

Detection, and Prosecution, GAO-06-954T (Washington, D.C.: July 12, 2006).
 

Page 87 GAO-14-343SP Fragmentation, Overlap, and Duplication

propose legislation that would authorize DOL to cross-match FECA 

records with Social Security records to reduce improper payments.

To help identify whether claimants are inappropriately receiving 

overlapping UI and FECA payments, GAO recommended in April 2013 

that the Secretary of Labor take the following action:

• assess the feasibility of developing a cost-effective mechanism to 

share FECA compensation information with states, such as reporting 

information to NDNH. 

To help verify claimants’ reported income and help ensure the proper 

payment of benefits, GAO also suggested in April 2013 that Congress 

should consider taking the following action:

• grant DOL the additional authority to access wage data.

According to the extent of potentially fraudulent or improper payments 

GAO identified, the federal government could realize significant benefits 

from implementing these actions. A cost-effective mechanism to share 

FECA compensation information with states to help identify whether 

claimants are inappropriately receiving overlapping UI and FECA 

payments could help determine the extent to which improper payments or 

potential fraud is occurring. In addition, DOL’s access to wage data 

sources would allow DOL to verify claimants’ self-reported employment 

income and better position the agency to identify potential fraud. Although 

GAO was able to identify instances of potentially fraudulent or improper 

payments, each individual case requires a detailed file review, and such 

findings cannot be generalized to other FECA claimants who also 

received quarterly wages. For these reasons, GAO cannot quantify the 

total amount of such payments

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

DOL agreed with the recommendation to assess the feasibility of 

developing a cost-effective mechanism to share FECA compensation 

information with the states, such as reporting information to NDNH, to 

help identify whether claimants are inappropriately receiving overlapping 

UI and FECA payments. DOL stated that it would undertake a review to 

determine whether such data sharing and reporting are feasible. GAO 

provided a draft of this report section to DOL for review and comment. 

DOL did not provide comments on this issue.

Actions Needed and 

Potential Financial or 

Other Benefits

Agency Comments 

and GAO’s Evaluation
 

Page 88 GAO-14-343SP Fragmentation, Overlap, and Duplication

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

April 2013 report listed in the related GAO products section. For that 

work, GAO matched QW and unemployment files from five selected 

states (California, Florida, Maryland, New York, and Virginia) with FECA 

payment files for the period of July 2009 to June 2010.8 GAO identified 

530 individuals who received concurrent FECA compensation payments 

and wages of at least $5,000 between July 2009 and June 2010. In 

addition, GAO identified 50 individuals who received concurrent FECA 

compensation and UI benefits of at least $5,000 each during the same 

period. GAO randomly selected up to seven recipients from each state for 

an in-depth review, for a total of 32 QW and 19 UI cases, respectively. 

The specific findings from the selected cases cannot be generalized to 

other, or all, FECA claimants who also received quarterly wages or UI 

benefits. GAO also reviewed DOL’s policies, guidelines, and procedures 

for managing claims.

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 fragmentation 

might not necessarily lead to actual duplication, and some degree of 

overlap and duplication may be justified.

Federal Employees’ Compensation Act: Case Examples Illustrate 

Vulnerabilities That Could Result in Improper Payments or Overlapping 

Benefits. GAO-13-386. Washington, D.C.: April 3, 2013.

Federal Employees' Compensation Act: Status of Previously Identified 

Management Challenges. GAO-12-508R. Washington, D.C.: March 21, 

2012.

Federal Employees’ Compensation Act: Preliminary Observations on 

Fraud-Prevention Controls. GAO-12-402. Washington, D.C.: January 25, 

2012.

Federal Workers’ Compensation: Better Data and Management 

Strategies Would Strengthen Efforts to Prevent and Address Improper 

Payments. GAO-08-284. Washington, D.C.: February 26, 2008.

For additional information about this area, contact Steve Lord at (202) 

512-4379 or lords@gao.gov.

 

8

The specific states were selected because of (1) the size of the census population within 

the state and, in part, (2) the proximity to the Washington, D.C., metropolitan area. This 

nonprobability sample is not representative of all states or FECA recipients. 

How GAO Conducted 

Its Work

Related GAO 

Products

Contact Information
Page 89 GAO-14-343SP Fragmentation, Overlap, and Duplication

Information Technology

10. Interoperable Radio Communications 

Systems 

Better collaboration among agencies that rely on radio communications solutions for mission-critical operations 

would help to address fragmentation in their approach to improving the interoperability of radio 

communications systems and has the potential to achieve savings.

Tragic events, such as the terrorist attacks on September 11, 2001, and 

Hurricane Katrina, have highlighted the importance of having effective 

radio communications systems for law enforcement and public safety 

agencies, including federal agencies with such responsibilities. In order to 

effectively respond to events such as natural disasters, criminal activities, 

and domestic terrorism, law enforcement and public safety agencies need 

reliable systems that enable communication with their counterparts in 

other disciplines and jurisdictions. For fiscal year 2012, the Office of 

Management and Budget reported that the federal government spent 

approximately $587 million on information technology investments where 

the primary business function was to provide voice communications 

capabilities.

The Integrated Wireless Network was intended to be a collaborative effort 

among the Departments of Justice (DOJ), Homeland Security (DHS), and 

the Treasury (Treasury) to provide secure, seamless, interoperable, and 

reliable nationwide wireless communication in support of federal agencies 

and officers engaged in law enforcement, protective services, homeland 

defense, and disaster response missions. This initiative began in 2001 

and was originally estimated to cost approximately $5 billion. However, 

GAO reported in December 2008 that the departments were no longer 

pursuing the Integrated Wireless Network as a joint development project 

and had begun independently modernizing their own wireless 

communications systems.

Additionally, the Middle Class Tax Relief and Job Creation Act of 2012 

provides that up to $7 billion be used to, among other purposes, fund the 

building, deployment, and operation of a nationwide public safety 

broadband network.1 This network is intended to provide a secure, 

reliable, and dedicated interoperable network for emergency responders 

to communicate during an emergency. However, GAO reported in 

February 2012 that while such a network would likely enhance 

interoperability by enabling accessibility of video and data applications 

 

1

See Pub. L. No. 112-96, 126 Stat. 156 (2012). Section 6413 of the act establishes a 

Public Safety Trust Fund and sets out the priorities in which the fund is to be used to make 

payments and deposits. Among the priorities is the deposit into the Network Construction 

Fund (established by section 6206) for purposes including the development of the

nationwide public safety broadband network.

Why This Area Is 

Important
Page 90 GAO-14-343SP Fragmentation, Overlap, and Duplication

that could improve incident response, it would not support mission-critical 

voice capabilities for perhaps 10 years or more.2

 

GAO reported in December 2008 that DOJ, DHS, and Treasury had 

decided to independently modernize their own wireless communications 

systems rather than continuing to pursue the Integrated Wireless Network 

as a joint development project. While DOJ and Treasury (and later DHS) 

collaborated on a pilot demonstration of the Integrated Wireless Network 

in the Seattle/Blaine area that continues to provide service to multiple 

agencies, the departments determined that this specific system design 

could not be implemented on a nationwide scale, and they have not acted 

collaboratively to identify an alternative approach for a jointly coordinated 

communications solution. In lieu of a joint solution, DOJ decided to 

implement a nationwide network for its component agencies, and DHS 

and its components decided to pursue numerous independent solutions. 

GAO reported in December 2008 that a primary reason why the 

collaboration on this joint communications solution had not been 

successful was that the departments did not effectively employ key crossagency collaboration practices. Specifically, they could not agree on a 

common outcome or purpose to overcome their differences in missions, 

cultures, and established ways of doing business; they had not 

established a collaborative governance structure with a process for

decision making and resolving disputes; and they had not developed a 

joint strategy for moving forward. While DHS considered improving radio 

communications at the nation’s borders to be a major priority, DOJ’s 

priorities were in other areas. Program officials from both departments 

acknowledged that these differing priorities led to an inability to resolve 

conflicts. For example, both DOJ and DHS stated that making joint 

decisions in their original partnership depended on reaching consensus 

among the departments, and when consensus could not be reached, 

progress on the Integrated Wireless Network stalled. As a result, they 

established several initiatives aimed at high-level coordination, none of 

which are focused on developing a joint communications solution. 

Since 2008, DHS, DOJ, and Treasury have continued to focus on their 

own communications initiatives. While some of these initiatives are being 

coordinated across the departments, none are focused on developing a 

joint communications solution. Specifically,

• DHS reported that it has a joint technology laboratory with DOJ that is 

intended for, among other things, the development of interoperable 

radio solutions; however, its key efforts have been focused on 

acquiring and implementing radio communications systems to enable 

 

2

For public safety, mission-critical voice communications must meet a high standard for 

reliability, redundancy, capacity, and flexibility, as determined by the National Public 

Safety Telecommunications Council.

What GAO Found
Page 91 GAO-14-343SP Fragmentation, Overlap, and Duplication

interoperable communications within DHS and not among other 

departments. For example, DHS’s Customs and Border Protection 

has continued developing and implementing a nationwide radio 

communications network intended to improve and update radio 

communications for its own officers and agents. 

In 2011, DHS directed an executive committee to create a joint 

wireless program management office that coordinates wireless 

communications activities across the department. However, a 

November 2012 DHS Office of Inspector General report found that 

DHS did not establish an effective governing structure for achieving 

Department-wide interoperability.3 Specifically, the report stated that, 

although DHS had created working groups, committees, and offices to 

explore Department-wide communication issues, including 

interoperability; none had the authority to implement and enforce their 

recommendations. 

Additionally, an August 2013 DHS Office of Inspector General report 

found that DHS needs to better manage its 20 different radio 

communications networks (which have a reported value of more than 

$1 billion) across the department in order to more efficiently utilize its 

resources, reduce duplicative efforts, and more strategically invest in 

modernizing aging networks.4 In February 2014, DHS reported that it 

had made progress in improving the management and oversight of its 

radio communications. For example, DHS officials reported that they 

had drafted a DHS Communications Interoperability Plan, which is 

intended to provide guidance to interoperability projects on topics 

such as governance, technical solutions, and training.

• According to a January 2012 DOJ Office of the Inspector General 

report, the department was planning to continue to develop an 

independent nationwide radio communications system (also referred 

to as DOJ’s Integrated Wireless Network). According to the Office of 

the Inspector General’s report, $356 million had been spent on this 

system.5 As part of DOJ’s efforts, it established a network in the 

National Capital Region in 2009. In December 2013, DOJ reported 

that it meets with representatives from Treasury, DHS, and the 

Department of the Interior to ensure that the National Capital Region 

network meets their needs. 

In February 2014, DOJ reported additional examples of its efforts to 

improve the interoperability of radio communications systems. For 

 

3

DHS, DHS’ Oversight of Interoperable Communications, OIG-13-06 (Washington, D.C.: 

Nov. 2, 2012).

4

DHS, DHS Needs to Manage Its Radio Communication Program Better, OIG-13-113 

(Washington, D.C.: Aug. 29, 2013).

5

DOJ, Audit of the Department of Justice’s Implementation of the Integrated Wireless 

Network, Audit Report 12-10 (Washington, D.C.: January 2012).
Page 92 GAO-14-343SP Fragmentation, Overlap, and Duplication

example, DOJ reported that its Federal Interoperability Program 

provides federal law enforcement and crisis response agencies with 

the ability to communicate with key local authorities in metropolitan 

areas that are deemed most likely targets for an attack or event. 

However, as of February 2014, DOJ’s primary efforts continue to 

revolve around establishing a land mobile radio network for its 

department—independent of other federal agencies’ efforts. Officials 

reported that in regions where law enforcement missions require

collaboration with other federal agencies, they consider those 

agencies’ radio communications requirements, and sharing

agreements are developed at the local level.

• As of September 2013, Treasury reported that it was coordinating with 

DHS and DOJ, had retired its agency-specific radio communications 

systems in the areas where the Integrated Wireless Network had 

been deployed, and was complying with radio communications 

interoperability standards where the Integrated Wireless Network had 

not been deployed.

Additionally, in February 2014, Treasury reported, among other 

things, that it participates in the Federal Partnership for Interoperable 

Communications whose goals include identifying and enhancing 

wireless communications interoperability capabilities within the federal 

government and coordinating these efforts with state and local 

interoperability programs. However, the department had at least five 

additional radio communications solutions that it was independently 

developing or maintaining. Treasury reported that some of the existing 

solutions would be maintained because those systems only require 

coverage around a single facility and they use a different radio 

spectrum than radio systems that provide larger coverage areas. 

Treasury did not provide the costs associated with all of these 

systems.

While collaboration on a joint solution is critical for success, this joint 

solution need not be based on a single nationwide network, such as an 

extension of the original Integrated Wireless Network design. It could also 

consist of a mutually agreed-upon strategy for developing separate but 

interoperable networks and systems that incorporate lessons learned 

from past efforts. In December 2008, GAO suggested that Congress 

consider requiring that DOJ, DHS, and Treasury employ key crossagency collaboration practices to develop a joint radio communications 

solution. Implementation of these practices is critical to sustaining a 

successful interagency project. As of March 2014, Congress has yet to 

require DHS, DOJ, and Treasury to collaborate on the development and

implementation of a joint radio communications solution.

In the absence of a solution that currently delivers interoperable missioncritical voice communication capabilities to federal, state, and local 

emergency response officials, GAO continues to believe, as suggested in 

December 2008, that Congress should consider requiring DHS, DOJ, and 

Treasury to collaborate on the development and implementation of a joint 

Actions Needed and 

Potential Financial or 

Other Benefits
Page 93 GAO-14-343SP Fragmentation, Overlap, and Duplication

radio communications solution that specifically requires the departments 

to establish an effective governance structure that includes a formal 

process for making decisions and resolving disputes, define and articulate 

a common outcome for this joint effort, and develop a joint strategy for 

improving radio communications.

While GAO is unable to quantify the cost savings of a joint radio 

communications solution, a coordinated approach provides the 

opportunity for potential savings on the reportedly nearly $600 million 

spent annually by the federal government on voice communications 

technologies.

In commenting on a draft of our 2008 report, DOJ and DHS disagreed 

with GAO’s findings and conclusions. DOJ stated, among other things, 

that its business environment was not conducive to a single mobile radio 

solution, and that such an approach was no longer feasible or costeffective. DHS also stated, among other things, that GAO’s report was 

focused on mandating that the three agencies have one radio 

communications solution and that it implied that any other option would 

result in a stovepipe of non-interoperable communications systems. GAO 

disagreed with these comments, stating that a single common project or 

system was not necessarily the best solution, and that it did not advocate 

such a system as the best solution. GAO added that although a joint 

solution could be based on a single nationwide network, such as an 

extension of the original Integrated Wireless Network design, it could also 

be, for example, a mutually agreed-upon strategy for developing separate 

but interoperable networks and systems.

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

review and comment. In emails received in February 2014, all three of the 

departments provided written comments. The departments also provided 

technical comments, which were incorporated as appropriate.

DHS and DOJ did not agree with our overall findings and conclusions. 

Specifically, DOJ and DHS commented that collaboration alone would not 

necessarily solve interoperability problems and reduce costs. Further, 

DHS added that, if done right, more collaborative actions likely would add 

to the overall cost, rather than reduce it. GAO recognizes that efforts 

beyond collaboration are required and that technical challenges to 

improving the interoperability of radio communications systems exist. 

However, past collaboration between agencies has shown that agencies 

can improve radio communications interoperability and reduce costs. For 

example, as stated by DOJ and Treasury officials, collaboration among 

agencies on the Integrated Wireless Network deployed in the National 

Capital Region has improved the interoperability of radio communications 

systems that access this network. Additionally, DHS’s United States 

Coast Guard stated that it saved costs by sharing a telecommunications 

tower with DOJ’s Federal Bureau of Investigation. GAO continues to 

believe that successful collaboration on a joint solution—whether that 

solution is the Integrated Wireless Network or an alternative approach—is 

Agency Comments 

and GAO’s Evaluation
Page 94 GAO-14-343SP Fragmentation, Overlap, and Duplication

necessary to promote efficient use of resources, reduce duplicative 

efforts, and encourage interoperability.

DHS and DOJ also stated that it is currently both technically infeasible 

and more expensive to create a single system that meets multiple 

agencies’ requirements. However, GAO did not advocate that a single 

common project or system was necessarily the best solution. As 

previously reported, although a joint solution could be based on a single 

nationwide network, it could also be a mutually agreed-upon strategy for 

developing separate but interoperable networks and systems.

In comments from Treasury, the department reported that additional DHS 

participation on the Integrated Wireless Network would be welcomed 

because DHS would be able to provide valuable spectrum resources.

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

products listed in the related GAO reports section as well as additional 

work conducted by GAO and the DHS Office of Inspector General. To 

update the information from these reports, GAO followed up with each of 

the departments (DHS, DOJ, and Treasury) to identify (1) wireless 

communications systems that were being developed, modernized, or 

maintained across the department; (2) efforts to consolidate 

communications systems across the department; and (3) efforts under

way to ensure interoperable mobile communications within each 

department as well as with other federal, state, and local agents, and first 

responders.

Emergency Communications: Various Challenges Likely to Slow 

Implementation of a Public Safety Broadband Network. GAO-12-343. 

Washington, D. C.: February 22, 2012.

Radio Communications: Congressional Action Needed to Ensure 

Agencies Collaborate to Develop a Joint Solution. GAO-09-133. 

Washington, D. C.: December 12, 2008. 

For additional information about this area, contact Carol R. Cha at (202) 

512-4456 or chac@gao.gov.

How GAO Conducted 

Its Work

Related GAO 

Products

Contact Information
Page 95 GAO-14-343SP Fragmentation, Overlap, and Duplication

International Affairs

11. International Religious Freedom

To promote international religious freedom more effectively, the Department of State and the U.S. Commission 

on International Religious Freedom should define how they are to interact in their efforts; the lack of defined 

roles has at times created tensions with foreign government officials.

Congress passed the International Religious Freedom Act of 1998 as 

amended to promote international religious freedom because of concerns 

about increasing restrictions on religious rights around the world.1 The act 

established two entities that are to cooperate and work on behalf of 

international religious freedom: (1) The Office of International Religious 

Freedom within the Department of State (State) and (2) the U.S. 

Commission on International Religious Freedom (Commission). The act 

describes the following roles for each entity; however, the act did not 

prescribe how the two entities should interact or coordinate their activities. 

• The Office of International Religious Freedom, headed by an 

Ambassador-at-Large (Ambassador), is to promote international 

religious freedom. The act establishes the Ambassador as an exofficio member of the Commission and states that the Ambassador is 

to consider the Commission’s advice in making policy 

recommendations. 

• The Commission is to review the facts and circumstances of violations 

of religious freedom and recommend policy actions to the President, 

Secretary of State, and Congress. In addition, a 1999 amendment to 

the act directs the Commission to effectively and freely cooperate with 

State. 

To promote religious freedom, the Office of International Religious 

Freedom hosts events, develops religious-freedom-related programs, and 

publishes an annual report on the status of religious freedom in each 

foreign country. The Office of International Religious Freedom and the 

Ambassador also provide a list of recommended Countries of Particular 

Concern (CPC)—those countries they believe exhibit “systematic, 

ongoing, egregious” violations of religious freedom—to the Secretary of 

State, who then makes the CPC designations.

2 The Commission 

 

1

See International Religious Freedom Act of 1998, Pub. L. No. 105-292 (1998), as 

amended by later acts such as A Bill to Amend the International Religious Freedom Act of 

1998 to Provide Additional Administrative Authorities to the United States Commission on 

International Religious Freedom, and to Make Technical Corrections to the Act, and for 

other purposes, Pub. L. No. 106-55 (1999); and the United States Commission on 

International Religious Freedom Reform and Reauthorization Act of 2011, Pub. L. No. 

112-75 (2011). 

2

The act assigned the responsibility for making CPC designations to the President, and 

the President delegated this responsibility to the Secretary of State in 1999. 

Why This Area Is 

Important
Page 96 GAO-14-343SP Fragmentation, Overlap, and Duplication

publishes an annual report that discusses the 20 to 30 countries that the 

Commission considers the worst violators of religious freedom and 

presents policy recommendations to the U.S. government. Both entities 

meet with foreign government officials to discuss the religious freedom 

situation in the country.

In March 2013, GAO reported that although the act, as amended, directs 

State and the Commission to cooperate, they have not defined how they 

should interact. In interviews with GAO, some of the former and current 

commissioners and all three Ambassadors—two former and one present 

at the time of the review—expressed different ideas about the role of the 

Ambassador and the degree to which the Ambassador should participate 

on the Commission.3 As a result, the level of interaction between the 

Ambassador and the Commission has varied greatly over the years. 

Former State and Commission officials said that both entities 

considerably decreased their official communication over the years, in 

part because of disagreement over how they should work together. In 

addition, commissioners and Ambassadors said that interaction at the 

staff level varied over time, although staff tried to maintain some informal 

collaboration. One former commissioner noted that when the 

Ambassador’s position was vacant for 2-1⁄2 years, the Commission’s 

contact with State was primarily at the staff level. 

The three Ambassadors and a few commissioners reported that not 

defining how the two entities should interact has sometimes led to 

tensions with foreign-government officials. For example, in its 2012 

report, the Commission recommended that the Secretary of State 

designate Turkey as CPC. Because the Ambassador was not regularly 

attending Commission meetings at the time, State officials learned of the 

commissioners' intent shortly before the Commission published its report. 

State officials explained that Turkey did not warrant the designation, as it 

had taken steps to improve religious freedom, but the Commission 

proceeded with its recommendation. According to Turkish officials, the 

Commission’s report contradicted State's annual report on religious 

freedom and was therefore "null and void." State officials told GAO that 

they had to resolve the resulting tensions with the Turkish government. 

Furthermore, all three Ambassadors cited instances when the 

Commission’s approach with foreign-government officials created bilateral 

tensions. For example, one Ambassador recounted helping to bring a 

delegation of high-level Laotian officials to the United States to tour, meet 

with government officials and religious communities, and view examples 

of religious freedom.4 According to the Ambassador, when the delegation 

 

3

The most recent Ambassador-at-Large for Religious Freedom resigned October 17, 

2013.

4

At the time of the Laotian delegation, the first Ambassador had left State and was 

President of the Institute for Global Engagement. 

What GAO Found
Page 97 GAO-14-343SP Fragmentation, Overlap, and Duplication

returned, they freed 34 of 37 people imprisoned for their religious beliefs. 

The Ambassador told us that as a result, he had judged that Laos was 

making progress in instituting some real changes in the area of religious 

freedom; however, the Commission recommended Laos for CPC 

designation shortly thereafter. The Ambassador said that the 

Commission’s recommendation almost ruined State’s diplomatic efforts to 

address religious freedom in Laos. 

In another example, in 2005, another Ambassador negotiated an action 

plan with the Vietnamese government including actions that, if taken by 

the government, could support its case for removal from the CPC list. 

According to State officials, Vietnam took the necessary steps and the 

Secretary of State removed the country’s CPC designation in 2006. 

However, when the Commission visited Vietnam later that year, according 

to State and Vietnamese officials, their conduct offended the Vietnamese 

officials in high-level meetings. State officials said that this was damaging 

to some of the progress made with Vietnamese officials and necessitated 

efforts to repair the U.S. relationship with Vietnam. 

As these examples illustrate, the lack of definition regarding how State 

and the Commission are to interact has sometimes created foreign policy 

tensions that State has had to mitigate. These tensions have resulted, in 

part, from the fact that the Ambassadors and the Commission have not 

defined the Ambassador’s role as an ex-officio member of the 

Commission. Agreeing on roles and responsibilities is a key practice that 

can enhance interagency collaboration.

5 Thus, guidance that would clarify 

(1) the Ambassador’s role as an ex officio member of the Commission 

and (2) how State and the Commission are to cooperate would 

strengthen each entity’s unique contribution to promoting international 

religious freedom. It would also help ensure that the U.S. government 

presents a more consistent foreign policy message with respect to 

religious freedom. 

To enhance U.S. efforts to promote international religious freedom, GAO 

recommended in its March 2013 report that the Secretary of State and the 

Chair of the Commission 

• jointly define how State and the Commission should interact in their 

efforts to promote international religious freedom, paying particular 

attention to defining the ex-officio role of the Ambassador-at-Large for 

International Religious Freedom as a nonvoting Commission member.

GAO believes that there are long-term foreign policy benefits to 

implementing this recommendation such as strengthening each entity’s 

unique contribution to promoting international religious freedom, and 

 

5

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

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

Actions Needed and 

Potential Financial or 

Other Benefits
Page 98 GAO-14-343SP Fragmentation, Overlap, and Duplication

ensuring that the U.S. government presents a more consistent foreign 

policy message with respect to religious freedom. GAO could not 

estimate the potential financial benefits of taking these actions because 

the foreign policy tensions that result from the lack of defined roles cannot 

be measured in terms of financial benefits.

In commenting on the March 2013 report on which this analysis is based, 

both State and the Commission agreed with GAO’s recommendation and 

expressed willingness to take action. 

GAO provided a draft of this report section to State and the Commission 

for review and comment. State provided no additional comments. 

According to the Commission, it is working with State to address GAO’s 

recommendation. 

The information contained in this analysis is based on findings from 

products listed in the related GAO product section. For that work, GAO 

analyzed documents from State and the Commission, including State 

cables and the Commission’s press releases, editorials, and annual 

reports. GAO met with officials from State and the Commission, including 

all three Ambassadors—two former and one present—and all of the 

current and approximately half of the former commissioners. GAO also 

interviewed State and foreign-government officials in Afghanistan, 

Indonesia, Turkey, Uzbekistan, and Vietnam, as well as nongovernmental organization officials in the United States and abroad who 

have worked closely with both entities. The five countries GAO selected 

for fieldwork met at least two of the following criteria: (1) Department of 

State had funded an international religious freedom program in the 

country; (2) the country was on the Commission’s watch list; (3) the 

Commission had recommended designating the country, or State has 

designated it, as a Country of Particular Concern; and (4) the 

Ambassador or the Commission had visited the country in the past 3 

years.

Table 9 in appendix IV lists the agencies GAO identified that 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.

International Religious Freedom Act: State Department and Commission 

Are Implementing Responsibilities but Need to Improve Interaction. 

GAO-13-196. Washington, D.C.: March 26, 2013.

For additional information about this area, contact Thomas Melito at (202) 

512-9601 or melitot@gao.gov. 

Agency Comments 

and GAO’s Evaluation

How GAO Conducted 

Its Work

Related GAO Product

Contact Information
Page 99 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities

Section II: Areas in Which GAO Has 

Identified Other Cost Savings or Revenue 

Enhancement Opportunities

This section summarizes 15 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 100 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities

Defense

12. Combatant Command Headquarters Costs 

The Department of Defense could potentially achieve tens of millions or more in cost savings annually if it (1) 

more systematically evaluates the sizing and resourcing of its combatant commands and (2) conducts a more 

comprehensive analysis of options for the location of U.S. Africa Command’s headquarters.

To perform a variety of missions around the world, the Department of 

Defense (DOD) operates six geographic combatant commands that have 

thousands of headquarters personnel who assist in coordinating the 

department’s military operations in combating transnational terrorism, 

building foreign partner nations’ military capabilities, and conducting 

international disaster-relief efforts and noncombatant evacuations.1

 Each 

geographic combatant command has military service component 

commands assigned to it and may include subordinate unified commands 

and joint task forces. Each of the units assigned to the combatant 

commands also has staff to support the combatant commands in 

conducting their operational missions. By fiscal year 2012, mission and 

headquarters-support costs2 at five of DOD’s geographic commands3 and 

their supporting components had grown to almost $1.7 billion: $1.1 billion 

for the combatant commands’ headquarters and about $604 million for 

the service component command headquarters that support the 

combatant commands.4

 

In May and September of 2013, GAO published reports that identified 

ways in which DOD could save millions of dollars by appropriately sizing 

and resourcing its combatant commands and by relocating one of the 

combatant commands’ headquarters to the United States. GAO also 

made several recommendations suggesting ways in which DOD could 

 

1

DOD has nine combatant commands, each with an assigned geographic region or 

assigned function. The six geographic commands, which have defined areas of operation 

and have a distinct regional military focus, are U.S. Africa Command, U.S. Central 

Command, U.S. European Command, U.S. Northern Command, U.S. Pacific Command, 

and U.S. Southern Command. The three functional commands, which have unique 

capabilities and operate worldwide, are U.S. Special Operations Command, U.S. Strategic 

Command, and U.S. Transportation Command.

2

Mission and headquarters-support costs reflect the costs for civilian personnel and 

contract services, among other costs for operations and maintenance. This does not 

include the costs associated with military personnel basic pay and allowances and other 

military personnel costs.

3

GAO did not include U.S. Central Command and its service component commands in its 

May 2013 review due to their responsibilities to support military operations in Iraq and 

Afghanistan during the past several years.

4

Mission and headquarters-support costs in this report section are in constant fiscal year 

2012 dollars. Costs were adjusted for inflation using the deflator for DOD total obligation 

authority by appropriation title-operation and maintenance, excluding the defense health 

program.

Why This Area Is 

Important

What GAO Found
Page 101 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

improve the data it collects to enable DOD to make better management 

decisions and fully justify decisions to better ensure that resources are 

properly matched to the department’s priorities.

In May 2013, GAO found that the number of authorized military and 

civilian positions and the cost of mission and headquarters-support had 

grown considerably over the past decade at the five DOD regional 

combatant commands GAO reviewed.5

 This growth was driven by the 

establishment of U.S. Northern Command in fiscal year 2003 to focus on 

homeland defense and U.S. Africa Command in fiscal year 2008 to focus 

on the African continent. GAO’s analysis of the five commands found that 

authorized military and civilian positions increased by about 50 percent 

from fiscal years 2001 through 2012, from 6,800 to more than 10,100. 

From fiscal years 2008 through 2012, the number of positions at the 

separate Army, Air Force, Marine Corps, and Navy component 

commands that support each combatant command had also increased by 

more than 30 percent.6

 Mission and headquarters-support costs for the 

five geographic commands more than doubled from fiscal years 2007 

through 2012, to about $1.7 billion: $1.1 billion for the geographic 

commands and another $604 million for the supporting commands in 

fiscal year 2012. 

DOD has taken some steps to manage the combatant commands’ 

resources, such as establishing baselines for the number of major DOD 

headquarters activity positions7 at each geographic and functional 

combatant command and reducing personnel and consolidating joint task 

forces at several commands to better align available resources with 

current missions. However, GAO found four primary weaknesses in 

DOD’s management of combatant command resources that challenge the 

department’s ability to make informed decisions. As a result, DOD cannot 

 

5

For purposes of this report section, authorized positions refer to military and civilian 

positions that have been approved by DOD components for funding for a specific fiscal 

year. 

6

The increases in authorized military and civilian positions do not include contractor 

personnel. Because the availability of data on the number of contractor personnel varied 

across the combatant commands and their corresponding service components, data were 

not available to calculate changes in contractor personnel over time. According to DOD 

officials, the combatant commands were not required by DOD to maintain historical data 

on the number of contractor personnel. DOD has outlined its approach to account for 

contractors, but does not expect to fully account for contractors’ manpower until fiscal year 

2016.

7

DOD identifies major headquarters activities as those headquarters (and the direct 

support integral to their operation) whose primary mission is to manage or command the 

programs and operations of DOD and its components, and their major military units, 

organizations, or agencies. See Department of Defense, Instruction 5100.73, Major DOD 

Headquarters Activities (Dec. 1, 2007) (incorporating change of June 12, 2012). GAO’s 

prior work has found that DOD’s major headquarters activity data are not always complete 

and reliable; see GAO, Defense Headquarters: Further Efforts to Examine Resource 

Needs and Improve Data Could Provide Additional Opportunities for Cost Savings, 

GAO-12-345 (Washington, D.C.: March 21, 2012).
Page 102 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

be assured that the commands are properly sized to meet their assigned 

missions or that the commands can identify opportunities to carry out 

those missions more efficiently.

• First, DOD has not periodically evaluated the commands’ authorized 

positions to ensure that they are still needed to meet the commands’ 

assigned missions. Chairman of the Joint Chiefs of Staff Instruction 

1001.01A, Joint Manpower and Personnel Program, outlines a 

process for determining and validating joint manpower requirements 

at the commands, but focuses on requests for additional positions or 

nominal changes in authorized positions rather than a review of the 

commands’ existing size and structure.8

• Second, the combatant commands are inconsistent in their use of the 

existing personnel management systems to identify and track their 

total assigned personnel.9 DOD identified the Electronic Joint 

Manpower and Personnel System as the system of record to manage 

manpower and personnel; however, GAO found differences across 

the commands in how they use the system to manage assigned 

personnel. 

• Third, DOD lacks visibility and oversight over the size and structure of 

the service component commands’ authorized manpower and number 

of assigned personnel that would enable it to determine whether some 

functions at the combatant commands duplicate functions performed 

by service component command personnel. Joint Publication 1-0, 

Joint Personnel Support, identifies the importance of having reliable 

data on all personnel within a geographic combatant command’s area 

of responsibility for visibility of personnel and for effective planning.10

Further, GAO’s previous work on human capital management has 

highlighted the need for agencies to have valid, reliable data and be 

aware of the size of their workforce; its deployment across the 

organization; and the knowledge, skills, and abilities needed for the 

agency to pursue its mission.11 

• Fourth, DOD’s annual budget documents do not provide transparency 

into the resources directed to each combatant command to enable 

congressional oversight. Volume 2A, chapter 1 of DOD’s Financial 

Management Regulation 7000.14-R, states that the military 

departments must ensure adequate visibility over the resources of 

 

8

See Chairman of the Joint Chiefs of Staff Instruction 1001.01A, Joint Manpower and 

Personnel Program (Oct. 1, 2010).

9

For purposes of this report section, assigned personnel refers to military and civilian 

personnel assigned to fill authorized or temporary positions and other personnel 

performing contract services. 

10See Joint Chiefs of Staff, Joint Pub. 1-0, Joint Personnel Support (Oct. 24, 2011).

11GAO, A Model of Strategic Human Capital Management, GAO-02-373SP (Washington, 

D.C.: Mar. 15, 2002).
Page 103 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

combatant command-directed missions and other costs for each 

operation and maintenance-funded command.12 Further, according to 

Standards for Internal Control in the Federal Government, reliable 

financial reporting, including reports on budget execution, financial 

statements, and other reports for internal and external use, is 

important for determining whether agencies’ objectives are 

achieved.13 The military departments’ budget documents identify the 

overall authorized military positions, civilian and contractor full-time 

equivalents, and mission and headquarters-support funding to support 

the combatant commands but do not provide these details by 

command.

In a second report, published in September 2013, GAO found that DOD’s 

decision to maintain the headquarters for the U.S. Africa Command 

(AFRICOM) in Germany was not well-supported by DOD’s analysis. 

When AFRICOM was created in October 2007, DOD temporarily located 

its headquarters in Stuttgart, Germany, with the intent of selecting a 

permanent location at a later date. However, in 2013, DOD decided to 

keep AFRICOM headquarters in Germany because the commander had 

determined that the operational benefits of staying in Stuttgart, which is 

closer to Africa, outweighed the benefits of moving to the United States. 

GAO’s review found that this decision was not supported by a 

comprehensive and well-documented analysis that balanced the 

operational benefits and costs of the options available to DOD. DOD’s 

2012 study that accompanied the decision did not fully explain the 

decisions that were made to forego a savings of between $60 million and 

$70 million annually that would result from moving the headquarters to 

the United States. For example, DOD’s 2012 study of potential locations 

listed several factors to be considered when determining where to place a 

combatant command headquarters, ranking two of these factors—access 

to the area of responsibility and access to service components—as 

critical. However, little support exists showing how these factors were 

weighted relative to each other or to the other factors. Moreover, the 

study described how a small headquarters element deployed in 

AFRICOM’s area of responsibility might mitigate operational concerns

about AFRICOM’s headquarters being further from Africa if it were moved 

to the United States, but the study was silent about why this mitigation 

plan was not deemed a satisfactory option. 

In discussions with GAO, officials from the U.S. Central and Southern 

Commands—both of which are located in Florida—stated that they had 

successfully overcome any negative effects of having a headquarters in 

the United States by maintaining a presence in their areas of operation. 

 

12See Department of Defense, Financial Management Regulation 7000.14-R, Volume 2A, 

Chapter 1, General Information (October 2008).

13GAO, Standards for Internal Control in the Federal Government, GAO/AMID-00-21.3.1

(Washington, D.C.: November 1999).
Page 104 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

However, neither the analysis nor the letter announcing the decision to 

retain AFRICOM headquarters in Stuttgart explains why operational 

factors outweighed the possibility of saving about $60 million to $70 

million annually by moving the headquarters to the United States. 

Moreover, the study estimated that such a move may create up to 4,300 

jobs, with several hundred million dollars a year in local economic 

impacts, but, according to DOD officials, this was not factored into the 

decision. 

Since GAO issued its September 2013 report, DOD has begun taking 

actions to increase the efficiency at its combatant commands while 

enabling them to continue to meet their missions. In July 2013, the 

Deputy Secretary of Defense announced in a memorandum14 to DOD 

components, including the combatant commands, that the Secretary of 

Defense had directed a 20 percent cut in management headquarters 

spending throughout DOD to include the combatant commands and 

service component commands. The memorandum stated that, while the 

20 percent cut applies to budget dollars, organizations would also strive 

for a goal of 20 percent reduction in the number of authorized civilian 

positions. The memorandum stated that senior managers should ensure 

that cuts are made aggressively and as soon as possible, both to 

eliminate uncertainty for DOD employees and contractors and to 

maximize savings. 

The Deputy Secretary indicated that, generally, these cuts should be 

roughly proportional by year—with about one-fifth of the 20 percent cut in 

fiscal year 2015, another fifth in fiscal year 2016, and so on until fiscal 

year 2019. In addition, the memorandum called on DOD organizations to 

strive for a 20 percent reduction in authorized military positions within 

headquarters staffs. In December 2013, DOD announced that the military 

services, combatant commands, and other headquarters organizations 

within the department were finalizing their reviews and plan to meet these 

reductions and that the department would submit the results of these 

reviews as part of the fiscal year 2015 President’s budget request. 

Released in March 2014, the budget stated that DOD’s efforts to reduce 

management headquarters staffs will result in savings of $5.3 billion 

through fiscal year 2019. 

To help ensure that the geographic combatant commands are properly 

sized and resourced to meet their assigned missions and to improve the 

transparency of the commands’ authorized manpower, assigned 

personnel, and mission and headquarters-support costs, GAO 

recommended in May 2013 that the Secretary of Defense take the 

following four actions:

 

14Deputy Secretary of Defense Memorandum, 20% Headquarters Reductions (July 31, 

2013).

Actions Needed and 

Potential Financial or 

Other Benefits
Page 105 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

• conduct a comprehensive, periodic evaluation of whether the 

combatant commands are sized and structured to efficiently meet 

assigned missions; 

• require the combatant commands to consistently identify, manage, 

and track all personnel, including those in the service component 

commands, in DOD’s personnel management system; 

• develop a process to gather information on authorized positions and 

assigned personnel at the service component commands; and 

• require information be provided in the budget documents submitted to 

Congress that detail the resources directed to each combatant 

command. 

To help enable the department to meet its Africa-related missions at 

substantially reduced costs, GAO recommended in September 2013 that 

the Secretary of Defense conduct a more comprehensive and welldocumented analysis of options for the permanent placement of the 

headquarters for AFRICOM, including documentation explaining how 

operational benefits are weighed against the costs. 

DOD may realize potential cost savings and efficiencies by taking the 

actions GAO recommended to help improve management and oversight 

of combatant command resources. As noted earlier, in July 2013 the 

Deputy Secretary of Defense indicated in a memorandum that DOD will 

be making a 20 percent reduction to management headquarters spending 

over 5 years. The memorandum also called on DOD organizations to 

strive for a goal of 20 percent reductions to authorized military and civilian 

staffs. While the Deputy Secretary of Defense’s memorandum indicated 

that DOD will seek to reduce headquarters resources by 20 percent, the 

memorandum did not identify the starting point for the budgetary and staff 

reductions, which makes it difficult to determine the extent of reductions 

made. However, based on GAO’s work examining the trends in 

geographic combatant command resources, GAO estimates that DOD 

could achieve up to $340 million in savings if the 20 percent reduction 

was applied to the $1.7 billion DOD used to operate and support the 

combatant and supporting commands in fiscal year 2012. If DOD also 

reduced the almost 10,700 authorized military positions GAO found were 

supporting the combatant and supporting commands’ headquarters, the 

department could reassign military personnel to other duties or realize 

additional savings in military personnel costs. In addition, based on 

GAO’s work examining DOD’s decisions regarding the location of 

AFRICOM’s headquarters, DOD’s estimates indicate that it could save 

$60 million to $70 million per year if the headquarters were relocated to 

the United States. Over 5 years, this would result in savings of $300 

million to $350 million. 

In commenting on GAO’s May 2013 report on which this analysis is 

based, DOD agreed with three of GAO’s four recommendations and 

disagreed with one. DOD concurred that the Secretary of Defense should 

track all personnel, implement a formal process to gather information on 

manpower, and require that more complete data be submitted to 

Agency Comments 

and GAO’s Evaluation
Page 106 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

Congress on positions and funding for the commands. DOD disagreed 

with GAO’s recommendation to require a comprehensive, periodic 

evaluation of whether the size and structure of the combatant commands 

efficiently meet assigned missions, stating that the combatant commands 

had already been reduced during previous budget reviews. GAO’s May 

2013 report acknowledged and described several of the actions DOD has 

taken to manage growth at its combatant commands. However, GAO 

continues to maintain that these actions do not constitute a 

comprehensive, periodic review because DODs’ actions have not 

included all authorized positions at the combatant commands. 

In commenting on the September 2013 GAO report on which this analysis 

is based, DOD partially concurred with GAO’s recommendation, stating 

that the decision to keep AFRICOM headquarters in Germany was based 

primarily on military judgment, but that the department will perform 

additional analysis of the location of the headquarters if the Secretary of 

Defense deems it necessary. GAO recognizes that military judgment can 

be difficult to quantify, but maintains that the department should conduct 

an analysis to provide a more complete explanation of how operational 

benefits and costs are weighed in the decision, especially in light of the 

considerable cost savings and benefits to the U.S. economy DOD could 

be foregoing.

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

comment. DOD reviewed the report section and did not provide 

comments on this issue.

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

reports listed in the related GAO products section. For its May 2013 

report, GAO obtained and analyzed data on combatant command 

resources, to include authorized positions and mission and headquarterssupport costs, for five regional combatant commands and their service 

component commands, excluding the U.S. Central Command. GAO also 

interviewed officials regarding the commands’ staffing and personnel 

policies and procedures for reported resources. For its September 2013 

report, GAO analyzed documents provided by and interviewed officials 

from the Office of the Secretary of Defense; the Joint Staff; and 

AFRICOM and other combatant commands. We calculated the estimated 

savings for the reductions based on our findings from our previous work, 

as described above. Table 10 in appendix IV lists the commands GAO 

identified that might have opportunities for costs savings or revenue 

enhancement.

Defense Headquarters: DOD Needs to Reassess Options for Permanent 

Location of U.S. Africa Command. GAO-13-646. Washington, D.C.: 

September 9, 2013.

How GAO Conducted 

Its Work

Related GAO 

Products
Page 107 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

Defense Headquarters: DOD Needs to Periodically Review and Improve 

Visibility of Combatant Commands’ Resources. GAO-13-293. 

Washington, D.C.: May 15, 2013. 

For additional information about this area, contact John H. Pendleton at Contact (202) 512-3489 or pendletonj@gao.gov. Information
Page 108 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities

Energy

13. Advanced Technology Vehicles 

Manufacturing Loan Program

Unless the Department of Energy can demonstrate demand for new Advanced Technology Vehicles 

Manufacturing loans and viable applications, Congress may wish to consider rescinding all or part of the 

remaining $4.2 billion in credit subsidy appropriations.

Faced with concerns over the nation’s reliance on imported oil, volatile 

energy costs, and greenhouse gas emissions, federal policymakers have 

established several programs and appropriated billions of dollars to 

promote advanced energy technologies to help meet our nation’s energy 

needs. In December 2007, Congress passed the Energy Independence 

and Security Act (EISA), which made the nation’s corporate average fuel 

economy standards more stringent by requiring significant increases by 

2020 in the fuel economy of newly manufactured passenger vehicles 

being sold in the United States. In addition, EISA authorized the 

Advanced Technology Vehicles Manufacturing (ATVM) loan program to 

provide up to $25 billion in loans (loan authority) for projects to produce 

more fuel-efficient passenger vehicles and their components. The fiscal 

year 2009 continuing resolution appropriated $7.5 billion to the 

Department of Energy (DOE) to support the program’s direct loans to 

manufacturers of passenger vehicles and their components by paying the 

credit subsidy costs of the loans. Credit subsidy costs represent the 

estimated net long-term cost of extending or guaranteeing credit, in 

present value terms, over the entire period the loans are outstanding (not 

including administrative costs).

Of the $7.5 billion in appropriations, DOE has used $3.3 billion to cover 

credit subsidy costs for five ATVM loans worth $8.4 billion. This leaves 

$4.2 billion in credit subsidy appropriations and $16.6 billion in loan 

authority remaining, as shown in the table below. The program accepts 

applications on a rolling, ongoing basis. DOE closed on its most recent 

ATVM loan in March 2011. The credit subsidy appropriations and loan 

authority for the ATVM loan program do not expire.

ATVM Loan Program Remaining Appropriations and Loan Authority

Provided Remaining

Credit subsidy appropriations $7.5 billion $4.2 billion

Loan authority $25 billion $16.6 billion

Source: GAO analysis of DOE information.

GAO reported in March 2013 that DOE was not actively considering any 

applications for using the remaining $4.2 billion in credit subsidy 

appropriations or $16.6 billion in loan authority available under the ATVM 

loan program. DOE considered the seven ATVM loan program 

Why This Area Is 

Important

What GAO Found
 

Page 109 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

applications it had at that time, requesting a total of $1.48 billion, to be 

inactive for reasons including insufficient project equity or technology that 

was not ready. Since GAO’s March 2013 report, DOE has received one 

additional application, which seeks a loan of approximately $200 million. 

However, according to DOE officials in November 2013, the application 

remained in the initial phase of DOE’s review because the application—

which was received in July 2013—was not complete. In commenting on 

this report section in February 2014, DOE said that it has moved the 

application to the due diligence phase of review.1

 

Many of the applications previously received by DOE did not meet all the 

project, technical, and financial eligibility requirements of the program. To 

be eligible for loans, projects must (1) meet the fuel economy and 

emissions requirements set forth in the definition of an advanced 

technology vehicle or be designed for a specific advanced technology 

vehicle; (2) be designed or manufactured in the United States; and (3) 

meet federal prevailing wage requirements. Applicants must also meet 

technical and financial eligibility requirements. Manufacturers must meet 

sufficient fleet fuel economy standards or make qualifying components, 

and be financially viable without the receipt of additional federal funding 

for the proposed project. In November 2013, DOE officials told us that the 

department planned to conduct renewed outreach to component 

manufacturers regarding the program requirements and application 

process. In commenting on this report section in February 2014, DOE 

said that the agency has conducted this outreach and, as a result, has 

recently received several expressions of interest from potential 

applicants.

GAO also reported in March 2013 that most ATVM loan program 

applicants and other auto manufacturers GAO spoke with noted that there 

remains a need to promote advanced technology for increasing fuel 

economy. However, in many cases they said that, as the program is 

currently implemented by DOE, the costs of participating outweigh the 

benefits to their companies. Most applicants and manufacturers we 

spoke to cited lengthy and burdensome application and review processes 

or restrictive loan and reporting requirements as challenges. In addition, 

most applicants and manufacturers noted that problems with the Solyndra 

default and other DOE programs have tarnished the ATVM loan 

program.2

 According to these applicants and manufacturers, the negative 

publicity makes DOE more risk-averse or makes companies wary of 

being associated with government support. 

 

1

During the due diligence phase, DOE performs a detailed examination of the project’s 

technical, financial, legal, and other qualifications and negotiates the terms of the loan with 

the applicant.

2

Solyndra, a solar panel manufacturer and the first recipient of a DOE loan guarantee 

under the Title XVII Loan Guarantee Program, declared bankruptcy in September 2011.
 

Page 110 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

Determining whether funds will be used is important, particularly in a 

constrained fiscal environment, as unused appropriations could be 

rescinded or go toward other government priorities. Although the ATVM 

loan program accepts applications on an ongoing basis, DOE officials 

said in March 2013 that DOE is not likely to use all the remaining ATVM 

loan program authority given the current eligibility requirements.

Unless DOE can demonstrate a demand for new ATVM loans and viable 

applications, Congress may wish to consider 

• rescinding all or part of the remaining $4.2 billion in credit subsidy 

appropriations.

In commenting on the March 2013 report on which this analysis is based, 

DOE generally agreed with GAO’s findings. DOE also provided technical 

comments that were incorporated, as appropriate. GAO provided a draft 

of this report section to DOE for review and comment. DOE provided 

written comments, including updated information on the status of the 

program, which was incorporated as appropriate. In its comments, DOE 

strongly disagreed with GAO’s suggested action. DOE asserted that its 

new outreach efforts to potential applicants, such as meetings and 

presentations with senior management at component manufacturers, will 

increase awareness and interest in the program and lead to additional 

applications in 2014. DOE also commented that market trends toward 

fuel-efficient technologies and constrained manufacturing capacity will 

encourage automotive manufacturers to seek additional sources of capital 

in the United States. 

Although DOE said that it has received several expressions of interest 

from potential applicants since November 2013, DOE has not received 

any new applications. Additionally, DOE did not comment on how it 

planned to address challenges cited by previous applicants, including 

lengthy and burdensome application and review processes. Although the 

expressions of interest by potential applicants are encouraging, GAO 

maintains that all or part of the remaining $4.2 billion in credit subsidy 

appropriations should be considered for rescission because DOE has not 

further demonstrated a demand for ATVM loans, such as new 

applications that meet all the project, technical, and financial eligibility 

requirements of the program and involve amounts sufficient to justify 

retaining the remaining credit subsidy appropriations. 

The information contained in this analysis is based on findings from 

products listed in the related GAO products section and additional work 

GAO conducted. For the March 2013 report, GAO reviewed DOE 

documents and interviewed five ATVM loan program applicants and other 

auto manufacturers. We selected applicants and auto manufacturers 

based on their eligibility to apply, ensuring that we included current, 

former, and prospective applicants. In addition, in November 2013, GAO 

Actions Needed and 

Potential Financial or 

Other Benefits

Agency Comments 

and GAO’s Evaluation

How GAO Conducted 

Its Work
 

Page 111 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

interviewed DOE officials to obtain updated information on the status of 

the ATVM loan program. 

Table 11 in appendix IV lists the programs GAO identified that might have 

opportunities for cost savings.

Department of Energy: Status of Loan Programs. GAO-13-331R. 

Washington, D.C.: March 15, 2013.

Department of Energy: Advanced Technology Vehicle Loan Program 

Implementation Is Under Way, but Enhanced Technical Oversight and 

Performance Measures Are Needed. GAO-11-145. Washington, D.C.: 

February 28, 2011. 

For additional information about this area, contact Frank Rusco at (202) 

512-3841 or ruscof@gao.gov. 

Related GAO 

Products

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Page 112 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities

General Government

14. Coin Inventory Management

The Federal Reserve should develop a process to assess factors influencing coin management costs and 

identify practices that could potentially lead to millions of dollars in revenue enhancement.

Efficiently managing the nation’s inventory of circulating coins helps to 

ensure that the coin supply meets the public’s demand while avoiding 

unnecessary costs. The Federal Reserve System is composed of an 

independent government agency—the Board of Governors (Board)—and 

12 regional Federal Reserve Banks (Reserve Banks). The Reserve 

Banks carry out a variety of functions for the Federal Reserve, including 

ensuring that coins and notes are available in quantities sufficient to meet 

the public’s needs by managing coins held in inventory and ordering new 

coins from the U.S. Mint. The 12 Reserve Banks provide coins and notes 

to depository institutions (e.g., commercial banks, federal savings 

associations, and credit unions), among other responsibilities. The 

Federal Reserve System’s Cash Product Office (CPO) manages the 

Reserve Banks’ coin inventory from a national perspective, working 

closely with the Reserve Banks. Since 2009, on behalf of the Reserve 

Banks, the Federal Reserve has taken steps to standardize its 

management of the circulating coin inventory from a national perspective.

The Board and Reserve Banks are self-funded entities that engage in a 

variety of activities that generate revenue, such as earnings from lending 

to financial institutions. The costs of operating the Federal Reserve 

System are deducted from these revenues and the remaining amount is 

transferred to the General Fund of the U.S. Treasury (General Fund). In 

2012, the Federal Reserve System transferred $88.4 billion to the 

General Fund. Federal Reserve System revenues contribute to total U.S. 

government revenues, and therefore, if coin-inventory management can 

become more efficient, more of its revenue could potentially be 

transferred to the General Fund.

In 2012, Reserve Bank costs related to coin management were 

approximately $62 million.1 To monitor costs related to coin and note 

management, CPO officials said they review currency management 

costs—which include costs related to both coins and notes—at the 

national level because individual Reserve Banks may vary in their 

accounting for operational costs related to coins and notes. In October 

2013, GAO found that from 2008 through 2012 total annual Reserve Bank 

currency management costs increased by 23 percent at the national level. 

 

1

Coin management includes the CPO’s administration, coin handling, and interbank coin 

transfer costs. Reserve Bank costs related to coin management include, for example, 

support costs (e.g. utilities and information technology) and direct costs (e.g., personnel 

and equipment).

Why This Area Is 

Important

What GAO Found
 

Page 113 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

While cost information for coins and notes is available separately, CPO 

does not separately monitor coin management costs. Looking specifically 

at coin management costs, GAO’s analysis indicates that coin 

management costs increased by 69 percent from 2008 through 2012. 

CPO officials attributed the increase in coin management costs to support 

costs, which increased by 80 percent during that period (approximately 

$19.6 million from 2008 to 2012). Support costs include utilities, facilities, 

and information technology as well as other local and national support 

services such as CPO’s services. According to CPO officials, direct 

costs—which include personnel and equipment—represent their primary 

measure of Reserve Bank coin management costs. GAO found that direct 

costs for coin management increased by 45 percent during this period, 

about $5 million across the 28 Reserve Bank offices. 

Although Reserve Bank coin management costs have risen since 2008, 

CPO has not taken steps to systematically assess factors influencing 

direct and support costs related to coin management and assess whether 

opportunities exist to isolate elements of their coin inventory management 

that could lead to cost savings or greater efficiencies across the Reserve 

Banks. In October 2013, GAO also found that the rates of increasing coin 

management costs differ across Reserve Banks. Using data provided by 

CPO on individual Reserve Banks’ costs, from 2008 through 2012, coin 

management costs increased for all Reserve Banks, with the increases 

ranging from a low of 36 percent to a high of 116 percent. The Federal 

Reserve’s 2012-2015 strategic plan includes an objective to use financial 

resources efficiently and effectively.2 In addition, according to a 

professional association that provides guidance on internal controls, as 

part of the internal control process, management should ensure that 

operations, such as managing an inventory, are efficient and costeffective, and this process includes monitoring costs and using this 

information to make operational adjustments.3 Without taking steps to 

identify and share cost-effective coin management practices across 

Reserve Banks, the Federal Reserve may be missing opportunities to 

support more efficient and effective use of Reserve Bank resources. In 

addition, more efficient management of the coin inventory may enhance 

revenues and contribute additional funds to the General Fund. 

 

2

Federal Reserve, Strategic Framework 2012-15 (2013). 

3

Committee of Sponsoring Organizations of the Treadway Commission (COSO), Internal 

Control—Integrated Framework (1992). COSO is a joint initiative of five professional 

associations dedicated to providing thought leadership through the development of 

frameworks and guidance on enterprise risk management, internal control, and fraud 

deterrence. 
 

Page 114 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

GAO recommended in October 2013 that the Board of Governors of the 

Federal Reserve System should direct the Cash Product Office to

• develop a process to assess the factors that have influenced 

increasing coin management costs and differences in costs across 

Reserve Banks and a process to use this information to identify 

practices that could lead to revenue enhancement.

Taking these actions may help the Federal Reserve identify ways to 

improve the cost-effectiveness of its coin management, potentially 

increasing the revenues that are available for the Federal Reserve 

System to transfer to the General Fund. Estimating the extent of potential 

increased revenues requires the Federal Reserve System to assess 

specific coin management practices at each Reserve Bank. 

We provided a draft of GAO-14-110 to the Chairman of the Board of 

Governors of the Federal Reserve System and the Secretary of the 

Treasury for review and comment. In written comments, the Board 

generally agreed with the report’s recommendations. Treasury had no 

comments.

GAO provided a draft of this report section to the Chairman of the Board 

of Governors of the Federal Reserve System and the U.S. Mint for review 

and comment. The Board provided written comments and noted that the 

CPO has agreed to define a new metric that measures the productivity of 

Reserve Bank coin operations and will enable them to monitor coin costs 

and identify cost variations across Reserve Banks. The U.S. Mint did not 

provide comments on this issue.

The information contained in this analysis is based on findings from 

GAO-14-110. GAO reviewed documentation and interviewed officials 

from the Board, Reserve Banks, CPO, and U.S. Mint. In addition, GAO 

obtained and analyzed Reserve Bank currency management cost data 

from 2008 through 2012. Table 12 in appendix IV lists the programs GAO 

identified that might have opportunities for cost savings.

U.S. Currency: Coin Inventory Management Needs Better Performance 

Information. GAO-14-110. Washington, D.C.: October 28, 2013. 

U.S. Coins: The Federal Reserve Banks Are Fulfilling Coin Demand, but 

Optimal Inventory Ranges Are Undefined. GAO-08-401. Washington, 

D.C.: March 21, 2008.

For additional information about this area, contact Lorelei St. James at 

(202) 512-2834 or stjamesl@gao.gov. 

Actions Needed and 

Potential Financial or 

Other Benefits

Agency Comments 

and GAO’s Evaluation

How GAO Conducted 

Its Work

Related GAO 

Products

Contact Information
Page 115 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities

15. Collection of Unpaid Federal Taxes

The federal government can increase tax revenue collections by hundreds of millions of dollars over a 5-year 

time period by identifying and taking actions to limit issuance of passports to applicants, levy payments to 

Medicaid providers, or identify security-clearance applicants with unpaid federal taxes. 

In January 2012, the Internal Revenue Service (IRS) estimated that it had 

a net tax gap of $385 billion. IRS’s enforcement of the tax laws promotes 

voluntary compliance by giving all taxpayers a sense that others are 

paying their fair share. Notwithstanding IRS’s activities, the net tax gap 

remains large. Accordingly, tax-law administration is on GAO’s high-risk 

list.1

GAO has identified several areas where the federal government can 

enhance its collection efforts by taking action to limit issuance of 

passports to applicants, levy payments to Medicaid providers, or identify 

security clearance applicants with unpaid federal taxes. Taking such 

actions could increase tax revenues by hundreds of millions of dollars 

over a 5-year time period. These actions are outlined below. 

• Limit issuance of passports to applicants with delinquent federal 

tax debt. Federal law permits the Secretary of State to deny or revoke 

the issuance of passports in certain circumstances, such as for 

delinquent child-support obligations. Under the Department of State’s 

(State) Passport Denial Program, the names of noncustodial parents 

certified by a state as having arrearages exceeding $2,500 are 

submitted by the Department of Health and Human Services to State, 

which denies them U.S. passports upon application or use of a 

passport service until the debt is satisfied. Similar legislation applied 

to federal tax debts could generate substantial collections of known 

unpaid federal taxes and increase tax compliance for millions of 

Americans holding passports. In March 2011, GAO reported that 

State issued passports to about 16 million individuals during fiscal 

year 2008; of these, over 224,000 individuals (over 1 percent) 

collectively owed over $5.8 billion in unpaid federal taxes as of 

September 30, 2008.2

 In September of 2013, the House introduced a 

bill that would authorize State to deny the issuance of a passport or 

revoke a passport of any individual who has a delinquent tax debt 

over $50,000.3 As of February 2014, no action had been taken on the 

bill since its introduction. 

 

1

See GAO, High-Risk Series: An Update, GAO-13-283 (Washington, D.C.: Feb.14, 2013). 

2

Tax debts less than $100 per individual were excluded from this analysis. 

3

Savings, Accountability, Value, and Efficiency II Act, H.R. 3146, 113th Cong. (2013).

Why This Area Is 

Important

What GAO Found
 

Page 116 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

• Continuous levy of Medicaid reimbursements. A portion of the tax 

gap is owed by individuals and businesses receiving payments from 

the federal and state governments, including Medicaid providers.4

 In 

July 2012, GAO reported that about 7,000 Medicaid providers, about 

5.6 percent of those paid during fiscal year 2009, had about $791 

million of unpaid federal taxes. These 7,000 Medicaid providers 

received a total of about $6.6 billion in Medicaid reimbursements 

during 2009 (including American Recovery and Reinvestment Act of 

2009 funds). The amount of unpaid federal taxes owed by 40 of these 

individual providers ranged from approximately $100,000 to over $6 

million, per provider. Current federal law does not allow the 

continuous levy (seizure) of Medicaid payments because Medicaid 

payments are not considered federal payments. In July 2012, GAO 

reported that IRS could have collected between $22 million and $330 

million from Medicaid providers in three states (New York, Texas, and 

Florida) in 2009 if it had been authorized to use a continuous levy 

process. In contrast, this process has been used to collect unpaid 

federal tax debts on Medicare payments. Several bills introduced in 

Congress in April and July of 2013 would allow the continuous levy of 

Medicaid reimbursements, but none had become law as of February 

2014. 

• Identification of delinquent federal tax debts through the security 

clearance process. Federal law does not expressly prohibit an 

individual with unpaid federal taxes from being granted a security 

clearance; however, delinquent tax debt does pose a potential 

vulnerability that must be considered in making a broader 

determination of whether an applicant should be granted a security 

clearance. Additionally, federal agencies generally do not routinely 

monitor individuals to identify delinquent tax debt accrued subsequent 

to the clearance approval. Further, there is no process to detect 

unpaid federal tax debts accrued after an individual has been 

favorably adjudicated unless the debt is self-reported, reported by a 

security manager due to garnishment of wages, or discovered during 

a clearance renewal or upgrade.5 Given that individuals who hold 

security clearances are reinvestigated every 10 years for secret 

clearances and every 5 years for top-secret clearances, if an 

individual accrues tax debt after a security clearance is granted, the 

unpaid federal tax debt may not be detected for up to 5 to 10 years. 

In September 2013, GAO reported that about 8,400 of the 240,000 

employees and contractors of civilian executive-branch agencies who 

had a federal security clearance or who were approved for secret and 

top-secret clearances owed approximately $85 million in unpaid 

 

4

Medicaid is a federal-state partnership that finances health care for certain low-income 

individuals, including children, families, the aged, and the disabled. 

5

Individuals who have been found favorably adjudicated for a clearance have been 

deemed eligible for a clearance by their adjudicating agency. 
 

Page 117 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

federal taxes, as of June 2012.6 According to IRS data, about 4,200 of 

these 8,400 individuals with tax debt had a repayment plan with the 

IRS to pay back their debt as of June 30, 2012. The tax debt owed by 

those on a repayment plan was approximately $35 million. GAO’s 

analysis also found that 6,300 individuals (approximately 76 percent 

of the 8,400 that owed tax debt) accrued their tax debt after approval 

of the security clearance. 

GAO previously reported that federal law does not permit IRS to 

disclose taxpayer information, including unpaid federal taxes, to 

federal officials without consent from taxpayer.7

 As noted in GAO’s 

September 2013 report, federal agencies may obtain information on 

federal tax debts directly from IRS if the applicant provides consent. 

However, obtaining consent waivers is a manual process and thus it is 

not conducive to the large-scale detection of unpaid federal taxes 

owed by security-clearance applicants. Additionally, the consent 

waiver generally provides limited visibility into an applicant’s overall 

tax-debt status because the form requires the requesting agency to 

identify the specific time periods for which it is requesting disclosure,

and, as such, the agency may not obtain the complete tax-debt history 

of the individual nor would it be of use during the duration of time 

between reinvestigations.

In September 2013, GAO reported that additional mechanisms that 

provide large-scale, routine detection of federal debt could improve 

the ability of federal agencies to identify individuals who owe federal 

debts, including federal taxes. Agencies could explore whether 

mechanisms could be developed that allowed them to perform 

routine, automated checks to determine whether individuals have 

unpaid federal debts, without compromising statutory tax privacy 

protections. If developing such a mechanism proved impractical, GAO 

reported that the Office of the Director of National Intelligence (ODNI) 

could determine whether seeking an exception to federal privacy law 

to allow for such checks is advisable. Enhancing federal investigative 

agencies’ access to federal debt information, including federal taxes, 

for the purpose of both investigating and adjudicating securityclearance applicants, as well as ongoing monitoring of current 

clearance holders’ tax-debt status, would better position agencies to 

make fully informed decisions about eligibility for security clearances.

 

6

Individuals included in the study do not include known employees and contractors of the 

Department of Defense and intelligence agencies. The study only includes those 

individuals who had a favorable adjudication decision made from April 1, 2006, through 

December 31, 2011.

7

See GAO, Medicaid: Providers in Three States with Unpaid Federal Taxes Received over 

$6 Billion in Medicaid Reimbursements, GAO-12-857 (Washington, D.C.: July 27, 2012). 
 

Page 118 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

GAO suggested actions to increase tax revenue collections by identifying 

and taking action to limit issuance of passports to applicants, levy 

payments to Medicaid providers, or identify security-clearance applicants 

with unpaid federal taxes in three reports issued in March 2011, July 

2012, and September 2013, respectively. Specifically, GAO suggested 

that Congress may wish to consider taking the following action: 

• Enable and require the Secretary of State to screen and prevent 

individuals who owe federal taxes from receiving passports, to include 

establishing criteria for specific categories of passport holders and 

waivers as appropriate. To do this, Congress may wish to ask the 

Secretary of State and Commissioner of Internal Revenue to jointly 

study policy and practical issues and develop options for further 

consideration, including developing appropriate criteria and 

safeguards. 

In addition, GAO recommended that the Commissioner of the Internal 

Revenue Service take the following action:

• Explore further opportunities to enhance the collection of unpaid 

federal taxes from Medicaid providers. This includes conducting a 

cost-benefit analysis of the implementation of a continuous levy 

program and expanded use of levies against providers with large 

Medicaid payments and significant unpaid federal taxes. Where 

appropriate, IRS should seek legislation to modify existing law to allow 

for more efficient collection of outstanding tax debts from Medicaid 

providers. 

Finally, GAO recommended that the Director of National Intelligence, in 

consultation with the Office of Personnel Management (OPM) and the 

Department of the Treasury, should take the following action:

• Evaluate the feasibility of federal agencies routinely obtaining federal 

debt information from the Department of the Treasury, or a similar 

automated mechanism that includes federal taxes, for the purposes of 

investigating and adjudicating clearance applicants, as well as for 

ongoing monitoring of current clearance holders’ tax-debt status. If 

this is found to be impractical, ODNI should consider whether an 

exception to federal privacy law is advisable and, if so, develop a 

legislative proposal, in consultation with Congress, to authorize 

access to tax-debt information.

These actions can increase tax revenue collections by more than $500 

million over a 5-year period by identifying and taking action to deny 

benefits or levy payments to passport applicants, Medicaid providers, and 

security-clearance applicants who owe federal taxes. For example, 

according to a 2012 Congressional Budget Office estimate, the federal 

government can save about $500 million over a 5-year period on the 

revocation or denial of passports in cases of certain federal tax 

delinquencies.

Actions Needed and 

Potential Financial or 

Other Benefits
 

Page 119 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

In commenting on the September 2013, July 2012, and March 2011 

reports, the cognizant federal agencies either agreed with GAO’s 

recommendations or did not provide any written comments, as follows

• IRS, the Department of State, and the Department of the Treasury did 

not comment on the findings in GAO’s March 2011 report on passport 

issuance to increase collection of unpaid taxes. The Department of 

State provided technical comments, which were incorporated into the 

March 2011 report as appropriate. 

In commenting on the July 2012 report on unpaid tax debt among 

Medicaid providers, IRS concurred with GAO’s recommendation to 

explore opportunities to enhance the collection of unpaid federal taxes 

from Medicaid providers, but noted that previous efforts have 

revealed significant operational challenges. Similarly, the Centers for 

Medicare & Medicaid Services (CMS) noted that the structure of the 

Medicaid program (wherein the federal government does not have a 

direct relationship with providers or pay them directly) provides a 

programmatic basis for excluding Medicaid from the levy program, 

and may result in significant challenges to the implementation of an 

automated levy. CMS further noted that any potential legislation 

related to the collection of outstanding tax debts from Medicaid 

providers may affect the basic structure of the Medicaid program. 

CMS noted, however, that it is prepared to coordinate with IRS in 

exploring opportunities to enhance levy collections from Medicaid 

providers. GAO recognizes the challenges expressed by IRS and 

CMS. However, given that GAO found over $6 billion of payments 

made to tax-delinquent Medicaid providers in three states, a more 

rigorous review of the potential costs and financial benefits of 

implementing enhanced continuous and other levies of Medicaid 

payments is warranted.

• ODNI agreed with the recommendation in the September 2013 report 

to evaluate the feasibility of federal agencies routinely obtaining 

delinquent federal debt information for the purposes of investigating 

and adjudicating clearance applicants, as well as for ongoing 

monitoring of current clearance holders’ tax-debt status. ODNI stated 

that it is collaborating with representatives from the Treasury Offset 

Department at the Department of the Treasury regarding the use of its 

automated record process to identify delinquent federal tax debt for 

purposes of investigating, adjudicating, and monitoring security 

clearance holders and applicants. 

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

Health and Human Services (HHS), ODNI, State, and OPM for review 

and comment. 

• In an e-mail dated February 21, 2014, a Program Manager with IRS’s 

Office of Legislative Affairs provided updates on the agency’s efforts 

to address two of the three recommendations listed above. 

Specifically, the Program Manager stated that the recommendation 

regarding the screening and preventing of individuals who owe federal 

Agency Comments 

and GAO’s Evaluation
 

Page 120 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

taxes from receiving passports would require a legislative change. 

According to the Program Manager, 26 U.S.C. § 6103 prohibits the 

IRS from disclosing return and return information and there is no 

exception to disclose such information to State for the purpose of 

limiting passport issuance. 

Regarding the recommendation regarding exploring further 

opportunities to enhance the collection of unpaid federal taxes from 

Medicaid providers, the Program Manager stated that the agency 

issued interim guidance to address the one-time notice of levy to state 

Medicaid agencies. IRS has planned meetings with the Bureau of the 

Fiscal Service about adding state Medicaid payments to a continuous 

levy program. These discussions are in the initial stages and IRS 

does not expect a resolution to the issue in the near term because the 

discussions with the reciprocal states are in the preliminary stages. 

While IRS’s action is a short-term solution for our recommendation of 

a one-time notice levy, GAO maintains that a long-term solution to 

integrate Medicaid payments into a continuous levy process is still 

necessary. The Program Manager did not comment on the 

recommendation related to obtaining federal debt information.

• In an e-mail dated February 20, 2014, an Oversight Analyst with 

HHS’s Office of the Assistant Secretary for Legislation stated that 

CMS continues to engage with the Department of the Treasury in 

exploring the feasibility of expanding the Treasury Offset Program 

to Medicaid.

• In an e-mail received on February 7, 2014, a policy coordinator with 

the ODNI Office of Legislative Affairs commented on the security 

clearance recommendation and provided technical comments, which 

were incorporated as appropriate. The policy coordinator stated that 

ODNI is collaborating with representatives from the Department of the 

Treasury regarding the use of their automated record process to 

identify delinquent federal tax debt for purposes of investigating, 

adjudicating, and monitoring security-clearance holders and 

applicants.

• State and OPM did not provide comments on this issue.

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

products in the related GAO products section. For all three reports, the 

estimated amount of unpaid federal taxes is likely understated because it 

excludes individuals who have not filed tax returns or who underreported 

income, among other reasons. Specifically, 

• For the March 2011 report, GAO obtained and analyzed IRS tax-debt 

data as of September 30, 2008, and obtained and analyzed data on 

passport recipients from the Department of State for fiscal year 2008. 

GAO matched the list of passport recipients with IRS tax debts using 

Social Security numbers. 

How GAO Conducted 

Its Work
 

Page 121 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

• For the July 2012 report, GAO compared Medicaid reimbursement 

information from three states to known IRS tax debts as of September 

30, 2009. These states were among those that received the largest 

portion of American Recovery and Reinvestment Act Medicaid 

funding. GAO also obtained federal tax-debt data from IRS as of 

September 30, 2011. Using the taxpayer identification number as a 

unique identifier, GAO electronically matched IRS’s tax-debt data to 

the population of Medicaid providers. GAO’s analysis determined the 

magnitude of known unpaid federal taxes owed by 2009 Medicaid 

providers in only New York, Texas, and Florida and cannot be 

generalized to other states or time periods.

• For the September 2013 report, GAO obtained and analyzed OPM 

data on individuals eligible for a secret or top-secret security 

clearance due to a favorable adjudication, either during an initial 

investigation or a reinvestigation, from April 1, 2006, through 

December 31, 2011. GAO also obtained and analyzed IRS tax-debt 

data as of June 30, 2012. GAO matched the list of individuals eligible 

for a security clearance with IRS tax debt data as of June 30, 2012, 

using the Social Security number. 8

 To determine to what extent 

federal agencies have mechanisms to detect unpaid tax debt during 

the security-clearance approval process, such as investigative and 

adjudication mechanisms, GAO also reviewed relevant laws and 

regulations and interviewed officials from ODNI, the Department of the 

Treasury, and OPM

Security Clearances: Additional Mechanisms May Aid Federal Tax-Debt 

Detection. GAO-13-733. Washington, D.C.: September 10, 2013.

Medicaid: Providers in Three States with Unpaid Federal Taxes Received 

over $6 Billion in Medicaid Reimbursements. GAO-12-857. Washington, 

D.C.: July 27, 2012.

Federal Tax Collection: Potential for Using Passport Issuance to Increase 

Collection of Unpaid Taxes. GAO-11-272. Washington, D.C.: March 10, 

2011.

For additional information about this area, contact Steve Lord at (202) 

512-6722 or lords@gao.gov.

 

8

GAO’s final estimate of tax debt does include some debt that is covered under an active 

IRS installment plan or is beyond normal statutory time limits for debt collection.

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Page 122 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities

16. Federal Real Property Ownership and 

Leasing

The General Services Administration could potentially achieve millions of dollars in savings by using capitalplanning best practices to create a long-term strategy for targeted ownership investments to replace some 

high-value leases.

In fiscal year 2012, the General Services Administration (GSA) received 

approximately $5.2 billion in new obligational authority1 to provide 193 

million square feet of rental space to federal agencies in privately owned 

buildings in cases where federally owned space was not available. GAO’s 

work has shown that building ownership often costs less than leasing, 

especially for long-term space needs. However, GSA relies heavily on 

costly operating leases to meet new long-term needs because it typically 

lacks the upfront funding needed to purchase buildings or space. 

Overreliance on costly leasing is one reason that federal real property has 

remained on GAO’s high-risk list.2

 

For leases with a net annual rent above a threshold—$2.79 million in 

fiscal year 2012—GSA is required to submit a prospectus, or proposal, to 

the House and Senate authorizing committees for their review and 

approval. The prospectus is to provide basic information on the proposed 

lease—including the purpose, location, and cost—to assist Congress in 

overseeing GSA’s management of its real property portfolio. As of 

November 2012, prospectus-level, or high-value leases, represented only 

about 3 percent of the total number of GSA leases, but made up about 

one-third of its leased portfolio in terms of cost and size.

GAO reported in September 2013 that GSA’s capital planning approach 

lacks transparency and a strategic focus that could support more 

informed decision making related to its high-value leases. GSA officials 

stated that for most high-value leases, federal ownership would be more 

cost-effective over the long term, but GSA did not have the funding 

 

1

The primary means of financing the operating and capital costs associated with federal 

space is the Federal Buildings Fund, a revolving fund financed by rents received from 

other agencies and authorized and established by the Public Buildings Act Amendments 

of 1972. Pub. L. No. 92-312 (1972). The Federal Buildings Fund is administered by GSA. 

Congress exercises control over the Federal Buildings Fund through the appropriations 

process that sets annual limits—called obligational authority—on how much of the fund 

can be obligated for various activities. GSA, as an executive branch agency, requests 

obligational authority from Congress as part of the annual President’s Budget Request. In 

annual appropriations legislation, Congress provides obligational authority to GSA to incur 

obligations and make expenditures from the Federal Buildings Fund in five categories of 

activities, including rental of space, which funds leases of privately owned space or 

buildings for federal agencies.

2

GAO, High-Risk Series: An Update, GAO-13-283 (Washington, D.C., February 2013).

Why This Area Is 

Important

What GAO Found
 

Page 123 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

available to pursue ownership solutions. However, GAO found that GSA 

does not follow leading capital-planning practices as identified by GAO’s 

Executive Guide and the Office of Management and Budget’s (OMB) 

Capital Programming Guide involving evaluating alternatives, prioritizing 

projects, and planning for long-term capital needs.3 The resulting lack of 

information on the long-term consequences of high-value leases, 

including costs and risks, could inadvertently contribute to the federal 

government’s overspending on long-term space needs. For example:

• Evaluating alternatives: GSA’s lease prospectuses do not discuss 

the length of time the space is needed or alternative approaches to 

meeting this need—which are key to understanding whether leasing 

or owning would be more cost-effective. Twenty-seven of the 218 

leases in our review had prospectuses that contained an alternatives 

analysis of the comparative costs of leasing versus owning over 30 

years. These analyses showed potential savings of over $866 million 

if the spaces were owned rather than leased. The remaining 191 

leases in our review did not contain an alternatives analysis, which 

are currently not required by GSA or OMB in light of the lack of capital 

funding for acquisitions and construction. As a result, decision 

makers did not have information on whether there were more costeffective options.

With regards to alternatives analysis, GAO also found that nine 

ongoing high-value leases did not go through the prospectus process, 

in most cases either because GSA mistakenly did not provide a 

prospectus for the lease (3 leases) or because the lease started 

below the prospectus threshold, but over time grew in size and cost to 

surpass the prospectus threshold (4 leases). The lack of a prospectus 

on these leases further limits the transparency of the prospectus 

process in providing decision makers information on the full scope of 

GSA’s high-value leased portfolio—information that could be used to 

analyze the extent to which leasing is the best alternative in these 

cases. Although these nine high-value leases have been in effect for 

several years, it is nonetheless important that information on them be 

submitted to the appropriate committees to maintain GSA’s 

accountability to Congress in this area and allow the committees to 

exercise their oversight responsibility.

• Prioritizing projects: GSA has not systematically prioritized which 

space needs currently being met through high-value leases would be 

most beneficial to move to federally-owned solutions. GSA’s current 

capital plan does not prioritize all of its proposed capital projects in the 

same list—instead ranking courthouse and land port-of-entry projects 

in their own list—making it difficult to compare GSA’s prioritization of 

 

3

GAO, Executive Guide: Leading Practices in Capital Decision-Making, GAO/AIMD-99-32

(Washington, D.C.: December 1998), and OMB, Capital Programming Guide, Supplement 

to Office of Management and Budget Circular A-11, Part 7: Planning, Budgeting, and 

Acquisition of Capital Assets (June 2006). 
 

Page 124 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

projects across its portfolio. In addition, GSA’s current capital plan 

does not clearly explain why projects selected are the best alternative. 

Moreover, GSA does not have a documented analysis of which, if 

any, of its high-value leases should be targeted for ownership and 

how such ownership might compare cost-wise to other capital projects 

it has included in its capital plan or budget request.

By adopting leading practices for capital decision making in managing its 

high-value lease portfolio, such as evaluating alternatives and prioritizing 

projects, GSA could help the government potentially save millions of 

dollars by working to convert costly leases to ownership. GAO’s case 

studies at 12 locations illustrated how a lack of these practices has 

resulted in high-value leases in cases where ownership could have 

potentially been considered. For example, one high-value lease for the 

Environmental Protection Agency in Seattle is for space in a building the 

agency has occupied for over 40 years. Another high-value lease is for 

the Department of State’s diplomatic security bureau in Virginia. The 

department invested at least $80 million in security upgrades into a facility 

that GSA leased for 10 years. When an agency makes a significant 

investment into a leased facility, there is a risk that when the lease 

expires, the agency may have to move and reinvest time and money into 

replicating the investment in a different facility—or the lessor may ask for 

a higher rent in the next lease knowing that any competitor will have to 

incorporate the costs of replicating the investment into its offer.

The current lack of alternatives analysis and other critical information in 

the lease prospectuses—such as a description of the length of time that 

an agency estimates it will need the space, an historical account of how 

long the agency has been in the particular building it is occupying at the 

time of the prospectus, and any major investments the agency will have 

to make to the leased space to meet its mission—limits decision makers’ 

ability to assess the costs of continuing to handle long-term needs 

through leasing rather than ownership. Moreover, cases in which highvalue leases lack a prospectus further reduce the transparency of GSA’s 

full portfolio. 

Finally, even with this additional information in the prospectuses, 

Congress would still be considering each leasing action separately. GSA 

lacks analysis of the effect of these long-term leases on its portfolio in line 

with capital-planning principles and it therefore cannot share this 

information with Congress, for example, by incorporating proposals for 

those space needs currently housed in high-value leases for which it 

would be most beneficial to transfer to an ownership solution into its 

capital plan. To strategically manage these leases, it is important to 

consider them in the context of GSA’s entire real property portfolio.
 

Page 125 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

To enhance transparency and allow for more informed decision making 

related to the appropriate role of leasing in GSA’s real property portfolio, 

GAO recommended in September 2013 that the Administrator of GSA 

take the following three actions:

• Include in the lease prospectus a description of the length of time that 

an agency estimates it will need the space, an historical account of 

how long the agency has been in the particular building it is occupying 

at the time of the prospectus, and any major investments the agency 

will have to make to the leased space to meet its mission. For those 

spaces for which the agency has a long-term projected need, also 

include an appropriate form of cost-to-lease versus cost-to-own 

alternatives analysis to facilitate the evaluation of these alternatives.

• Report to the appropriate congressional committees any leases above 

the prospectus threshold that did not follow the congressional 

prospectus process.

• Develop and use criteria to rank and prioritize potential long-term 

ownership solutions to current high-value leases among other capital 

investments. Use this ranking to create a long-term, cross-agency 

strategy that facilitates consideration of targeted investments in 

ownership. 

GSA could potentially save millions of dollars by improving its capital 

planning through incorporating a strategy for targeted investment into 

ownership solutions for some space needs that are currently in high-value 

leases. Such a strategy could help GSA work with OMB and Congress to 

make available more funds for the upfront costs of renovating, 

constructing, or acquiring a building in cases in which these alternatives 

present a significant potential for cost savings.

In its comments on the 2013 report, GSA stated that it agreed with the 

recommendations, and would take action to implement them. GSA also 

commented that it had concerns about some of the information GAO

recommended be provided in prospectuses. For example, GSA stated 

that some information may not be included in prospectuses due to 

requirements of GSA’s competitive real estate procurement process. In 

GAO’s response to the agency comments, GAO agreed that GSA must 

adhere to the requirements of its competitive procurement process in 

carrying out the prospectus process but stated that the additional 

information GAO recommended be incorporated into prospectuses, even 

if it was modified to some degree to ensure adherence to GSA’s 

competitive procurement process, would provide valuable information to 

Congress that could help inform its decisionmaking in this area. 

GAO provided a draft of this report section to GSA for review and 

comment. In contrast to its comments on the 2013 report, in an email 

received on January 30, 2014, an official from the audit liaison’s office 

stated that GSA only partially agreed with the report’s first and second 

Actions Needed and 

Potential Financial or 

Other Benefits

Agency Comments 

and GAO’s Evaluation
 

Page 126 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

recommendation and fully agreed with the third recommendation. 

Regarding the first recommendation, GSA stated that it does not always 

know all of the information GAO recommended be included in the 

prospectuses—for example, it may not know how long an agency will 

need the space or which building an agency will occupy, which could 

affect the level of investment an agency may need to make in the space 

to meet its mission. Even so, GSA stated that to implement this 

recommendation, it plans to include in lease prospectuses the 

recommended information in cases where this information is known, such 

as a cost-to-lease versus cost-to-own analysis for long-term projected 

space needs. While acknowledging that there may be cases in which 

GSA does not know all of the information GAO recommended be included 

in prospectuses, GAO maintains that GSA should include as much of this 

information as possible, in order to provide valuable information to 

Congress that could help inform its decision making in this area. 

Regarding the second recommendation, GSA stated that it only partially 

agreed with the recommendation because in most cases, the leases GAO

identified as being above the prospectus threshold did not have nor were 

required to have a prospectus at lease inception, as the net annual rent 

did not exceed the prospectus threshold until subsequent expansion took 

place. GSA therefore stated that to implement the recommendation, it will 

inform the appropriate congressional committees of the three prospectuslevel leases that did not follow the proper procedures because the net 

annual rent exceeded the threshold even at lease inception. Further, 

GSA said it will enhance its internal controls to reduce instances of such 

leases (where net annual rent exceeds the threshold at inception) not 

going through the proper process. However, GAO maintains that GSA 

should inform appropriate congressional committees about any leases 

above the prospectus threshold even if the leases reached the threshold 

after lease inception. This information, along with additional information in 

the prospectuses and the cross-agency strategy that GAO recommended, 

could significantly increase the extent to which congressional 

decisionmakers have critical, transparent information needed to 

strategically manage GSA’s real property portfolio. GSA itself recognizes 

the need to share such information with its authorizing committees,

stating in its leasing guidance that its relationship with its authorizing 

committees is “paramount” and that “as a matter of comity” it will honor 

the expectations of the authorizing committees.4

 For these additional 

reasons, GAO continues to recommend that GSA inform the committees 

of those leases that exceed the prospectus threshold but did not go 

through the prospectus process, whether that occurred before or after 

inception.

 

4

GSA, PBS Leasing Desk Guide, 2011.
 

Page 127 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

Regarding the third recommendation, GSA continues to agree with GAO 

and said it will develop and implement criteria to prioritize space needs to 

determine the most beneficial capital investment solutions.

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

products in the related GAO products section. GAO reviewed GSA data 

for all 218 active high-value leases as of November 2012 and selected 12 

leases for case studies based on expiration dates, locations, and tenant 

agencies. GAO interviewed officials from GSA, tenant agencies, lessors, 

and other private sector officials with experience leasing to GSA.

Table 13 in appendix IV lists the programs GAO identified that might have 

opportunities for cost savings.

Federal Real Property: Greater Transparency and Strategic Focus 

Needed for High-Value GSA Leases, GAO-13-744. Washington, D.C., 

September 19, 2013.

Federal Buildings Fund: Improved Transparency and Long-term Plan 

Needed to Clarify Capital Funding Priorities. GAO-12-646. Washington, 

D.C.: July 12, 2012.

Federal Real Property: Strategy Needed to Address Agencies’ 

Longstanding Reliance on Costly Leasing. GAO-08-197. Washington, 

D.C.: January 24, 2008.

For additional information about this area, contact David Wise at (202) 

512-2834 or wised@gao.gov.

How GAO Conducted 

Its Work

Related GAO 

Products

Contact Information
 

Page 128 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

17. Online Taxpayer Services The Internal Revenue Service could potentially realize hundreds of millions of dollars in cost savings and 

increased revenues by enhancing its online services, which would improve service to taxpayers and encourage 

greater tax law compliance.

The Internal Revenue Service’s (IRS) website is a low-cost method for 

providing service to millions of taxpayers. Taxpayers visited IRS’s website 

over 375 million times during 2012 to obtain tax-related information, 

download forms, and check on the status of a refund, among other things. 

Further, taxpayers benefit from online services because they can 

research large amounts of tax guidance, access the services 24 hours a 

day, and avoid waiting in a queue to speak to a telephone representative. 

In addition, the Department of the Treasury has cited enhancing IRS.gov 

with additional online services as part of its plan to achieve its priority 

goals of improving service to taxpayers and increasing compliance with 

tax laws. 

In December 2011, GAO reported that IRS could realize substantial 

savings by transferring taxpayers away from costly telephone interactions 

and recommended that IRS finalize a more comprehensive plan for its 

website. In its 2012 online strategy document, IRS also stated that 

investing in online services could produce benefits for the taxpayer and 

IRS. For example, IRS reported that operational efficiencies, such 

reducing telephone service, could result in savings of hundreds of millions 

of dollars.

In April 2013, GAO found that static web pages such as general 

information and forms constituted the majority of www.IRS.gov, with over 

110,000 web pages and downloadable documents. The website included 

some basic interactive tools, such as providing a locator for its sites 

staffed by volunteers and allowing taxpayers to order a transcript of a 

prior year return. These interactive tools allow users to perform routine 

tasks online and, in some cases, obtain personalized information. 

IRS, however, does not offer dynamic account access, which is the ability 

for users to make account changes after confirming their identity online. 

Other federal and state taxing authorities provide a broader range of 

online services to their customers, including dynamic interactive account 

access. For example, the Social Security Administration allows users to 

start or change direct deposit benefit payments online. The New York and 

California state tax agencies provide dynamic account access allowing 

taxpayers to view tax account balances and recent payments, to respond 

to notices, and to edit addresses. The IRS Oversight Board, National 

Taxpayer Advocate, and Electronic Tax Administration Advisory 

Committee have all recently made recommendations that IRS should 

provide taxpayers with online access to their accounts. 

Why This Area Is 

Important

What GAO Found
 

Page 129 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

To improve its website, IRS has been simultaneously focusing on multiple 

short-term projects to deliver additional basic interactive tools, as well as 

longer-term efforts to invest in infrastructure such as more secure internet 

portals for accessing information. However, IRS does not have a longterm strategy for enhancing its website that explains how its ongoing and 

new efforts fit together. Strategic plans should contain the goals and 

objectives of a program along with measures of performance so that an 

agency can be held accountable. Further, IRS is following some but not 

all fundamental elements for a website strategy as described on 

www.howto.gov—a federal website designed to be a resource to help 

improve how agencies communicate and interact with customers and use 

innovative tools and technologies to improve service—and in other 

guidance. For example, 

• IRS reviews other organizations’ interactive tool designs, but has not 

used leading practices to inform its priorities for web enhancement.

• IRS’s business cases that support the decisions to implement new 

interactive tools are missing key information, such as costs and 

benefits, and are not being used to set priorities. Further, IRS does 

not have overall cost estimates or enough detail on goals, 

deliverables, future online services, and time frames to be able to 

assess progress. 

• IRS is not consistently conducting security risk assessments when 

implementing interactive tools. Further, IRS’s investments in 

upgrading security and developing authentication capabilities are not 

linked to a long-term strategy. 

While IRS’s efforts to date have already benefited taxpayers and hold the 

promise of additional benefits in the future, without a long-term strategy it 

will be difficult for Congress and other decision makers to understand the 

costs and the benefits associated with assisting customers using 

interactive online services. Further, because some of the costs being 

incurred today are for infrastructure to enhance security and authenticate 

taxpayers’ identities, it is even more important that a strategy explain the 

long-term benefits.

GAO made multiple recommendations to improve interactive web 

services in a report issued in April 2013. Specifically, GAO recommended 

that the Acting Commissioner of the Internal Revenue Service should 

direct appropriate officials to take the following four actions:

• Develop a long-term strategy to improve web services provided to 

taxpayers, in accordance with www.Howto.gov and other federal 

guidance outlined in GAO’s April 2013 report. 

• Study leading practices of other organizations to understand how web 

improvement strategies were developed and new services prioritized.

Actions Needed and 

Potential Financial or 

Other Benefits
 

Page 130 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

• Develop business cases for all new online services, describing the 

potential benefits and costs of the project, and use them to prioritize 

future projects. 

• Review risk mitigation plans for interactive tools to ensure all risks are 

addressed and link investments in security to the long-term plan.

In its 2012 online strategy document, IRS estimated that enhancing online 

services, such as providing taxpayers with the ability to access account 

information, will produce hundreds of millions of dollars through improved 

operational efficiencies. Improvements in all of these areas would help 

IRS develop a strategic plan that would provide the information that 

managers and Congress need for improving website services to 

taxpayers.

In commenting on GAO’s April 2013 report on which this analysis is 

based, IRS neither agreed nor disagreed with the recommendation to 

develop a long-term strategy in accordance with federal guidance. 

Rather, IRS stated it has a long-term strategy to improve online services 

and would make improvements to the plan as appropriate. As of February 

2014, officials from IRS’s Office of Online Services told us that a longterm online strategy for improving web services will be completed in 

February 2015 and include the fundamental elements. IRS agreed with 

the recommendation to study leading practices of other organizations for 

website strategies. IRS partially agreed with the recommendation to 

develop business cases for all new online services. Specifically, IRS 

stated that it will continue to develop business cases, including potential 

benefits and costs, for all new online services and use them to help 

prioritize future projects. However, GAO maintains that the benefit and 

cost information in the business cases lacked enough information to be 

useful for setting priorities. Additionally, IRS agreed with the 

recommendation to review risk mitigation plans for interactive tools to 

ensure all risks are addressed and investments in security are in its longterm plan. 

GAO provided a draft of this report section to IRS for review and 

comment. IRS provided oral comments in response to GAO’s 

recommendations to improve interactive web services. The IRS Director 

of the Office of Online Services agreed that improvements to its 

interactive web services could result in cost savings, increase revenue, 

and importantly, improved services to taxpayers. The IRS Director of the 

Office of Online Services said the agency has made significant progress 

in implementing our recommendations, which will be integrated into its 

long-term strategy that is projected to be complete in February 2015. For 

example, IRS reported that it contracted with a third party to conduct an 

assessment of select IRS web services and compared them with industry 

best practices from multiple other organizations to understand how web 

improvement strategies were developed.

Agency Comments 

and GAO’s Evaluation
 

Page 131 GAO-14-343SP 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. GAO analyzed agency 

documents, including the IRS Online Strategy dated September 2012, 

business cases, and plans to authenticate taxpayer identities for new 

interactive tools. GAO also compared IRS’s documents with relevant 

guidance. GAO interviewed officials from IRS and other parties.

2013 Tax Filing Season: IRS Needs to Do More to Address the Growing 

Imbalance between the Demand for Services and Resources. 

GAO-14-133. Washington, D.C.: December 18, 2013. 

IRS Website: Long-Term Strategy Needed to Improve Interactive 

Services. GAO-13-435. Washington, D.C.: April 16, 2013. 

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. 

2011 Tax Filing: Processing Gains, but Taxpayer Assistance Could Be 

Enhanced by More Self-Service Tools. GAO-12-176. Washington, D.C.: 

December 15, 2011.

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

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

How GAO Conducted 

Its Work

Related GAO 

Products

Contact Information
 

Page 132 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

18. Real Estate-Owned Properties

Improvements to the Department of Housing and Urban Development’s Federal Housing Administration’s 

disposition and oversight practices for foreclosed properties could produce increased sales proceeds and 

savings from maintenance and other expenses from holding properties totaling hundreds of millions of dollars 

per year.

In recent years, the Federal Housing Administration (FHA), within the 

Department of Housing and Urban Development (HUD), has faced fiscal 

challenges, as has the rest of the mortgage insurance industry. Since 

2009, the insurance fund under which FHA insures almost all of its singlefamily mortgages has not met minimum statutory capital requirements. 

Also, declining balances in the insurance fund’s capital reserve account 

and higher than expected claims on loans insured before 2010 have 

resulted in FHA requiring additional funds to have sufficient resources for 

all future insurance claims on its existing portfolio. The federal role in 

housing finance remains on GAO’s high-risk list in part because of these 

difficulties and because FHA’s portfolio of insured mortgages has 

continued to grow.1

With mortgage foreclosures at historic levels in recent years, FHA is 

faced with disposing of a high volume of foreclosed properties—known as 

real estate-owned (REO) properties—that it acquires after the foreclosure 

process is completed on a defaulted FHA-insured loan.2 As GAO reported 

in June 2013, FHA disposed of more than 400,000 REO properties from 

January 2007 through June 2012.3 Other federally related entities that 

operate housing finance programs—including the Department of Veterans 

Affairs’ (VA) Loan Guaranty Service, as well as the two governmentsponsored housing enterprises, Fannie Mae and Freddie Mac—also have 

experienced increasing numbers of REO properties in recent years. All of 

these entities seek to sell or otherwise dispose of their REO properties in 

order to recover some portion of the loss on the original failed loans. 

REO properties generally must be maintained, repaired when 

appropriate, evaluated to determine an appropriate selling price, and 

marketed for sale. Conducting these activities effectively can help ensure 

that FHA maximizes returns and minimizes maintenance and other 

holding costs. Achieving higher recoveries on REO property sales and 

 

1

GAO, High-Risk Series: An Update, GAO-13-283 (Washington, D.C.: February 2013).

2

FHA and other federally related entities acquire REO properties from mortgage servicers 

when borrowers default on insured or guaranteed mortgage loans and no third party 

purchases the property at the foreclosure sale. 

3

Since the period covered in our analysis, FHA disposed of 131,700 properties from July 

2012 through August 2013.

Why This Area Is 

Important
 

Page 133 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

lower maintenance and other costs related to properties after foreclosure 

sale generally would have positive effects on the financial condition of the 

insurance fund.

GAO reported in June 2013 that FHA’s performance in selling its REO 

properties lagged behind the performance of both Fannie Mae and 

Freddie Mac (the enterprises). Its combined 2007-2012 returns, 

measured by the net execution rate (net sales proceeds divided by 

independently assessed property values), were about 4 to 6 percentage 

points below the enterprises’ returns (see fig.). 

FHA’s Aggregate Net Execution Rate Relative to the Enterprises’ Rates for REO 

Dispositions, January 2007 through June 2012 

Note: The year 2012 represents data from January 1, 2012, through June 30, 2012. The figures that 

GAO reports for execution rates are aggregate calculations for individual years and the entire period 

rather than averages of the execution rates for individual property dispositions. The results are not 

controlled for the effects of property characteristics. These calculations did not include all dispositions 

for each entity because of missing values for certain data elements. VA did not have the propertylevel data available that are necessary to calculate net execution rates.

Differences in combined returns between FHA and the enterprises 

persisted even after controlling for certain differences in their properties’ 

characteristics (e.g., value, location, and local market conditions).

Further, while the enterprises took an average of around 200 days after 

foreclosure to dispose of REO properties, FHA took about 340 days—

more than 60 percent longer (see fig.). FHA also took longer than VA. 

What GAO Found
 

Page 134 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

Average Disposition Timelines by Entity for REO Dispositions, January 2008 through June 2012 (All Years Combined) 

Notes: The enterprises generally acquire REO properties within 24 hours of foreclosure sales, and VA 

generally acquires properties within 15 days. The REO sale date represents the closing date of the 

REO sale. The results are not controlled for the effects of property characteristics. The calculations 

did not include all dispositions for each entity because of missing values for certain data elements. 

a

VA did not have data available for its REO properties’ initial valuation dates.

A similar pattern persisted even after controlling for certain property 

differences. In the first half of 2012, FHA’s disposition returns and 

timelines generally improved relative to the enterprises’ returns and 

timelines.

For FHA, unlike the others, a significant part of the time between the 

foreclosure sale and the REO sale is taken by loan servicers who must 

complete certain activities before conveying title to FHA. GAO originally 

reported in April 2002 and noted again in its June 2013 report that while 

other government entities maintain unified custody of foreclosed 
 

Page 135 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

properties and are responsible for maintaining the properties from the 

time of foreclosure sale until the properties are sold, FHA divides property 

custody between its mortgage servicers and REO contractors, which 

operate largely independently of one another. This divided approach to 

property custody in the post-foreclosure sale period could delay the 

initiation of critical steps necessary to sell REO properties quickly. 

In June 2013, GAO reported that if FHA’s execution rate and disposition 

time frame had equaled those of the enterprises in 2011, it could have 

increased its proceeds from the sale of REO properties by as much as 

$400 million and decreased the costs it incurs while holding these 

properties—which can include items such as taxes, homeowners’ 

association fees, and maintenance costs—by up to $600 million for the 

year. 

FHA and the enterprises used similar strategies to dispose of their REO 

properties, but FHA did not use some practices that the enterprises and 

private mortgage servicers used that may have the potential to improve 

its sales performance. For example, FHA did not repair its properties to 

increase their marketability, something both enterprises did. And unlike 

the enterprises, FHA did not incorporate information from multiple 

sources in setting list prices or consistently take into account market 

conditions when reducing prices. Instead, it relied on one appraisal in 

setting initial prices and often reduced the prices by set amounts. 

In addition, FHA’s oversight of the contractors that it used to maintain and 

dispose of REO properties had weaknesses, and FHA did not use some 

of the oversight tools other entities used that might prove effective. First, 

government internal control standards require complete, updated policies 

and procedures to guide program oversight. As of June 2013, FHA had 

not updated its REO disposition handbook since 1994, even though the 

agency implemented a different program and contractor structure in 2010. 

In the absence of a central source of updated guidance, GAO and FHA 

internal auditors found inconsistencies in both contractor activities and 

staff oversight across FHA’s four regional offices that oversee REO 

activities. Second, FHA had not implemented a uniform system for 

evaluating contractor performance. For instance, FHA had yet to 

implement a proposed version of the type of scorecard that the 

enterprises used to assess differences in contractor performance. 

Further, FHA aimed to inspect 2 to 6 percent of its REO properties 

annually, although other entities with REO properties required more 

inspections, with some reporting inspecting between 25 and 35 percent 

monthly. Finally, FHA had not taken steps to ensure that the listing 

brokers marketing its REO properties were located close enough to the 

properties to have adequate knowledge of local markets. Without 

implementing more effective activities to evaluate contractor performance 

and ensure compliance with program requirements, FHA’s REO 

properties may continue to remain on the market longer and sell for lower 

prices than properties held by the enterprises.
 

Page 136 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

To increase the potential for higher financial returns from FHA’s 

disposition of REO properties, GAO recommended in June 2013 that the 

Secretary of HUD direct the Commissioner of FHA to take the following 

two actions:

• identify and implement changes in current disposition practices that 

could improve disposition outcomes, including requiring the use of 

additional information when setting initial and subsequent listing 

prices and considering repairs that could increase net proceeds, and 

• make changes to improve its oversight of the REO disposition 

program, including updating and maintaining comprehensive guidance 

on REO policies and procedures, implementing a scorecard to 

monitor contractor performance, increasing in-person property 

inspections, and ensuring that listing brokers are appropriately 

located. 

In addition, to provide for the most effective acquisition and sale of REO 

properties, GAO recommended in April 2002 that the Secretary of HUD 

establish unified property custody as a priority for FHA and determine and 

implement the optimal method for establishing unified property custody, 

including seeking additional statutory authority if necessary. GAO’s June 

2013 report again noted that taking this action could assist the agency in 

achieving financial benefits. 

FHA may realize financial benefits of hundreds of millions of dollars by 

implementing these recommendations. For example, if FHA had 

performed as well as the enterprises in disposing of REO property in 

2011, it could have potentially increased sales proceeds and reduced 

maintenance and other holding costs by a total of as much as $1 billion, 

resulting in higher financial returns to the insurance fund.

In commenting on the June 2013 report on which this analysis is based, 

HUD agreed with GAO’s recommendations. HUD also identified actions 

that it has taken or planned to take in response to GAO’s 

recommendations. For example, HUD wrote that it is conducting trial 

programs using multiple valuations to set initial list prices and conducting 

limited repairs of certain properties to analyze their effect on net 

proceeds, and that it will implement several actions to improve oversight 

of the program. HUD estimated that it would complete actions in response 

to most of the recommendations by June 30, 2014. 

In contrast to HUD’s comments on the June 2013 report, a 

communication to Congress from the FHA Commissioner in September 

2013 raised several reasons why the agency could not likely achieve the 

additional sales proceeds and reduced holding costs that GAO’s analysis 

had projected. These included that FHA takes possession of properties at 

a later time after the foreclosure sale than the enterprises do, that it would 

still incur most of the costs regardless of when it takes possession, and 

that the location of its properties result in lower net proceeds. However, 

Actions Needed and 

Potential Financial or 

Other Benefits

Agency Comments 

and GAO’s Evaluation
 

Page 137 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

GAO found that if HUD changed its processes to shorten the overall time 

it takes to dispose of REO properties, it could achieve higher net 

proceeds and incur lower overall costs. In addition, because GAO 

controlled for differences in property characteristics of each of the entities’ 

REO inventories and because appraised values take into account 

property conditions and local market factors, GAO continues to maintain 

that implementing the various actions it recommended could reduce costs 

and improve marketing results.

In response to GAO’s 2002 recommendation to establish unified property 

custody, HUD subsequently determined that it would not be advisable for 

the agency to establish unified property custody as an objective for the 

agency, and it did not implement the recommendation. The analysis in 

GAO’s June 2013 report once again highlights the need for FHA to 

consider whether the potential benefits from unified property custody, 

such as shorter REO disposition timelines and lower holding costs, 

outweigh any costs and challenges associated with acquiring REO 

properties from servicers closer to the foreclosure sale date. If FHA 

obtained custody of REO properties sooner after the foreclosure 

completion, it would have more control over disposition outcomes, could 

possibly realize cost savings, and could limit any potential negative 

effects from distressed properties remaining unsold for longer than is 

necessary.

GAO provided a draft of this report section to HUD for review and

comment. In an email received on February 10, 2014, a coordinator from 

FHA’s Office of the Comptroller provided comments from the Office of 

Economic Affairs within HUD’s Policy Development and Research Office 

that also cited reasons why HUD would not likely be able to achieve the 

additional proceeds and costs savings GAO projected. These reasons 

included differences in the locations and value of HUD’s properties. GAO 

continues to believe that HUD could achieve these savings since GAO’s 

analysis incorporated differences in property locations and values. 

The email also noted that GAO did not assess whether it could achieve 

better REO returns by employing alternative disposition means other than 

selling properties individually and that GAO had not provided evidence 

that undertaking repairs of more properties would increase returns. 

However, GAO’s June 2013 report recommended that HUD identify and 

implement changes in current practices or requirements that could 

improve REO disposition outcomes and identified several specific areas 

for accomplishing this goal. Considering the benefits and costs of 

alternative disposition models relative to traditional REO dispositions 

would be a worthwhile goal consistent with this recommendation and 

GAO continues to maintain that implementing the recommendations in 

that report—which HUD already has agreed to do—would likely improve 

HUD’s returns on any properties it continues to sell individually. Finally, 

GAO found that the enterprises repaired more properties than FHA and 

experienced higher returns on these properties, and reported that HUD 

had begun a small pilot project in 2011 to assess the impact of repairs on 

its properties’ marketability. As a result, GAO reaffirms its 
 

Page 138 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

recommendation that HUD conduct the analysis necessary to determine 

whether repairing certain of its properties would increase the amount of 

net proceeds from its REO sales.

The information contained in this analysis is based on the reports in the 

related GAO products section. To assess the effectiveness of FHA’s REO 

property dispositions, GAO analyzed disposition data from FHA and the 

other federally related entities, including all REO properties disposed of 

from January 2007 through June 2012. GAO created regression models 

to assess the extent of differences between FHA’s performance and that 

of the two enterprises after accounting for some differences in the 

characteristics of the properties they acquired. To determine how FHA 

and the other entities oversaw the contractors that managed and 

disposed of their REO properties, GAO reviewed program regulations, 

requirements, and policies and interviewed staff from these entities as 

well as from some private sector mortgage servicers that also acquired 

and disposed of REO properties.

Table 14 in appendix IV lists the program GAO identified that might have 

opportunities for cost savings or revenue enhancement.

Federal Housing Administration: Improving Disposition and Oversight 

Practices May Increase Returns on Foreclosed Property Sales. 

GAO-13-542. Washington, D.C.: June 20, 2013.

Single-Family Housing: Opportunities to Improve Federal Foreclosure and 

Property Sale Processes. GAO-02-305. Washington, D.C.: April 17, 2002.

For additional information about this area, contact Mathew J. Scirè at 

(202) 512-8678 or sciremj@gao.gov.

How GAO Conducted 

Its Work

Related GAO 

Products

Contact Information
Page 139 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities

19. Reverse Auctions in Government 

Contracting Including Commercial Items

Due to increasing government use of reverse auctions—with over $1 billion awarded in contracts in fiscal year 

2012—additional guidance may help maximize opportunities to increase competition and improve the accuracy 

of estimated cost savings. 

As opposed to a traditional auction, where buyers bid prices up to win an 

item, in a reverse auction, sellers bid prices down in an online forum to 

win a government contract. In recent years, federal agencies have been 

using reverse auctions as a tool to reduce the price they pay for certain 

types of items, such as information technology (IT) products and medical 

equipment. In theory, a reverse auction leverages competition, enabling 

agencies to obtain lower prices and reduce acquisition costs. Since GAO 

reported in 2004 that the US Postal Service was using reverse auctions, 

other government agencies have increasingly used this tool, and the 

Office of Federal Procurement Policy, among others, has explored the 

benefits of its use.1

In December 2013, GAO found that the Departments of the Army, 

Homeland Security, the Interior, and Veterans Affairs (which together 

accounted for about 70 percent of fiscal year 2012 reverse auctions) have 

steadily increased their use of reverse auctions in volume and dollars. 

From fiscal years 2008 to 2012, the number of reverse auctions for these 

agencies almost tripled—from 7,193 to 19,688—and resulted in about 

$828 million in fiscal year 2012 contract awards.2 While there is no 

requirement to limit reverse auctions to commercial items, agencies 

generally used them to acquire commercial products and services—

primarily for IT products and the lease or rental of equipment.

GAO found that competition and savings—two of the key benefits of 

reverse auctions cited by the agencies—were not always being 

maximized. Both had been limited because not all reverse auctions 

involved interactive bidding, where vendors bid against each other to 

drive prices lower. GAO found that over one-third of fiscal year 2012 

reverse auctions had no interactive bidding. These included situations 

where only one vendor submitted one or multiple bids and where multiple 

vendors submitted only one bid each. GAO also found that the agencies 

 

1

GAO, Postal Service: Progress in Implementing Supply Chain Management Initiatives,

GAO-04-540 (Washington D.C.: May 17, 2004) and Federal Contracting: OMB’s 

Acquisition Savings Initiative Had Results, but Improvements Needed, GAO-12-57

(Washington D.C.: Nov. 15, 2011).

2

GAO, Reverse Auctions: Guidance Is Needed to Maximize Competition and Achieve 

Cost Savings, GAO-14-108 (Washington D.C.: Dec. 9, 2013). 

Why This Area Is 

Important

What GAO Found
 

Page 140 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

paid a company that provided the reverse auction services $3.9 million in 

fees for these auctions. The company charged a variable fee up to 3 

percent of the winning bid and not to exceed $10,000. However, GAO 

also found that agencies were not aware of the fees they were paying. 

The company that ran almost all of the government’s fiscal year 2012 

auctions estimated savings of more than $98 million for the four agencies. 

But GAO questioned the accuracy of these savings estimates, which are 

based on the difference between the government’s independent cost 

estimate and the amount of the winning bid. GAO found that the 

government’s cost estimate may be set too low or too high, which may 

affect the accuracy of calculated savings.

The Federal Acquisition Regulation (FAR), which is the primary document 

for publishing uniform policies and procedures related to federal 

acquisitions, does not specifically address reverse auctions. In addition, 

there is no governmentwide guidance addressing reverse auctions, 

including how and when they should be used, the roles and 

responsibilities of the contracting officers, and what agencies should do if 

there is no interactive bidding during an auction. Without comprehensive 

guidance, agencies may be limited in their ability to maximize the 

potential benefits of reverse auctions.

In December 2013 GAO recommended that the Director of the Office of 

Management and Budget should: 

• take steps to amend the FAR to address agencies’ use of reverse 

auctions, and 

• issue government-wide guidance advising agencies to collect and 

analyze data on the level of interactive bidding and, where applicable, 

fees paid, to determine the cost effectiveness of using reverse 

auctions, and disseminating best practices from agencies on their use 

of reverse auctions related to maximizing competition and savings.

Agencies’ use of reverse auctions is increasing, and without guidance on 

the effective use of reverse auctions, agencies may be limited in their 

ability to achieve the full potential of cost savings. Moreover, due to the 

lack of reliable and detailed agency-wide data, it is not possible to 

estimate the extent of potential cost savings associated with the use of 

reverse auctions in contracting for products and services.

In commenting on the December 2013 report on which this analysis is 

based, the Office of Management and Budget generally agreed with 

GAO’s recommendations, noting that FAR coverage should be 

considered and that, before taking concrete steps to amend the FAR, 

officials would discuss GAO’s findings and conclusions with the FAR and 

Chief Acquisition Officers Councils.

Actions Needed and 

Potential Financial or 

Other Benefits

Agency Comments 

and GAO’s Evaluation
 

Page 141 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

GAO provided a draft of this report section to OMB for review and 

comment. In an e-mail received on February 3, 2014, the Office of 

Federal Procurement Policy (OFPP) within OMB generally agreed with 

GAO’s recommendation to issue guidance regarding the use of reverse 

auctions in federal acquisitions. Current FAR coverage is being 

considered in discussions with the FAR and Chief Acquisition Officers 

Councils.

The information contained in this analysis is based on findings from 

products listed in the related GAO products section. To address agencies’ 

use of reverse auctions, GAO identified the agencies that used the 

greatest number of reverse auctions in fiscal year 2012. However, 

because the federal agencies did not maintain the level of detailed 

information needed for the review, GAO obtained reverse auction data 

from the contractor that provided reverse auction services. GAO used 

these data to (1) confirm that the Departments of Army, Homeland 

Security, the Interior, and Veterans Affairs were primary users of reverse 

auctions; (2) determine the types of products and services acquired by 

these agencies; (3) compute the fees charged by the reverse auction 

service provider; and (4) analyze the savings. GAO also reviewed and 

analyzed government-wide and agency policies and guidance, where 

available, related to the use of reverse auctions. GAO also discussed the 

use of reverse auctions with government acquisition officials, including 

agency contracting officers, small business and competition officials, and 

officials from the Office of Management and Budget’s Office of Federal 

Procurement Policy. GAO also spoke with organizations representing 

government contractors to obtain their positions on the federal 

government’s use of reverse auctions. To understand how contracting 

officers conducted market research, determined government estimates, 

and made source selections, GAO selected a random sample of 119 

contract files for acquisitions that used reverse auctions in fiscal year 

2012 and reviewed the contract files from the selected agencies. Using 

the same sample, GAO compared the data obtained from the reverse 

auction service provider with the information contained in the contract 

files and determined that the data were sufficiently reliable for the

purposes of this review. 

Reverse Auctions: Guidance Is Needed to Maximize Competition and 

Achieve Cost Savings. GAO-14-108. Washington D.C.: December 9, 

2013.

Federal Contracting: OMB’s Acquisition Savings Initiative Had Results, 

but Improvements Needed. GAO-12-57. Washington D.C.: November 15, 

2011.

Postal Service: Progress in Implementing Supply Chain Management 

Initiatives. GAO-04-540. Washington D.C.: May 17, 2004.

How GAO Conducted 

Its Work

Related GAO 

Products
 

Page 142 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

For additional information about this area, contact Michele Mackin at Contact Information (202) 512-4841 or mackinm@gao.gov.
 

Page 143 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

20. Tax Policies and Enforcement

The Internal Revenue Service can realize cost savings and increase revenue by, among other things, 

identifying continued offshore tax evasion and evaluating whether the agency’s streamlined corporate audit 

process is meeting its goals.

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. Because the net tax gap is so large and the 

effectiveness of various new IRS enforcement initiatives largely remains 

to be determined, tax law enforcement is on GAO’s high-risk list.1 The 

nation’s long-term fiscal challenges heighten the importance of reducing 

the tax gap. 

In a series of reports in 2013, GAO identified several areas where IRS 

can further improve its programs and collect additional tax revenue, 

reduce its costs, and facilitate voluntary compliance. These improvements 

include the following.

As of February 2014, IRS’s four offshore voluntary disclosure programs, 

which offered incentives for taxpayers to disclose their offshore accounts 

and pay delinquent taxes, interest, and penalties, have resulted in more 

than 43,000 disclosures by taxpayers and over $6 billion in revenue 

collected.2 However, based on reviews of IRS data, in March 2013, GAO 

reported that IRS may be missing attempts by taxpayers to circumvent 

the programs. GAO identified more than 200,000 instances where it 

appeared that taxpayers with unreported foreign accounts may have 

chosen not to participate in one of IRS’s offshore programs. 

One technique identified, called a quiet disclosure, involved taxpayers 

filing amended tax returns for some or all of the tax years covered by an 

offshore program, and reporting the income from the previously 

unreported accounts. These taxpayers would generally pay taxes and 

 

1

GAO, High-Risk Series: An Update, GAO-13-283 (Washington, D.C.: Feb. 14, 2013).

2

The programs are the 2003 Offshore Voluntary Compliance Initiative, 2009 Offshore 

Voluntary Disclosure Program, 2011 Offshore Voluntary Disclosure Initiative, and 2012 

Offshore Voluntary Disclosure Program. The 2012 program remains open. Generally, the 

offshore programs offer participating taxpayers a lower penalty than they could have been 

subject to if IRS had discovered their offshore account outside of the program, and no risk 

of criminal prosecution, if eligible taxpayers fully disclosed their previously unreported 

offshore accounts, and paid taxes due plus interest and penalties. 

Why This Area Is 

Important

What GAO Found

Identifying Continued 

Offshore Tax Evasion 
 

Page 144 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

interest on the previously unreported income and possibly accuracyrelated or delinquency penalties, but would avoid the higher offshore 

penalty.3 Another technique involved declaring existing offshore accounts, 

which could have been open for years, as new when filing a current-year 

tax return. Unlike a quiet disclosure, these taxpayers would only pay tax 

on the current-year offshore income. If additional research by IRS 

confirms that taxpayers are circumventing its offshore programs using 

either of these techniques, pursuing those taxpayers could result in 

significant additional revenue.

In addition, GAO found that IRS missed opportunities to better target 

taxpayers with offshore accounts. Examples include the following: (1) the 

2009 offshore voluntary disclosure program application did not ask 

taxpayers how they learned of the program, and (2) IRS has not targeted 

outreach efforts about offshore account reporting requirements to recent 

immigrants. Using such information could promote voluntary compliance, 

help IRS better target noncompliant taxpayers bolster overall fairness of 

the program, and increase taxes collected. 

In August 2013, GAO reported on the potential major benefits to 

taxpayers and IRS of the Compliance Assurance Process (CAP) whereby 

IRS examiners and participating large corporations work to reach 

agreement on how to report tax issues before their tax returns are filed. 

IRS initiated CAP as a pilot program in 2005 with the goals of saving IRS 

time and resources while ensuring compliance, reducing taxpayer burden, 

and increasing certainty on tax amounts owed. IRS officials decided to 

make the program permanent in 2011 and to start expanding the program 

in 2013 based on a desire to meet these goals, such as generating IRS 

resource savings, and on positive feedback from taxpayers and IRS staff. 

However, although CAP started 8 years ago, IRS has not evaluated 

CAP’s effectiveness, tracked its progress against goals, or assessed 

whether CAP should be expanded and if so, to what extent. 

Also, because IRS does not have a system to track resource savings, it 

does not know the amount of resources saved through CAP nor does it 

have a plan for reallocating saved resources. CAP is an ambitious effort 

to improve tax audits of large corporations and holds the promise of 

significant benefits to participating corporations and IRS. However, 

without a CAP-wide assessment to validate such benefits, support for 

CAP, both inside and outside IRS, could wane. 

 

3 For the 2009 program, the standard offshore penalty was 20 percent of the highest 

aggregate account balance during the calendar years that correspond to the tax years 

covered by the program. The penalty increased in future programs. 

Evaluating Whether IRS’s 

Streamlined Corporate 

Audit Process Is Meeting 

Its Goals 
 

Page 145 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

IRS conducts examinations for two purposes: research and operations. 

In May 2013, GAO reported significant differences in the procedures for 

examinations (i.e., audits) IRS conducted for research purposes 

compared to regular, operational examinations. 

The first step in either type of examination is classification, where IRS 

classifiers screen tax returns to select issues that merit an examination. 

One difference between research and operational examinations is that 

IRS classifiers see the entire tax return when classifying returns for 

research examinations. By contrast, operational classifiers only see 

portions of a return.4

 Examiners told GAO that transcribing more lines 

from paper returns and having access to all the lines of electronic returns 

would improve classification decisions and reduce the risk of compliant 

taxpayers being needlessly audited. Another difference is that research 

examiners have more specific guidance on how to save case files 

electronically than operational examiners. Clarifying the key files to be 

saved electronically by updating operational training and guidance 

regarding electronic case files could minimize costs and make file sharing 

more efficient by reducing storage costs and processing time. For 

example, IRS said electronic case files could save time in processing 

more than 100,000 audit reconsiderations that IRS works on each year by 

making it easier for examiners to search the old files and identify what 

previous examiners concluded.5

 IRS officials also have said that savings 

on handling costs is one of the benefits of added electronic 

documentation. IRS must place hundreds of thousands of field 

examination case files into storage at a federal records center each year. 

IRS said that it spends about $5 to $9 for each document it recalls from 

federal record centers. The money IRS spends on recalling documents 

may be saved through greater use of electronic files. In addition, having 

electronic case files facilitates the ability for examiners to share their work 

with colleagues and reduces the chances that files will get lost.

 

4

IRS limits what operational classifiers see to those lines that are transcribed if a tax 

return is filed on paper. These limits apply even for electronic returns.

5

An audit reconsideration is the administrative process IRS uses to reevaluate prior audits 

where IRS assessed additional tax and it remains unpaid, or a tax credit was reversed. If 

the taxpayer disagrees with the original determination, the taxpayer must provide 

information not previously considered during the original examination. It is also the 

process IRS uses when the taxpayer contests a Substitute for Return (i.e., a return that 

IRS generates when a taxpayer does not file) determination by filing an original delinquent 

return.

Improving Examinations 

by Adopting Research

Program Procedures
 

Page 146 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

In December 2013, GAO found that some IRS staff had developed 

extensive sets of prewritten, standardized case notes that allowed them 

to quickly update a taxpayer’s account regarding their installment 

agreements (which allow taxpayers to pay their tax debt in scheduled 

payments). GAO also found that IRS staff were handwriting case notes 

on paper copies of the agreements and then typing those same notes into 

IRS’s computers. More automation and less redundant data entry could 

reduce resource needs. In fiscal year 2012, IRS used 1,800 full time 

equivalent staff to approve 3.2 million new installment agreements and 

collected almost $10 billion from them. With the large volume of 

installment agreements, efficiency gains matter to handle increased 

service demands with limited resources.

GAO made multiple recommendations to reduce the tax gap and improve 

taxpayer service in four reports issued in March, May, August, and 

December of 2013. Specifically, GAO recommended that the 

Commissioner of the IRS take the following eight actions:

• Explore options for employing a methodology for identifying and 

pursuing potential quiet disclosures to provide more assurance that 

actual quiet disclosures are not being missed and then implement the 

best option. 

• Conduct an analysis designed to measure the extent to which 

taxpayers are reporting existing foreign accounts and circumventing 

some of the taxes, interest, and penalties that would otherwise be 

owed, and take appropriate action based on the analysis. 

• Use data gained from offshore programs to identify and educate 

populations of taxpayers that might not be aware of their tax 

obligations related to offshore income filing requirements. 

• Obtain information that can help IRS test offshore program promotion 

strategies and identify new ones by adding a question to current and 

future programs to determine how participants found out about the 

program. 

• Develop an evaluation plan for the Compliance Assurance Process 

that can track progress against the goals and determine whether and 

how much to expand CAP. 

• Track savings including from CAP overall and develop a plan for 

reinvesting any savings. 

• Find ways to transcribe and use additional data from paper-filed tax 

forms that are not currently transcribed and make the data available to 

examiners and clarify examiner guidance on saving case files. 

• Adopt a set of standardized account entries and eliminate 

unnecessary redundancy when entering installment agreement 

account data. 

Using More Standardized 

Notes and Reducing 

Redundancy to Gain 

Efficiencies in Installment 

Agreement Case 

Processing

Actions Needed and 

Potential Financial or 

Other Benefits
 

Page 147 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

IRS could generate cost savings by applying more rigorous analyses, 

expanding use of electronic filing, and achieving program efficiencies. 

These actions could generate cost savings. Furthermore, IRS could 

increase revenue collections through better enforcement of tax laws and 

services designed to facilitate voluntary compliance, such as through 

identifying continued offshore tax evasion. GAO was not able to estimate 

the amount of savings or collections from these actions in part because 

IRS does not collect data needed to do so.

In commenting on the four reports issued in March, May, August, and 

December of 2013 on which these analyses are based, IRS agreed with 

six of the eight recommendations presented, but did not state whether it 

agreed or disagreed with two. 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 explore options for employing a methodology for 

identifying and pursuing potential quiet disclosures, IRS responded that 

they are taking steps to implement our recommendation and address any 

identified noncompliance, as warranted. 

IRS did not agree or disagree with two of GAO’s recommendations, but 

acknowledged related actions it is taking to address them. First, in 

response to GAO’s recommendation that IRS find ways to transcribe and 

use additional data from paper-filed tax forms and clarify examiner 

guidance on saving case files, the agency agreed to study the possibility 

of increasing data transcription, and clarify its policy on when case files 

should be saved electronically, among other actions. Second, in response 

to GAO’s recommendation that IRS adopt a set of standardized account 

entries and eliminate redundancy when entering installment agreement 

account data, IRS acknowledged that standardized account entries can 

sometimes lead to increased efficiencies and lower costs, and taxpayers 

and IRS can benefit by the elimination of redundancy in its processes. 

IRS stated that it will explore whether the introduction of standardized 

account entries into the installment agreement process will yield 

increased efficiencies and lower costs, and will evaluate whether there 

are unnecessary redundancies in its current processes that can be 

eliminated without adversely affecting tax administration. 

GAO provided a draft of this report section to IRS for review and 

comment. IRS provided comments in response to GAO’s 

recommendations regarding offshore tax evasion and the evaluation of 

the agency’s corporate audit process. In regards to the actions needed to 

identify continued offshore tax evasion, IRS said it will continue to take 

corrective actions in response to the agreed-upon recommendations 

GAO’s March 2013 report. In regards to the actions needed to evaluate 

IRS’s streamlined corporate audit process, IRS said it is continuing to 

pursue corrective actions and plans to provide a response to each action 

by June 30, 2014. IRS did not provide comments on GAO’s other 

recommendations presented in this report section.

Agency Comments 

and GAO’s Evaluation
 

Page 148 GAO-14-343SP 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. GAO analyzed agency 

documents and interviewed officials from the Department of the Treasury, 

IRS, and other parties. GAO analyzed budget data from IRS and related 

budget documents. GAO also analyzed relevant federal laws, regulations, 

and procedures. 

Offshore Tax Evasion: IRS Has Collected Billions of Dollars, but May be 

Missing Continued Evasion. GAO-13-318. Washington, D.C.: March 27, 

2013.

Tax Administration: IRS Could Improve Examinations by Adopting Certain 

Research Program Practices. GAO-13-480. Washington, D.C.: May 24, 

2013. 

Corporate Tax Compliance: IRS Should Determine Whether Its 

Streamlined Corporate Audit Process Is Meeting Its Goals. GAO-13-662. 

Washington, D.C.: August 22, 2013.

2013 Tax Filing Season: IRS Needs to Do More to Address the Growing 

Imbalance between the Demand for Services and Resources. 

GAO-14-133. Washington, D.C.: December 18, 2013.

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

(202) 512-9110 or whitej@gao.gov, or James R. McTigue, Jr. at (202) 

512-7968 or mctiguej@gao.gov. 

How GAO Conducted 

Its Work

Related GAO 

Products

Contact Information
Page 149 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities

Health

21. Medicaid Demonstration Waivers

Federal spending on Medicaid demonstrations could be reduced by billions of dollars if the Department of 

Health and Human Services were required to improve the process for reviewing, approving, and making 

transparent the basis for spending limits approved for Medicaid demonstrations. GAO’s work between 2002 

and 2013 has shown that HHS approved several demonstrations without ensuring that they would be budget 

neutral to the federal government.

The Medicaid program—an over $400 billion a year joint federal-state 

program that finances health care coverage for low-income individuals—

involves significant and growing expenditures for the federal government 

and states. Under section 1115 of the Social Security Act, the Secretary 

of Health and Human Services may waive certain federal Medicaid 

requirements and allow costs that would not otherwise be covered for 

experimental, pilot, or demonstration projects that are likely to promote 

Medicaid objectives. These demonstrations also allow states to test and 

evaluate new approaches for delivering Medicaid services. In fiscal year 

2013, $70 billion in federal funds, or about one-fourth of the $265 billion in 

federal Medicaid outlays for that year, were spent under section 1115 

demonstrations. In FY 2011, 10 states spent more than half of their total 

federal Medicaid expenditures for section 1115 demonstrations. 

Under the Department of Health and Human Services (HHS) policy, 

section 1115 Medicaid demonstrations should be budget neutral to the 

federal government; that is, the federal government should spend no 

more under a state's demonstration than it would have spent without the 

demonstration. Once approved, each demonstration operates under a 

negotiated budget neutrality agreement that places a limit on federal 

Medicaid spending over the life of the demonstration. Demonstration 

spending limits are based on states’ estimated costs of continuing their 

Medicaid programs. According to HHS policy, spending limits should be 

calculated by estimating future costs of baseline spending—actual 

Medicaid costs typically from the most recently completed fiscal year—

using a benchmark growth rate, which is the lower of the state-specific 

historical growth rates for a recent 5-year historical period, or estimates of

nationwide Medicaid growth. The higher the demonstration spending 

limits, the more federal funds states are able to receive. HHS’s process 

for setting spending limits allows for adjustments to the benchmark policy 

to reflect documented anomalies in the historical data that would not 

result in accurate projections. 

In four reports issued between 2002 and 2013, GAO reviewed spending 

limits of different demonstrations approved during a recent time period. 

GAO raised concerns about HHS’s process for ensuring that 

demonstrations would be budget neutral to the federal government. Since 

2003, Medicaid has been on GAO’s list of high-risk programs, in part 

because of concerns about inadequate fiscal oversight including oversight 

of section 1115 Medicaid demonstrations.

Why This Area Is 

Important
 

Page 150 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

Between 2002 and 2013, GAO reviewed several states’ approved 

comprehensive demonstrations and found that HHS had not ensured that 

all of the demonstrations would be budget neutral. During this period, 

HHS approved spending limits that, among other concerns, were based 

on assumptions of cost growth that exceeded benchmark growth rates. 

Although HHS’s process allows for adjustments to benchmark growth 

rates, GAO found that adjustments made by states and allowed by HHS 

were not clear or well supported. GAO estimated that HHS’s approved 

spending limits could potentially increase the federal government’s fiscal 

liability by billions of dollars more than it would have been without the 

demonstrations. 

In its most recent report on Medicaid demonstration waivers, issued in 

June 2013, GAO found that concerns continued. For 4 of 10 states 

reviewed, HHS approved spending limits that were based on assumptions 

of cost growth that were higher than its benchmark rates, and that, in 

some cases, included costs the states had never incurred in the 

estimates of base year spending. GAO also found limited support and 

documentation for the use of higher-than-benchmark growth rates HHS 

approved. If HHS had held the four demonstrations’ spending to levels 

suggested by its policy, spending limits would have been tens of billions 

of dollars lower. For example, for two states with demonstrations 

approved through 2016, GAO found that approved spending limits were 

not based on valid methods. 

• One state’s approved spending limit for 2011-2016 was based on 

outdated information on spending—1982 data were projected forward 

to represent baseline spending and state-specific historical spending 

growth for a recent time period. Had baseline expenditures and 

benchmark growth rates been based on recent expenditure data that 

were available, the 5-year spending limit would have totaled about 

$26 billion less and the federal share of this reduction would have 

been about $18 billion. 

• Another state’s approved spending limit for 2011-2016 included 

hypothetical costs in the state’s estimate of its baseline spending, that 

is, costs the state had not incurred were included in the base year 

spending estimate. These costs represented higher payment amounts 

that the state could have paid providers during the base year, but did 

not actually pay. For example, the state base year included costs 

based on the state hypothetically paying hospitals the maximum 

amount allowed under federal law, although the state had not paid the 

maximum amount. GAO estimated that had the state included only 

actual expenditures as indicated by HHS’s policy, the 5-year spending 

limit would have totaled about $4.6 billion less and the federal share 

of this reduction would have been about $3 billion. 

In this report GAO noted that the Secretary of Health and Human 

Services had disagreed with earlier recommendations to improve the 

process for reviewing and approving spending under Medicaid 

What GAO Found
 

Page 151 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

demonstrations. Therefore, GAO elevated this matter for consideration by 

Congress.

GAO has recommended actions by Congress and the Secretary of Health 

and Human Services to better ensure Medicaid demonstrations do not 

increase federal costs: 

• Because the Secretary of Health and Human Services disagreed with 

GAO’s recommendations to improve the demonstration review 

process in its prior reports, in January 2008, GAO suggested that 

Congress consider acting on our findings. In particular, GAO 

suggested increased attention to fiscal responsibility in the approval of 

section 1115 Medicaid demonstrations by requiring the Secretary to 

improve the demonstration review process, through steps such as 

improving the review criteria, better ensuring that valid methods are 

used to demonstrate budget neutrality, and documenting and making 

clear the basis for the approved limits. 

• In June 2013, GAO recommended that the Secretary of Health and 

Human Services reconsider spending limits for the two state

demonstrations, and make appropriate adjustments to spending limits 

for the remaining years of each demonstration.

Estimating the extent of potential cost savings by ensuring that valid 

methods are used to establish spending limits for Medicaid 

demonstrations is difficult. The amount of cost savings depends on how 

much spending has already occurred under the two demonstrations 

approved through 2016 and whether the two states will ultimately spend 

up to their approved spending limits. Additional cost savings in the future 

would depend on the number of states seeking demonstrations in the 

future, and the extent to which proposed demonstration spending limits 

include hypothetical costs in baseline spending and use of growth rates 

that are greater than benchmarks without clear support for doing so. 

However, based on GAO estimates—up to $21 billion for two states’ 

recent demonstrations that GAO reviewed—spending limit reductions 

resulting from improved budget neutrality methods could be in the billions 

of dollars. 

In commenting on a draft of the June 2013 report on which this analysis is 

based, HHS stated that its methods were valid and that it followed its 

budget neutrality policy. The agency also disagreed with the 

recommendation that it should make adjustments to the spending limits 

for two states as suggested by GAO, stating that the adjustments and 

costs it used were justified. After reviewing HHS’s response to the June 

2013 report, GAO determined at that time that its recommendations were 

warranted because HHS did not provide additional support or clarification 

for existing spending limit calculations. For example, HHS did not respond 

to GAO’s finding that one state’s spending limit included about $4 billion 

Actions Needed and 

Potential Financial or 

Other Benefits

Agency Comments 

and GAO’s Evaluation
 

Page 152 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

dollars in costs that the state could have paid but did not actually pay 

prior to the demonstration. 

GAO provided a draft of this report section to HHS for review and 

comment. In an email received on February 20, 2014 the HHS agency 

liaison stated that HHS continues to follow its policy of using the best 

available data when establishing spending limits and uses sound fiscal 

methods that are applied consistently and transparently to all 

demonstrations reviewed. In addition, HHS cited other agency oversight 

actions, such as review of renewals and amendments to existing 

demonstrations, after demonstrations are approved and spending limits 

established. GAO maintains that HHS’s actions for overseeing approved 

demonstrations does not lessen the need for establishing sound spending 

limits, and continues to recommend that HHS reconsider and make 

appropriate spending limits adjustments for the remaining years of each 

demonstration.

As GAO suggested in a 2008 report and reiterated in the 2013 report, the 

Congress should consider requiring the Secretary to improve the Section 

1115 Medicaid demonstration review process.

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

products in the related GAO products section. To assess the extent to 

which HHS's budget neutrality policy and process provide assurance that 

federal costs will not potentially increase over what they would have been 

in the absence of the demonstration, GAO reviewed HHS's policy and 

interviewed agency officials. GAO also reviewed documentation for 

selected new comprehensive demonstrations and budget neutrality 

analyses prepared by the states and submitted to HHS. GAO compared 

the spending limits approved by HHS with GAO’s estimates of the 

spending limits following HHS’s policy.1

 

Table 15 in appendix IV lists the programs GAO identified that might have 

opportunities for cost savings.

Medicaid Demonstration Waivers: Approval Process Raises Cost 

Concerns and Lacks Transparency. GAO-13-384. Washington, D.C.: 

June 25, 2013.

 

1

GAO calculated its estimate of the spending limits in accordance with HHS’s policy by 

using the most recent year of expenditures provided by the state for the base year, and 

the lower of either the state’s historical average cost growth rate or the estimate of the 

Medicaid national growth rate developed by the Centers for Medicare & Medicaid Services 

actuary. See GAO’s June 2013 report for more information on the estimates.

How GAO Conducted 

Its Work

Related GAO 

Products
 

Page 153 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

Medicaid Demonstration Waivers: Recent HHS Approvals Continue to 

Raise Cost and Oversight Concerns. GAO-08-87. Washington, D.C.: 

January 31, 2008.

Medicaid Waivers: HHS Approvals of Pharmacy Plus Demonstrations 

Continue to Raise Cost and Oversight Concerns. GAO-04-480. 

Washington, D.C.: June 30, 2004.

Medicaid and SCHIP: Recent HHS Approvals of Demonstration Waiver 

Projects Raise Concerns. GAO-02-817. Washington, D.C.: July 12, 2002.

For additional information about this area, contact Katherine Iritani at Contact Information (202) 512-7114 or iritanik@gao.gov.
Page 154 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities

Income Security

22. Disability Insurance

The Social Security Administration could prevent significant potential cash benefit overpayments in the 

Disability Insurance program by obtaining more-timely earnings data to identify beneficiaries’ work activity that 

is beyond program limits and suspend benefits appropriately.

The Disability Insurance (DI) program is the nation’s largest cash 

assistance program for workers with disabilities. In fiscal year 2011, more 

than 10 million DI beneficiaries received cash benefits exceeding $128 

billion, and the program is poised to grow further as the baby-boom 

generation ages. Total government spending on DI beneficiaries is 

substantially higher when including the costs of Medicare benefits, which 

cost about $80 billion in 2011 for DI beneficiaries. DI benefits are paid by 

the DI trust fund. The DI trust fund is a separate account in the United 

States Treasury. A fixed proportion of the taxes received under the 

Federal Insurance Contributions Act and the Self-Employment 

Contributions Act are deposited in the fund. 

The Social Security Board of Trustees projects that the DI trust fund will 

be exhausted in 2016, and notes that changes designed to improve the 

financial status of the DI program are needed soon. Although program 

statutes and regulations allow limited work activity, some work activity 

(e.g., exceeding earnings limits for over 12 months) may indicate 

beneficiaries are not disabled and therefore not entitled to DI benefits. 

Consequently, the Social Security Administration (SSA) might overpay 

beneficiaries if the agency does not detect disqualifying work activity and 

suspend benefits appropriately.

In August 2013, based on an analysis of SSA data on individuals who 

were DI beneficiaries and earnings data from the National Directory of 

New Hires (NDNH), GAO estimated that SSA made $1.29 billion in total 

potential overpayments to about 36,000 individuals as of January 2013.1

These DI beneficiaries represent an estimated 0.4 percent of all primary 

DI beneficiaries as of December 2010, the date GAO began this analysis. 

The total number of individuals who received overpayments and the total

amount of overpayments made to those individuals cannot be determined 

without detailed case investigations by SSA. 

GAO estimated DI program overpayments on the basis of work activity 

performed by two populations of individuals. The first population received 

 

1

GAO’s estimate is within a 95 percent level of confidence, based upon reviews from 

random samples of the identified populations. The estimate has a margin of error of plus 

or minus $352 million, meaning the actual amount of payments that were potentially 

improper could be as low as $936 million and as high as $1.64 billion. This estimate is 

based on individuals who were DI beneficiaries as of December 2010. 

Why This Area Is 

Important

What GAO Found
 

Page 155 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

potential overpayments due to work activity during the DI program’s 

mandatory 5-month waiting period—a statutory program requirement to 

help ensure that SSA does not pay benefits to individuals who do not 

have long-term disabilities. Prior to receiving benefits, individuals must 

complete a 5-month waiting period, in which the individual cannot exceed 

a certain level of earnings, known as substantial gainful activity, during 

any month in order to be eligible for DI benefits. The second population 

received potential overpayments due to work activity beyond the 

program’s trial work period. The trial work period consists of up to 9 

months in which a DI beneficiary may work without affecting his or her

benefits. It allows beneficiaries to test their ability to return to work while 

continuing to receive DI benefits. However, beneficiaries whose earnings 

consistently exceed program limits after completing a trial work period are 

generally no longer entitled to benefits, and any benefit payments they 

receive after a subsequent 3-month grace period could be an 

overpayment. 

To illustrate the circumstances in which SSA made potential DI 

overpayments, GAO reviewed case files for a nongeneralizable selection 

of six individuals—three who received potential overpayments for at least 

3 years, and three who worked during their waiting period. For the three 

individuals who worked beyond their trial work period, GAO found that 

SSA had identified and established overpayments based on their work 

activity. However, at the time of GAO’s review, SSA had not identified 

potentially disqualifying work activity for the three individuals who worked 

during their waiting period. SSA officials told GAO that they plan to 

conduct follow-up work on these cases based on the information GAO 

provided during the review. As of February 18, 2014, SSA reported that it 

has completed its review of one of these cases and continues to research 

the other 2. For the case it has completed SSA also determined the 

beneficiary was in overpayment status, but calculated a lower 

overpayment amount than GAO’s estimate. 

To determine if beneficiaries are working above the level of substantial 

gainful activity, SSA conducts work-related continuing disability reviews.2

While these reviews can be prompted by several events, most are 

generated by SSA’s enforcement operation. This process involves 

periodic data matches between SSA’s disability beneficiary file and 

Internal Revenue Service earnings data. The enforcement operation 

generates alerts for cases that exceed specified earnings thresholds,

which are then forwarded to SSA’s processing centers and field offices for 

additional development by staff.3 Additional events that may trigger a 

 

2

20 C.F.R. §§ 404.1589 – 1590. 

3

SSA generally uses six times the monthly SGA amount, or $6,000 in 2010, as the annual 

earnings cutoff. In fiscal year 2010, the enforcement operation identified approximately 2 

million records of which more than 531,000 were sent to SSA’s processing centers and 

field offices for review. The remaining records did not meet SSA’s criteria for conducting 

an enforcement work continuing disability review. For more information on the results of 

the enforcement operation for fiscal years 2008 to 2010, see GAO-11-724. 
 

Page 156 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

work-related continuing disability review include reports from state 

vocational-rehabilitation agencies, reports from other federal agencies, 

and anonymous tips. Finally, DI beneficiaries are required to report 

increases to their earnings to SSA and may do so by visiting an SSA field 

office or calling the agency’s toll-free number.

While SSA uses its enforcement operation to generate alerts for 

potentially disqualifying earnings, the agency’s enforcement operation 

does not generate alerts for earnings that occur in all months of the 

waiting period, which allows potentially disqualifying work activity to 

remain undetected. Specifically, in August 2013, GAO reported that 

SSA’s enforcement operation will not generate an alert for earnings 

during the waiting period if the earnings occur in a year when the 

beneficiary does not receive a benefit payment. For example, in one of 

the three nongeneralizable cases that GAO reviewed from the wait period 

overpayment population, benefits began to be paid in January 2010, and 

the waiting period was the last 5 months of 2009. SSA’s enforcement 

operation did not generate an alert for the work activity during the last 5 

months of 2009 because no benefits were paid in 2009. GAO obtained 

earnings records from these individuals’ employers that show they 

worked continually both during and after their waiting periods at a level of 

work that would normally result in a denial of benefits. 

SSA officials stated that modifying its enforcement operation to detect 

waiting period earnings in a year when the beneficiary does not receive a 

benefit payment could be costly, but the agency has not assessed the 

costs of doing so. To the extent that it is cost-effective and feasible, 

establishing a mechanism to detect earnings during all months of the 

waiting period would strengthen SSA’s enforcement operation.

Reductions in overpayments to disability beneficiaries could mean 

savings for the Social Security Administration’s Disability Insurance trust 

fund, which is expected to be exhausted by 2016. In this context, it 

becomes critical to strengthen DI enforcement operations so as to 

prevent overpayments and help safeguard the DI trust fund.

To improve SSA’s ability to detect and prevent potential DI cash benefit 

overpayments due to work activity during the 5-month waiting period, in 

August 2013, GAO recommended that the Commissioner of Social 

Security:

• assess the costs and feasibility of establishing a mechanism to detect 

potentially disqualifying earnings during all months of the waiting 

period, including those months of earnings that the agency’s 

enforcement operation does not currently detect, and implement this 

mechanism, to the extent that an analysis determines it is costeffective and feasible. 

Estimating the total amount of overpayments is not possible without SSA 

conducting a detailed investigation of each case. Our work indicates that 

SSA’s inability to identify work activity during the waiting period may result 

Actions Needed and 

Potential Financial or 

Other Benefits
 

Page 157 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

in large overpayments to beneficiaries who are ineligible for benefits. 

Assessing the costs and savings associated with establishing a 

mechanism to identify work activity during all months of the waiting period 

would help SSA to determine whether establishing such a mechanism 

would be cost-effective and feasible. To the extent that it is determined to 

be cost-effective and feasible, implementing a mechanism to identify work 

activity performed during all months of the waiting period, including those 

that occur in a year when benefits were not paid, may help provide SSA 

greater assurance that DI beneficiaries are eligible to receive benefits and 

safeguard SSA’s DI trust fund. . 

In commenting on the August 2013 report on which this analysis is based, 

SSA concurred with the recommendation. However, SSA raised concerns 

about GAO’s methodology and asserted that GAO’s inability to replicate 

the process SSA uses to make substantial gainful activity determinations 

may lead to substantial overstatement of GAO’s estimate of potential 

overpayments. For example, SSA noted that GAO’s review does not 

consider certain work-related program features, such as unsuccessful 

work attempts. As mentioned in the report, SSA’s process for 

determining substantial gainful activity and its policies for determining 

whether individuals remain entitled to benefits despite potentially 

disqualifying work activity involve a consideration of all the facts and 

circumstances surrounding a case, including medical data that doctors 

and hospitals were not required to share with GAO for purposes of this 

audit. As such, GAO’s objective was to estimate the extent to which 

individuals received DI benefit payments that were potentially overpaid 

due to their work activity. To do this, GAO used wage data from the 

NDNH to identify two populations of individuals with earnings beyond 

program limits; GAO then drew a random, generalizable sample of 

individuals from each population. GAO then obtained wage information 

from their employers and compared it to DI program information from 

SSA to develop estimates of potential overpayments. Thus, GAO 

continues to maintain that the methodology applied using available data 

leads to valid estimates of potential overpayments due to beneficiaries’ 

work activity. 

GAO provided a draft of this report section to SSA for review and 

comment. SSA provided written comments. In their written comments 

SSA continued to express concerns about GAO's methodology for the 

study. As previously mentioned GAO continues to maintain that the 

methodology applied using available data leads to valid estimates of 

potential overpayments due to beneficiaries’ work activity.

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

August 2013 report listed in the related GAO products section. To 

determine the extent to which individuals received DI overpayments due 

to work activity, GAO compared NDNH quarterly wage data with DI 

beneficiary files from SSA’s Master Beneficiary Record, which is an 

electronic record containing information on DI beneficiaries’ entitlement 

Agency Comments 

and GAO’s Evaluation

How GAO Conducted 

Its Work
 

Page 158 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

status and benefit payments, among other information. To identify 

potential overpayments and to develop data for estimates of potential 

overpayments in each population, GAO drew random, generalizable 

samples of individuals from those whose earnings on the NDNH were 

beyond program limits and compared wages from their employers to DI 

program data. 

To illustrate the circumstances in which SSA made potential DI 

overpayments, GAO reviewed case files for a nongeneralizable selection 

of six individuals—three who worked during their waiting period, and three 

who received potential overpayments for at least 3 years. Because GAO 

selected a small number of individuals for further review, these examples 

cannot be generalized to the population of individuals receiving potential 

DI benefit overpayments. Finally, GAO examined SSA’s mechanisms to 

detect potentially disqualifying work activity and compared them with 

Standards for Internal Control in the Federal Government. Table 16 in 

appendix IV lists the programs GAO identified that might have 

opportunities for cost savings.

Disability Insurance: Work Activity Indicates Certain Social Security 

Disability Insurance Payments Were Potentially Improper. GAO-13-635. 

Washington, D.C.: August 15, 2013.

Social Security Administration: Long-Term Strategy Needed to Address 

Key Management Challenges. GAO-13-459. Washington, D.C.: May 29, 

2013.

Social Security Administration: Preliminary Observations on Key 

Management Challenges. GAO-13-545T. Washington, D.C.: April 26, 

2013. 

Disability Insurance: SSA Can Improve Efforts to Detect, Prevent, and 

Recover Overpayments. GAO-11-724. Washington, D.C.: July 27, 2011.

Disability Insurance: SSA Should Strengthen Its Efforts to Detect and 

Prevent Overpayments. GAO-04-929. Washington, D.C.: September 10, 

2004.

For additional information about this area, contact Steve Lord at (202) 

512-6722 or lords@gao.gov. 

Related GAO 

Products

Contact Information
Page 159 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities

23. Veterans’ and Survivors’ Benefits

The Department of Veterans Affairs’ direct spending could be reduced—by an average of about $4 million 

annually, according to the Congressional Budget Office—if new statutory provisions were enacted, namely, a 

look-back review and penalty period for claimants who transfer assets for less than fair market value prior to 

applying for pension benefits that are available to low-income wartime veterans who are at least 65 years old 

or have disabilities unrelated to their military service. This action would help to ensure that only those in 

financial need receive benefits and make the program more consistent with other federal programs for lowincome individuals.

The Department of Veterans Affairs’ (VA) pension program is intended to 

provide economic benefits to wartime veterans with financial need. It is 

available to low-income wartime veterans who are age 65 and older or 

who are under age 65 but are permanently and totally disabled as a result 

of conditions unrelated to their military service. Surviving spouses and 

dependent children may also be eligible for these benefits. In fiscal year 

2012, VA provided about $4.9 billion in pension benefits to about 518,000 

recipients (314,000 veterans and 204,000 survivors). About two-thirds of 

recipients were over age 65.

VA’s pension program is means tested and, therefore, to qualify for 

pension benefits, claimants’ countable income must not exceed annual 

pension limits that are set by statute. In assessing financial eligibility for 

benefits, VA also considers net worth or the total value of claimants’ 

assets, such as bank accounts, stocks, bonds, mutual funds, and any 

property other than the claimant’s dwelling, a reasonable lot area, a 

vehicle, and personal belongings.1 VA’s policy manual specifically states 

that the pension program is not intended to protect substantial assets or 

preserve an estate for a beneficiary’s heirs, and the department’s 

procedures manual requires claims processors to formally review the 

eligibility of claimants with assets worth over $80,000. However, the 

relevant statute does not define thresholds on the value of a claimant’s 

assets.2

In its May 2012 report, GAO found that despite being a means-tested 

program, VA’s pension program permitted claimants to transfer assets 

and reduce their net worth prior to applying for pension benefits. Federal 

 

1

See 38 C.F.R. § 3.275. VA also assesses the net worth of the veteran’s spouse to 

determine financial eligibility.

2

The relevant statute states that a veteran’s pension shall be denied “when the corpus of 

the estate of the veteran or, if the veteran has a spouse, the corpus of the estates of the 

veteran and of the veteran’s spouse is such that under all the circumstances, including 

consideration of the annual income of the veteran, the veteran’s spouse, and the veteran’s 

children, it is reasonable that some part of the corpus of such estates be consumed for the 

veteran’s maintenance.” 38 U.S.C. § 1522(a).

Why This Area Is 

Important

What GAO Found
 

Page 160 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

regulations state that for the purpose of evaluating financial eligibility for 

VA pension benefits, assets gifted to someone who does not reside in the 

claimant’s household will reduce the claimant’s net worth if all rights of 

ownership and control of the assets have been relinquished.3 As a result, 

prior to applying for VA pension benefits, claimants can transfer excess 

assets to someone outside their household to meet the financial eligibility 

criteria and be approved, as long as they no longer retain ownership or 

control of the assets.4 For example, GAO identified a case involving a 

pension recipient who transferred more than $1 million in assets into an 

irrevocable trust less than 3 months prior to applying for these benefits.5

VA was aware of the asset transfer when this pension claim was 

approved and did not count the trust as part of the claimant’s net worth. 

However, this practice is inconsistent with the pension program’s goal of 

supporting those with financial need and undermines the integrity of the 

program.

In contrast, for Medicaid—another means-tested program—federal law 

explicitly restricts eligibility for coverage for long-term care for certain 

individuals who transfer assets for less than fair market value prior to 

applying.6

 As a result, when an individual applies for Medicaid coverage 

for long-term care, states conduct a look-back review to determine if the 

applicant transferred assets for less than fair market value prior to 

applying. Individuals who transfer assets for less than fair market value 

during the 60 months prior to applying may be denied eligibility for longterm care coverage for a period of time, known as the penalty period.7 For 

example, gifting assets within 5 years of applying for Medicaid would 

generally be considered a transfer of assets at less than fair market value 

and therefore trigger a penalty period. Also, under Social Security’s 

Supplemental Security Income program, claimants who transfer assets 

for less than fair market value prior to applying may become ineligible for 

these benefits for up to 36 months.8

According to VA, the agency supports controls that would prevent the 

transfer of assets for less than fair market value. Such controls are 

 

3

38 C.F.R. § 3.276(b).

4

Assets gifted to a family member in the pension claimant’s household do not reduce the 

claimant’s net worth.

5

An irrevocable trust is one that cannot be terminated by the individual who set up the 

trust once it is created. Black’s Law Dictionary (8th ed. 2004).

6

42 U.S.C. § 1396p(c). An asset transfer at less than fair market value would occur when 

the claimant gifts or sells a resource and receives in return an amount that is less than the 

value of the resource on the open market at the time of the transfer.

7

Certain asset transfers are exempt from Medicaid penalty provisions, such as a home 

transferred to an individual’s spouse or disabled child, or when the state determines that 

the penalty would result in undue hardship. 42 U.S.C. § 1396p(c).

8

42 U.S.C. § 1382b(c)(1)(A).
 

Page 161 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

consistent with VA’s policy that states that the pension program is not 

intended to protect substantial assets or preserve an estate for a 

beneficiary’s heirs. Consequently, in response to our 2012 report, the 

agency stated that it had been working to develop regulations addressing 

the effects of asset transfers on eligibility for program benefits.

In May 2012, GAO recommended that Congress consider establishing a 

look-back and penalty period, similar to other means-tested programs. 

Since this report, various bills have been introduced, but not enacted, that 

would provide stronger controls for the VA pension program. In the 112th 

Congress, bills were introduced in both the U.S. House of 

Representatives and the Senate that included language addressing the 

eligibility status of claimants who transfer assets at less than fair market 

value prior to applying for VA pension benefits.9 However, neither bill was 

enacted. More recently, during the 113th Congress, H.R. 2189 passed in 

the House of Representatives containing language to establish a 3-year 

look-back and penalty period for the VA pension program.10 Such controls 

would help ensure that pension benefits are extended exclusively to 

veterans and survivors with a financial need.

To ensure that only those in financial need are granted VA pension 

benefits, GAO recommended in May 2012 that Congress consider 

establishing a look-back and penalty period similar to other means-tested 

programs. While various legislative proposals that would establish the 

needed controls have been introduced, such as H.R. 2189, legislation has 

not yet been enacted. Until legislation is enacted that would establish a 

look-back and penalty period, VA cannot ensure that benefits are 

extended to only veterans and survivors with a financial need. The 

Congressional Budget Office estimates that enacting a look-back and 

penalty period will decrease direct spending by an average of about $4 

million per year. Therefore, GAO suggests that Congress should consider 

the following action:

• pass legislation that would establish a look-back and penalty period 

for claimants who transfer assets for less than fair market value prior 

to applying for pension benefits.

In commenting on the May 2012 report on which this analysis is based, 

VA noted that the pension program lacks statutory provisions addressing 

the effects of asset transfers on eligibility for program benefits. Despite 

this limitation, VA nonetheless reported that it is working to develop 

regulations that would address this issue but noted that such regulations 

would be subject to challenge in the U.S. Court of Appeals for the Federal 

 

9

See H.R. 6171, 112th Cong. (2012); S. 3270, 112th Cong. (2012).

10See H.R. 2189, 113th Cong. (2013). This bill has been referred to the Senate Committee 

on Veterans’ Affairs.

Actions Needed and 

Potential Financial or 

Other Benefits

Agency Comments 

and GAO’s Evaluation
 

Page 162 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

Circuit.11 Further, during a congressional hearing on the report’s findings, 

VA expressed support for the need to address this issue through statute 

or regulations, and acknowledged that while VA knows such asset 

transfers have occurred, the department does not know the extent of this 

practice.

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

Affairs for review and comment. The department did not provide 

comments on this report section.

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

products listed in the related GAO products section and additional work 

GAO conducted. GAO reviewed VA’s Fiscal Year 2014 Budget 

Submission and the Congressional Budget Office’s Cost Estimate for 

H.R. 2189, which included a cost savings estimate associated with 

implementing an asset look-back for VA disability pensions.

Table 17 in appendix IV lists the programs GAO identified that might have 

opportunities for cost savings.

Veterans’ Pension Benefits: Improvements Needed to Ensure Only 

Qualified Veterans and Survivors Receive Benefits. GAO-12-540. 

Washington, D.C.: May 15, 2012.

For additional information about this area, contact Daniel Bertoni at (202) 

512-7215 or bertonid@gao.gov. 

 

11Proposed regulations have not yet been promulgated in the Federal Register.

How GAO Conducted 

Its Work

Related GAO Product

Contact Information
Page 163 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities

Information Technology

24. Information Technology Investment 

Portfolio Management

The Office of Management and Budget and multiple agencies could help the federal government realize 

billions of dollars in savings by taking steps to better implement PortfolioStat, a process to help agencies 

manage their information technology investments. 

Federal agencies expect to spend at least $82 billion in fiscal year 2014 

to meet their increasing demand for information technology (IT). In recent 

years, GAO and the Office of Management and Budget (OMB) have 

highlighted a number of potentially duplicative, wasteful, low-value IT 

investments. For example, in September 2011 GAO reported that there 

were hundreds of IT investments providing similar functions across the 

federal government, including 781 supply chain management investments 

(659 at the Department of Defense and 122 at other agencies) and 661 

human resource management investments (363 at the Department of 

Defense and 298 at other agencies). 

More recently, in February 2012 GAO reported on efforts at the 

Departments of Defense, Energy, and Homeland Security to identify 

duplicative IT investments. Specifically, GAO noted that although these 

departments use various investment review processes to identify 

duplicative investments, 37 of GAO’s sample of 810 investments were 

potentially duplicative at the Departments of Defense and Energy. These 

investments accounted for $1.2 billion in spending for fiscal years 2007 

through 2012. It is important that federal agencies avoid investments that 

are determined to be duplicative whenever possible in order to ensure the 

most efficient use of resources. 

In March 2012, OMB launched an initiative, referred to as PortfolioStat, to 

maximize the return on IT investments across the government’s portfolio. 

PortfolioStat is designed to assist agencies in assessing the current 

maturity of their IT investment management process, making decisions on 

eliminating duplicative investments, and moving to shared solutions (such 

as cloud computing) within and across agencies. According to OMB, 

PortfolioStat has the potential to save the government $2.53 billion 

through fiscal year 2015.

1

In November 2013, GAO reported that while the 26 federal agencies 

required to participate in PortfolioStat had made progress in implementing 

 

1

Cloud computing is an emerging form of delivering computing services via networks with 

the potential to provide IT services more quickly and at a lower cost. Cloud computing 

provides users with on-demand access to a shared and scalable pool of computing 

resources with minimal management effort or service provider interaction. 

Why This Area Is 

Important

What GAO Found
 

Page 164 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

OMB’s initiative, shortcomings in their implementation of key 

requirements could undermine the savings the PortfolioStat effort is 

expected to achieve: 

• Twelve agencies could not ensure the completeness of their 

commodity IT baseline, either because they did not identify a process 

for this task or faced challenges in collecting complete information.2

Until agencies develop a complete commodity IT baseline, they may 

not have sufficient information to identify additional consolidation 

opportunities that could yield considerable cost savings or avoidance. 

• Thirteen agencies reported that they still had not completed the 

migration of two commodity IT areas —such as enterprise IT systems 

and IT infrastructure—to a shared service as of August 2013, even 

though they reported to OMB that these efforts would be completed 

by December 2012. These agencies reported several reasons for this, 

including delays in establishing contracts with vendors due to the 

current budget situation, and delays due to technical challenges.

Continuing to report progress on the status of these migration efforts 

will increase the likelihood that they will be completed and that 

estimated savings will be realized. 

• Six agencies reported limitations in their chief information officer’s 

(CIO) authority to review and approve the entire portfolio.

3 These 

responses indicate that several CIOs still do not exercise the authority 

needed to review and approve the entire IT portfolio, consistent with 

OMB guidance. Although OMB has issued guidance and required 

agencies to report on actions taken to implement it, these steps have

not been sufficient to ensure that agency Chief Operating Officers 

address the issue of CIO authority at their respective agencies. As a 

result, agencies are hindered in addressing certain responsibilities set 

out in the Clinger-Cohen Act of 1996, which established the position 

of CIO to advise and assist agency heads in managing IT 

investments.4 These limitations may prevent CIOs from having the 

 

2

OMB required agencies establish a commodity IT baseline which included the number of 

systems and fiscal year 2011 obligations for those systems providing 13 types of 

commodity IT services. OMB has defined these 13 types of commodity IT investments in 

three broad categories: (1) enterprise IT systems (including e-mail; identity and access 

management; IT security; web hosting, infrastructure, and content; and collaboration 

tools); (2) IT infrastructure (including desktop systems, mainframes and servers, mobile 

devices, and telecommunications); and (3) business systems (including financial 

management, grants-related federal financial assistance, grants-related transfer to state 

and local governments, and human resources management systems).

3

OMB’s survey did not specifically require agencies to disclose limitations their CIOs might 

have in their ability to exercise the authorities and responsibilities provided by law and 

OMB guidance. Thus it is not clear whether all those who have such limitations reported 

them or whether those who reported limitations disclosed all of them.

4

See Pub. L. No. 104-106, Div. E, 110 Stat. 186, 679 (1996); Pub.L. No. 104-208, 110 

Stat. 3009, 3009-393 (1996); 40 U.S.C §11101, et seq. 
 

Page 165 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

visibility into agencies’ IT portfolio that is needed to successfully 

implement the PortfolioStat initiative. 

In addition, GAO reported in November 2013 that while OMB was working 

to improve its oversight of federal agencies’ implementation of 

PortfolioStat through additional guidance, these efforts could be 

strengthened in order to address weaknesses GAO identified in the 

implementation of the initiative. In particular, OMB’s 2013 guidance does 

not require agencies to document how they verified their commodity IT 

baseline data or disclose any limitations of these data or to report on the 

completion of their two 2012 migration efforts. Without such requirements, 

it will be more difficult for OMB to hold agencies accountable for 

identifying and achieving potential cost savings. In addition, while OMB’s 

memorandum has indicated that agencies must now report on how their 

policies, procedures, and CIO authorities are consistent with OMB 

Memorandum 11-29, “Chief Information Officer Authorities,” OMB’s prior 

guidance and reporting requirements have not been sufficient to address 

the implementation of CIO authority at all agencies.5 OMB’s 2013 

PortfolioStat guidance also does not require agencies to disclose any 

limitations CIOs might have in their ability to exercise their authority. Until 

CIOs are able to exercise their full authority, they will be limited in their 

ability to implement PortfolioStat and other initiatives to improve IT 

management.

Furthermore, OMB’s overall estimate of the number of opportunities and 

cost savings from PortfolioStat is underreported. According to OMB, 

agencies reported a total of 98 consolidation opportunities and $2.53 

billion in planned cost savings and avoidance for fiscal years 2013 

through 2015. However, among other things, OMB’s estimates do not 

include the Departments of Defense and Justice because these agencies 

did not report their plans in the template OMB was using to compile its 

overall estimate. GAO’s analysis of data collected from the 26 agencies, 

including the Departments of Defense and Justice, shows that they are 

reporting 204 opportunities and at least $5.8 billion in savings through 

fiscal year 2015, at least $3.3 billion more than the number initially 

reported by OMB.6

 While OMB acknowledged that the $2.53 billion in 

planned cost savings and avoidance was underreported when it issued 

the estimate, it did not disclose that the Departments of Defense and 

Justice’s estimates were not included in its total. Until OMB discloses any 

limitations or qualifications to the data it reports on the agencies’

 

5

OMB M-11-29 states that CIOs must be empowered by the agency head to have 

authority over IT governance, commodity IT systems, information security, and IT program 

management in order to drive efficiencies.

6

Subsequent to its report of agencies’ planned consolidation initiatives and associated 

savings, OMB issued the 2013 PortfolioStat memorandum requiring agencies to submit an 

updated list of consolidation initiatives and estimated cost savings and avoidance by May 

15, 2013. Some agencies reported to GAO that the information provided in this 

submission has changed from what they reported in 2012. 
 

Page 166 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

consolidation efforts and associated savings and avoidance, the public 

and other stakeholders may lack crucial information needed to 

understand the current status of PortfolioStat and agency progress in 

meeting the goals of the initiative.

Finally, GAO previously reported that the public reporting of agencies’ 

data, such as IT investment data showing assessments of actual 

performance against cost and schedule targets, allows OMB, other 

oversight bodies, and the general public to hold the agencies accountable 

for results and progress.7 While OMB officials have stated that they intend 

to make agency-reported data and the best practices identified for the 

PortfolioStat effort publicly available, they have not yet decided 

specifically which information they will report. Until OMB publicly reports 

data agencies submit on their commodity IT consolidation efforts, 

including planned and actual cost savings, it will be more difficult for 

stakeholders, including Congress and the public, to monitor agencies’ 

progress and hold them accountable for reducing duplication and 

achieving cost savings.

In November 2013, GAO made the following two recommendations to 

multiple agencies to improve their implementation of PortfolioStat 

requirements. 

• The Secretaries of Agriculture, Commerce, Defense, Housing and 

Urban Development, the Interior, and Labor, and the agency heads of 

the Environmental Protection Agency, U.S. Nuclear Regulatory 

Commission, Office of Personnel Management, Small Business 

Administration, Social Security Administration, and U.S. Agency for 

International Development should develop a complete commodity IT 

baseline.

• The Secretaries of Defense, Housing and Urban Development, the 

Interior, Labor, State, Transportation, and Veterans Affairs, and the 

agency heads of the Environmental Protection Agency, General 

Services Administration, National Aeronautics and Space 

Administration, Office of Personnel Management, Social Security 

Administration, and U.S. Agency for International Development should 

report on the agencies’ progress in consolidating remaining migration 

efforts to a shared service as part of the OMB integrated data 

collection quarterly reporting until the efforts are completed.

In addition, to help ensure the success of the PortfolioStat initiative, GAO 

recommended in November 2013 that the Director of OMB direct the 

Federal Chief Information Officer to take the following five actions:

 

7

GAO, Information Technology: OMB’s Dashboard Has Increased Transparency and 

Oversight, but Improvements Needed, GAO-10-701 (Washington, D.C.: July 16, 2010). 

Actions Needed and 

Potential Financial or 

Other Benefits
 

Page 167 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

• require that agencies (1) state what actions have been taken to 

ensure the completeness of their commodity IT baseline information 

and (2) identify any limitation with this information as part of integrated 

data collection quarterly reporting;

• require agencies to report on the progress of their two consolidation 

efforts that were to be completed by December 2012 as part of the 

integrated data collection quarterly reporting; 

• require agencies to fully disclose limitations their CIOs might have in 

exercising the authorities and responsibilities provided by law and 

OMB’s guidance, with particular attention to the Departments of 

Health and Human Services and State; the National Aeronautics and 

Space Administration; the Office of Personnel Management; and the 

U.S. Agency for International Development, which reported specific 

limitations with the CIOs’ authority;

• disclose the limitations of any data reported (or disclose the 

parameters and assumptions of these data) on the agencies’ 

consolidation efforts and associated savings and cost avoidance; and

• improve transparency of and accountability for PortfolioStat by 

publicly disclosing planned and actual data consolidation efforts and 

related cost savings by agency. 

Taking these actions will provide greater assurance that agencies will 

realize the nearly $6 billion dollars in savings they estimated they will 

achieve through fiscal year 2015. 

In commenting on a draft of the November 2013 report on which this 

submission is based, 10 agencies (Agriculture, Commerce, General 

Services Administration, Housing and Urban Development, Interior, 

National Aeronautics and Space Administration, U.S. Nuclear Regulatory 

Commission, Office of Personnel Management, State, and Veterans 

Affairs) generally agreed with the recommendations directed to them, 4 

(Defense, Environmental Protection Agency, Social Security 

Administration, and OMB) either partially agreed or disagreed with the 

recommendations directed to them, and 4 (Labor, Small Business 

Administration, Transportation, and U.S. Agency for International 

Development) stated they had no comments. However, GAO continued to 

believe that the recommendations to the agencies that partially agreed or 

disagreed were valid. 

In particular, Defense partially concurred with the recommendation to 

develop a complete commodity baseline, stating that the department has 

efforts under way to further refine the baseline. In addition, both the 

Environmental Protection Agency and the Social Security Administration 

disagreed with our recommendation to develop a complete commodity IT 

baseline, stating they had already submitted one. However, GAO found 

that neither agency had a process in place to ensure the completeness of 

the information and therefore could not be assured that their data were 

complete. 

Agency Comments 

and GAO’s Evaluation
 

Page 168 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

Lastly, OMB disagreed with the recommendations to (1) disclose the 

limitations of any data reported on agency consolidation efforts and (2) 

improve transparency and accountability for PortfolioStat by disclosing 

consolidation efforts and related cost savings by agency. Regarding the 

first recommendation, OMB stated it had disclosed some limitations. 

However, OMB did not disclose that information from the departments of 

Defense and Justice was not included in the consolidation estimates 

reported, which, considering the scope of Defense’s efforts in this area (at 

least $3.2 billion), is a major gap. For the second recommendation, OMB 

stated that it performs work to ensure accountability and transparency but 

that some details of agency efforts are deliberative or procurement 

sensitive and it would therefore not be appropriate to disclose them. 

While OMB currently reports realized savings by agency on a quarterly 

basis, these savings are not measured against planned savings. Doing 

this would greatly enhance Congress’s insight into agencies’ progress 

and hold them accountable for reducing duplication and achieving 

planned cost savings and would not require reporting deliberative or 

procurement-sensitive information. Therefore, we stand by all 

recommendations made to these agencies and OMB.

GAO provided a draft of this report section to the following 18 agencies: 

OMB, the Departments of Agriculture, Commerce, Defense, Housing and 

Urban Development, Interior, Labor, State, Transportation, Veterans 

Affairs; the Environmental Protection Agency, General Services 

Administration, National Aeronautics and Space Administration, U.S. 

Nuclear Regulatory Commission, Office of Personnel Management, Small 

Business Administration, Social Security Administration, and U.S. Agency 

for International Development. One agency (U.S. Nuclear Regulatory 

Commission) agreed with the report section. Four agencies commented 

on efforts to address our recommendations. Specifically, Environmental 

Protection Agency reported actions underway and plans to address our 

recommendations. Housing and Urban Development referenced its 

December 2013 response to the report in which it agreed with the 

recommendations made and stated that the department’s next 

PortfolioStat update to OMB was scheduled for February 2014. The Small 

Business Administration stated that it was working to better identify, 

control, record, and audit their commodity IT baseline. The Social 

Security Administration stated that the agency now requires commodity IT 

and associated costs to be identified and reported as part of its IT budget. 

In addition, the agency anticipates completing its consolidation of 

geospatial architecture by September 2014. Ten agencies (Agriculture, 

Commerce, Defense, General Services Administration, Interior, Labor, 

Office of Personnel Management, State, U.S. Agency for International

Development, and Veterans Affairs) stated they had no comments. Two 

agencies (National Aeronautics and Space Administration and 

Transportation) had technical comments which we incorporated as 

appropriate. OMB did not provide comments on this issue.
 

Page 169 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

The information contained in this analysis is based on the November 

2013 report in the related GAO products section. GAO obtained 

documentation from the 26 agencies that were required to comply with 

OMB’s memorandum for implementing the PortfolioStat initiative and 

compared it to the memorandum’s requirements and supporting 

guidance.

8 In addition, GAO obtained a briefing book which OMB 

provided to the agencies that, among other things, summarized the 

agencies’ commodity IT baseline data. GAO assessed the reliability of 

OMB’s reporting of these data through interviews with OMB officials 

regarding their processes for compiling the briefing books and used the 

briefing books to describe the federal investment in commodity IT at the 

time of the 2012 PortfolioStat. 

GAO also assessed the reliability of agencies’ commodity IT baseline 

data by reviewing the processes agencies described they had in place to 

ensure that all investments were captured in the baseline. GAO identified 

issues with the reliability of the agencies’ commodity IT baseline data and 

highlighted these issues throughout the November 2013 report, as 

appropriate. GAO compiled the list of commodity IT opportunities and the 

total estimated savings or cost avoidance that agencies identified using 

the cost target templates agencies provided to OMB in September 2012 

and the action plans the Departments of Defense and Justice provided to 

OMB in August 2012.9

 

GAO also reviewed OMB’s guidance for the 2013 PortfolioStat and 

interviewed OMB’s PortfolioStat Lead regarding plans for improving the 

PortfolioStat process. In addition, GAO analyzed the information obtained 

from federal agencies against the requirements in the 2013 guidance and 

the information obtained from OMB staff to determine whether OMB’s 

plans for improving PortfolioStat addressed the implementation issues 

identified in the report. Table 18 in appendix IV lists the programs GAO 

identified that might have opportunities for cost savings. 

GAO, Information Technology: Additional OMB and Agency Actions Are 

Needed to Achieve Portfolio Savings. GAO-14-65. Washington, D.C.: 

November 6, 2013.

 

8

The 26 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; the Environmental Protection Agency, General Services Administration, 

National Aeronautics and Space Administration, National Archives and Records 

Administration, National Science Foundation, Office of Personnel Management, Small 

Business Administration, Social Security Administration, U.S. Agency for International 

Development, U.S. Army Corps of Engineers, and the U.S. Nuclear Regulatory 

Commission. 

9

We used the action plans for the Departments of Defense and Justice because they did 

not provide information on the number of opportunities or potential cost savings in the cost 

target templates required by OMB 

How GAO Conducted 

Its Work

Related GAO 

Products
 

Page 170 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

GAO, Information Technology: Departments of Defense and Energy Need 

to Address Potentially Duplicative Investments. GAO-12-241. 

Washington, D.C.: February 17, 2012.

GAO, Information Technology: OMB Needs to Improve Its Guidance on IT 

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

GAO, Information Technology: OMB’s Dashboard Has Increased 

Transparency and Oversight, but Improvements Needed. GAO-10-701. 

Washington, D.C.: July 16, 2010. 

For additional information about this area, contact David A. Powner at Contact Information (202) 512-9286 or pownerd@gao.gov. 
Page 171 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities

Social Services

25. Better Data to Mitigate Foreclosures

The Department of Housing and Urban Development’s Federal Housing Administration and the Departments of 

Veterans Affairs and Agriculture could improve outcomes and better manage the costs associated with 

foreclosure mitigation efforts with additional data collection and analysis, potentially saving taxpayers millions 

of dollars on an annual and recurring basis. 

Foreclosures have remained a key hurdle to recovery from the U.S. 

economic slowdown. To help homeowners avoid preventable 

foreclosures, the Department of the Treasury (Treasury) allocated $29.9 

billion for its Home Affordable Modification Program and other programs 

under the Making Home Affordable Program. The goal of the Home 

Affordable Modification Program is to help struggling borrowers stay in 

their homes by reducing their monthly mortgage payment to a more 

affordable amount. Since 2009, the Federal Housing Administration 

(FHA) and the Departments of Veterans Affairs (VA) and Agriculture 

(USDA)—which collectively insured or guaranteed about $248 billion in 

single-family home mortgages in fiscal year 2012—also expanded their 

foreclosure mitigation efforts. Evaluating the costs of various loan 

modification actions enables agencies to more effectively help borrowers 

keep their homes and protect taxpayers’ interests.

Research on the effectiveness of these efforts, however, has been 

limited, and the relationships between particular mitigation actions and 

loan and borrower characteristics on keeping loans current are not well 

understood. Information on the outcome of foreclosure mitigation efforts is 

central to helping ensure that these efforts efficiently and effectively 

preserve homeownership, prevent avoidable foreclosures, protect home 

values, and reduce taxpayers’ costs.

As noted in GAO’s June 2012 report, three of the six agencies reviewed 

had not incorporated analyses of long-term costs into their loss mitigation 

efforts. Treasury, Fannie Mae, and Freddie Mac analyzed the 

performance of modified loans and considered loan and borrower 

characteristics to better understand the long-term costs of various loan 

modification actions taken under its program. In contrast, GAO found that 

FHA had not updated its analysis of loan performance and long-term 

costs to reflect changes to its loss and foreclosure mitigation activities 

since 1996. In addition, FHA officials said that they had not assessed the 

extent to which individual servicers considered long-term costs in making

decisions about which mitigation options to offer to borrowers. FHA 

collected limited data on loan and borrower characteristics at the time of a 

mitigation action, but not key information—such as borrower income and 

expenses—that could be analyzed to help identify which action would be 

most appropriate for the borrower and for minimizing losses to the federal 

government. More recently, FHA began to calculate redefault rates 

(becoming 90 days or more delinquent) for specific loss mitigation actions 

and planned to examine these data in the future. 

Why This Area Is 

Important

What GAO Found
 

Page 172 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

USDA and VA also had not incorporated analyses of long-term costs into 

their loss mitigation efforts. USDA collected loan-level data from servicers 

on loan performance and type of action taken and separately collected 

data on certain loan and borrower characteristics, but had not matched or 

analyzed these separate data sets. Although VA collected some 

information about the performance of modified loans and modified loan 

characteristics, it had not analyzed its portfolio to understand differences 

in performance based on type of mitigation actions or for loan and 

borrower characteristics. VA also had not evaluated servicer-provided 

data on loan performance and other mitigation actions to determine 

redefault rates or used servicer-reported information on loan and 

borrower characteristics to determine the optimal change in monthly 

payment amounts for future modifications. 

GAO’s analysis of loan-level data purchased from a private vendor 

identified certain loan and borrower characteristics that reduced the 

redefault rate after being modified. When controlling for observable 

borrower and loan characteristics, large reductions in monthly mortgage 

payments (specifically, reductions of 30-49 percent) resulted in lower 6-

month redefault rates. But reductions in monthly payments of 50 percent 

or more did not result in further improvement in the 6-month redefault 

rate. 

Because FHA did not analyze the performance of mitigation activities by 

loan and borrower characteristics and VA and USDA did not analyze 

these activities by type of mitigation action or loan and borrower 

characteristics, the agencies had a limited understanding of the ultimate 

costs and effectiveness of their foreclosure mitigation efforts. If the 

agencies better understood the performance and ultimate costs of each 

mitigation action, they could change the order in which mitigation options 

were offered or adjust their eligibility requirements to both improve the 

likelihood of borrower success and reduce losses. Conducting more 

comprehensive analyses could help ensure that federal foreclosure 

mitigation efforts are as effective as possible while limiting long-term 

costs. 

Generally, federal agencies are responsible for helping ensure that 

foreclosure mitigation efforts reduce taxpayers’ costs. To more fully 

understand the strengths and risks of foreclosure mitigation actions and 

protect taxpayers from absorbing avoidable losses, GAO recommended 

in June 2012 that FHA, VA, and USDA periodically analyze the 

effectiveness and long-term costs and benefits of their mitigation 

strategies and actions. These analyses should consider (1) the redefault 

rates associated with each type of mitigation action and (2) the impact 

that loan and borrower characteristics have on the performance of 

different actions. The agencies should use analysis results to reevaluate 

their mitigation approaches and provide additional guidance to servicers 

to effectively target mitigation actions. If FHA, VA, and USDA do not 

maintain data needed to consider this information, they should require 

servicers to provide the information.

Actions Needed and 

Potential Financial or 

Other Benefits
 

Page 173 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

Estimating definitive cost savings in this area is challenging because such 

savings will depend on the extent to which the agencies use the analyses 

to reduce their losses associated with mitigation efforts. However, modest 

reductions in claims that would be associated with improvements to 

FHA’s, VA’s, and USDA’s loss mitigation efforts could achieve millions of 

dollars in savings. For example, in fiscal year 2012, FHA paid more than 

$17 billion in claims related to defaults. If changes to FHA’s loss 

mitigation program reduced claims related to defaults by 1 percent, 

potential costs savings would equal about $176 million.1 Given the size of 

the residential loan programs of VA and USDA, the potential cost savings 

would be smaller than for FHA. 

In commenting on the June 2012 report on which this analysis is based, 

FHA, VA, and USDA either agreed or generally concurred with GAO’s 

recommendations to consider (1) the redefault rates associated with each 

type of mitigation action and (2) the impact that loan and borrower 

characteristics have on the performance of different actions and 

subsequently have begun to take actions to implement GAO’s 

recommendation, as follows. 

• FHA agreed and, in November 2012, revised the types of mitigation 

actions and manner in which the actions are offered, and according to 

the FHA Commissioner’s July 2013 congressional testimony, the 

changes FHA has made to its loss mitigation efforts are reducing 

losses. FHA officials have begun to evaluate the effectiveness of 

these changes. 

• VA concurred, and in May 2013, VA officials stated they would begin 

analyzing redefault rates associated with each type of mitigation 

action. In addition, VA would begin analyzing loan and borrower 

characteristics to determine their impact on the performance of 

different mitigation actions. VA will use these analyses to inform its 

mitigation efforts and guidance to servicers. 

• USDA generally concurred and, in September 2013, USDA officials 

indicated that they had secured the funding needed to build the datagathering and analysis capability necessary to start implementing 

GAO’s recommendation. Specifically, the Under Secretary provided 

$1.5 million to enhance the existing Data Interface Exchange, 

improving both data capture (more data elements) and data frequency 

(monthly rather than quarterly). The agency expects that the new 

capabilities will be fully operational by September 30, 2015.

 

1

This estimate is based on our review of various loan performance and cost information, 

including redefault rates for FHA and non-FHA modified loans, FHA’s historical loss 

mitigation expenses, and FHA’s reported claim losses.

Agency Comments 

and GAO’s Evaluation
 

Page 174 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

GAO provided a draft of this report section to FHA, VA, and USDA for 

review and comment. In emails received on February 10 and 7, 2014, 

FHA’s Special Projects Coordinator and Audit Liaison Officer and USDA’s 

GAO Liaison, respectively, stated that their agencies did not have any 

comments on this issue. In an email received on February 6, 2014, VA’s 

GAO Liaison indicated that VA continued to have action ongoing in 

response to our recommendation. 

The information contained in this analysis is based on the June 2012 

report in the related GAO products section. To examine opportunities to 

enhance the effectiveness of current foreclosure mitigation efforts, GAO 

identified and reviewed the goals of federal foreclosure mitigation efforts 

as well as statutes, requirements, and guidance associated with these 

efforts. To describe the costs associated with the mitigation actions, GAO 

obtained summary data from Treasury, FHA, VA, and USDA. GAO did 

not independently confirm the accuracy of the summary data obtained, 

but took steps to ensure that the data used were sufficiently reliable for 

our purposes, such as interviewing officials familiar with the data. GAO 

also obtained viewpoints from a range of housing market participants and 

observers. For example, GAO met with officials from Treasury, FHA, VA, 

and USDA, to understand their foreclosure mitigation efforts, and 

representatives of housing market trade associations and consumer 

advocacy groups. Furthermore, GAO conducted an econometric analysis 

of redefault among modified loans by analyzing a sample of loan-level 

data purchased from a private vendor as well as loan-level data obtained 

from Treasury on Home Affordable Modification Program loans. GAO 

took steps to ensure that the data used were sufficiently reliable for our 

purposes.

Table 19 in appendix IV lists the programs GAO identified that might have 

opportunities for cost savings. 

Troubled Asset Relief Program: Further Actions Needed to Enhance 

Assessments and Transparency of Housing Programs. GAO-12-783. 

July 19, 2012. 

Foreclosure Mitigation: Agencies Could Improve Effectiveness of Federal 

Efforts with Additional Data Collection and Analysis. GAO-12-296. 

June 28, 2012.

Federal Housing Administration: Risks to the Mutual Mortgage Insurance 

Fund and the Agency's Operations. GAO-12-277T. December 1, 2011. 

Troubled Asset Relief Program: Treasury Continues to Face 

Implementation Challenges and Data Weaknesses in Its Making Home 

Affordable Program. GAO-11-288. March 17, 2011. 

How GAO Conducted 

Its Work

Related GAO 

Products
 

Page 175 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

Troubled Asset Relief Program: Actions Needed by Treasury to Address 

Challenges in Implementing Making Home Affordable Programs. 

GAO-11-338T. March 2, 2011.

For additional information about this area, contact Mathew J. Scirè at Contact Information (202) 512-8678 or sciremj@gao.gov. 
Page 176 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities

26. Housing Choice Vouchers Rent Reform

By improving data collection and analysis efforts under the Moving to Work demonstration program, the 

Department of Housing and Urban Development would provide Congress with information to determine which 

rent reform option should be implemented program-wide and thereby potentially reduce program funding by 

millions of dollars or extend housing assistance to additional low-income households or some combination of 

these outcomes.

The Department of Housing and Urban Development’s (HUD) Housing 

Choice Voucher (voucher) program is the largest among HUD’s rental 

housing assistance programs. Under the program, HUD pays subsidies to 

landlords to help eligible households rent units (apartments or houses) on 

the private market. Annually, from fiscal years 2003 through 2010, the 

voucher program helped provide affordable rental housing to 

approximately 2 million households. 

To be eligible for voucher assistance, in general, households must have 

very low incomes—not exceeding 50 percent of the area median income, 

as determined by HUD.1 Under the voucher program, an assisted 

household pays 30 percent of its monthly adjusted income in rent; the 

remainder of the rent is paid through a HUD-subsidized “voucher,” which 

generally is equal to the difference between (1) the lesser of the unit’s 

gross rent (generally, rent plus utilities) or a local “payment standard” and 

(2) the household’s payment. The payment standard is set between 90 

and 110 percent of the HUD-determined fair market rent for the locality, 

which generally equals the 40th percentile of market rents (including 

utilities) renters who recently moved paid for standard-quality units. 

In 2011, approximately 2,400 state and local housing agencies 

administered the voucher program on HUD’s behalf. Housing agencies 

are responsible for inspecting units, ensuring that rents are reasonable, 

determining households’ eligibility, calculating and periodically 

redetermining households’ incomes and rental payments, and making 

subsidy payments to landlords. In addition, housing agencies perform 

basic program functions, such as establishing and maintaining a waiting 

list, processing tenant moves, conducting landlord and tenant outreach, 

and reporting to HUD. HUD disburses appropriated funds to housing 

agencies for subsidy payments to landlords and administrative expenses.

 

1

Under the Quality Housing and Work Responsibility Act of 1998 (P.L. 105-276), at least 

75 percent of new voucher program participants must have extremely low incomes—not 

exceeding 30 percent of the area median income. See 42 U.S.C. 1437n (b)(1).

Why This Area Is 

Important
 

Page 177 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

Some housing agencies that administer vouchers can participate in 

HUD’s Moving to Work (MTW) demonstration program.2 The MTW 

program has three statutory purposes: to reduce costs and achieve 

greater cost-effectiveness in federal housing expenditures, to give 

families with children incentives to obtain employment and become selfsufficient, and to increase housing choices for low-income families. The 

program gives participating housing agencies the flexibility to design and 

test innovative strategies for providing and administering housing 

assistance in their communities. Rent reform (that is, changes in the way 

households’ payments toward rent are calculated) is one of the strategies 

housing agencies can implement under the MTW program. Currently, 39 

housing agencies are authorized to participate in MTW. 

In March 2012, using 2010 HUD data, GAO found that rent reform could 

yield substantial reductions in program funding from between 

approximately $11 million to $1.8 billion, or allow housing agencies to 

serve from approximately 1,400 to 287,000 additional households, if 

Congress were to maintain program funding levels (see table below). To 

develop these estimates, GAO primarily considered reforms certain 

housing agencies have already implemented under the MTW program, 

including requiring households to pay (1) higher minimum rents, (2) 35 

percent of their adjusted income in rent, (3) 30 percent of their gross 

income in rent, or (4) a percentage of the applicable fair market rent.3 The 

estimates demonstrate the potential magnitude of reductions in program 

funding or additional households that would be served if these variations 

of MTW agencies’ rent reforms were expanded to all housing agencies 

that administer vouchers.

 

2

Congress authorized the Moving to Work demonstration program in the Omnibus 

Consolidated Rescissions and Appropriations Act of 1996. Pub. L. No. 104-134, 110 Stat. 

1321, 1321-281 (1996). 

3

A rent structure based on gross income would eliminate the deductions and exclusions to 

income that households currently may claim. Laws and HUD regulations provide 44 

different income exclusions and deductions: (1) HUD regulations cite 20 income sources 

to be excluded when determining households’ eligibility for assistance and calculating 

tenant rents. See 24 C.F.R. § 5.609. (2) Under various statutes, 19 other income sources 

qualify as exclusions. (3) In addition, program administrators (housing agencies) must 

apply 5 income deductions, which reduce the amount of income that can be considered in 

calculating tenant rents. See 24 C.F.R. § 5.611. Once program administrators have 

collected information from households on income and applicable exclusions and 

deductions, HUD policy requires that they independently verify this information (“thirdparty” verification). After verifying households’ income information, program administrators 

must compute the amounts the households will pay in rent. See 24 C.F.R. § 5.628. 

What GAO Found
 

Page 178 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

Estimated Annual Effect of Selected Rent Reform Options on Program Funding or Number of Additional Voucher-Assisted 

Households Served

Reform option

Estimated annual reduction in program 

funding OR a Estimated additional households 

served

Increase minimum rents tob

$50 $11 million 1,400

$75 $67 million 8,600

$100 $124 million 16,000

$150 $318 million 43,000

$200 $602 million 85,000

$250 $1.1 billion 167,000

$300 $1.8 billion 287,000

Require households to payc

35 percent of adjusted income in rent $1.1 billion 164,000

30 percent of gross income in rent $513 million 76,000

35 percent of the fair market rent $927 million d 136,000

Source: GAO analysis of Department of Housing and Urban Development data. 

a

These estimates illustrate the relative effects of the options if fully implemented in 1 year. Actual 

implementation of such options likely would be done gradually, and not all of the funding reductions or 

additional households served would be realized in the first year.

b

GAO assumed that all households paid the greater of the minimum rent or 30 percent of adjusted 

income. GAO’s minimum rent calculations did not take into account any payment households 

received for utility assistance.

c

For the adjusted and gross income options, GAO did not impose a minimum rent requirement. 

d

For this option, GAO evaluated the effect of requiring households to pay 12, 15, 20, 30, and 35 

percent of the fair market rent and no minimum rent. Only the 35 percent option resulted in reductions 

in program funding or additional households served on an annual basis—all other percentages 

resulted in funding increases and fewer households served.

In addition to estimating the reductions in program funding that could 

result from each of these rent reform options, GAO considered each 

option in terms of its effect on assisted households and other program 

objectives, including (1) changes in the rent paid by assisted households, 

(2) household attrition rates, (3) HUD’s goals of encouraging households 

to move to the neighborhoods of their choice (mobility) and discouraging 

households from choosing communities that have higher levels of poverty 

(deconcentration), (4) incentives to seek work, (5) program 

administration, and (6) housing agency and industry support. While each 

of these options has advantages over the current rent structure in that 

they could reduce program funding or create administrative efficiencies, 

each also involves trade-offs. Specifically, under each rent reform option, 

some households would have to pay more in rent than they currently pay 

(see table below).
 

Page 179 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

Estimated Number and Percentage of Voucher-Assisted Households for Which 

Rents Would Increase and the Average Monthly Increase, by Rent Reform Option

Number of 

households 

experiencing an 

increase in their 

monthly 

payment

Percentage of 

households 

experiencing an 

increase in their 

monthly payment a

Mean change

in monthly 

payment of 

affected 

households

Minimum rent

$50 36,000 2 $31

$75 207,000 11 $27

$100 256,000 13 $45

$150 358,000 19 $75

$200 698,000 36 $71

$250 1,012,000 52 $92

$300 1,225,000 63 $122

Household rent formula

35% of adjusted income 1,751,000 92 $50

30% of gross income 1,662,000 86 $27

35% of fair market rent 1,172,000 b 61 $155

Source: GAO analysis of Department of Housing and Urban Development data.

a

To estimate the effect of each rent reform option on the number of households affected and their 

monthly payments, GAO analyzed household characteristics and rent data as of December 2010.

b

Under this option, approximately 755,000 households would experience an average decrease of 

$139 in their monthly payments.

In addition, these rent reform options may have other implications for 

assisted households and other program objectives: 

• Household attrition: Under each rent reform option GAO evaluated, a 

small number of households might lose their subsidies—that is, their 

subsidy payments would be reduced to zero because their new, 

higher rental payments would fully cover the gross rent. For example, 

under the option where households pay 35 percent of their adjusted 

income in rent, we estimated that approximately 1.8 percent of 

households would lose their subsidies.4 Further, other affected 

households might leave the program because they would have to pay 

more in rent and would no longer choose to participate in the 

program. 

• HUD’s deconcentration and mobility efforts: Rent structures that 

decrease the amount of subsidy households receive may discourage 

HUD’s deconcentration efforts, as well as household mobility. With 

smaller subsidies, households (especially those with lower incomes) 

may not have the means to move from neighborhoods of 

 

4

In addition, under all other rent reform scenarios, less than 0.5 percent of households 

would lose their subsidies. 
 

Page 180 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

concentrated poverty to those with a diversity of people and 

opportunities, which may have higher rents. 

• Work incentives: Rent structures that do not take into account 

household income may do more to encourage assisted households to 

find and retain employment. Under the current rent structure, 

households generally pay 30 percent of their income toward rent and 

those with no reported income generally do not pay rent—HUD’s 

subsidy covers the gross rent. Consequently, some have argued that 

these households have a disincentive to seek employment or increase 

their earnings because for every additional $100 they earn on a 

monthly basis, they will pay $30 more in rent. 

• Program administration: Moving toward a rent structure either based 

on fair market rents or gross income would introduce significant 

administrative efficiencies into the program and could allow housing 

agencies to further reduce improper payments from administrator 

(housing agency) error or tenants’ underreporting of income. As GAO 

found in February 2005, the complexity of the current income and rent 

determination policies was of major concern to HUD and program 

administrator errors in calculating rents significantly contributed to the 

level of improper payments at that time.5

 

• Housing agency and industry support: Nearly all of the housing 

agencies GAO contacted said that they supported some type of rent 

reform—among the most popular options were increasing minimum 

rents and increasing tenant rental payments to 35 percent of adjusted 

income. Despite this, some housing advocates have voiced concern 

about rent reform. For example, one advocate suggested that rent 

reform would put HUD-assisted households at risk of having 

significant rent burdens.

Program data and other information that could be used to assess the 

actual effects of these trade-offs were not available. Consequently, 

GAO’s March 2012 analysis was limited to estimating reductions in 

program funds and additional households served if certain rent reform 

options were implemented. 

As a demonstration program, MTW is intended to identify actual 

reductions in program funding and effects on assisted households and 

other program goals resulting from rent reform efforts similar to those 

GAO examined in March 2012. However, in April 2012, GAO found that 

HUD lacked the data and performance indicators needed to assess the 

impact of activities implemented under the MTW program, including rent 

 

5

Improper rental assistance payments include subsidy over- and underpayments resulting 

from program administrator errors (that is, a housing agency’s failure to properly apply 

income exclusions and deductions and correctly determine income, rent, and subsidy 

levels). HUD has taken steps to reduce improper payments in the voucher program. 

According to HUD reports, the department has reduced gross improper payments by 

almost 60 percent, from $1.1 billion in fiscal year 2000 to $440 million in fiscal year 2009. 
 

Page 181 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

reform. The GPRA (Government Performance and Results Act) 

Modernization Act (GPRAMA) and federal internal control standards 

require that agencies establish performance indicators for program 

activities in order to demonstrate program results.6 Further, GAO found 

that the shortage of performance data and indicators had hindered HUD’s 

ability to comprehensively evaluate the MTW program, including 

systematically identifying lessons learned. As GAO reported, one of the 

goals of the MTW program is to identify successful approaches that can 

be applied to housing agencies nationwide.

In April 2012, GAO made several recommendations to HUD, including the 

following three actions, to improve its analysis of the implications of 

activities implemented under the MTW program: 

• develop and implement a plan for quantitatively assessing the 

effectiveness of similar activities and the program as a whole, 

including the identification of standard performance data, as needed;

• establish performance indicators for the MTW program as a whole; 

and 

• create a process to systematically identify lessons learned to enhance 

the department’s ability to identify MTW practices that could be 

applied more broadly.

With standard data and performance indicators, HUD would be well 

equipped to assess the actual effects of rent reform and the implications 

of extending it to all housing agencies that participate in the voucher 

program. Such analysis would provide Congress with information to 

determine which rent reform option should be implemented program-wide 

and thereby potentially reduce program funding by millions of dollars or 

extend housing assistance to additional low-income households or some 

combination of these outcomes.

In its response to GAO’s April 2012 report, HUD 

• Agreed that quantitatively assessing the effectiveness of similar 

activities was an important step but noted the difficulties associated 

with assessing the effectiveness of the MTW program as a whole.

• Disagreed with GAO’s recommendation that the department develop 

performance indicators for the MTW program. The department said 

that developing program-wide performance measures could be 

difficult and might be contrary to the nature of the demonstration. In 

March 2014, HUD further clarified that the department is working with 

 

6

Pub. L. No. 111-352, 124 Stat. 3866 (2011) and GAO, Standards for Internal Control in 

the Federal Government, GAO/AIMD-00-21.3.1 (Washington, D.C.: November 1999). 

Actions Needed and 

Potential Financial or 

Other Benefits

Agency Comments 

and GAO’s Evaluation
 

Page 182 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

MTW housing agencies to develop programwide indicators based on 

standard metrics.

• Agreed that it should proactively identify lessons learned.

Since GAO’s April 2012 report, HUD has revised the reporting 

requirements for MTW housing agencies. The Office of Management and 

Budget approved these requirements in May 2013. The new requirements 

state that MTW agencies are to report standard metrics and report 

outcome information on the effects of MTW policy changes on residents. 

HUD also developed a standard format to allow aggregation and analysis 

of data across agencies for similar activities. HUD noted that one purpose 

of the revised reporting requirements was to identify promising practices 

learned through the MTW demonstration. In addition, HUD required the 

four new housing agencies that were admitted into the MTW program 

since April 2012 to implement and study rent reform activities through 

partnerships with local universities and a research organization. However, 

until more complete information on the MTW program’s effectiveness is 

available and HUD implements a plan to assess program outcomes and 

lessons learned, it will be difficult for Congress to know whether extending 

rent reform or other activities to all housing agencies that administer 

vouchers would be beneficial.

In its response to GAO’s March 2012 report, HUD did not comment on 

the rent reform options discussed but stated that the report provided an 

accurate assessment of the program and its current outcomes.

GAO provided a draft of this report section to HUD for review and 

comment and HUD provided written comments. In its comments, HUD 

said that in December 2011 the Office of Policy Development and 

Research issued a request for proposal for a rent demonstration. As GAO 

reported in March 2012, according to the request, the demonstration will 

test alternatives to the current rent structure using a random assignment 

experimental model and most likely would be undertaken at select MTW 

housing agencies because these agencies already have the authority to 

request waivers of voucher program laws and regulations. In its 

comments HUD also noted that it had published an evaluation of the 

MTW program in 2010.7 However, this evaluation found that the effects of 

many MTW activities could not be conclusively identified because of the 

variety of and differences in the activities and metrics that MTW housing 

agencies were implementing. GAO’s April 2012 report made a similar 

finding noting that program design and a lack of standard performance 

data and indicators have hindered program evaluation efforts.

 

7

HUD, Office of Public and Indian Housing and Office of Policy Development and 

Research, Moving to Work: Interim Policy Applications and the Future of the 

Demonstration, a report to Congress (Washington, D.C.: 2010). 
 

Page 183 GAO-14-343SP 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 its April 2012 report, 

GAO reviewed MTW housing agencies’ annual reports and compared 

HUD’s guidance for MTW housing agencies on the type of performance 

information they should report with the GPRAMA. GAO also reviewed 

evaluations of the MTW program and summarized the challenges that 

HUD and others have faced in conducting such evaluations, and 

assessed HUD’s efforts to identify lessons learned from the MTW 

program. Finally, GAO interviewed HUD officials, officials from a sample 

of seven MTW housing agencies, research organizations, affordable 

housing advocates, and organizations that advocate on behalf of 

residents of federally subsidized housing.

For its March 2012 report, GAO analyzed program data that HUD 

prepared using information derived from multiple HUD systems to 

determine how much housing agencies’ expenditures changed and the 

factors that have affected costs in the voucher program from 2003 to 

2011. To identify additional steps that could be taken to limit cost growth 

in the voucher program and more effectively provide decent, safe, and 

affordable housing, GAO identified and reviewed relevant legislation, draft 

legislation, and studies. Using data from HUD’s Public and Indian 

Housing Information System on household characteristics, income, and 

rents, GAO evaluated the cost and policy implications of three types of 

programmatic reform options for the voucher program: increasing 

minimum rents, changing the percentage of income tenants pay toward 

rent, and requiring tenants to pay a percentage of fair market rent. In 

identifying and assessing these programmatic reform options, GAO 

considered variations of reforms certain MTW housing agencies have 

implemented, and reviewed proposals included in draft legislation and in 

HUD, Congressional Budget Office, and housing industry group reports. 

Finally, GAO interviewed HUD officials and consulted with an academic 

and officials from various housing groups. GAO also contacted or visited 

93 local housing agencies selected generally based on the number of 

vouchers administered.

Table 20 in appendix IV lists the federal programs or activities GAO 

identified in this submission. 

Moving to Work Demonstration: Opportunities Exist to Improve 

Information and Monitoring. GAO-12-490. Washington, D.C.: April 19, 

2012.

Housing Choice Vouchers: Options Exist to Increase Program 

Efficiencies. GAO-12-300. Washington, D.C.: March 19, 2012. 

HUD Rental Assistance: Progress and Challenges in Measuring and 

Reducing Improper Rent Subsidies. GAO-05-244. Washington, D.C.: Feb. 

18, 2005.

How GAO Conducted 

Its Work

Related GAO 

Products
 

Page 184 GAO-14-343SP Cost Savings and Revenue Enhancement Opportunities 

For additional information about this area, contact Daniel Garcia-Diaz at Contact Information (202) 512-8678 or garciadiazd@gao.gov.
 

Page 185 GAO-14-343SP List of Congressional Addressees 

Appendix I: List of Congressional Addressees

The Honorable Barbara A. Mikulski

Chairman 

The Honorable Richard C. 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, M.D.

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 186 GAO-14-343SP 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 governmentwide. 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 As agreed with the key congressional committees, 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 address 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 11 areas of fragmentation, 

overlap, or duplication where greater efficiencies or effectiveness in 

providing government services may be achievable. We also highlighted 

15 other opportunities for potential cost saving or revenue enhancements. 

Over the course of our 2011 through 2013 annual reports we conducted a 

systematic and practical examination across the federal government to 

provide reasonable coverage for areas of potential fragmentation, 

overlap, and duplication government-wide.3

 We continue to consider a 

 

1

This is the first year in which we propose a rescission. See area 24, Advanced 

Technology Vehicles Manufacturing Loan Program.

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.

3

See GAO-13-279SP. 

GAO’s Approach
 

Page 187 GAO-14-343SP Objectives, Scope, and Methodology 

variety of factors to determine whether such potential instances or 

opportunities identified in our routine audit work warrant inclusion in this 

annual report. Such factors included, but were not limited 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. 

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 update 

in the section entitled “How GAO Conducted Its Work” of each issue area.

To identify what actions, if any, exist to address 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 and evaluating performance and results achieving 

efficiencies.4

To identify the potential financial and other benefits that might result from 

actions addressing fragmentation, overlap, or duplication, 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, or duplication 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 eliminating duplication, overlap, or fragmentation 

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 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 IV that provide a 

detailed listing of federally-funded program names and associated 

budgetary information. While there is no standard definition for what 

 

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)

and 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 188 GAO-14-343SP Objectives, Scope, and Methodology 

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 2012 for 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 162 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 380 actions included in these previous 

reports. 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 380 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. 

Assessing Status of 

Areas and Actions
 

Page 189 GAO-14-343SP Objectives, Scope, and Methodology 

We used the following criteria in assessing the status of areas and 

actions.5

• 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 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” 

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. In providing the drafts to the agencies for review, we 

communicated that we would use an as of date of March 6, 2014, for all 

assessments. In addition to summarizing any comments received on our 

assessments, we incorporated a summary of comments on the prior GAO 

work upon which each issue area is based. Consistent with GAO policy, 

we are not reprinting copies of agencies’ comment letters with this report, 

as the work included is based predominantly on previously issued GAO 

reports. Copies of agency comment letters associated with previous 

reports can be found in those reports, if applicable.

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 

 

5

Based on subsequent audit work that we conducted, 4 areas reported in 2011, 1 area 

reported in 2012, and 19 actions were not assessed this year, and we have categorized 

those areas and actions as “consolidated or other.” These areas and 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. We also added new 

actions to two areas reported in 2011 and one area reported in 2012 based on new work. 

The status of these areas and actions has not yet been assessed.
 

Page 190 GAO-14-343SP Objectives, Scope, and Methodology 

provides a reasonable basis for our findings and conclusions based on 

our audit objectives.
 

Page 191 GAO-14-343SP Selected Tables 

Appendix III: Areas Identified in 2011 – 2014 

Annual Reports, by Mission

This enclosure presents a summary of the areas we identified in our 2011 

– 2014 annual reports. It also includes our assessment of the overall 

progress made in each of the 162 areas that we identified in our 2011, 

2012, and 2013 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 its 2014 areas. Table 

1 presents our assessment of the overall progress made in implementing 

the actions needed in the areas related to fragmentation, overlap, or 

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. 

Table 1: GAO Identified Areas of Fragmentation, Overlap, and Duplication in 2011 – 2014 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 (USDA) 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 save taxpayers millions of 

dollars annually without affecting the safety of catfish intended for human consumption. 

○

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.

●

 

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); 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); and GAO, 2013 Annual Report: Actions Needed to Reduce Fragmentation, 

Overlap, and Duplication and Achieve Other Financial Benefits. GAO-13-279SP

(Washington, D.C.: Apr 9, 2013).
 

Page 192 GAO-14-343SP Selected Tables 

Mission 

Annual 

Report

Areas identified Overall 

assessment

 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 prepositioning 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. ●

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: DOD’s fragmented approach to developing and acquiring 

uniforms could be more efficient, better protect servicemembers, and result in up to 

$82 million in development and acquisition cost savings through increased 

collaboration among the military services. 

●

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. ◐

2014 Area 1: Army Workforce Planning: To address potential overlap between two Army 

information systems that support workforce planning for weapon system maintenance, 

manufacturing, and other industrial operations, the Army should increase leadership 

attention to the issue and establish a fully developed and documented approach for 

completing a timely assessment of unnecessary overlap, which could lead to millions 

of dollars in annual savings.

a 

2014 Area 2: Contracting for Defense Health Care Professionals: DOD should develop a 

consolidated agency-wide strategy to contract for health care professionals to reduce 

fragmentation and achieve greater efficiencies. a 

2014 Area 3: Defense Satellite Control Operations: Increased use of shared satellite 

control networks and leading practices within DOD could reduce fragmentation and 

potential duplication associated with dedicated systems, resulting in millions of dollars 

in savings annually.

a 
 

Page 193 GAO-14-343SP Selected Tables 

Mission 

Annual 

Report

Areas identified Overall 

assessment

2014 Area 4: Defense Studies and Analysis Research: To address fragmentation in the 

processes used across the department to request studies and analysis research and 

limit the potential for overlap and duplication in research activities, DOD should 

establish a mechanism that requires the military services and other departmental 

offices to formally coordinate their annual research requests.

a 

2014 Area 5: POW/MIA Mission: DOD should minimize overlapping and duplicative efforts 

by examining options to reduce fragmentation and clarify guidance on roles and 

responsibilities among the eight organizations that account for missing persons and 

improve the effectiveness of the mission. 

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. 

Consolidated or 

Other

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 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 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.

●

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. ◐
 

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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: Governmentwide 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. ○

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. ◐

2014 Area 6: Federal Autism Research: Because much of the $1.2 billion that federal 

agencies spent on autism research from fiscal years 2008 through 2012 had the 

potential to be duplicative, the Interagency Autism Coordinating Committee and 

federal agencies should improve coordination and monitoring of autism research to 

help avoid unnecessary duplication.

a 

2014 Area 7: Minority AIDS Initiative: Consolidating the fragmented funding of the 

Department of Health and Human Services’ Minority AIDS Initiative into core HIV/AIDS 

funding would likely reduce grantees’ administrative burden and help the agency more 

efficiently and effectively provide services to minority populations who are 

disproportionally affected by HIV/AIDS, with the approximately $3 billion used for this 

purpose. In addition to fragmentation, we found that the services provided by Minority 

AIDS Initiative grantees overlapped with those provided by core HIV/AIDS grantees 

and were provided to similar populations; this overlap increases the administrative 

costs associated with participating in the programs. 

a 

Homeland 

security/ law 

enforcement

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

efforts to defend against biological threats. ◐
 

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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. ●

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. ○

2013 Area 8: Field-Based Information Sharing: To help reduce inefficiencies resulting from 

overlap in analytical and investigative support activities, DOJ and DHS 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. 

◐

2013 Area 9: Justice and Treasury Asset Forfeiture: Conducting a study to evaluate the 

feasibility of consolidating DOJ’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. 

◐

Income 

Security

2014 Area 8: Disability and Unemployment Benefits: Congress should consider passing 

legislation to prevent individuals from collecting both full Disability Insurance benefits 

and Unemployment Insurance benefits that cover the same period, which could save 

$1.2 billion over 10 years in the Social Security Disability Insurance program according 

to the Congressional Budget Office. 

a

2014 Area 9: Federal Employees’ Compensation and Unemployment Benefits: Changes 

to enhance the sharing of compensation and wage information between state and 

federal agencies could improve the Department of Labor’s ability to identify potentially 

improper payments, including inappropriately overlapping payments from the Federal 

Employees’ Compensation Act program and the Unemployment Insurance program 

administered by the states. 

a

Information 

technology

2012 Area 19: Information Technology Investment Management: The Office of 

Management and Budget and the Departments Defense and Energy need to address 

potentially duplicative information technology investments to avoid investing in 

unnecessary systems. ◐
 

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2013 Area 10: Dissemination of Technical Research Reports: Congress should 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. 

○

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.

◐

2014 Area 10: Interoperable Radio Communications Systems: Better collaboration 

among agencies that rely on radio communications solutions for mission-critical

operations would help to address fragmentation in their approach to improving the 

interoperability of radio communications systems and has the potential to achieve 

savings.

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. ◐

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. ◐

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. 

◐

2014 Area 11: International Religious Freedom: To promote international religious 

freedom more effectively, the Department of State and the U.S. Commission on 

International Religious Freedom should define how they are to interact in their efforts; 

the lack of defined roles has at times created tensions with foreign government 

officials.

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. ◐
 

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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 (HUD), 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.

◐

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.

◐

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. a 
 

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

higher education should better coordinate to improve program administration and help 

reduce fragmentation. ◐

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. ◐

Source: GAO analysis.

a

As of April 8, 2014, we have not assessed the 2014 areas identified. Additionally, we added 

new actions that have not yet been assessed to 2012 Area 32 and, therefore, did not provide 

an overall assessment for that area.

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.

Table 2: GAO Identified Areas of Cost-Savings and Revenue-Enhancement Opportunities in 2011 – 2014 Annual Reports

Mission 

Annual 

Report

Areas identified Overall 

assessment

Agriculture 2011 Area 35: Reducing some 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: USDA’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.

◐

2013 Area 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. 

○

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. ◐
 

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2011 Area 40: More comprehensive and complete cost data can help DOD improve the costeffectiveness of sustaining weapons systems. ◐

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

billions in unnecessary costs over time. 

Consolidated or 

Other

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. ◐

2014 Area 12: Combatant Command Headquarters Costs: The Department of Defense 

could potentially achieve tens of millions or more in cost savings annually if it (1) more 

systematically evaluates the sizing and resourcing of its combatant commands and (2) 

conducts a more comprehensive analysis of options for the location of U.S. Africa 

Command’s headquarters.

Economic 

development

a 

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 over 10 years. ◐

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

uranium could provide billions in 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.

◐

2014 Area 13: Advanced Technology Vehicles Manufacturing Loan Program: Unless the 

Department of Energy can demonstrate demand for new Advanced Technology 

Vehicles Manufacturing loans and viable applicants, Congress may wish to consider 

rescinding all or part of the remaining $4.2 billion in credit subsidy appropriations.

a
 

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General 

government

2011 Area 46: Efforts to address governmentwide 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 save billions of dollars annually. 

Consolidated or 

Other

2011 Area 49: Adherence to new 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 the end of fiscal year 2012 

through the continued disposal of unneeded federal real property. 

a

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

leasing decisions could save millions of dollars. 

Consolidated or 

Other

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. ◐

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. ○
 

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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 governmentwide. ●

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.

Consolidated or 

Other

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 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. 

◐

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.

◐

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.

◐

2014 Area 14: Coin Inventory Management: The Federal Reserve should develop a 

process to assess factors influencing coin management costs and identify practices that 

could potentially lead to millions of dollars in revenue enhancement. a 

2014 Area 15: Collection of Unpaid Federal Taxes: The federal government can increase 

tax revenue collections by hundreds of millions of dollars over a 5-year time period by 

identifying and taking actions to limit issuance of passports to applicants, levy payments 

to Medicaid providers, or identify security-clearance applicants with unpaid federal 

taxes. 

a 

2014 Area 16: Federal Real Property Ownership and Leasing: The General Services 

Administration could potentially achieve millions of dollars in savings by using capitalplanning best practices to create a long-term strategy for targeted ownership 

investments to replace some high-value leases.

a 

2014 Area 17: Online Taxpayer Services: The Internal Revenue Service could potentially 

realize hundreds of millions of dollars in cost savings and increased revenues by 

enhancing its online services, which would improve service to taxpayers and encourage 

greater tax law compliance. 

a 
 

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2014 Area 18: Real Estate-Owned Properties: Improvements to the Department of Housing 

and Urban Development’s Federal Housing Administration’s disposition and oversight 

practices for foreclosed properties could produce increased sales proceeds and savings 

from maintenance and other expenses from holding properties totaling hundreds of 

millions of dollars per year.

a 

2014 Area 19: Reverse Auctions in Government Contracting Including Commercial 

Items: Due to increasing government use of reverse auctions—with over $1 billion 

awarded in contracts in fiscal year 2012—additional guidance may help maximize 

opportunities to increase competition and improve the accuracy of estimated cost 

savings. 

a 

2014 Area 20: Tax Policies and Enforcement: The Internal Revenue Service can realize 

cost savings and increase revenue by, among other things, identifying continued 

offshore tax evasion and evaluating whether the agency’s streamlined corporate audit 

process is meeting its goals.

Health

a 

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

attention and action by CMS. ◐

2011 Area 72: Federal oversight over 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: 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.

◐

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.

◐

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. 

○

2014 Area 21: Medicaid Demonstration Waivers: Federal spending on Medicaid 

demonstrations could be reduced by billions of dollars if the Department of Health and 

Human Services (HHS) were required to improve the process for reviewing, approving, 

and making transparent the basis for spending limits approved for Medicaid 

demonstrations. GAO’s work between 2002 and 2013 has shown that HHS approved 

several demonstrations without ensuring that they would be budget neutral to the 

federal government.

a 
 

Page 203 GAO-14-343SP Selected Tables 

Mission 

Annual 

Report

Areas identified Overall 

assessment

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 

future funding. a

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 onetime 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.

◐

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. 

○

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. ○

2014 Area 22: Disability Insurance: The Social Security Administration could prevent 

significant potential cash benefit overpayments in the Disability Insurance program by 

obtaining more-timely earnings data to identify beneficiaries’ work activity that is beyond 

program limits and suspend benefits appropriately.

a

2014 Area 23: Veterans’ and Survivors’ Benefits: The Department of Veterans Affairs’ 

direct spending could be reduced—by an average of about $4 million annually, 

according to the Congressional Budget Office—if new statutory provisions were 

enacted, namely, a look-back review and penalty period for claimants who transfer 

assets for less than fair market value prior to applying for pension benefits that are 

available to low-income wartime veterans who are at least 65 years old or have 

disabilities unrelated to their military service. This action would help to ensure that only 

those in financial need receive benefits and make the program more consistent with 

other federal programs for low-income individuals.

Information 

technology

a

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

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

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. 

◐

2014 Area 24: Information Technology Investment Portfolio Management: The Office of 

Management and Budget and multiple agencies could help the federal government 

realize billions of dollars in savings by taking steps to better implement PortfolioStat, a 

process to help agencies manage their information technology investments. 

a 
 

Page 204 GAO-14-343SP Selected Tables 

Mission 

Annual 

Report

Areas identified Overall 

assessment

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.

○

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.

○

2014 Area 25: Better Data to Mitigate Foreclosures: The Department of Housing and 

Urban Development’s Federal Housing Administration and the Departments of Veterans 

Affairs and Agriculture could improve outcomes and better manage the costs 

associated with foreclosure mitigation efforts with additional data collection and 

analysis, potentially saving taxpayers millions of dollars on an annual and recurring 

basis.

a

2014 Area 26: Housing Choice Vouchers Rent Reform: By improving data collection and 

analysis efforts under the Moving to Work demonstration program, the Department of 

Housing and Urban Development would provide Congress with information to 

determine which rent reform option should be implemented program-wide and thereby 

potentially reduce program funding by millions of dollars or extend housing assistance 

to additional low-income households or some combination of these outcomes.

Source: GAO.

a

a

As of April 8, 2014, we have not assessed the 2014 areas identified. Additionally, we added new 

actions that have not yet been assessed to 2011 Area 50 and 2011 Area 77 and, therefore, did not 

provide an overall assessment for those areas.

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 205 GAO-14-343SP 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 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, or 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 206 GAO-14-343SP Lists of Programs Identified 

Table 1: Army Workforce Planning: List of Programs and Related Budgetary Information

Agency or 

subagency Program name Program description

Fiscal year 2013

program costs

Army 

a

Army Workload and Performance 

System

Information system that produces management 

reports and decision support tools intended to assist 

the Army in linking its industrial workload demands 

to its workforce requirements.

$7,900,000

Army Logistics Modernization Program Enterprise resource planning system that supports 

operations conducted at the Army’s industrial sites. 

It is the primary source of data for the Army 

Workload and Performance System.

345,600,000

Source: GAO analysis of Army data.

a

According to the Army, the Army Workload and Performance System costs are actual costs, and the 

Logistics Modernization Program costs are estimated costs.

Table 2: Contracting for Defense Health Care Professionals: Program and Related Budgetary Information

Agency Program name Program description

Fiscal year 2011a

Department of Defense (DOD) 

obligation

Obligations for Contract Health 

Care Professionals 

Obligations on service contracts 

for health care professionals to 

supplement the care provided in 

military treatment facilities in the 

United States. 

$1.14 billion

Source: GAO analysis of Department of Defense data.

a

Fiscal year 2011 was the latest year for which complete data were available when GAO began its review.

Table 3: Defense Studies and Analysis Research: List of Joint Professional Military Education (JPME) Research Institutions 

and Related Budgetary Information 

College or university Associated research institution Funding fiscal year 2013

National Defense University 

a

Center for Complex Operations $16,827,000

Center for Strategic Research 

Center for Study of Chinese Military Affairs 

Center for Study of Weapons of Mass Destruction 

Center for Technology & National Security Policy

Conflict Records Research Center 

Center for Transatlantic Security Studiesb 

Air University Air Force Research Institute $4,298, 000

Center for Strategy and Technology 

Air Force Counterproliferation Center 

Naval War College Strategic Research Department $6,752,000

China Maritime Studies Institute 

International Law Department 

Strategic Studies Group
 

Page 207 GAO-14-343SP Lists of Programs Identified 

College or university Associated research institution Funding fiscal year 2013

Marine Corps University 

a

History Division $3,724,000

Middle East Studies 

Center for Advanced Operational Culture Learning 

Translational Research Group 

Army War College Strategic Studies Institute $3,515,000

Army Command & General Staff College Center for Army Leadership $5,440,000

Combat Studies Institute 

Source: GAO analysis of Department of Defense data.

Note: “JPME Research institutions” refers to those affiliated with service and joint colleges and 

universities. These research institutions support the professional military education mission at their 

associated colleges and universities in addition to conducting research. The scope of GAO’s March 

2014 review did not include collecting financial information from all organizations which conduct 

studies and analysis research. Therefore, GAO is not reporting financial information for other 

Department of Defense-funded research organizations.

a

JPME research institutions receive funding through their colleges and universities and other 

departmental offices for their operations, which include research activities. Specifically, this funding 

includes direct funding from their respective military service, reimbursements from other departmental 

offices, or in some instances, monetary gifts from their associated college or university. Nominal 

dollars, unadjusted for inflation. 

b

National Defense University’s Center for Transatlantic Security Studies was disestablished in 

September 2012.

Table 4: POW/MIA Mission: Agency Responsibilities and Related Budgetary Information

Organization Responsibilities

Fiscal year 2012 

obligations

Defense Prisoner of War/Missing 

Personnel Office

a

Within the Office of the Under Secretary of Defense, leads the 

national effort to account for personnel who are missing as a 

result of hostile action Defense Prisoner of War/Missing 

Personnel Office (DPMO) is responsible for, among other things, 

overseeing archival research and rendering final analytic 

judgments as to what constitutes fullest possible accounting for 

each case by identifying possibilities for future action, or 

determining when no further pursuit is possible. 

$20,339,000

Joint Prisoner of War/ Missing in Action 

Accounting Command

Reports to U.S. Pacific Command. Responsible for conducting 

field operations in support of achieving the missing persons 

accounting mission.

97,864,000

Armed Forces DNA Identification 

Laboratory

Reports to the Army Surgeon General. Conducts DNA analyses 

of missing persons remains from past military conflicts and 

maintains the past conflict accounting family reference sample 

database, to include processing of all DNA references.

10,682,000

Life Sciences Equipment Laboratory

b

Part of the Air Force Materiel Command. Analyzes and identifies 

life science equipment-related artifacts that have been recovered 

and may potentially be related to missing persons cases.

 188,000

Army service casualty office Army’s primary liaison for families concerning missing persons 

recovery and accounting, including gathering family DNA 

reference samples, coordinating responses to family inquiries 

and concerns, and maintaining family contact information. Assists 

families and helps explain the methods used to account for their 

missing loved ones. 

2,082,000

Navy service casualty office Navy’s primary liaison for families concerning missing persons 

recovery and accounting. including gathering family DNA 

reference samples, coordinating responses to family inquiries 

and concerns, and maintaining family contact information. . 

Assists families and helps explain the methods used to account 

for their missing loved ones. 

536,000
 

Page 208 GAO-14-343SP Lists of Programs Identified 

Organization Responsibilities

Fiscal year 2012 

obligations

Marine Corps service casualty office

a

Marine Corps’ primary liaison for families concerning missing 

persons recovery and accounting, including gathering family DNA 

reference samples, coordinating responses to family inquiries 

and concerns, and maintaining family contact information. Assists 

families and helps explain the methods used to account for their 

missing loved ones. 

83,000

Air Force service casualty office Air Force’s primary liaison for families concerning missing 

persons recovery and accounting, including gathering family DNA 

reference samples, coordinating responses to family inquiries 

and concerns, and maintaining family contact information. Assists 

families and helps explain the methods used to account for their 

missing loved ones. 

244,000

Total $132,018,000

Source: GAO analysis of accounting community organizations’ funding data.

Note: Many DOD organizations, collectively known as the missing persons accounting community, 

have a role in accounting for the missing. Section 1509 of Title 10 of the United States Code defines 

the members of DOD’s Prisoner of War/Missing in Action accounting community, who are assigned 

roles by statute or by DOD directives and instructions. See 10 U.S.C. §§ 1501(a) and 1509(b)(2); 

DOD Directive 5110.10, Defense Prisoner of War/Missing Personnel Office (Sept. 21, 2005); and 

DOD Directive 2310.07E, Personnel Accounting—Losses Due to Hostile Acts (Nov. 10, 2003, 

certified current as of Aug. 21, 2007). While many of these organizations have responsibilities outside 

of the missing persons accounting mission, only their roles for this mission are described here. In 

addition to these members of the missing persons accounting community, other organizations play a 

role in the missing persons accounting process, including the Office of the Under Secretary of 

Defense for Personnel and Readiness, the Chairman of the Joint Chiefs of Staff, the Office of the 

Under Secretary of Defense for Intelligence, and the State Department. In addition, family and 

veterans organizations serve as constituency groups to the accounting community.

a

These amounts do not include indirect costs, such as the personnel costs for the service casualty 

offices or associated with the augmentees used for recovery missions, airlift costs, and funeral 

expenses associated with burials. An augmentee is an individual placed to meet unfunded, temporary 

manpower requirements.

b

The Armed Forces DNA Identification Laboratory obligation amounts do not include additional 

funding from the Defense Health Program, biometrics partners, or grants for other mission sets.

Table 5: Federal Autism Research: List of Agencies and Related Budgetary Information 

Federal agency

Number of autism

research projects

2008-20012

Funds awarded for projects

fiscal years 2008-2012 

Administration for Children and Families 1 $100,000

Agency for Healthcare Research and Quality 5 6,987,860

Centers for Disease Control and Prevention 42 77,290,758

Centers for Medicare & Medicaid Services 4 883,846

Department of Defensea 64 25,954,015

Department of Education 55 48,671,086

Environmental Protection Agency 1 2,271,501

Health Resources and Services Administration 38 44,724,023

National Institutes of Health 964 960,507,499

National Science Foundation 31 15,076,379

Substance Abuse and Mental Health Services Administration 1 450,000

Source: GAO analysis of data from federal agencies that funded autism research.

a

The number of autism research projects and funds awarded for the Department of Defense do not 

include its projects and funding for fiscal year 2012.
 

Page 209 GAO-14-343SP Lists of Programs Identified 

Table 6: Minority AIDS Initiative: List of Agencies and Related Budgetary Information

Agency Funding stream Agency use of funding stream

Fiscal year 2012 

funding

Health Resources and 

Services Administration 

(HRSA) 

HRSA Minority AIDS 

Initiative (MAI) 

Awarded grants for outpatient medical care, mental 

health and oral health services, local pharmacy 

assistance, substance abuse treatment, outreach, case 

management, early intervention services, treatment 

adherence, health education/risk reduction, nutritional 

services, specialty care, pediatric care, women’s health, 

access to clinical trials, technical assistance, training, 

and education.

$151,500,000

HRSA Secretary’s MAI Fund 

(SMAIF)a Awarded grants for outreach to minority populations and training to HIV providers, contracts promoting linkages to 

care for HIV/AIDS clients, and cooperative agreements 

to support networks of HIV care by enhancing primary 

medical care.

$4,500,000

Centers for Disease Control 

and Prevention (CDC)

CDC MAI Awarded grants for capacity building, evaluation, HIV 

prevention, demonstration projects, and research 

activities to individuals disproportionately affected by 

HIV/AIDS. 

$93,592,000

CDC SMAIF Awarded grants for capacity building, evaluation, HIV 

prevention, surveillance, demonstration projects, and 

research efforts.

$16,897,890

Substance and Mental 

Health Services 

Administration (SAMHSA) 

SAMHSA MAI Awarded grants for enhanced and expanded the 

provision of effective, culturally competent HIV/AIDSrelated mental health, HIV testing and outreach services; 

reentry programs hepatitis education; technical 

assistance; behavioral health, and substance abuse 

treatment services in minority communities for persons 

living with HIV/AIDS. 

$117,223,515

SAMHSA SMAIF Awarded grants to expand the capacity for providers to 

deliver rapid HIV testing, counseling and referrals to 

care; provide training and technical assistance HIV 

outreach and awareness, as well as provide HIV testing 

on college campuses and universities.

$3,399,996

Indian Health Service SMAIF Awarded grants for HIV screening services, capacity 

building, and access to care services, online HIV training 

for clinicians, HIV screening services, and behavioral 

interventions for tribal communities.

$3,990,000

Office of Adolescent Health SMAIF Awarded a grant for management of a resource center 

website and technical assistance. The Office of 

Adolescent Health also developed a web-based 

Resource Center focused on HIV/AIDS prevention 

among adolescents; synthesized existing and emerging 

research as resources for adolescent HIV prevention; 

and served as resource for capacity-building for program 

staff and communities to implement HIV/AIDS prevention 

for adolescents.

$200,000

Office of HIV/AIDS and 

Infectious Disease Policy 

(OHAIDP) 

SMAIF Awarded grants for technical assistance, education, and 

outreach via AIDS.gov. OHAIDP also awarded grants for 

outreach, education, technical assistance, HIV testing, 

and capacity building for the Minority Serving Institutions 

HIV/AIDS Prevention Demonstration Initiative. Funds 

were used for the National HIV testing mobilization 

campaign, and to coordinate for the National HIV/AIDS 

Strategy.

$3,385,000
 

Page 210 GAO-14-343SP Lists of Programs Identified 

Agency Funding stream Agency use of funding stream

Fiscal year 2012 

funding

Office of Minority Health SMAIF Awarded grants for capacity building, technical 

assistance, health promotion and education, access to 

testing and care, counseling, peer education, and links to 

social and support services.

$4,800,000

Office of Population Affairs SMAIF Awarded grants to health departments, community 

health centers, Planned Parenthood, as well as other 

organizations including non-profits, universities, 

hospitals, faith-based organizations, tribal health centers, 

and free-standing family planning organizations for the 

provision of expanded HIV testing, prevention education, 

and referrals to care.

$6,800,000

Office of Women’s Health SMAIF Awarded contracts and cooperative agreements for HIV 

prevention and education services to women living in the 

United States Virgin Islands, Puerto Rico, and Native 

American women, as well as women sexually involved 

with an incarcerated or recently released partner. 

Additionally, the Office of Women’s Health awarded 

grants for outreach and education services and events 

including the National HIV/AIDS Awareness Day and the 

Young Women’s Mobilization project.

$4,100,000

Regional Health 

Administrators

SMAIF Awarded a contract to provide capacity building services. $1,900,000

Source: GAO analysis of HRSA, CDC, SAMHSA, OAH and OHAIDP data.

a

MAI funds administered by the Department of Health and Human Services’ Office of the Secretary, 

referred to as the Secretary’s MAI Fund, are distributed by to HRSA, CDC, SAMHSA, and seven 

other HHS agencies and offices. These agencies and offices, in turn, award SMAIF grants. In fiscal 

year 2011, the Office of the Secretary received a $52.8 million appropriation for SMAIF which 

OHAIDP distributed.

Table 7: Disability and Unemployment Benefits: List of Federal Programs and Related Budgetary Information

Agency Program name Program description

Fiscal year 2012

benefit disbursements 

Social Security Administration Disability Insurance Disability Insurance provides benefits to 

replace lost earnings for eligible workers 

who have qualifying disabilities, and their 

eligible family members. 

$136,925,000,000

Department of Labor Unemployment Insurance Unemployment Insurance provides 

temporary cash benefits to eligible 

workers who are able to work but remain 

involuntarily unemployed.

90,430,000,000

Sources: GAO analysis of Social Security Administration and Department of Labor data.

Table 8: Federal Employees’ Compensation and Unemployment Benefits: List of Programs and Related Budgetary 

Information 

Agency Program name Program description

Fiscal year 2012 benefit 

disbursements

Department of Labor

Office of Workers’ 

Compensation Programs

Federal Employees’ 

Compensation Act (FECA) 

program

The FECA program provides monetary 

and medical benefits to Federal workers 

who sustain work-related injury or 

disease.

$2,677,000,000
 

Page 211 GAO-14-343SP Lists of Programs Identified 

Agency Program name Program description

Fiscal year 2012 benefit 

disbursements

Employment and Training 

Administration

Unemployment Insurance Unemployment Insurance provides 

temporary cash benefits to eligible 

workers who are able to work but 

remain involuntarily unemployed.

90,430,000,000

Source: GAO analysis of Department of Labor data.

Table 9: International Religious Freedom: List of Federal Entities 

Source: GAO analysis of the International Religious Freedom Act of 1998, as amended.

a

See International Religious Freedom Act of 1998, Pub. L. No. 105-292 (1998), as amended by later 

acts such as A Bill to Amend the International Religious Freedom Act of 1998 to Provide Additional 

Administrative Authorities to the United States Commission on International Religious Freedom, and 

to Make Technical Corrections to the Act, and for other purposes, Pub. L. No. 106-55 (1999) and the 

United States Commission on International Religious Freedom Reform and Reauthorization Act of 

2011, Pub. L. No. 112-75 (2011). 

b

Although the Act directs that the Ambassador is the head of the Office, it does not explicitly outline 

responsibilities for the Office. State officials said that the primary responsibilities of the Office mirror 

those established for the Ambassador. 

Table 10: Combatant Command Headquarters Costs: List of Command Types and 

Related Budgetary Information 

Department of Defense command type

Fiscal year 2012 mission and

headquarters- support costs

Geographic Combatant Commands

a

$ 1,100,000,000

Service Component Commands 600,000,000

Total 1,700,000,000

Source: GAO analysis of Department of Defense data. 

Note: The data reflect mission and headquarters-support costs at U.S. Africa Command, U.S. 

European Command, U.S. Northern Command, U.S. Pacific Command, and U.S. Southern 

Command and their supporting service component commands. It excludes U.S. Central Command 

and its service component commands. Numbers may reflect rounding.

a

Federal entity

Mission and headquarters-support costs reflect the costs for civilian personnel and contract services, 

among other costs for operations and maintenance. This does not include the costs associated with 

military personnel basic pay and allowances and other military personnel costs. Mission and 

headquarters support costs in this report section are in constant fiscal year 2012 dollars. Costs were 

Responsibilities outlined in International

Religious Freedom Act of 1998, as amendeda

The Department of State Office of 

International Religious Freedom 

 

The Ambassador-at-Large for International Religious Freedom is the head of the 

Office, and the Act outlines the Ambassador’s four primary responsibilities:

(1) promote religious freedom, (2) serve as a principal adviser to the President and 

Secretary of State on religious freedom issues abroad, (3) represent the U.S. 

government diplomatically in matters relevant to religious freedom abroad, and (4) 

report on the status of international religious freedom annually.b

 

United States Commission for International 

Religious Freedom (USCIRF) 

The Act outlines two primary responsibilities for USCIRF: (1) review the facts and 

circumstances of violations of religious freedom and (2) make policy 

recommendations to the President, Secretary of State, and Congress with respect to 

these matters. In addition, the Act requires the Commission to issue an annual report 

setting forth its recommendations for U.S. policy options based on its evaluation of the 

facts and circumstances presented in State’s annual report and of information from 

other sources where appropriate. The Act also authorizes USCIRF to hold hearings, 

conduct travel, and secure information from any federal agency as necessary to carry 

out its duties.
 

Page 212 GAO-14-343SP Lists of Programs Identified 

adjusted for inflation using the deflator for DOD total obligation authority by appropriation titleoperation and maintenance, excluding the defense health program. 

Table 11: Advanced Technology Vehicles Manufacturing Loan Program: Program and Related Budgetary Information

Agency Program name Program description

Remaining credit

subsidy appropriations

Department of Energy Advanced Technology Vehicles 

Manufacturing loan program

Provides loans to manufacturers for projects 

to produce more fuel-efficient passenger 

vehicles and their components.

$4,200,000,000

Source: GAO analysis of Department of Energy data.

Table 12: Coin Inventory Management: List of Agencies and Related Budgetary Information

Federal program Program activity Description

Program costs

fiscal year 2012

Federal Reserve System: 

Reserve Banks

Coin management Coin management includes the Cash Product Office’s 

administration, coin handling, and interbank coin 

transfer costs.a 

$62,000,000

Source: GAO analysis of Federal Reserve information.

Note: The Federal Reserve System’s Reserve Banks are self-funded entities that engage in a variety 

of activities that generate revenue, such as earnings from lending to financial institutions. The costs of 

operating the Federal Reserve System are deducted from these revenues and the remaining amount 

is transferred to the General Fund of the U.S. Treasury (General Fund). The Cash Product Office 

manages the Reserve Bank’s coin inventory from a national perspective.

a

These costs are indirect costs to the government because the Federal Reserve incurs the costs and 

the amounts it remits to the U.S. Treasury are less the costs related to coins. Reserve Bank costs 

related to coin management include, for example, support costs (e.g., utilities and information 

technology) and direct costs (e.g., personnel and equipment).

Table 13: Federal Real Property Ownership and Leasing: Program and Related Budgetary Information

Agency Program name Program description

Fiscal year 2012 obligational 

authority to lease space in 

privately-owned buildings

General Services 

Administration (GSA)

a

Real property leasing GSA leases space for federal agencies in 

privately-owned buildings where 

federally-owned space is not available. 

$5,210,198,000

Source: GAO analysis of GSA data.

a

The primary means of financing the operating and capital costs associated with federal space is the 

Federal Buildings Fund, a revolving fund financed by rents received from other agencies and 

authorized and established by the Public Buildings Act Amendments of 1972. Pub. L. No. 92-312 

(1972). The Federal Buildings Fund is administered by GSA. Congress exercises control over the 

Federal Buildings Fund through the appropriations process that sets annual limits—called obligational 

authority—on how much of the fund can be obligated for various activities. GSA, as an executive 

branch agency, requests obligational authority from Congress as part of the annual President’s 

Budget Request. In annual appropriations legislation, Congress provides obligational authority to

GSA to incur obligations and make expenditures from the Federal Buildings Fund in five categories of 

activities, including rental of space, which funds leases of privately owned space or buildings for 

federal agencies.
 

Page 213 GAO-14-343SP Lists of Programs Identified 

Table 14: Real Estate-Owned Properties: List of Agencies and Appraised Value of Real Estate-Owned Dispositions

Agency and subagency

Description of subagency’s

role in real estate-owned process

Total

appraised value of FHA’s 2011

real estate-owned dispositions

Housing and Urban Development 

Federal Housing Administration (FHA) Manages and disposes of real estate-owned properties 

resulting from foreclosure on homes with mortgages 

insured through its Mutual Mortgage Insurance Fund. 

$9,125,000,000

Source: GAO analysis of FHA data.

Table 15: Medicaid Demonstration Waivers: Program and Related Budgetary Information

Agency Program name Program description

Fiscal year 2013 

federal expenditure

Department of Health and 

Human Services

Medicaid Demonstration Waivers Demonstration projects that are 

likely to promote Medicaid 

objectives. 

$70,000,000,000

Source: Centers for Medicare & Medicaid Services.

Table 16: Disability Insurance: Program and Related Budgetary Information

Agency Program name Program description

Fiscal year 2012

benefit disbursements

Social Security 

Administration

Disability Insurance Disability Insurance provides benefits to replace 

lost earnings for eligible workers who have 

qualifying disabilities, and their eligible family 

members. 

$136,925,000,000

Source: Social Security Administration.

Table 17: Veterans’ and Survivors’ Benefits: Program and Related Budgetary Information 

Agency Program name Program description

Fiscal Year 2012 

obligation

Department of Veterans 

Affairs 

Pensions Provides cash benefits to bring veterans’ total 

income, including other retirement or Social Security 

income, to a level set by Congress. 

$4,892,758,000

Source: GAO analysis of Department of Veterans Affairs data.

Table 18: Information Technology Investment Portfolio Management: List of 

Agencies Required to Implement PortfolioStat

Federal agency

U.S. Agency for International Development

U.S. Army Corps of Engineers

U.S. Department of Agriculture

Department of Commerce
 

Page 214 GAO-14-343SP Lists of Programs Identified 

Federal agency

Department of Defense

Department of Education

Department of Energy

Department of Health and Human Services

Department of Homeland Security

Department of Housing and Urban Development

Department of the Interior

Department of Justice

Department of Labor

Department of State

Department of Transportation

Department of the Treasury

Department of Veterans Affairs

Environmental Protection Agency

General Services Administration

National Aeronautics and Space Administration

National Archives and Records Administration

National Science Foundation

U.S. Nuclear Regulatory Commission

Office of Personnel Management

Small Business Administration

Social Security Administration

Source: Office of Management and Budget.

Table 19: Better Data to Mitigate Foreclosures: List of Programs and Related Budgetary Information

Agency or subagency Program Program Description

Fiscal year 2012 

commitments

Housing and Urban Development

a

Federal Housing 

Administration (FHA)

Mutual Mortgage Insurance, 

Single Family, Guaranteed 

Loans

FHA provides mortgage insurance to private lenders 

against losses from borrower defaults on mortgages 

that meet FHA requirements.

$160,500,000,000

Agriculture

Rural Housing Service 

(RHS)

502 Single Family Guaranteed 

loans

RHS provides loan guarantees to private lenders 

against losses from borrower defaults on mortgages 

that meet RHS requirements.

24,000,000,000

Veterans Affairs 

Veterans Benefits 

Administration 

Housing Guaranteed Loans Veterans Benefits Administration provides ‘s loan 

guarantees to private lenders against losses from 

borrower defaults on mortgages that meet VA 

requirements.

63,941,043,000

Source: GAO analysis of the Fiscal Year 2013 Federal Credit Supplement of the Budget of the U.S. Government.

a

Commitments are defined as an agency’s administrative reservation of funds in anticipation of 

obligating those funds. These commitments are then used by the agency to make loan guarantees 

under specified conditions.
 

Page 215 GAO-14-343SP Lists of Programs Identified 

Table 20: Housing Choice Vouchers Rent Reform: List of Federal Programs and Related Budgetary Information

Agency or subagency Program name Program description

Fiscal year 2012 

obligation

Department of Housing 

and Urban Development

Housing Choice Voucher 

Program 

The Housing Choice Voucher program 

subsidizes private-market rents for low-income 

households.

$18,316,054,000 

Moving to Work Demonstration 

Program

The Moving to Work demonstration program 

gives participating housing agencies the 

flexibility to design and test innovative strategies 

for providing and administering housing 

assistance in their communities.

N/A

Source: GAO analysis of Department of Housing and Urban Development data.

a

a

The agencies participating in the Moving to Work demonstration program do not receive special 

funding allocations. Rather, they receive funds from multiple HUD programs, including Housing 

Choice Vouchers.

(250744)
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