Report to Congressional Addressees

April 2015

GAO-15-404SP

United States Government Accountability Office

2015 Annual Report: 

Additional 

Opportunities to 

Reduce

Fragmentation,

Overlap, and

Duplication and 

Achieve Other 

Financial Benefits
Page 1 GAO-15-404SP 2015 Annual Report 

441 G St. N.W.

Washington, DC 20548

April 14, 2015

Congressional Addressees

The gap between federal revenue and spending has created a long-term 

fiscal imbalance.1

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 

bring these opportunities to light, Congress included a provision in statute 

for GAO 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.

Absent fiscal policy changes, this imbalance leads to 

continuous growth in federal debt that is unsustainable. Addressing this 

imbalance will require long-term changes to both spending and revenue, 

which will likely require difficult fiscal policy decisions. Significant action to 

mitigate this imbalance must be taken soon to minimize the disruption to 

individuals and the economy.

2

In our first four annual reports issued from 2011 through 2014, we 

presented 188 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 

As part of 

this work, we also identify additional opportunities to achieve greater 

efficiency and effectiveness that result in cost savings or enhanced 

revenue collection.

 

1

GAO’s analysis of the Federal Fiscal Outlook can be found at 

http://www.gao.gov/fiscal_outlook/federal_fiscal_outlook/overview. See also, GAO, 

Financial Audit: U.S. Government’s Fiscal Years 2014 and 2013 Consolidated Financial 

Statements, GAO-15-341R (Washington, D.C.: Feb. 25, 2015), and Congressional Budget 

Office, The Budget and Economic Outlook: 2015 to 2025 (Washington, D.C.: Jan. 26, 

2015).

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.

 
 

Page 2 GAO-15-404SP 2015 Annual Report 

revenue.3

Figure 1: Definitions of Fragmentation, Overlap, and Duplication

Figure 1 outlines the definitions we use for fragmentation, 

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

identified approximately 440 actions that executive branch agencies and 

Congress could take to address the opportunities for greater efficiency 

and effectiveness that we identified.

 

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), 

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), 

and 2014 Annual Report: Additional Opportunities to Reduce Fragmentation, Overlap, and 

Duplication and Achieve Other Financial Benefits, GAO-14-343SP (Washington, D.C.: 

Apr. 8, 2014).
 

Page 3 GAO-15-404SP 2015 Annual Report 

This report is our fifth 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. In 2013, we 

launched GAO’s Action Tracker, a publicly accessible website that allows 

executive branch agencies, Congress, and the public to track the 

progress the government is making in addressing the issues we have 

identified. We plan to add areas and suggested actions identified in future 

reports to GAO’s Action Tracker and periodically update the status of all 

identified areas and activities.

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, 

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 or GAO’s quality assurance framework.4

See appendix II for more information on our scope and methodology.

 

4

We conducted the work for Area 16: U.S. Enrichment Corporation Fund under GAO’s 

quality assurance framework. We use this framework when we conduct routine nonaudits, 

such as technical assistance provided to Congress. GAO’s quality assurance framework 

requires that we plan and perform the engagement to meet our stated objectives and to 

discuss any limitations in our work. We maintain that the information and data obtained, 

and the analysis conducted, provide a reasonable basis for our findings and conclusions.
 

Page 4 GAO-15-404SP 2015 Annual Report 

In this report, we present 66 actions that the executive branch or

Congress could take to improve efficiency and effectiveness across 24 

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

suggest 20 actions to address 12 new areas in which we found evidence 

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

agriculture, defense, health, homeland security, information technology, 

international affairs, and science and the environment. In addition, we 

present 46 opportunities for executive branch agencies or Congress to 

take actions to reduce the cost of government operations or enhance 

revenue collections for the U.S. Treasury across 12 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, including the 

following example:

• Consumer Product Safety Oversight: Oversight of consumer product 

safety involves at least 20 federal agencies, including the Consumer 

Product Safety Commission (CPSC), resulting in fragmented 

oversight across agencies. Although agencies reported that the 

involvement of multiple agencies with various expertise can help 

ensure more comprehensive oversight by addressing a range of 

safety concerns, they also noted that fragmentation can result in 

unclear roles and potential regulatory gaps. In addition, we found that 

although the agencies we reviewed for a November 2014 report 

collaborated on a variety of issues, they also reported that they face 

challenges when they work collaboratively. These challenges include 

staying informed about the regulatory activities of other agencies, 

coordinating on jurisdictional issues, and considering options to share 

data rather than purchasing the same data under multiple contracts. 

Although a number of agencies have an oversight role in consumer 

product safety, no single entity has the expertise or authority to 

address the full scope of product safety activities. Moreover, some 

oversight agencies are independent regulatory agencies and not 

subject to the Office of Management and Budget’s (OMB) interagency 

planning process and review of draft rules within the executive 

branch. In past work, GAO has noted that interagency mechanisms or 

strategies to coordinate programs that address crosscutting issues 

may reduce potentially duplicative, overlapping, and fragmented 

efforts. To strengthen coordination and achieve greater efficiency in 

New Opportunities 

Exist to Improve 

Efficiency and 

Effectiveness 

Identified across the 

Federal Government

20 Suggested Actions to 

Address New Evidence of 

Fragmentation, Overlap, 

or Duplication in 12 Areas
 

Page 5 GAO-15-404SP 2015 Annual Report 

oversight across consumer product safety agencies more broadly, we 

suggested that Congress consider establishing a formal 

comprehensive oversight mechanism for consumer product safety 

agencies to address crosscutting issues as well as inefficiencies 

related to fragmentation and overlap such as communication and 

coordination challenges and jurisdictional questions between 

agencies. Mechanisms could include, for example, formalizing 

relationships and agreements among consumer product safety 

agencies or establishing a task force or interagency work group. 

CPSC, the Department of Homeland Security (DHS), the Department 

of Housing and Urban Development, and the Department of 

Commerce’s National Institute of Standards and Technology agreed 

with GAO’s matter for congressional consideration, while the 

remaining agencies neither agreed nor disagreed.

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:

• Nonemergency Medical Transportation: Forty-two programs across 

six different federal departments provide nonemergency medical 

transportation (NEMT) to individuals who cannot provide their own 

transportation due to age, disability, or income constraints.5 For 

example, NEMT programs at both Medicaid, within the Department of 

Health and Human Services (HHS), and the Department of Veterans 

Affairs (VA) have similar goals (to help their respective beneficiaries 

access medical services), serve potentially similar beneficiaries (those 

individuals who have disabilities, are low income, or are elderly), and 

engage in similar activities (providing NEMT transportation directly or 

indirectly). 

We found a number of challenges to coordination for these programs. 

For example, Medicaid and VA largely do not participate in NEMT 

coordination activities in the states we visited, in part because both 

programs are designed to serve their own populations of eligible 

 

5

The six federal departments are the Departments of Agriculture, Health and Human 

Services, Education, Housing and Urban Development, Transportation, and Veterans 

Affairs. 
Page 6 GAO-15-404SP 2015 Annual Report

beneficiaries. We also found that using certain coordination 

strategies—in particular, cost or ride sharing—could increase the risk 

of Medicaid funds being spent for individuals who do not qualify for 

Medicaid benefits. Without proper controls, cost or ride sharing with 

other non-Medicaid programs could allow for improper payments for 

individuals who do not qualify for Medicaid. Because Medicaid and VA 

are important to NEMT, as they provide services to potentially over 90 

million individuals, greater interagency cooperation is needed to 

enhance services to transportation-disadvantaged individuals. An 

interagency coordinating council was developed to enhance federal, 

state, and local coordination activities, and it has taken some actions 

to address human service-transportation program coordination. 

However, the council has provided limited leadership and has not 

convened since 2008. For example, the council has not issued key 

guidance documents that could promote coordination, including an 

updated strategic plan. 

To improve efficiency, we recommended that the Department of 

Transportation, which chairs the interagency coordinating council, 

should take steps to enhance coordination among the programs that 

provide NEMT. In response to this recommendation, DOT agreed that 

more work is needed to increase coordination activities with all HHS 

agencies, especially the Centers for Medicare & Medicaid Services 

(CMS). DOT also said the Federal Transit Administration is asking its 

technical assistance centers to assist in developing responses to 

NEMT challenges.

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. We 

found duplication among federal programs or initiatives in a variety of 

areas, including the following:

• DOD US Family Health Plan: The US Family Health Plan (USFHP)—a 

statutorily required component of the Department of Defense’s (DOD) 

Military Health System—duplicates the same TRICARE Prime benefit 

that is offered to military beneficiaries by DOD managed care support 

contractors.6

 6

TRICARE-eligible beneficiaries include active duty personnel and their dependents, 

medically eligible Reserve and National Guard personnel and their dependents, and 

retirees and their dependents and survivors. 

The USFHP was initially incorporated into the Military 
Page 7 GAO-15-404SP 2015 Annual Report

Health System in 1982 when Congress enacted legislation 

transferring ownership of certain U.S. Public Health Service hospitals 

to specific health care providers, referred to as designated providers 

under the program. During the implementation of the TRICARE 

program in the 1990s, Congress required the designated providers to 

offer the TRICARE Prime benefit to their enrollees in accordance with 

the National Defense Authorization Act (NDAA) for Fiscal Year 1997.

Today, the USFHP remains a health care option required by statute to 

be available to eligible beneficiaries in certain locations, despite 

TRICARE’s national presence through the managed care support 

contractors. However, the USFHP has largely remained unchanged, 

and its role has not since been reassessed within the Military Health 

System.

DOD contracts with managed care support contractors to administer 

TRICARE Prime—TRICARE’s managed care option—in three regions 

in the United States (North, South, and West). Separately, TRICARE 

Prime is offered through the USFHP by designated providers in 

certain locations within the same three TRICARE regions that are 

served by a managed care support contractor. Thus, the USFHP 

offers military beneficiaries the same TRICARE Prime benefit that is 

offered by the managed care support contractors across much of the 

same geographic service areas and through many of the same 

providers. As a result, DOD has incurred added costs by paying the 

USFHP designated providers to simultaneously administer the same 

TRICARE Prime benefit to the same population of eligible 

beneficiaries in many of the same locations as the managed care 

support contractors. To eliminate this duplication within DOD’s health 

system and potentially save millions of dollars, we suggested that 

Congress terminate the statutorily required USFHP.

• EPA’s and FDA’s Laboratory Inspections: The Environmental 

Protection Agency (EPA) and the Food and Drug Administration 

(FDA) within HHS may be duplicating each other’s work by inspecting 

the same laboratories. Although EPA and FDA entered into an 

interagency agreement to collaborate on laboratory inspections in 

1984, the agreement was not renewed in 2004 and formal 

communication ended by 2007. We found in May 2014 that they do 

not regularly communicate about scheduled inspections or share 
Page 8 GAO-15-404SP 2015 Annual Report

results from completed inspections.7

To avoid potentially duplicative inspections and use limited resources 

more efficiently, we recommended that EPA and FDA take actions to 

regularly collaborate and share information on laboratory inspections 

through a formal written agreement such as a memorandum of 

understanding that outlines how the two agencies plan to regularly 

collaborate and share information on inspections. In response to our 

recommendation, EPA agreed to work with FDA to develop written 

procedures that outline how EPA and FDA plan to collaborate and 

share information on laboratory inspections. However, EPA stated 

that it did not agree that a formal memorandum of understanding 

between the two agencies was necessary. We agree and note that we 

did not prescribe the type of agreement the agencies should 

undertake and offered a memorandum of understanding as one 

example. FDA agreed with our recommendation but reiterated that 

there are legitimate reasons why some laboratory inspections may be 

conducted by both agencies at a single laboratory within a short 

period of time. 

For example, one laboratory in 

Maryland was inspected by both EPA and FDA eight times from fiscal 

year 2005 to fiscal year 2012. A representative from this laboratory 

told us that some of the information in the laboratory’s toxicology 

studies FDA officials examined during a 2011 inspection could have 

been shared with EPA officials. By not collaborating and 

communicating regularly, EPA and FDA may be missing opportunities 

to improve efficiency and effectiveness. For example, if EPA knew in 

advance that a laboratory was recently inspected by FDA, EPA 

inspectors could use FDA’s inspection results to inform their decision 

regarding whether to conduct their own inspection. Moreover, 

information-sharing between agencies could help them leverage 

limited resources, because each agency can only inspect a certain 

number of laboratories each year.

 7

Both EPA and FDA conduct laboratory inspections to test laboratories’ compliance with 

the agencies’ Good Laboratory Practices (GLP), which are intended to ensure the quality 

and integrity of data. For example, FDA’s GLP regulations ensure the quality and integrity 

of the data for nonclinical laboratory studies of investigational drugs, medical devices, food 

additives, and other products. 
Page 9 GAO-15-404SP 2015 Annual Report

We suggest 46 actions that the executive branch and Congress can take 

to reduce the cost of government operations and enhance revenue 

collections for the U.S. Treasury in 12 areas. Examples of these actions 

include rescinding unobligated funds, re-examining the appropriate size of 

the Strategic Petroleum Reserve, modifying the way Medicare pays 

certain cancer hospitals, and increasing tax revenue collections.

• Rescinding unobligated funds: Congress may wish to consider 

permanently rescinding the entire $1.6 billion balance of the U.S. 

Enrichment Corporation (USEC) Fund, a revolving fund in the U.S. 

Treasury. As part of a 2001 GAO legal opinion, we determined that 

the USEC Fund was available for two purposes, which have been 

fulfilled: (1) environmental clean-up expenses associated with the 

disposition of depleted uranium at two specific facilities and (2) 

expenses of USEC privatization. Regarding the first authorized 

purpose, the construction of intended facilities associated with the 

disposition of depleted uranium has been completed. Regarding the 

second authorized purpose, USEC privatization was completed in 

1998 when ownership of USEC was transferred to private investors. 

In an April 2014 report to Congress, the Department of Energy’s 

(DOE) National Nuclear Security Administration stated that the USEC 

Fund was one of two sources of funding that it was exploring to 

finance research, development, and demonstration of national nuclear 

security-related enrichment technologies. However, this is not one of 

the authorized purposes of the USEC Fund. Transparency in budget 

materials is important for informing congressional decisions, and 

DOE’s efforts to utilize USEC Fund monies instead of general fund 

appropriations diminish that transparency. The House of 

Representatives included language to permanently rescind the USEC 

Fund in H.R. 4923, Energy and Water Development and Related 

Agencies Appropriations Act, which passed the House on July 10, 

2014. However, the rescission was not included in Public Law 113-

235, Consolidated and Further Continuing Appropriations Act, 2015. 

As of March 2015, legislation containing a similar rescission had not 

been introduced in the 114th Congress.

• Re-examining the appropriate size of the Strategic Petroleum 

Reserve: DOE should assess the appropriate size of the Strategic 

Petroleum Reserve (SPR) to determine whether excess crude oil 

could be sold to fund other national priorities. The United States holds 

the SPR so that it can release oil to the market during supply 

disruptions to protect the U.S. economy from damage. After decades 

of generally falling U.S. crude oil production, technological advances 

have contributed to increasing U.S. production. Monthly crude oil 

46 New Actions to Reduce 

Costs or Enhance 

Revenues Identified in 12 

Areas
Page 10 GAO-15-404SP 2015 Annual Report

production has increased by almost 68 percent from 2008 through 

April 2014, and increases in production in 2012 and 2013 were the 

largest annual increases since the beginning of U.S. commercial 

crude oil production in 1859, according to the Energy Information 

Administration (EIA).8

As of September 2014, the reserve had 106 days of imports, which 

DOE estimated was valued at about $45 billion as of December 2014. 

As a member of the International Energy Agency, the United States is 

required to maintain public and private reserves of at least 90 days of 

net imports and to release these reserves and reduce demand during 

oil supply disruptions. We found in September 2014 that DOE had 

taken steps to assess aspects of the SPR but had not recently 

reexamined its size. Without such a reexamination, DOE cannot be 

assured that the SPR is holding an appropriate amount of crude oil. If,

for example, DOE found that 90 days of imports was an appropriate 

size for the SPR, it could sell crude oil worth $6.7 billion and use the 

proceeds to fund other national priorities. In addition, by reducing the 

SPR to 90 days, DOE may be able to reduce its operating costs by 

about $25 million per year.9

• Modifying the way Medicare pays certain cancer hospitals: To better 

control Medicare spending and generate cost savings of almost $500 

million per year, Congress should consider changing Medicare’s 

payment methods for certain cancer hospitals. Medicare pays the 

majority of hospitals using an approach known as the inpatient and 

outpatient prospective payment systems (PPS). Under a PPS, 

hospitals are paid a predetermined amount based on the clinical 

classification of each service they provide to beneficiaries. Beginning 

in 1983, in response to concern that certain cancer hospitals would 

experience payment reductions under such a system, Congress 

required the establishment of criteria under which 11 cancer hospitals 

DOE concurred with our 

recommendation, stating that a broad, long-range review of the SPR 

is needed and that it has initiated a process for conducting a 

comprehensive reexamination of the appropriate size of the SPR.

 8

EIA is a statistical agency within the Department of Energy that collects, analyzes, and 

disseminates independent information on energy issues.

9

The estimated operation savings was based on GAO’s calculation of the amount of oil in 

excess of 90 days of net imports as of September 2014 and DOE’s assessment of its 

annual operating cost for the SPR at $0.25 per barrel.
Page 11 GAO-15-404SP 2015 Annual Report

are currently exempted from the inpatient PPS and receive payment 

adjustments under the outpatient PPS. Since these cancer hospitals 

were first established in the early 1980s, cancer care and Medicare’s 

payment system have changed significantly. Advances in techniques 

and drugs have increased treatment options and allowed for more 

localized delivery of care. Along with these developments, the primary 

setting for cancer care has shifted from the inpatient setting to the 

outpatient setting. In addition, Medicare’s current payment system 

better recognizes the resource intensity of hospital care than the 

system put in place in 1983.

While most hospitals are paid a predetermined amount based on the 

clinical classification of each service they provide to beneficiaries, 

Medicare generally pays these 11 cancer hospitals based on their 

reported costs, providing little incentive for efficiency. We found that if 

beneficiaries who received care at the 11 cancer hospitals had 

received inpatient and outpatient services at nearby PPS teaching 

hospitals, Medicare might have realized substantial savings in 2012. 

Specifically, we estimated inpatient savings of about $166 million; we 

calculated outpatient savings of about $303 million if forgone payment 

adjustments were returned to the Medicare Trust Fund.10

• Increasing tax revenue collections: Our 2015 annual report includes 

21 actions that the federal government should take to potentially 

enhance tax revenue in the billions of dollars. Reducing the tax gap—

the difference between taxes owed and taxes paid on time—by 1 

percent through improved collections could increase tax revenues by 

almost $4 billion annually. Given that individual income tax 

misreporting accounts for the largest portion of the estimated annual 

$385 billion net tax gap, even small changes in IRS’s enforcement 

programs could result in hundreds of millions of dollars of increased 

revenue.

Until 

Medicare pays these cancer hospitals in a way that encourages 

greater efficiency, Medicare remains at risk for overspending.

Specifically, we recommended that IRS develop and implement a 

strategy to better estimate the extent and nature of misreporting by 

partnerships and S corporations and the effectiveness of partnership 

 10We estimated this inpatient savings amount within a range of plus or minus $4 million at 

a 95 percent confidence level. This savings estimate covers 9 of the 11 cancer hospitals 

due to missing 2012 data for 2 hospitals.
Page 12 GAO-15-404SP 2015 Annual Report

examinations in detecting this misreporting.11

In addition to the new areas presented in this year’s annual report, we 

identified new actions from recently issued work that address six issues

presented in our 2011-2013 annual reports. These areas include federal 

oversight of food safety, DOD joint basing operations and efficiency, 

DOD-VA electronic health records, geospatial investments, tax 

expenditures, and new markets tax credit. In particular, in our 2011 

annual report, we reported that federal tax revenue losses for the New 

Markets Tax Credit (NMTC) were over $700 million for 2010, according to 

the Department of the Treasury (Treasury), and recommended that 

Congress consider converting the NMTC to a grant program to increase 

the equity that could be placed in low-income businesses and significantly 

reduce the $3.8 billion, 5-year revenue cost of the program. In 2014, we 

reviewed the financial structures of NMTC projects and recommended 

that Treasury issue further guidance on how other government programs 

can be combined with NMTCs; ensure adequate controls to limit the risks 

of unnecessary duplication and above-market rates of return; and ensure 

that more complete and accurate data are collected on fees and costs, 

the equity remaining in the business after 7 years, and loan 

In May 2014, we 

reported that IRS does not know the full extent of partnership and S 

corporation income misreporting. We estimated a rough order of 

magnitude of partnership and S corporation income misreported by 

individuals to be $91 billion per year in lost tax revenue for tax years 

2006 through 2009. Further, IRS has limited information on the 

effectiveness of its examinations in detecting income misreporting by 

partnerships. For example, IRS estimated that 3 percent to 22 percent 

of identified misreporting by partnerships was double counted due to 

income flowing from one partnership to another or to other related 

parties. Without reliable information on the extent of partnership 

misreporting, or the results of its partnership examinations, IRS 

cannot make fully informed decisions about whether its allocation of 

enforcement resources across business types is justified. IRS stated 

that it had not fully evaluated our recommendations but said it would 

consider all of our recommendations and identify appropriate IRS 

actions while keeping resource limitations in mind.

 11Partnerships and S corporations are flow-through entities, which are entities that 

generally do not pay taxes themselves on income, but instead, pass income or losses to 

their partners and shareholders, who must include that income or loss on their income tax 

returns.
Page 13 GAO-15-404SP 2015 Annual Report

performance.12

Finally, in addition to issues identified in our annual reports, in our 

February 2015 high-risk series update, we identified options to help 

reduce the risk of tax refund fraud due to identity theft.

We will track the status of these and the other new actions

through GAO’s Action Tracker. See appendix III for a list of the new 

actions added to these six areas.

13 Identity theft 

occurs when an identity thief files a fraudulent tax return using a 

legitimate taxpayer’s identifying information and claims a refund. IRS 

estimates it paid out $5.8 billion (the exact number is uncertain) in 

fraudulent refunds in filing season 2013 due to identity theft. While there 

are no simple solutions to combating identity refund fraud, we identified 

various options that could help, some of which would require legislative 

action. Because some of these options represent a significant change to 

the tax system that could likely burden taxpayers and impose significant 

costs to IRS for systems changes, it is important for IRS to assess the 

relative costs and benefits of the options. This assessment will help 

ensure an informed discussion among IRS and relevant stakeholders—

including Congress—on the best option (or set of options) for preventing 

identity theft refund fraud.

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

to monitor the progress that executive branch agencies or Congress have 

made in addressing the issues we identified in our last four reports. In our

2011-2014 annual reports, we identified approximately 440 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.

 12GAO, New Markets Tax Credit: Better Controls and Data Are Needed to Ensure 

Effectiveness, GAO-14-500 (Washington, D.C.: July 10, 2014).

13GAO, High-Risk Series: An Update, GAO-15-290 (Washington, D.C.: Feb. 11, 2015).

Executive Branch 

Agencies and 

Congress Continue to 

Address Actions That 

Span the Federal 

Government
Page 14 GAO-15-404SP 2015 Annual Report

Executive branch agencies and Congress have made progress in 

addressing a number of the actions we previously identified (fig. 2).14 In 

total, as of March 6, 2015, the date we completed our audit work, we 

found that 169 (37 percent) were addressed, 179 (39 percent) were 

partially addressed, and 90 (20 percent) were not addressed.15

 14In 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.

An 

additional 46 actions have been assessed as addressed over the past 

year. These addressed actions include 13 actions identified in 2011, 14

actions identified in 2012, 11 actions identified in 2013, and 8 identified in 

2014. See appendix IV for a list of all areas and the status of related 

actions.

15Twenty actions were categorized as “consolidated or other” and were not assessed due 

to additional audit work or other information we considered.

Overall Progress on 2011-

2014 Actions
Page 15 GAO-15-404SP 2015 Annual Report

Figure 2: Progress in Addressing 2011, 2012, 2013, and 2014 Actions as of the 2014 and 2015 Annual Reports

Note: Actions assessed as “consolidated or other” are not assessed due to additional work or other 

information we considered. Additionally, 2014 actions were not assessed in 2014 since that was the 

year that the actions were identified.
 

Page 16 GAO-15-404SP 2015 Annual Report 

We estimated that executive branch and congressional efforts to address 

suggested actions resulted in roughly $20 billion in financial benefits from 

fiscal years 2011 through 2014, with another approximately $80 billion in 

additional benefits projected to be accrued through 2023.16

Table 1 outlines a selection of our addressed actions that have resulted in 

or are expected to result in cost savings or enhanced revenue.

Table 1: Selected Addressed Actions with Associated Cost Savings and Enhanced Revenues, 2011-2014

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 

the Congressional Budget Office.

2011 Baggage Screening Systems (Area 78): The Transportation Security Administration (TSA) estimated 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 

we 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, according to Air Force officials, 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 we 

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.

 

16In calculating these estimates, we relied on estimates from the Congressional Budget 

Office and the Joint Committee on Taxation, where possible. We also developed 

estimates based on agencies’ data and used agencies’ developed estimates. The totals 

reflect a summary of these estimates, which relied on different data sources and 

methodologies and considered different time periods. They represent a rough estimate of 

financial benefits and have been rounded down to the nearest $5 billion. 
 

Page 17 GAO-15-404SP 2015 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, should 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.

2013

d

Combat Uniforms (Area 2): Consistent with our recommendation, the Army chose not to introduce a new 

family of camouflage uniforms into its inventory, resulting in a cost avoidance of about $4.2 billion over 5 

years.

Source: GAO. | GAO-15-404SP

a

See Pub. L. No. 113-67, § 601(b), 127 Stat. 1165, 1187 (2013), amending 49 U.S.C. § 44940(c).

b

§§ 44923(h), 44940(i).

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. 

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 U.S. Treasury each fiscal year, 2014 

through 2023).

d

The Bipartisan Budget Act further revoked TSA’s authority to collect the Aviation Security 

Infrastructure Security Fee, which TSA had been collecting from air carriers pursuant 49 U.S.C. 

§ 44940(a)(2). See Pub. L. No. 113-67, § 601(a), 127 Stat. at 1187.

The following examples illustrate progress made by executive branch 

agencies and Congress in addressing our identified actions over the last 

5 years.

• Domestic Ethanol Production: In our 2011 annual report, we stated 

that the ethanol tax credit would cost about $5 billion in forgone 

revenues in 2011 and that Congress could reduce annual revenue 

losses by addressing duplicative federal efforts directed at increasing 

domestic ethanol production. To reduce these revenue losses, we 

suggested that Congress consider whether revisions to the ethanol 

tax credit were needed and suggested options to consider, including 

allowing the credit for the volumetric ethanol excise tax (for fuel 

blenders that purchase and blend ethanol with gasoline) to expire at 

the end of 2011. Congress allowed the tax credit to expire at the end 

of 2011.

• Farm Program Payments: We reported in our 2011 annual report that 

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

eliminating direct payments to farmers. These are fixed annual 

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

Page 18 GAO-15-404SP 2015 Annual Report 

received them regardless of whether they grew crops and even in 

years of record income. Direct payments were expected to be 

transitional when first authorized in 1996, but subsequent farm bills 

continued these payments.17 Congress passed the Agricultural Act of 

2014, which eliminated direct payments to farmers and should save 

approximately $4.9 billion annually from fiscal year 2015 through fiscal 

year 2023, according to the Congressional Budget Office.

• Combat Uniforms: In our 2013 annual report, we found that DOD’s 

fragmented approach could lead to increased risk on the battlefield for 

military personnel and increased development and acquisition costs. 

In response, DOD developed and issued guidance on joint criteria to 

help ensure that future service-specific uniforms will provide 

equivalent levels of performance and protection. In addition, a 

provision in the National Defense Authorization Act for Fiscal Year 

2014 established as policy that the Secretary of Defense shall 

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.18 Most recently, the Army chose not to introduce a new 

family of camouflage uniforms into its inventory, in part, because of 

this legislation, resulting in a cost avoidance of about $4.2 billion over 

5 years.

• Overseas Defense Posture: In our 2012 annual report, we suggested 

the Secretary of Defense should direct appropriate organizations 

within DOD to complete a business case analysis, including an 

 

17According to the conference report accompanying the 1996 Farm Bill, production 

flexibility contract payments—the precursors to direct payments, which were similar in 

design—were established to help farmers make a transition to basing their planting 

decisions on market signals rather than on government programs. Accordingly, production 

flexibility contract payments were scheduled to decrease over time and expire in 2002. 

Federal Agricultural Improvement and Reform Act of 1996, Pub. L. No. 104-127, 110 Stat. 

888. However, farm bills passed in 2002 and 2008 continued these payments as “direct 

payments.”

18Subject 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. See Pub. L. No. 113-66, § 352(a), (b) 

(2013). 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. See Pub. L. No. 113-66, § 352(f).
 

Page 19 GAO-15-404SP 2015 Annual Report 

evaluation of alternative courses of action, for the strategic objectives 

that have to this point driven the decision to implement tour 

normalization in South Korea—that is, a DOD initiative to transform its 

defense posture in South Korea. DOD subsequently evaluated the 

costs and benefits 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. In addition, DOD fully 

addressed our recommended actions to develop comprehensive cost 

information and re-examine alternatives to planned initiatives. For 

example, the data that DOD reports to Congress now reflect all cost

categories for new or ongoing funded posture initiatives in support of 

enduring operations that, according to DOD officials, have been 

approved by the Secretary of Defense. To further facilitate 

congressional oversight of plans to realign U.S. defense posture in the 

Pacific, DOD made corrective actions for mitigating financial risks and 

better defining future requirements, as we recommended. As a result 

of these actions, DOD decision makers will have additional fiscal 

context in which to review posture plans and requirements, and 

congressional committees should have a better understanding of the 

potential funding requirements associated with DOD budget requests. 

• Employment and Training: Congress and executive branch agencies 

have also taken actions to help address the proliferation of certain 

employment programs and improve the delivery of benefits.

Specifically, in June 2012, we reported on 45 programs administered 

by nine federal agencies that supported employment for people with 

disabilities and found these programs were fragmented and often 

provided similar services to similar populations.19

 

19GAO’s February 2012 annual report on opportunities to reduce duplication, overlap, and 

fragmentation across the federal government included 50 programs that supported 

employment for people with disabilities in fiscal year 2010. GAO later updated its analyses 

to exclude, for example, programs that had been phased out or ended as of April 2012. In 

June 2012, GAO reported on 45 programs that supported employment for people with 

disabilities.

The Workforce 

Innovation and Opportunity Act, enacted in July 2014, eliminated 

three programs that supported employment for people with 

disabilities, including the Veterans’ Workforce Investment Program, 

administered by the Department of Labor, and the Migrant and 

Seasonal Farmworker Program and Projects with Industry, 
 

Page 20 GAO-15-404SP 2015 Annual Report 

administered by the Department of Education.20

Although Congress and executive branch agencies have made 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, 57 percent of the actions addressed to executive branch 

agencies and 66 percent of the actions addressed to Congress identified 

in our 2011-2014 reports remain partially or not addressed.

In addition, OMB 

worked with executive agencies to propose consolidating or 

eliminating two other programs, although Congress did not take action 

and both programs continued to receive funding. The Workforce 

Innovation and Opportunity Act also helped to promote efficiencies for 

some of the 47 employment and training programs that support a 

broader population (including people with and without disabilities), 

which we reported on in 2011. In particular, this law requires states to 

develop a unified state plan that covers all designated core programs 

in order to receive certain funding. As a result, states’ implementation 

of the requirement may enable them to increase administrative 

efficiencies in employment and training programs—a key objective of 

our prior recommendations.

21

Table 2: Status of 2011-2014 Actions Directed to Congress and the Executive Branch, as of March 6, 2015

Status 

Executive brancha Congressb Grand totals

Number

of actions Percentage

Number

of actions Percentage

Total number

of actions

Overall 

percentage

Addressed 149 39% 20 27% 169 37% 

Partially addressed 168 44 11 15 179 39

Not addressed 52 14 38 51 90 20

Consolidated or other 15 4 5 7 20 4 

Source: GAO. | GAO-15-404SP

Note: Actions assessed as “consolidated or other” are not assessed due to additional work or other 

information we considered. See appendix II for more information on how we assess the status of 

actions.

a

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

b

 

20Funding for Projects with Industry was eliminated in fiscal year 2011. As a result, we 

excluded it from our list of 45 programs in our June 2012 report.

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

to executive branch agencies.

21Twenty actions, or 4 percent, have been consolidated into other areas and are no longer 

been assessed due to additional work or other information that we considered. 

Leadership Attention 

Needed to Continue 

Progress on Remaining 

Actions
 

Page 21 GAO-15-404SP 2015 Annual Report 

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. Without increased or renewed leadership focus, opportunities 

will be missed to improve the efficiency and effectiveness of programs 

and save taxpayers’ dollars. As figure 3 shows, we have directed actions 

to all 15 cabinet-level executive departments and at least 17 other federal 

entities. A substantial number of our actions are directed to the three 

departments that make up 55 percent of federal obligations in fiscal year 

2014—DOD, Treasury, and HHS. Specifically, we have directed 126 

actions to DOD, 89 actions to Treasury, and 60 actions to HHS. 
 

Page 22 GAO-15-404SP 2015 Annual Report 

Figure 3: Fiscal Year 2014 Obligations and Number of Actions by Agency

Notes: Individual actions 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 2014 obligations includes interest on the national debt.

c

The judicial branch represented 0.2 percent of federal obligations in fiscal year 2014.

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 2014.

The following are examples of areas where additional leadership attention 

could potentially promote progress.
 

Page 23 GAO-15-404SP 2015 Annual Report 

In our 2013 annual report, we reported that federal agencies could 

achieve significant cost savings annually by expanding and improving 

their use of strategic sourcing—a contracting process that moves away 

from numerous individual procurement actions to a broader aggregated 

approach. In particular, DOD, DHS, DOE, and VA accounted for 80 

percent of the $537 billion in federal procurement spending in fiscal year 

2011, but reported managing about 5 percent, or $25.8 billion, through 

strategic sourcing efforts. In contrast, leading commercial firms leverage 

buying power by strategically managing 90 percent of their spending—

achieving savings of 10 percent or more of total procurements costs. 

While strategic sourcing may not be suitable for all procurement 

spending, we reported that a reduction of 1 percent from procurement 

spending at these agencies would equate to over $4 billion in savings 

annually. However, a lack of clear guidance on metrics for measuring 

success has hindered the management of ongoing strategic sourcing 

efforts across the federal government. Since our 2013 report, OMB has 

made progress by issuing guidance on calculating savings for 

government-wide strategic sourcing contracts, and in December 2014 it 

issued a memorandum on category management that, among other 

things, identifies federal spending categories suitable for strategic 

sourcing. These categories cover some of the government’s largest 

spending categories, including information technology and professional 

services. According to OMB, these categories accounted for $277 billion 

in fiscal year 2013 federal procurements. This level of spending suggests 

that by using smarter buying practices the government could realize 

billions of dollars in savings. In addition, the administration has identified 

expanded use of high-quality, high-value strategic sourcing solutions as 

one of its cross-agency priority goals, which are a limited set of outcomeoriented, federal priority goals. However, until OMB sets government-wide 

goals and establishes metrics, the government may miss opportunities for 

billions in cost savings through strategic sourcing.

Our work on defense has highlighted opportunities to improve 

efficiencies, reduce costs, and address overlapping and potentially 

duplicative services that result from multiple entities providing the same 

service, including the following examples.

• Combatant Command Headquarters Costs: Our body of work has 

raised questions about whether DOD’s efforts to reduce headquarters 

overhead will result in meaningful savings. In 2013, the Secretary of 

Defense directed a 20 percent cut in management headquarters 

spending throughout DOD, to include the combatant commands and 

service component commands. In June 2014 we found that mission 

Reducing Contract Spending 

through Strategic Sourcing

More Effectively Targeting 

Defense Resources
 

Page 24 GAO-15-404SP 2015 Annual Report 

and headquarters-support costs for the five geographic combatant 

commands and their service component commands we reviewed 

more than doubled from fiscal years 2007 through 2012, to about $1.7 

billion. We recommended that DOD more systematically evaluate the 

sizing and resourcing of its combatant commands. If the department 

applied the 20 percent reduction in management headquarters 

spending to the entire $1.7 billion DOD used to operate and support 

the five geographic combatant commands in fiscal year 2012, we 

reported that DOD could achieve up to an estimated $340 million in 

annual savings.

• Tactical Wheeled Vehicles: DOD spends billions of dollars each year 

to procure tactical wheeled vehicles, which are used to transport 

people, weapons, and cargo. Since 2008, GAO has identified tactical 

wheeled vehicle procurement as being at risk for duplication, and in 

2009 GAO recommended that DOD develop a unified acquisition 

strategy. As of February 2015, DOD no longer plans to issue a 

comprehensive Tactical Wheeled Vehicle Roadmap, originally 

expected for release in the spring of 2013. The purpose of the 

roadmap was to document agreements and plans between DOD and 

the military services and to address our recommendation to reduce 

the risk of duplication. According to an official at the Office of the 

Under Secretary of Defense for Acquisition, Technology, and 

Logistics, sharp reductions in fleet modernization funds prompted 

DOD to no longer use the roadmap approach. Instead, the 

department will evaluate each investment opportunity in terms of 

future force structure, fleet composition, best value, affordability, joint 

capabilities, and survivability through the joint capabilities integration 

development system and acquisition management system framework. 

Prior to this decision, DOD had taken numerous steps to address cost 

effectiveness and potential duplication within the tactical wheeled 

vehicle portfolio, as we recommended, but it stopped short of 

developing a comprehensive tactical wheeled vehicle strategy. 

Without a comprehensive roadmap that describes strategies and 

goals for the entire tactical wheeled vehicle portfolio, it will likely be 

difficult for DOD to ensure risk reduction and avoid duplication in 

future acquisitions of tactical wheeled vehicles, which could drive up 

acquisition and support costs. We maintain that a comprehensive 

strategy would help DOD manage the risk of duplication and cost 

growth.

• Electronic Warfare: We reported in 2011 that all four military services 

in DOD had been separately developing and acquiring new airborne 

electronic attack systems and that spending on new and updated 
 

Page 25 GAO-15-404SP 2015 Annual Report 

systems was projected to total more than $17.6 billion during fiscal 

years 2007–2016. While the department has taken steps to better 

inform its investments in airborne electronic attack capabilities, it has 

yet to assess its plans for developing and acquiring two new 

expendable jamming decoys to determine if these initiatives should be 

merged.22

More broadly, we identified multiple weaknesses in the way DOD 

acquires weapon systems and the actions that are needed to address 

these issues, which we recently highlighted in our high-risk series 

update.23

The federal government planned to spend at least $79 billion on 

information technology (IT) in fiscal year 2015. The magnitude of these 

expenditures highlights the importance of avoiding duplicative 

investments to better ensure the most efficient use of resources. 

Opportunities remain to reduce or better manage duplication and the cost 

of government operations in critical IT areas, many of which require 

agencies to work together to improve systems, including the following 

examples.

For example, further progress must be made in tackling the 

incentives that drive the acquisition process and its behaviors, applying 

best practices, attracting and empowering acquisition personnel, 

reinforcing desirable principles at the beginning of programs, and 

improving the budget process to allow better alignment of programs and 

their risks and needs. Addressing these issues could help DOD improve 

the returns on its $1.4 trillion investment in major weapon systems and 

find ways to deliver capabilities for less than it has in the past.

• Information Technology Investment Portfolio Management: To better 

manage existing IT systems, in March 2012 OMB launched the 

PortfolioStat initiative. PortfolioStat requires agencies to conduct an 

annual, agency-wide review of their IT portfolios to reduce commodity 

IT spending and demonstrate how their IT investments align with their 

missions and business functions, among other things. In 2014, we 

found that while the 26 federal agencies required to participate in 

PortfolioStat had made progress in implementing OMB’s initiative, 

weaknesses existed in agencies’ implementation of the initiative, such 

 

22DOD employs expendable jamming decoys to degrade enemy air defense systems with 

the purpose of allowing U.S. aircraft to operate within threat environments.

23GAO-15-290. 

More Efficiently Managing 

Information Technology

Investments
 

Page 26 GAO-15-404SP 2015 Annual Report 

as limitations in the Chief Information Officer’s authority. In the 

President’s Fiscal Year 2016 Budget submission, the administration 

proposes to use PortfolioStat to drive efficiencies in agencies’ IT 

programs. As noted in our recent high-risk series update, we have 

made more than 60 recommendations to improve OMB and agencies’ 

implementation of PortfolioStat and provide greater assurance that 

agencies will realize the nearly $6 billion in savings they estimated 

they would achieve through fiscal year 2015.24

• Federal Data Centers: In September 2014, we found that 

consolidating federal data centers would provide an opportunity to 

improve government efficiency and achieve cost savings and 

avoidances of about $5.3 billion by fiscal year 2017. Although OMB 

has taken steps to identify data center consolidation opportunities 

across agencies, weaknesses exist in the execution and oversight of 

the consolidation efforts. Specifically, we reported many agencies are 

not fully reporting their planned savings to OMB as required; GAO 

estimates that the savings have been underreported to OMB by 

approximately $2.2 billion. It will continue to be important for agencies 

to complete their inventories and implement their plans for 

consolidation to better ensure continued progress toward OMB’s 

planned consolidation, optimization, and cost-savings goals.

• Information Technology Operations and Maintenance: Twenty-seven 

federal agencies plan to spend about $58 billion—almost threequarters of the overall $79 billion budgeted for federal IT in fiscal year 

2015—on the operations and maintenance of legacy investments. 

Given the magnitude of these investments, it is important that 

agencies effectively manage them to better ensure the investments 

(1) continue to meet agency needs, (2) deliver value, and (3) do not 

unnecessarily duplicate or overlap with other investments. 

Accordingly, OMB developed guidance that calls for agencies to 

analyze (via operational analysis) whether such investments are 

continuing to meet business and customer needs and are contributing 

to meeting the agency’s strategic goals. In our 2013 annual report, we 

reported that agencies did not conduct such an analysis on 52 of the 

75 major existing information technology investments we reviewed.25

 

24GAO-15-290. 

25Our review included major information technology investments at DOD, HHS, DHS, 

Treasury, and VA.
 

Page 27 GAO-15-404SP 2015 Annual Report 

As a result, there was increased potential for these information 

technology investments in operations and maintenance—totaling $37 

billion in fiscal year 2011—to result in waste and duplication. To avoid 

wasteful or duplicative investments in operations and maintenance, 

we recommended that agencies analyze all information technology 

investments annually and report the results of their analyses to OMB. 

Agencies have made progress in performing some operational 

analyses; however, until the agencies fully implement their policies 

and ensure complete and thorough operational analyses are being 

performed on their multibillion-dollar operational investments, there is 

increased risk that these agencies will not know whether these 

investments fully meet their intended objectives, therefore increasing 

the potential for waste and duplication.

• Geospatial Investments: In a 2013 report, we found that 31 federal 

departments and agencies invested billions of dollars to collect, 

maintain, and use geospatial information—information linked to 

specific geographic locations that supports many government 

functions, such as maintaining roads and responding to natural 

disasters. We found that federal agencies had not effectively 

implemented policies and procedures that would help them identify 

and coordinate geospatial data acquisitions across the government, 

resulting in duplicative investments.

In a 2015 report, we reported that federal agencies had made 

progress in implementing policies and procedures.26

 

26GAO, Progress Needed on Identifying Expenditures, Building and Utilizing a Data 

Infrastructure, and Reducing Duplicative Efforts, 

However, critical 

items remained incomplete, including coordinating activities with state 

governments, which also use a variety of geospatial datasets—

including address data and aerial imagery—to support their missions. 

We found that a new initiative to create a national address database 

could potentially result in significant savings for federal, state, and 

local governments. To foster progress in developing such a national 

database, we suggested that Congress consider assessing existing 

statutory limitations on address data. We also recommended that the 

interagency coordinating body for geospatial information (1) establish 

subcommittees and working groups to assist in furthering a national 

address database; and (2) identify discrete steps to further a national 

imagery program benefitting governments at all levels. Finally, we 

GAO-15-193 (Washington, D.C.: Feb. 12, 

2015).
 

Page 28 GAO-15-404SP 2015 Annual Report 

recommended that the Director of OMB require agencies to report on 

their efforts to implement policies and procedures before making new 

investments in geospatial data. OMB generally agreed with this 

recommendation. In addition, in March 2015, the Geospatial Data Act 

of 2015 was introduced and includes provisions to improve oversight 

and help reduce duplication in the management of geospatial data, 

consistent with our recommended actions.27 Fully addressing the 

actions in our two reports could help reduce duplicative investments 

and the risk of missing opportunities to jointly acquire data, potentially 

saving millions of dollars.28

• DOD and Department of Veterans Affairs (VA) Electronic Health 

Records System: DOD and VA have abandoned their plans to 

develop a single electronic system for health records that both 

departments would share. Although the departments’ 2008 study 

showed that over 97 percent of inpatient functional requirements were 

common to both DOD and VA, they have decided to pursue separate 

electronic health record system modernization efforts. In a February 

2014 report, we found that the departments had based this decision 

on the assertion that pursuing separate systems would be less 

expensive and faster than the single, shared-system approach.29

However, the departments had not supported this assertion with cost 

and schedule estimates that compared the separate efforts with 

estimates for the single-system approach. As a result, we 

recommended that VA and DOD develop and compare the estimated 

cost and schedule of their current and previous approaches to 

creating an interoperable electronic health record and, if applicable, 

provide a rationale for pursuing a more costly or time-consuming 

approach. We also recommended that the departments develop plans 

for interoperability and ensure the Interagency Program Office—

established by law to act as a single point of accountability for the 

departments’ development of interoperable health records—has 

control over needed resources and clearer lines of authority.30

 

27S. 740, 114th Cong. (2015).

The 

28We have added the recommendations from GAO-15-193 to GAO’s Action Tracker. 

29GAO, Electronic Health Records: VA and DOD Need to Support Cost and Schedule 

Claims, Develop Interoperability Plans, and Improve Collaboration, GAO-14-302

(Washington, D.C.: Feb. 27, 2014).

30We have added the recommendations from GAO-14-302 to GAO’s Action Tracker. 
 

Page 29 GAO-15-404SP 2015 Annual Report 

departments generally agreed with our recommendations. Through 

continued duplication of efforts, the departments may be incurring 

unnecessary system development and operation costs and missing 

opportunities to support higher-quality health care for servicemembers 

and veterans.

The federal information technology acquisition reforms enacted in 

December 2014 reinforce a number of the actions that we have 

recommended to address IT management issues. For example, the law 

containing these reforms codifies federal data center consolidation, 

emphasizing annual reporting on cost savings and detailed metric 

reporting and OMB’s PortfolioStat process, focusing on reducing 

duplication, consolidation, and cost savings. If effectively implemented, 

this legislation should improve the transparency and management of IT 

acquisitions and operations across the government.

Over the years, we have identified a number of actions that have the 

potential for sizable cost savings through improved fiscal oversight in the 

Medicare and Medicaid programs. For example, CMS could save billions 

of dollars by improving the accuracy of its payments to Medicare 

Advantage programs, such as through methodology adjustments to 

account for diagnostic coding differences between Medicare Advantage 

and traditional Medicare.31 In addition, we found that federal spending on 

Medicaid demonstrations could be reduced by billions of dollars if HHS 

were required to improve the process for reviewing, approving, and 

making transparent the basis for spending limits approved for Medicaid 

demonstrations.32

 

31Medicare Advantage is the private plan alternative to the original Medicare program. 

Medicare Advantage plans are paid a fixed, per member, per month payment to provide

all services covered under original Medicare. This payment does not vary on the basis of 

the services beneficiaries receive.

In particular, our work between 2002 and 2014 has 

shown that HHS approved several demonstrations without ensuring that 

they would be budget neutral to the federal government.

32Under Section 1115 of the Social Security Act, the Secretary of Health and Human 

Services can approve waivers of certain Medicaid requirements, and provide states with 

new spending authorities, for purposes of implementing Medicaid demonstration projects. 

The demonstrations under the law are for purposes of testing new ways to operate state 

programs and deliver services, and agency policy requires that the programs not increase 

federal spending.

Improving Fiscal Oversight of 

Medicare and Medicaid
 

Page 30 GAO-15-404SP 2015 Annual Report 

To address this issue, we suggested that Congress could require the 

Secretary of Health and Human Services to improve the Medicaid 

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. We concluded in August 2014, that HHS’s 

approval of $778 million dollars of hypothetical costs (i.e., expenditures 

the state could have made but did not) in the Arkansas demonstration 

spending limit and the department’s waiver of its cost-effectiveness 

requirement is further evidence of our long-standing concerns that HHS is 

approving demonstrations that may not be budget-neutral.33

In our February 2015 high-risk series update, we reported that while CMS 

had taken positive steps to improve Medicare and Medicaid oversight in 

recent years, in several areas, CMS had still to address some issues and 

recommendations, and improper payment rates have remained 

unacceptably high.

HHS’s 

approval of the Arkansas demonstration suggests that the Secretary may 

continue to approve section 1115 Medicaid demonstrations that raise 

federal costs, inconsistent with the department’s policy of budget 

neutrality. We maintain that enhancing the process HHS uses to 

demonstrate budget neutrality of its demonstrations could save billions in 

federal expenditures.

34

 

33GAO, Medicaid Demonstrations: HHS’s Approval Process for Arkansas’s Medicaid 

Expansion Waiver Raises Cost Concerns, 

We have reported that to achieve and demonstrate 

reductions in the amount of Medicare improper payments, CMS should 

fully exercise its authority related to strengthening its provider and 

supplier enrollment provisions and address our open recommendations 

related to prepayment and postpayment claims review activities. Similarly, 

in the area of Medicaid, we have made recommendations targeted at (1) 

improving the completeness and reliability of key data needed for 

ensuring effective oversight, (2) implementing effective program integrity 

processes for managed care, (3) ensuring clear reporting of overpayment 

recoveries, and (4) refocusing efforts on program integrity approaches 

that are cost-effective. Table 3 summarizes selected recommendations 

we have made to reduce improper payments in these important areas. 

These recommendations, if effectively implemented, could improve 

GAO-14-689R (Washington, D.C.: Aug. 8, 

2014).

34GAO-15-290. 
 

Page 31 GAO-15-404SP 2015 Annual Report 

program management, help reduce improper payments in these 

programs, and achieve cost savings.

Table 3: Selected GAO Recommendations To Help Reduce Medicare and Medicaid Improper Payments and Improve Program 

Integrity

Selected GAO recommendations on Medicare 

Improving use of automated edits.a In November 2012, we reported that use of prepayment edits saved Medicare at least $1.76 

billion in fiscal year 2010, but savings could have been greater if prepayment edits had been more widely used.

Monitoring postpayment claims reviews. To improve the efficiency and effectiveness of Medicare program integrity efforts, we 

recommended in July 2014 that CMS reduce differences between contractor postpayment review requirements, when possible, and 

monitor the database used to track recovery audit activities to ensure that all data were submitted, accurate, and complete.

b

Removing Social Security numbers from Medicare cards. The health insurance claims number on Medicare beneficiaries’ cards 

includes as one component the Social Security number of the beneficiary (or other eligible person, such as a spouse). This introduces 

risks that the beneficiaries’ personal information could be obtained and used to commit identity theft.

c

d

Implementing actions authorized by the Patient Protection and Affordable Care Act (PPACA). We reported in our February 

2015 update to our high-risk series that CMS should fully exercise its PPACA authority related to strengthening its provider and 

supplier enrollment provisions.

To better position the agency to 

efficiently and cost-effectively identify, design, develop, and implement a solution to address this issue, we recommended that CMS 

direct the initiation of an IT project for identifying, developing, and implementing changes that would have to be made to CMS’s 

affected systems.

e

• require a surety bond for certain types of at-risk providers and suppliers;

The following summarizes additional open recommendations and procedures authorized by PPACA 

that CMS should implement to make progress toward fulfilling the four outstanding criteria to remove Medicare improper payments 

from our high-risk list. CMS should

• publish a proposed rule for increased disclosures of prior actions taken against providers and suppliers enrolling or revalidating 

enrollment in Medicare, such as whether the provider or supplier has been subject to a payment suspension from a federal health 

care program;

• establish core elements of compliance programs for providers and suppliers;

• improve automated edits that identify services billed in medically unlikely amounts;

• develop performance measures for the Zone Program Integrity Contractors who explicitly link their work to the agency's Medicare 

FFS program integrity performance measures and improper payment reduction goals; and

• require Medicare administrative contractors to share information about the underlying policies and savings related to their most 

effective edits.
 

Page 32 GAO-15-404SP 2015 Annual Report 

Selected GAO recommendations on Medicaid 

Improving third-party liability efforts. Congress generally established Medicaid as the health care payer of last resort, meaning that 

if enrollees have another source of health care coverage—such as private insurance—that source should pay, to the extent of its 

liability, before Medicaid does. This is referred to as third-party liability. However, there are known challenges to ensuring that 

Medicaid is the payer of last resort. While CMS has issued guidance to states, we recommended additional actions that could help to 

improve cost-saving efforts in this area, such as monitoring and sharing information on third-party liability efforts and challenges 

across all states and providing guidance to states on oversight of third-party liability efforts related to Medicaid managed care plans.

Increasing oversight of managed care. Most Medicaid beneficiaries are in managed care, and managed care expenditures have 

been growing at a faster rate than fee-for-service expenditures. In May 2014, we reported that most state and federal program 

integrity officials we interviewed told us that they did not closely examine managed care payments, focusing on fee-for-service claims 

instead.

f

g

Strengthening program integrity. Although CMS has taken positive steps to oversee program integrity efforts in Medicaid, other 

actions remain, such as improving reporting of key data, strengthening its efforts to calculate return on investment for its program 

integrity efforts, and using knowledge gained from its comprehensive reviews of states to better focus audit resources and improve 

recovery of improper payments.

To help improve the efficiency and effectiveness of program integrity efforts, we recommended that CMS require states to 

conduct audits of payments to and by managed care organizations, update managed care guidance on program integrity practices, 

and provide states with additional support in overseeing managed care program integrity.

Source: GAO. | GAO-15-404SP

a

To help ensure that payments are made properly, CMS uses controls called edits that are 

programmed into claims processing systems to compare claims data with Medicare requirements in 

order to approve or deny claims or flag them for further review.

b

See GAO, Medicare Program Integrity: Greater Prepayment Control Efforts Could Increase Savings 

and Better Ensure Proper Payment, GAO-13-102 (Washington, D.C.: Nov. 13, 2012).

c

GAO, Medicare Program Integrity: Increased Oversight and Guidance Could Improve Effectiveness 

and Efficiency of Postpayment Claims Reviews, GAO-14-474 (Washington, D.C.: July 18, 2014). We 

suggest actions related to monitoring postpayment claims reviews in this report; see area 7: Medicare 

Postpayment Claims Reviews.

d

See GAO, Medicare Information Technology: Centers for Medicare and Medicaid Services Needs to 

Pursue a Solution for Removing Social Security Numbers from Cards, GAO-13-761 (Washington, 

D.C.: Sept. 10, 2013).

e

See GAO, High-Risk Series: An Update, GAO-15-290 (Washington, D.C.: Feb. 11, 2015).

f

See GAO, Medicaid: Additional Federal Action Needed to Further Improve Third-Party Liability 

Efforts, GAO-15-208 (Washington, D.C.: Jan. 28, 2015).

g

See GAO, Medicaid Program Integrity: Increased Oversight Needed to Ensure Integrity of Growing 

Managed Care Expenditures, GAO-14-341 (Washington, D.C.: May 19, 2014).

Over the last 4 years, our work identified multiple opportunities for the 

government to increase revenue collections. For example, in 2014, we 

identified three actions that Congress could authorize that could increase 

tax revenue collections from delinquent taxpayers by hundreds of millions 

of dollars over a 5-year period: limiting issuance of passports to 

applicants, levying payments to Medicaid providers, and identifying 

Increasing Tax Revenue 

Collections
 

Page 33 GAO-15-404SP 2015 Annual Report 

security clearance applicants.35

In addition, in our 2011 annual report, we highlighted the area of improper 

payments as having the potential for significant cost savings and reported 

on the federal government’s challenges in determining the full extent to 

which improper payments occur and in ensuring appropriate actions are 

being taken to reduce them. In addition to Medicare and Medicaid, the 

Earned Income Tax Credit (EITC) has one of the highest estimates of 

improper payments government-wide.

For example, Congress could consider 

requiring the Secretary of State to prevent individuals who owe federal 

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

passports were issued to about 16 million individuals; about 1 percent of 

these collectively owed more than $5.8 billion in unpaid federal taxes as 

of September 30, 2008. According to a 2012 Congressional Budget Office 

estimate, the federal government could save about $500 million over a 5-

year period by revoking or denying passports to those with certain federal 

tax delinquencies.

36 In particular, in fiscal year 2014, 

IRS reported program payments of $65.2 billion for the EITC. According 

to IRS, an estimated 27.2 percent, or $17.7 billion, of these program 

payments were improper.37

 

35Federal 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.

The estimated EITC improper payment rate 

has remained relatively unchanged since fiscal year 2003 (the first year 

IRS was required to report estimates of these payments to Congress), but 

36Congress established the EITC in 1975 to (1) offset the impact of Social Security taxes 

on low-income families and (2) encourage low-income families to seek employment rather 

than public assistance. EITC eligibility depends on an individual’s earned income. Credit 

amounts depend on the number of qualifying children who meet age, relationship, and 

residency tests. The credit gradually increases with income (the phase-in range), plateaus 

at a maximum amount (the plateau range), and then gradually decreases until it reaches 

zero (the phaseout range). For EITC, program payments include tax expenditures (a tax 

credit that offsets income taxes) and outlays (a refund if the credit exceeds the amount of 

taxes owed).

37EITC overpayments are the difference between the EITC amount claimed by the 

taxpayer on his or her return and the amount the taxpayer should have claimed. EITC 

underpayments are defined as the amount of EITC disallowed by IRS in processing that 

should have been allowed. 
 

Page 34 GAO-15-404SP 2015 Annual Report 

the amount of improper EITC payments has increased from an estimated 

$10.5 billion in fiscal year 2003 to nearly $18 billion in fiscal year 2014.38

We have highlighted the persistent problems with improper EITC 

payments for years, and it is a factor underlying our continued 

designation of IRS Enforcement of Tax Laws as a high-risk area.39

In addition to these efforts, additional IRS and legislative actions are likely 

necessary to make any meaningful reduction in improper payments. We 

have recommended a number of executive branch actions or matters for 

congressional consideration that if effectively implemented, could help to 

reduce EITC improper payments (table 4).

As we 

have reported, although the EITC program has been modified a number 

of times since its enactment in 1975 to reduce complexity and help 

improve the program’s administration, complexity remains a key factor 

contributing to improper payments in the program. Among other things, 

IRS uses audits to help identify EITC improper payments, and in June 

2014, we reported that about 45 percent of correspondence audits (audits 

done by mail) that closed in fiscal year 2013 focused on EITC issues. 

However, the effectiveness of these audits may be limited because of 

regular backlogs in responding to taxpayers since 2011 and unclear 

correspondence that generates additional work for IRS, such as phone 

calls to IRS examiners. These issues impose unnecessary burdens on 

taxpayers and costs for IRS. IRS acknowledged these concerns and the 

limitations faced in significantly reducing EITC improper payments using 

the traditional audit process. Consequently, IRS has initiated several 

programs to address EITC improper payments, such as increasing 

outreach and education to taxpayers and return preparers.

 

38These numbers have not been adjusted for inflation.

39GAO-15-290. 
 

Page 35 GAO-15-404SP 2015 Annual Report 

Table 4: Selected GAO Matters and Recommendations That Could Help Reduce Earned Income Tax Credit Improper 

Payments 

Recommendation area Rationale

Regulating paid tax preparers In August 2014, IRS reported that 68 percent of all tax returns claiming the EITC in tax years 

2006 and 2007 were prepared by paid tax preparers—most of whom were not subject to 

any IRS regulation—and that from 43 percent to 50 percent of the returns overclaimed the 

credit.a Similarly, in our undercover visits to randomly selected tax preparers, a sample that 

cannot be generalized, we found errors in EITC claims, resulting in significant overstatement 

of refunds.b Based in part on our recommendation, in 2010, IRS initiated steps to regulate 

certain preparers through testing and education requirements; however, the courts ruled 

that IRS lacked such regulatory authority.

c

Accelerating W-2 filing deadlines

In 2014, we suggested that Congress consider 

granting IRS the authority to regulate paid tax preparers, if it agrees that significant paid 

preparer errors exist.

IRS estimates that it paid $5.8 billion in fraudulent identity theft refunds during the 2013 filing 

season.d While we do not know the extent to which improper EITC payments are the result 

of identity theft, IRS has reported that improper payments are a mix of unintentional 

mistakes and fraud. IRS issues most refunds months before receiving and matching 

information returns, such as the W-2 “Wage and Tax Statement,” to tax returns. In August 

2014, we recommended that IRS estimate the cost and benefits of options to implement prerefund matching using W-2 data.e

Broadening math error authority

Given that any change could impose burdens on 

employers and taxpayers as well as create additional costs to IRS for systems and process 

changes, Congress and other stakeholders need information on this impact to fully assess 

any potential changes.

IRS has statutory authority—called math error authority—to correct certain errors, such as 

calculation mistakes or omitted or inconsistent entries, during tax return processing of EITC 

claims. According to the Treasury Inspector General for Tax Administration, IRS has math 

error authority to address some erroneous claims, but additional authority to systematically 

disallow certain erroneous EITC claims with unsupported wages could reduce improper 

payments.f

Source: GAO. | GAO-15-404SP

Treasury has proposed expanding IRS authority to permit it to correct errors in 

cases where information provided by the taxpayer does not match information in 

government databases, among other things. Expanding such math error authority—which at 

various times we have suggested that Congress consider—could help IRS correct additional 

errors and avoid burdensome audits and taxpayer penalties.

a

Internal Revenue Service, Compliance Estimates for the Earned Income Tax Credit Claimed on 

2006- 2008 Returns, Publication 5162 (8-2014) (Washington, D.C.: August 2014).

b

GAO, Paid Tax Return Preparers: In a Limited Study, Preparers Made Significant Errors, 

GAO-14-467T (Washington, D.C.: Apr. 8, 2014), and Paid Tax Return Preparers: In a Limited Study, 

Chain Preparers Made Significant Errors, GAO-06-563T (Washington, D.C.: Apr. 4, 2006).

c

Loving v. IRS, 917 F. Supp. 2d 67 (D.D.C. 2013), aff'd 742 F.3d 1013 (D.C. Cir. 2014). 

d

GAO, Identity and Tax Fraud: Enhanced Authentication Could Combat Refund Fraud, but IRS Lacks 

an Estimate of Costs, Benefits and Risks, GAO-15-119 (Washington, D.C.: Jan. 20, 2015).

e

GAO, Identity Theft: Additional Actions Could Help IRS Combat the Large, Evolving Threat of Refund 

Fraud, GAO-14-633 (Washington, D.C.: Aug. 20, 2014).

f

Treasury Inspector General for Tax Administration, Existing Compliance Processes Will Not Reduce 

the Billions of Dollars in Improper Earned Income Tax Credit and Additional Child Tax Credit 

Payments. 
 

Page 36 GAO-15-404SP 2015 Annual Report 

We have also identified opportunities to implement program benefit 

offsets, in which certain program benefits for individuals are reduced in 

recognition of other benefits received. Examples include the following: 

• Social Security Offsets: In our 2011 annual report, we reported that 

the Social Security Administration (SSA) needs data from state and 

local governments on retirees who receive pensions from employment 

not covered under Social Security to better enforce offsets and ensure 

benefit fairness. In particular, SSA needs this information to fairly and 

accurately apply the Government Pension Offset, which generally 

applies to spouse and survivor benefits, and the Windfall Elimination 

Provision, which applies to retired worker benefits. The Social 

Security’s Government Pension Offset and Windfall Elimination 

Provision takes noncovered employment into account when 

calculating Social Security benefits. While information on receipt of 

pensions from noncovered employment is available for federal 

pension benefits from the federal Office of Personnel Management 

(OPM), it is not available to SSA for many state and local pension 

benefits. The President’s Fiscal Year 2016 Budget submission reproposed legislation that would require state and local governments to 

provide information on their noncovered pension payments to SSA so 

that the agency can apply the Government Pension Offset and 

Windfall Elimination Provision. The proposal includes funds for 

administrative expenses, with a portion available to states to develop 

a mechanism to provide this information. Also, we continue to suggest 

that Congress consider giving IRS the authority to collect the 

information that the SSA needs to administer these offsets. Providing

information on the receipt of state and local noncovered pension 

benefits to SSA could help the agency more accurately and fairly 

administer the Government Pension Offset and Windfall Elimination 

Provision and could result in an estimated $2.4 billion–6.5 billion in 

savings over 10 years if enforced both retrospectively and 

prospectively. If Social Security only enforced the offsets 

prospectively, the overall savings would be less as it would not reduce 

benefits already received.

• Disability and Unemployment Benefits: In our 2014 annual report, 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 

Implementing Benefit Offsets
 

Page 37 GAO-15-404SP 2015 Annual Report 

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

The President’s Fiscal Year 2016 Budget submission proposes to 

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

bills had 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 

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.

Table 5 highlights some of our suggested actions within these and other 

areas that have significant potential cost-savings or revenueenhancement opportunities, according to estimates from GAO, executive 

branch agencies, the Congressional Budget Office, or the Joint 

Committee on Taxation.

Table 5: Selected Areas with Associated Cost-Savings and Revenue-Enhancement Opportunities Identified in Our 2011-2014 

Annual Reports

Annual report Areas identified 

Defense and Contracting

2011 Tactical Wheeled Vehicles (Area 6): A department-wide acquisition strategy could reduce the Department of 

Defense’s (DOD) risk of costly duplication in purchasing Tactical Wheeled Vehicles. Reducing the number of 

joint light tactical vehicles DOD procures could result in billions of dollars in cost savings.

2011 Weapon Systems Acquisition Programs (Area 38): Employing best management practices could help DOD 

achieve significant cost savings on the $1.4 trillion (fiscal year 2015 dollars) it expects to invest in the 

development and procurement of its portfolio of 78 major defense acquisition programs

2014 Combatant Command Headquarters Costs (Area 12): If the department applied the 20 percent reduction in 

management headquarters spending to the $1.7 billion DOD used to operate and support the five geographic 

combatant commands in fiscal year 2012, DOD could potentially achieve up to an estimated $340 million in 

annual savings. 

2013 Agencies’ Use of Strategic Sourcing (Area 23): 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 1 percent from selected agencies’ procurement spending alone would equate to over 

$4 billion. 

2013 Joint Basing (Area 20): A plan to achieve the efficiencies and cost savings envisioned from joint bases, 

coupled with a reevaluation of associated goals and guidance, could lead to greater consolidation of installation 

services at joint bases and better position DOD to achieve its identified goals.

2012 Military Health Care Costs (Area 36): 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.
 

Page 38 GAO-15-404SP 2015 Annual Report 

Annual report Areas identified 

2011 Military Personnel Costs (Area 37): A total compensation approach would be needed to manage military 

personnel costs—which grew 31 percent from fiscal year 2001 to fiscal year 2014. 

Information Technology

2014 Information Technology Investment Portfolio Management (Area 24): 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 (IT) 

investments.

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

government efficiency and achieve cost savings and avoidances of about $5.3 billion by fiscal year 2017.

2013 Information Technology Operations and Maintenance (Area 30): Strengthening oversight of key federal 

agencies’ major IT investments in operations and maintenance would provide an opportunity for savings on 

billions in IT investments. 

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 IT operations and avoid costs 

through enterprise software license agreements and hardware procurement consolidation, resulting in financial 

savings of at least $80 million. In addition, the Department of Health and Human Services (HHS) will achieve 

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

architecture to improve its telecommunications infrastructure.

Energy and Agriculture

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. 

2014 Advanced Technology Vehicles Manufacturing Loan Program (Area 13): 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.

2013 Crop Insurance (Area 19): To achieve up to nearly $2 billion per year in cost savings in the crop insurance 

program, Congress could consider limiting the subsidy for premiums that are provided on behalf of individual 

farmers, reducing the subsidy, or some combination of limiting and reducing these subsidies.

Health Care

2014 Medicaid Demonstration Waivers (Area 21): Federal spending on Medicaid demonstrations could be reduced 

if HHS were required to improve the process for reviewing, approving, and making transparent the basis for 

spending limits approved for Medicaid demonstrations. We estimated the federal share of savings could have 

been up to $21 billion over 5 years for two states’ recent demonstrations that we reviewed.

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

would 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.

Taxes and Fees

2014 Collection of Unpaid Federal Taxes (Area 15): The federal government could increase tax revenue 

collections by $500 million over a 5-year time period, according to a 2012 Congressional Budget Office 

estimate, by identifying and taking actions to limit issuance of passports to applicants with unpaid federal taxes.

2013 Tobacco Taxes (Area 31): Federal revenue losses ranged from 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.
 

Page 39 GAO-15-404SP 2015 Annual Report 

Annual report Areas identified 

2011 Simple Tax Return Errors (Area 56): Congress could grant the Internal Revenue Service (IRS) broader 

authority, with appropriate safeguards against misuse of that authority, to correct math errors during tax return 

processing. In March 2015, the Joint Committee on Taxation estimated that this change could result in 

$166 million in savings over 10 years, similar to last year’s scoring.

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) 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.

2012 Immigration Inspection Fee (Area 49): The user fee for immigration inspection of air and sea passengers 

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 relying on general fund appropriations; in 2012 this could 

have resulted in reduced reliance on general fund appropriations used for inspection services by about $175 

million. 

Homeland Security

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 primary criterion 

FEMA uses to determine whether to recommend that the President declare a major disaster, which could have 

reduced federal cost by as much as $3.59 billion. 

2013 Checked Baggage Screening (Area 28): By reviewing the appropriateness of the federal cost share the 

Transportation Security Administration (TSA) applies to agreements that finance modification projects related to 

the installation of checked baggage screening systems at airport facilities, TSA could, if a reduced cost share 

were deemed appropriate, achieve cost efficiencies and be positioned to install a greater number of optimal 

baggage screening systems than currently anticipated. According to TSA, as of March 2015, their data show 

that lowering the cost share from 90 percent to 75 percent could result in roughly $140 million in cost 

efficiencies during the fiscal year 2015 to 2030 timeframe.

Income Security

a

2011 Social Security Offsets (Area 80): Social Security needs data on pensions from noncovered earnings to better 

enforce offsets and ensure benefit fairness, estimated to result in $2.4-$6.5 billion savings over 10 years if 

enforced both retrospectively and prospectively. If Social Security only enforced the offsets prospectively, the 

overall savings would be less as it would not reduce benefits already received. 

2014 Disability and Unemployment Benefits (Area 8): 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.

2014 Veterans’ and Survivors’ Benefits (Area 23): 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 before 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. 

Source: GAO. | GAO-15-404SP

Note: The estimates in this table are from a range of sources, including GAO, executive branch 

agencies, the Congressional Budget Office, or the Joint Committee on Taxation.
 

Page 40 GAO-15-404SP 2015 Annual Report 

a

We reported in 2013 that reducing the portion of costs that TSA pays for facility modifications 

associated with the installation of optimal baggage screening systems, from 90 percent to 75 percent, 

would lower the federal government’s cost for airport modification projects it supports by roughly $300 

million from fiscal year 2012 through fiscal year 2030. However, according to TSA, since 2012, many 

assumptions and cost estimates for airport modification have changed. Specifically, TSA explained 

that as of March 2015, the data show that lowering the cost share from 90 percent to 75 percent 

would result in cost efficiencies of roughly $140 million during the fiscal year 2015 to 2030 time frame. 

TSA stated that this variance in estimates is driven by the fact that cost savings for 2012 through 

2015 can no longer be realized and many assumptions and definitions of related data elements have 

changed.

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. If 

fully and effectively implemented, the GPRA Modernization Act of 2010 

(GPRAMA) and the Digital Accountability and Transparency Act of 2014 

(DATA Act) hold promise for helping to improve performance and budget 

information and helping to address challenges in identifying and 

addressing areas of fragmentation, overlap, and duplication.40

• GPRAMA establishes a framework aimed at taking a more 

crosscutting and integrated approach to focusing on results and 

improving government performance. Effective implementation of 

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.41

 

40Pub. L. No. 111-352, 124 Stat. 3866 (2011) (GPRAMA); Pub. L. No. 113-101, 128 Stat. 

1146 (2014) (DATA Act). 

41For GAO’s most recent work on GPRAMA, see GAO, Government Efficiency and 

Effectiveness: Inconsistent Definitions and Information Limit the Usefulness of Federal 

Program Inventories, GAO-15-83 (Washington D.C.: Oct. 31, 2014); Managing for 

Results: Selected Agencies Need to Take Additional Efforts to Improve Customer Service, 

GAO-15-84 (Washington D.C.: Oct. 24, 2014); and Managing for Results: Agencies’ 

Trends in the Use of Performance Information to Make Decisions, GAO-14-747 

(Washington D.C.: Sept. 26, 2014). In addition, information on GAO’s work on GPRAMA 

can be found at 

http://www.gao.gov/key_issues/managing_for_results_in_government/issue_summary. 

Existing and New 

Tools Can Assist in 

Identifying, 

Evaluating, and 

Addressing 

Fragmentation, 

Overlap, or 

Duplication
 

Page 41 GAO-15-404SP 2015 Annual Report 

• The DATA Act requires actions that would help make spending data 

comparable across programs, allowing executive branch agencies 

and Congress to accurately measure the costs and magnitude of 

federal investments. As we have previously reported, better data and 

a greater focus on expenditures and outcomes are essential to 

improving the efficiency and effectiveness of federal efforts.42

To help analysts and decision makers better assess the extent of 

fragmentation, overlap and duplication, GAO has developed an 

evaluation and management guide (GAO-15-49SP), which is being 

released concurrently with this report.43

Part one provides four steps for analysts to identify and evaluate 

instances of fragmentation, overlap or duplication:

The guide includes two parts. 

Part one is for analysts, including federal, state, and local auditors; 

congressional staff; researchers; and consultants. Part two is for 

policymakers, including congressional decision makers and executive 

branch leaders.

1. Identify fragmentation, overlap or duplication among a selected set of 

programs and understand how the programs are related.

2. Identify the potential positive and negative effects of any 

fragmentation, overlap, or duplication found.

3. Validate the effects and assess and compare the fragmented, 

overlapping or duplicative programs to determine their relative 

performance and cost-effectiveness.

4. Identify options to reduce or better manage the negative effects of 

fragmentation, overlap, or duplication.

Each step includes examples that illustrate how to implement suggested 

actions or consider different types of information. The guide also includes 

a number of Tip Sheets and Tools to help guide analysts’ reviews of 

fragmentation, overlap, and duplication. The guide is constructed so that 

analysts may follow it from beginning to end, or apply only certain steps to 

 

42See GAO, Federal Data Transparency: Effective Implementation of the DATA Act Would 

Help Address Government-wide Management Challenges and Improve Oversight, 

GAO-15-241T (Washington, D.C.: Dec. 3. 2014).

43See GAO, Fragmentation, Overlap, and Duplication: An Evaluation and Management 

Guide, GAO-15-49SP (Washington, D.C.: Apr. 14, 2015).
 

Page 42 GAO-15-404SP 2015 Annual Report 

their reviews. For example, analysts relying on existing GAO work that 

identifies fragmentation, overlap, and duplication among a number of 

programs may use the latter steps of the guide to evaluate and compare 

those programs and identify options for reducing or better managing the 

fragmentation, overlap, or duplication identified. The guide is meant to 

provide a framework for considering these issues and offers an approach 

for conducting a fragmentation, overlap, and duplication review and 

selecting options to reduce or better manage negative effects.

Part two provides guidance to help policymakers reduce or better manage 

fragmentation, overlap, and duplication. It includes two sections, one for 

congressional decision makers and one for executive branch leaders.

1. The first section of part two provides steps for congressional decision 

makers to consider that could include proposing legislation

establishing deadlines for agencies to provide performance and other 

programmatic information with consequences for noncompliance, as 

well as, obtaining informal cost estimates of proposed legislation from 

the Congressional Budget Office. Congressional decision makers 

could also use existing processes, such as authorization or 

reauthorization, budget, appropriations or oversight, to establish such 

deadlines and consequences or to specifically appropriate funds to 

help establish a program’s performance or cost-effectiveness, 

particularly when limited information is available about a program’s 

performance.

2. The second section of part two addresses steps that executive branch 

leaders could take, including actions for mitigating the negative effects 

of fragmentation, overlap, or duplication through management 

approaches. These management approaches could include engaging 

in performance management activities, initiating and participating in 

collaborative efforts both within and among agencies, indentifying and 

implementing through guidance or rule-making efficiencies and other 

streamlining measures, and identifying and communicating to 

congressional decision makers opportunities for increasing efficiency 

that require congressional action to implement.

In recognition that the pervasiveness of fragmentation, overlap, and 

duplication may require attention beyond the program level, the guide 

also includes information on a number of options Congress and the 

executive branch may consider to address these issues governmentwide. Some of these options are executive branch reorganization, special 

temporary commissions, interagency groups, automatic sunset 

provisions, and portfolio or performance-based budgeting. These options 
 

Page 43 GAO-15-404SP 2015 Annual Report 

can be used independently or together to assist policymakers in 

evaluating and addressing fragmentation, overlap, and duplication 

beyond the programmatic level.

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 44 GAO-15-404SP 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

FDA Food and Drug Administration

FECA Federal Employees’ Compensation Act

FEMA Federal Emergency Management Agency

FHA Federal Housing Administration

GLP Good Laboratory Practices

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
 

Page 45 GAO-15-404SP Abbreviations

NSF National Science Foundation

OARC Office of Autism Research Coordination

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 46 GAO-15-404SP Report at a Glance

Report at a Glance

Section I of this report presents 12 areas in which we found evidence of 

fragmentation, overlap, or duplication among federal government 

programs. 

Table 1: Fragmentation, Overlap, and Duplication Areas Identified in This Report

Mission Areas Identified Page 

Agriculture 1. EPA’s and FDA’s Laboratory Inspections: To avoid potential duplication of certain types of 

laboratory inspections and better leverage limited resources, the Environmental Protection Agency 

and the Food and Drug Administration should develop a formal process to collaborate and share 

information on planned inspections.

50

Defense 2. Ground Radar and Guided Munitions Programs: The Department of Defense should take steps 

to minimize the risk of future duplication within its ground radar and guided munitions weapons 

systems.

55

3. Weapon System Milestone Decision Process: To improve efficiency, the Secretary of Defense 

should streamline the Department of Defense’s milestone decision process used for major weapon 

system acquisition programs by eliminating reviews that can be duplicative and are not highly 

valued by acquisition officials.

60

General 

government

4. Consumer Product Safety Oversight: More formal and comprehensive coordination among 

federal agencies is needed to help increase efficiency and effectiveness related to consumer 

product safety oversight and address challenges related to fragmentation and overlap.

64

5. Nonemergency Medical Transportation: To mitigate the effects of overlap, the Department of 

Transportation should take steps to enhance federal, state and local coordination among 42 

programs that provide nonemergency medical transportation to individuals who cannot provide 

their own transportation due to age, disability, or income constraints.

70

Health 6. DOD US Family Health Plan: To potentially save millions of dollars and eliminate duplication 

within the Department of Defense’s health care system, Congress should terminate the statutorily 

required US Family Health Plan because it offers military beneficiaries the same health care benefit 

offered by other DOD health care contractors.

76

7. Medicare Postpayment Claims Reviews: To prevent inappropriate duplicative postpayment 

claims reviews by contractors, the Centers for Medicare & Medicaid Services should monitor the 

Recovery Audit Data Warehouse—the database developed in part to prevent duplicative reviews—

and develop more complete guidance on contractors’ responsibilities. 

82

8. Serious Mental Illness Programs: To help ensure that the eight federal agencies administering 

over 100 programs supporting individuals with serious mental illness are able to develop an

overarching perspective in order to understand the breadth of programs and resources used—

including any potential gaps or overlap—greater coordination of federal efforts is needed from the 

Department of Health and Human Services, and within it, the Substance Abuse and Mental Health 

Services Administration, which is required to promote coordination of programs relating to mental 

illness throughout the federal government.

87

Homeland 

security / law 

enforcement

9. Vulnerability Assessments of Critical Infrastructure: The Department of Homeland Security 

could mitigate potential duplication or gaps by consistently capturing and maintaining data from 

overlapping vulnerability assessments of critical infrastructure and improving data sharing and 

coordination among the offices and components involved with these assessments.

91

Information 

technology

10. DHS Processing of FOIA Requests: To address duplication in the processing of Freedom of 

Information Act requests, the Department of Homeland Security should determine the viability of 

re-establishing an agreement between two of its component agencies that process immigration 

files. 

97

International 

affairs 

11. Federal and States’ Export Promotion: Because federal and state export promotion efforts 

overlap, the Department of Commerce should take steps to enhance collaboration among them to 

promote economic development while ensuring the most efficient use of limited federal resources.

102
 

Page 47 GAO-15-404SP Report at a Glance

Section II of this report summarizes 12 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 13. Defense Facilities Consolidation and Disposal: To help identify opportunities for saving costs 

by consolidating or disposing of unutilized or underutilized facilities, the Department of Defense 

should ensure that data on the utilization of DOD facilities—which were collectively valued at 

around $850 billion in fiscal year 2013—are complete and accurate.

114

14. DOD Headquarters Reductions and Workforce Requirements: The Department of Defense 

could potentially achieve hundreds of millions of dollars in cost savings and help to ensure that 

headquarters organizations are properly sized to meet their assigned missions by reevaluating 

its ongoing headquarters-reductions efforts and conducting periodic reassessments of workforce 

requirements.

120

Energy 15. Strategic Petroleum Reserve: The Department of Energy could potentially realize savings by 

reexamining the appropriate size of the Strategic Petroleum Reserve—which was valued at 

about $45 billion as of December 2014—and depending on the outcome of the analysis, selling 

crude oil from the reserve and using the proceeds to fund other national priorities.

129

16. U.S. Enrichment Corporation Fund: Congress may wish to consider permanent rescission of 

the entire $1.6 billion balance of the U.S. Enrichment Corporation Fund—a revolving fund in the 

U.S. Treasury—because its purposes have been fulfilled.

134

General 

government

17. Tax Policies and Enforcement, 2015: By more effectively using data to manage various 

enforcement programs, the Internal Revenue Service could bolster tax compliance and 

potentially collect hundreds of millions of dollars in additional revenue. 

138

Health 18. DOD TRICARE Improper Payments: To achieve potential cost savings associated with billions 

of dollars of improper payments, the Department of Defense should implement a more 

comprehensive improper payment measurement methodology and develop more robust 

corrective action plans for the military health care program known as TRICARE.

150

19. Medicare Payments to Certain Cancer Hospitals: To achieve almost $500 million per year in 

program savings, Congress should consider modifying how Medicare pays certain cancer 

hospitals.

156

20. State Medicaid Sources of Funds: To potentially save hundreds of millions of dollars, the 

Centers for Medicare & Medicaid Services should ensure that states report accurate and 

complete data on state Medicaid sources of funds so that it may better oversee states’ financing 

arrangements that can increase costs for the federal government.

161

Income security 21. Children’s Disability Reviews: To prevent an estimated $3.1 billion dollars in potential 

overpayments over 5 years, the Social Security Administration needs to conduct timely disability 

reviews to better ensure that only eligible children receive cash benefits from the Supplemental 

Security Income program.

168

22. Supplemental Nutrition Assistance Program Fraud and Abuse: States should be able to 

more effectively fight fraud among beneficiaries of the Supplemental Nutrition Assistance 

Program—which provided more than $76 billion in benefits in fiscal year 2013—by using data to 

better focus investigative efforts on high-risk households.

173

Science and 

environment

12. Oceanic and Atmospheric Observing Systems Portfolio: The National Oceanic and 

Atmospheric Administration should analyze its portfolio of observing systems to determine the 

extent to which unnecessary duplication may exist.

110
 

Page 48 GAO-15-404SP Report at a Glance

Mission Areas Identified Page 

Information 

technology 

23. Federal Software Licenses: In order to achieve hundreds of millions of dollars in governmentwide savings, federal agencies should apply better management of software licenses and the 

Office of Management and Budget should issue a directive to assist agencies in doing so.

180

Social services 24. Disaster Relief Fund Administrative Costs: Cost savings of millions of dollars could be 

realized if Federal Emergency Management Agency officials enhance their oversight of the 

agency’s administrative costs obligated from the Disaster Relief Fund for major disasters.

187

Table 3: Appendixes 

Appendixes Page 

Appendix I: List of Congressional Addressees 193

Appendix II: Objectives, Scope, and Methodology 194

Appendix III: New Actions of Fragmentation, Overlap, and Duplication Added to Existing Areas 199

Appendix IV: List of Areas Identified in 2011-2015 Annual Reports, by Mission 202

Appendix V: Lists of Programs Identified 222
 

Page 49 GAO-15-404SP Fragmentation, Overlap, and Duplication

Section I: Areas in Which GAO Has Identified 

Fragmentation, Overlap, or Duplication 

This section presents 12 areas in which we found evidence of 

fragmentation, overlap, or duplication among federal government 

programs.
Page 50 GAO-15-404SP Fragmentation, Overlap, and Duplication

Agriculture

1. EPA’s and FDA’s Laboratory Inspections

To avoid potential duplication of certain types of laboratory inspections and better leverage limited resources, 

the Environmental Protection Agency and the Food and Drug Administration should develop a formal process 

to collaborate and share information on planned inspections. 

Pesticides that are used to destroy or control weeds and pests contribute 

to agricultural productivity by preventing crop damage and to improving 

public health by controlling disease-carrying pests. However, the use of 

pesticides may also have adverse effects on human health and the 

environment. The Federal Insecticide, Fungicide, and Rodenticide Act 

generally requires registration of pesticides, and under implementing 

regulations, the Environmental Protection Agency (EPA) reviews 

applications for pesticides. EPA also inspects the laboratories where 

these pesticides are first tested for safety. Laboratories must conduct 

studies in accordance with regulations called Good Laboratory Practices 

(GLP), which are intended to ensure the quality and integrity of data. 

The Department of Health and Human Services’s Food and Drug 

Administration (FDA) also uses its own GLP regulations, promulgated 

under the Federal Food, Drug, and Cosmetic Act, to ensure the quality 

and integrity of the data for nonclinical laboratory studies of 

investigational drugs, medical devices, food additives, and other products 

through laboratory inspections and reviews of studies to ensure GLP 

compliance. GLP regulations were developed and promulgated in the late 

1970s and early 1980s, in response to fraudulent laboratory activities and 

poor laboratory practices that occurred during that time. 

According to EPA and FDA officials, the GLP standards of the two 

agencies are largely similar. Moreover, a senior EPA official and 

representatives from three laboratories that were inspected by both EPA 

and FDA stated that the inspections performed by the two agencies were 

comparable. In some cases, EPA and FDA also receive studies from the 

same laboratories.

EPA inspected about 4 to 6 percent of the eligible 1,400 laboratories each 

year from fiscal year 2009 to fiscal year 2013. EPA inspected an average 

of 67 laboratories for GLP compliance from fiscal year 2009 to fiscal year 

2012.1

 

1

In comparing EPA and FDA data, GAO used the 2009 through 2012 time frame, since 

2012 is the latest year for which both agencies have data. 

EPA officials said that a limited number of inspectors and tight 

budgets have hindered their ability to perform more inspections. From 

fiscal year 2009 to fiscal year 2013, EPA reduced the budget for its GLP 

Compliance Monitoring Program—which conducts inspections for GLP 

compliance—from about $1.4 million to about $700,000 annually, and the 

number of full-time equivalent staff was reduced by 50 percent from eight 

Why This Area Is 

Important
 

Page 51 GAO-15-404SP Fragmentation, Overlap, and Duplication

to four inspectors.2 EPA officials said that the reduction in the number of 

full-time equivalent staff was due to retirements, an inability to hire new 

inspectors because of budgetary constraints, and most importantly, 

according to these officials, the inability to find inspector candidates with 

the requisite skills. From fiscal year 2009 to fiscal year 2012 (the most 

recent year for which data are available), FDA inspected an average of 61 

laboratories per year for GLP compliance.3

GAO found in May 2014 that EPA and FDA do not regularly collaborate 

on GLP laboratory inspections and may be duplicating each other’s work 

by inspecting the same laboratories. In addition, GAO found that EPA and 

FDA do not regularly communicate about future inspections or share 

results from completed inspections. In 1984, EPA and FDA entered into 

an interagency agreement to collaborate on GLP inspections. Under the 

agreement, FDA’s responsibilities included conducting a certain number 

of on-site inspections of laboratories identified by EPA. FDA performed 

some inspections of laboratories identified by EPA until 2007, although 

the agreement was not renewed after 2004. EPA officials said they also 

formally met with FDA officials on a quarterly and annual basis to discuss 

upcoming inspections but that communication ended by 2007, when, 

according to EPA officials, FDA began selecting laboratories for 

inspection on an annual basis instead of on a quarterly basis as EPA 

does. Since these meetings ended, EPA officials said that they do not 

always know if a laboratory has been inspected by FDA until they arrive 

on site. 

As a result, GAO found that EPA and FDA may be duplicating each 

other’s work in some of their GLP inspections. For fiscal years 2005 to 

2012, EPA and FDA conducted a total of 170 GLP inspections of the 

same 37 laboratories. In 38 of the 170 inspections, the agencies 

inspected the same laboratory during the same fiscal year. 

GAO found that there is some degree of overlap in the laboratories that 

are eligible for inspection by the two agencies. Some laboratories covered 

by GLP regulations conduct tests yielding data that will be submitted only 

to EPA, but other laboratories conduct tests for review by both EPA and 

FDA and are therefore eligible for inspection by both agencies. FDA 

officials told GAO that they did not have data to identify the total number 

of laboratories that submit data to both agencies and would therefore be 

subject to GLP inspections by both agencies. EPA officials and 

 

2

GAO used the EPA budget numbers from 2009 through 2013 to get a 5-year budget 

figure, since EPA had budget data through 2013. Because FDA does not budget by 

inspection type, but by overall program activity, GAO was not able to determine annual 

cost of FDA’s GLP inspections. 

3

GAO was unable to determine the percentage of eligible laboratories that FDA inspected 

because FDA could not provide GAO with the total number of laboratories eligible for 

inspection. 

What GAO Found
 

Page 52 GAO-15-404SP Fragmentation, Overlap, and Duplication

stakeholders GAO interviewed, however, said that laboratories that 

conduct toxicology testing are the most likely to perform tests that are 

submitted to both EPA and FDA. For example, one representative from a 

laboratory in Maryland that had been inspected by both EPA and FDA 

eight times from fiscal year 2005 to fiscal year 2012 told GAO that some 

of the information in the laboratory’s toxicology studies FDA officials 

examined during a 2011 GLP inspection could have been shared with 

EPA officials. FDA officials said that they would welcome a list of 

inspections planned and conducted by EPA and that it would be helpful if 

EPA shared information on potential problems that it may have found 

during its inspections. EPA officials also said collaborating and 

communicating on inspections would be helpful.

By not collaborating and communicating regularly, EPA and FDA may be 

missing opportunities to improve efficiency and effectiveness. For 

example, if EPA knew in advance that a laboratory was recently 

inspected by FDA, EPA inspectors could use FDA’s inspection results to 

inform their decision regarding whether to conduct their own inspection. In 

some circumstances, it may be necessary for both agencies to inspect 

the same laboratory. However, sharing information could help both 

agencies leverage and extend resources, since each agency can only 

inspect a certain number of laboratories each year. This coordination also 

could increase the number of laboratories that are inspected for GLP 

compliance. The federal government uses a range of mechanisms to 

implement interagency collaboration, such as interagency groups and 

interagency agreements and memorandums of understanding.4 GAO has 

identified key practices that can strengthen agencies’ commitment to 

working collaboratively, including articulating their agreements in formal 

documents.5 Written agreements are most effective when they are 

regularly updated and monitored. Officials from both agencies said that 

collaborating and communicating on inspections would be helpful. Absent 

a formal written agreement, it is not clear that the agencies would 

regularly collaborate on future planned inspections and share results from 

completed inspections.

In May 2014, GAO recommended that the EPA Administrator and the 

FDA Commissioner 

• develop a formal written agreement, such as a memorandum of 

understanding, which outlines how the two agencies plan to regularly 

collaborate and share information on GLP inspections and avoid 

 

4

GAO, Managing for Results: Key Considerations for Implementing Interagency 

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

5

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

Collaboration among Federal Agencies, GAO-06-05 (Washington, D.C.: Oct. 21, 2005). 

Actions Needed and 

Potential Financial or 

Other Benefits
 

Page 53 GAO-15-404SP Fragmentation, Overlap, and Duplication

duplication of inspections so that EPA can more efficiently use its 

limited resources. 

GAO was not able to ascertain the financial benefits of taking this action 

because the two agencies did not use comparable methods to establish 

the cost estimate of a GLP inspection. In addition, the number of 

inspections EPA and FDA would be able to leverage in any given year is 

unknown, adding further uncertainty to the quantification of financial 

benefits. However, by sharing information on planned inspections, both 

agencies may be able to expand their inspection coverage.

In commenting on the May 2014 report on which this analysis is based, 

EPA agreed to work with FDA to develop written procedures that outline 

how EPA and FDA will collaborate and share information on GLP 

inspections. EPA also stated that it did not agree that a formal 

memorandum of understanding between the two agencies was 

necessary. However, GAO’s recommendation did not prescribe the type 

of agreement the agencies should undertake and offered a memorandum 

of understanding as one example. The Department of Health and Human 

Services also agreed with GAO’s recommendation, but reiterated that 

there are legitimate reasons why some GLP inspections may be 

conducted by both EPA and FDA at a single laboratory within a short 

period of time. 

GAO provided a draft of this report section to EPA and FDA in February 

2015. An EPA official told us that EPA and FDA representatives had held 

initial meetings to discuss coordination on strategies to implement a 

formal written agreement for sharing information on GLP inspections.

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

product listed in the related GAO products section. To determine the 

extent to which EPA and FDA collaborated on inspections, GAO analyzed 

EPA and FDA GLP laboratory inspection data. GAO also conducted a 

web-based survey of 53 laboratories and other entities. GAO received 

responses from 20 laboratories and analyzed these responses to 

determine, among other things, if the laboratories had conducted GLP 

tests or studies for submission to both EPA and FDA since 2008.6

 

6

GAO initially selected a random sample of 80 laboratories and other entities that sent 

study data to EPA from fiscal year 2010 to fiscal year 2012 using EPA’s Office of Pesticide 

Program Information Network database. Because the database did not include e-mail 

addresses, GAO searched for e-mail addresses and found them for 53 of the 80 in our 

sample. GAO administered the survey to these 53 and received responses from 26. Of 

these 26, 6 reported that they were not a laboratory and did not conduct GLP testing. 

Therefore, these 6 were considered out-of-scope, leaving 20 for analysis. The results of 

our analysis are not generalizeable to all laboratories that are covered by the GLP 

Program. 

GAO 

reviewed agency documents, such as a 1984 interagency agreement 

between EPA and FDA to cooperate on GLP inspections, and GAO 

Agency Comments 

and GAO’s Evaluation

How GAO Conducted 

Its Work
 

Page 54 GAO-15-404SP Fragmentation, Overlap, and Duplication

interviewed EPA and FDA officials and laboratory representatives about 

the potential for the two agencies to collaborate.

Pesticide Safety: Improvements Needed in EPA’s Good Laboratory 

Practices Inspection Program. GAO-14-289. Washington, D.C.: May 15, 

2014. 

For additional information about this area, contact John Neumann at 

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

Related GAO 

Products

Contact Information
Page 55 GAO-15-404SP Fragmentation, Overlap, and Duplication

Defense

2. Ground Radar and Guided Munitions 

Programs

The Department of Defense should take steps to minimize the risk of future duplication within its ground radar 

and guided munitions weapons systems.

The Department of Defense (DOD) and the military services spend over 

$150 billion each year on the development and procurement of weapons 

and other defense systems to fulfill their roles and missions. Among many 

other systems, DOD and the military services invest in ground radars and 

air-to-ground precision guided munitions. Ground radars are groundbased sensor systems used by the Army, Air Force, and Marine Corps to 

detect and track a variety of targets. These radars perform missions such 

as air surveillance, air defense, and counterfire target acquisition, among 

others. Air-to-ground precision guided munitions are weapons launched 

from Army, Navy, Air Force, and Marine Corps aircraft that are intended 

to accurately engage and destroy enemy targets on the ground. 

The House Armed Services Committee has previously raised questions 

about potential overlap in the ground radar area. For example, in 2012, 

House report 112-479 for the National Defense Authorization Act for 

Fiscal Year 2013 noted overlap with the Army and Marine Corps ground 

radar programs’ missions. The report encouraged the Army and Marine 

Corps to collaborate and identify overlapping requirements and determine 

if they could procure a single system rather than having each service 

procuring and maintaining separate systems. In the Senate report 113-44 

accompanying the National Defense Authorization Act for Fiscal Year 

2014, the Senate Armed Services Committee raised questions about 

potential duplication within DOD’s ground radar and air-to-ground 

precision guided munitions programs, which led to GAO’s December 

2014 report.

DOD’s requirements and acquisition policies contain provisions to help 

avoid redundancy and consider existing alternatives before starting new 

acquisition programs. DOD guidance states that when validating key 

requirements documents, the chair of the group responsible for that 

capability area is also certifying that the proposed requirements and 

capabilities are not unnecessarily redundant to existing capabilities in the 

joint force. In some cases, redundancy may be advisable for operational 

reasons. The validation authority for a requirements document depends 

on factors such as the potential dollar value of a program, and determines 

the level of oversight a requirement document receives. The validation 

authority for major defense acquisition programs—known as acquisition 

category I programs—is the Joint Requirements Oversight Council 

(JROC). The JROC is chaired by the Vice Chairman of the Joint Chiefs 

of Staff and includes one senior leader from each of the military services, 

among others. Documents that require JROC review receive a “JROC 

Interest” designation.

Why This Area Is 

Important
 

Page 56 GAO-15-404SP Fragmentation, Overlap, and Duplication

GAO’s December 2014 report examined the extent to which potential 

overlap or duplication exists in ground radar programs and in air-toground precision guided munitions programs. In both areas, GAO found 

that opportunities exist to reduce the risk of future duplication. 

GAO found overlap and potential duplication among several ground radar 

programs.1

However, GAO found that the JROC did not review whether the 

capabilities of the Army’s AN/TPQ-53 and the Marine Corps’ G/ATOR 

Block II were unnecessarily redundant or duplicative as part of the 

requirements validation process. The JROC did not validate the Army’s 

AN/TPQ-53 performance requirements because it was initially an urgent 

wartime need and did not meet the dollar threshold to automatically 

trigger a review. However, the AN/TPQ-53 later transitioned to the more 

traditional acquisition process, at which point the JROC could have 

reviewed the program. Instead, the Joint Staff delegated the validation 

authority for the AN/TPQ-53 requirements to the Army, which validated 

them in 2010. The JROC had previously validated the G/ATOR Block II 

requirements documents in 2005, prior to the Army starting the AN/TPQ53 program. Because the Joint Staff delegated the validation authority for 

In particular, based on analysis of program requirements 

documents, GAO found that the Marine Corps’ Ground/Air Task Oriented 

Radar (G/ATOR) Block I and Air Force’s Three-Dimensional 

Expeditionary Long-Range Radar (3DELRR) acquisition programs have 

some key overlapping requirements and provide similar capabilities in 

their air surveillance and air defense roles. However, the JROC ultimately 

determined that any redundancy between requirements was necessary.

In addition, based on analysis of program requirements documents, GAO

found that the Army’s AN/TPQ-53 Counterfire Radar and the Marine 

Corps’ G/ATOR Block II have some overlapping requirements. Both radar 

systems detect, track, classify, and locate the origin of enemy projectiles, 

including mortar, artillery, and rocket systems and are to replace existing 

Army and Marine Corps Firefinder radars that perform counterfire target 

acquisition missions. While many of the requirements overlap, the 

AN/TPQ-53 does not meet the G/ATOR Block II detection range 

requirements for multiple target types. In addition to some unique 

requirements, urgent operational needs and different acquisition 

approaches led the Army and Marine Corps to establish separate 

acquisition programs for counterfire target acquisition radars.

 

1

GAO’s review focused on ground radars that perform three types of missions: (1) air 

surveillance, in which radars search, detect, and track cruise missiles, fixed and rotary 

wing aircraft, and unmanned aircraft systems; (2) air defense, in which radars provide data 

that enables other weapon systems, such as air and missile defense or aircraft, to take 

offensive or defense actions against enemy cruise missiles, fixed and rotary wing aircraft, 

and unmanned aircraft systems; and (3) counterfire target acquisition, in which radars 

detect and track enemy rockets, artillery, and mortars to determine enemy firing positions 

and impact areas for incoming fire.

What GAO Found

Ground Radar Programs
 

Page 57 GAO-15-404SP Fragmentation, Overlap, and Duplication

the AN/TPQ-53 to the Army, the JROC may have missed an opportunity 

to review whether the capabilities of the AN/TPQ-53 and G/ATOR Block II 

were unnecessarily redundant or duplicative, or to encourage additional 

areas of cooperation between the Army and the Marine Corps.

There may be other opportunities for increased service cooperation to 

meet future ground radar needs, but in order for key decision makers, 

such as the JROC, to take advantage of them, it is important for them to 

have insight into ground radar programs, including programs that do not 

meet the dollar thresholds that trigger a “JROC Interest” designation and 

automatic review. A “JROC Interest” designation provides the JROC the 

opportunity to review ground radar performance requirements and 

capabilities for potential duplication and CAPE with the opportunity to 

develop broad AOA guidance. This type of visibility would put DOD in a 

better position to take the actions necessary to make the most efficient 

use of its resources.

GAO’s analysis of DOD’s active air-to-ground precision guided munitions 

found evidence of overlapping target sets among the munitions, but 

unique factors—such as what type of aircraft a munition can be launched 

from, the munition’s seeker capability in varying weather conditions, and 

the cost of the munition for the desired effect—clearly distinguish them 

from one another. In addition, where some overlap was found, DOD 

officials explained the overlap was necessary to provide flexibility for 

military operations. 

Based on analysis of a number of factors, GAO did not find evidence that 

DOD’s capabilities in air-to-ground precision guided munitions programs

were duplicative. Additionally, none of the DOD or military service 

requirements and acquisition organizations GAO spoke to identified 

unnecessary redundancy or duplication within air-to-ground precision 

guided munitions. In general, DOD officials described the air-to-ground 

precision guided munitions area as efficient in terms of the investments 

DOD has made. GAO found that cooperation among the military services 

contributed to the current lack of duplication.

Although DOD’s active air-to-ground precision guided munitions programs 

are not duplicative, potential for duplication exists in the future. GAO 

found one example of potential future duplication in the Army’s and the 

Navy’s procurement of air-to-ground rocket guidance kits, which could 

result in DOD not fully leveraging its buying power. Both the Army and the 

Navy plan to buy the Advanced Precision Kill Weapon System through 

fiscal year 2015 to meet their guided rocket needs, but starting in fiscal 

year 2016, they may pursue separate, potentially duplicative, efforts. 

There are costs and benefits associated with both the Army and Navy’s 

acquisition approaches; however, if the Army and Navy fulfill their guided 

rocket needs separately instead of cooperatively, it could result in the 

inefficient use of weapon system investment dollars and a loss of buying 

power.

Air-to-Ground Precision 

Guided Munitions 

Programs
 

Page 58 GAO-15-404SP Fragmentation, Overlap, and Duplication

In December 2014, GAO recommended that DOD take the following two 

actions: 

• To provide the JROC the opportunity to review all ground radar 

programs for potential duplication and CAPE with the opportunity to 

develop broad analysis of alternative guidance, the Vice Chairman of 

the Joint Chiefs of Staff should direct the Joint Staff to assign all new 

ground radar capability requirement documents with a Joint Staff 

designation of “JROC Interest.”

• To address potential overlap or duplication in the acquisition of rocket 

guidance kits, the Under Secretary of Defense for Acquisition, 

Technology, and Logistics should require the Army and Navy to 

assess whether a single solution and cooperative, preferably 

competitive, contracting strategy offers the most cost effective way to 

meet both services’ needs.

DOD could potentially realize increased efficiencies through these 

improvements. However, the actual cost savings associated with these 

actions is unknown, because they are related to potential future 

acquisition programs whose costs have not yet been determined. As a 

result, GAO cannot quantify potential financial benefits associated with 

the recommended actions. In general, taking these actions could help 

result in a more efficient use of weapon system investment dollars and an 

increase in buying power.

In commenting on the December 2014 report on which this analysis is 

based, DOD partially concurred with GAO’s first recommendation and 

concurred with the second recommendation. DOD noted that assigning all 

new ground radar capability requirement documents with a Joint Staff 

designation of “JROC Interest” would ignore the tiered Joint Staff 

designation system process. DOD also noted that this would lessen the 

impact and importance of the Functional Capabilities Boards and their 

role to ensure minimization of duplication across the portfolio. GAO 

maintains that without this designation for all new ground radar programs, 

DOD may miss additional opportunities to encourage collaboration across 

the military services. Although DOD concurred with GAO’s second 

recommendation, DOD stated that it has a process to consider 

redundancies across the services’ programs, but it was unclear what 

actions it planned to take to assess if the services could use a single 

contracting strategy to meet its guided rocket needs. GAO maintains that 

DOD should assess this option as part of its consideration of potential 

redundancies

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

for review and comment. The department did not provide comments on 

this report section.

Actions Needed and 

Potential Financial or 

Other Benefits

Agency Comments 

and GAO’s Evaluation
 

Page 59 GAO-15-404SP Fragmentation, Overlap, and Duplication

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

product listed in the related GAO product section. To determine the extent 

of potential overlap or duplication across ground radar and air-to-ground 

precision guided munitions programs, GAO reviewed acquisition 

programs currently in development or production, or “active” programs. 

GAO reviewed and analyzed documentation on system requirements, 

capabilities, and other distinguishing factors to determine if potential 

overlap or duplication exists. GAO interviewed DOD officials regarding 

any instances where we identified potential overlap or duplication. GAO 

also reviewed DOD analysis and interviewed DOD officials to identify 

instances in which DOD found potential overlap or duplication during 

acquisition and requirements reviews and what actions DOD took in 

response.

Ground Radar and Guided Munitions: Increased Oversight and 

Cooperation Can Help Avoid Duplication among the Services’ Programs. 

GAO-15-103. Washington D.C.: December 19, 2014.

For additional information about this area, contact Michael J. Sullivan at 

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

How GAO Conducted 

Its Work

Related GAO 

Products

Contact Information
Page 60 GAO-15-404SP Fragmentation, Overlap, and Duplication

3. Weapon System Milestone Decision 

Process

To improve efficiency, the Secretary of Defense should streamline the Department of Defense’s milestone 

decision process used for major weapon system acquisition programs by eliminating reviews that can be 

duplicative and are not highly valued by acquisition officials. 

The Department of Defense (DOD) has repeatedly delivered the most 

capable weapon systems in the world, but the process used to manage 

the acquisition of these systems has been characterized by organizations 

both internal and external to DOD as one that is inefficient, cumbersome, 

and bureaucratic. As of December 2014, DOD’s portfolio of major 

defense acquisition programs included 78 programs with a total estimated 

acquisition cost of roughly $1.4 trillion.1

In DOD’s acquisition process, weapon system programs typically proceed 

through three major milestones—A, B, and C—where program offices 

provide information to the milestone decision authority in order to make a 

decision on whether the program is ready to transition to the next 

acquisition phase.2

DOD’s acquisition process is managed and supported by officials at 

different hierarchical levels. Weapon system program managers typically 

report to program executive officers in each military service, who are 

charged with overseeing the execution of a portfolio of related systems 

such as fighter aircraft or ships. Program executive officers, in turn, 

typically report to a military service acquisition executive, who reports to 

the defense acquisition executive. As part of the milestone decision 

process, programs are reviewed at each level before reaching the 

milestone decision authority, who is responsible for making decisions at 

major program milestones.

The milestones normally represent transition points in 

the overall acquisition process where there is a marked increase in the 

resources required for the program. Statutes and DOD policy require the 

documentation of specific information—known as information 

requirements—on major defense acquisition programs at each acquisition 

milestone. 

 

1

Major defense acquisition programs are those identified by DOD with a dollar value for all 

increments estimated to require eventual total expenditures for research, development, 

test, and evaluation of more than $480 million or for procurement of more than $2.79 

billion in fiscal year 2014 constant dollars.

2

Milestone A is the decision for an acquisition program to enter into the technology 

maturation and risk reduction phase; Milestone B is the decision to enter the engineering 

and manufacturing development phase; and Milestone C is the decision to enter the 

production and deployment phase.

Why This Area Is 

Important
 

Page 61 GAO-15-404SP Fragmentation, Overlap, and Duplication

For a February 2015 report, GAO surveyed 24 weapon acquisition 

programs and found that, on average, they spent over 2 years completing

up to 49 information requirements for their most recent milestone

decision. This includes the time for the program office to develop the 

documentation and for various stakeholders to review and approve the 

documentation. A primary reason it takes over 2 years to complete the 

information required for a milestone decision is the large number of 

stakeholders that review the documents at the many organizational levels 

above the program office. At the same time, most program managers

considered these reviews to add high value to only 10 percent of the 

documents. 

DOD’s review process can be duplicative in nature, with many 

organizational levels and offices. The information and documentation 

required at milestones can be reviewed by as many as eight different 

organizational levels before a decision is reached on whether a program 

is ready for the next acquisition phase. In general, the information is 

reviewed at each level to gain approval before the program provides the 

information to the next level. This is done serially, which takes more time. 

Eventually, the milestone decision authority and other senior executives 

review the information and determine whether the program is ready to 

proceed to the next acquisition phase.

Many different functional organizations within each level review the 

information before the document is approved. The number of 

organizations conducting reviews varies depending on the information 

included in each document. A few documents that include a wide breadth 

of information can be reviewed by many offices at each level. For 

example, Air Force acquisition strategies, which on average took over 12 

months to complete for the programs GAO surveyed, can be reviewed by 

56 offices, some more than once, before being approved.

In contrast, some DOD classified programs and five commercial firms 

GAO visited use streamlined methods to provide input needed for 

milestone decisions with fewer documents and reviews. Several past 

DOD programs, like the F-16 and F-117 aircraft programs, were managed 

successfully with a more streamlined approach, and DOD is currently 

using a more streamlined milestone decision process for some classified 

programs. Commercial companies GAO examined—Boeing, Caterpillar, 

Cummins, Honda, and Motorola Solutions—also use processes that 

minimize the levels of review resulting in a quicker, more efficient 

milestone decision process. The figure below compares the review levels 

of DOD’s traditional programs to the streamlined review process used for 

some classified programs.

What GAO Found
 

Page 62 GAO-15-404SP Fragmentation, Overlap, and Duplication

Comparison of Review Levels for DOD Traditional and Classified Programs

The need to document information about essential aspects of a program 

and for an appropriate level of review and approval is legitimate. 

According to federal internal control standards, agencies should develop 

effective and efficient processes to ensure that actions are taken to 

address requirements, such as in this case, completing the information 

required to aid in milestone decisions.3 However, over time, the process 

has become bloated, time-consuming, and cumbersome to complete. If 

the information requirements and associated reviews are not providing 

value and are not clearly linked with the key issues facing weapon system 

acquisitions today, inefficiencies will likely remain. Establishing an 

efficient process for documentation and oversight is a key internal control 

to avoid wasteful spending.

To help improve DOD’s milestone decision process, GAO recommended 

in February 2015 that the Secretary of Defense direct the Under 

Secretary of Defense for Acquisition, Technology, and Logistics in 

collaboration with the military service acquisition executives, program 

executive officers, and program managers to take the following action: 

• identify and potentially eliminate reviews associated with information 

requirements that do not add value, with a specific focus on reducing 

levels of review.

Taking this action will help DOD reduce the duplication embedded in its 

milestone decision process and improve the efficiency of its major 

weapon system acquisition programs, which should help the department 

 

3

GAO, Internal Control: 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 63 GAO-15-404SP Fragmentation, Overlap, and Duplication

avoid wasteful spending. GAO could not estimate the potential financial 

benefits of this action because data are not available to measure the 

costs of the current or streamlined review processes.

In commenting on the February 2015 report on which this analysis is 

based, DOD agreed with our recommendations and reported that efforts 

are under way, although not yet fully implemented, to address the 

recommendations.

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

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

product listed in the related GAO product section. To perform this work, 

GAO examined the levels of review and information requirements that are 

part of DOD’s milestone decision process. GAO surveyed 24 program 

managers and 40 other DOD officials on the value and the time to 

complete milestone documentation. For 15 programs, GAO gathered data 

on the time to complete the entire milestone decision process. GAO 

discussed with DOD officials the factors that lead to inefficiencies. GAO 

also examined practices used by some classified DOD programs and five 

commercial firms generally recognized as leaders in product 

development. 

Table 1 in appendix V shows the estimated acquisition costs associated 

with major weapons systems.

Acquisition Reform: DOD Should Streamline Its Decision-Making Process 

for Weapon Systems to Reduce Inefficiencies. GAO-15-192. Washington, 

D.C.: February 24, 2015. 

For additional information about this area, contact Michael J. Sullivan at 

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

Agency Comments 

and GAO’s Evaluation

How GAO Conducted 

Its Work

Related GAO 

Products

Contact Information
Page 64 GAO-15-404SP Fragmentation, Overlap, and Duplication

General Government

4. Consumer Product Safety Oversight

More formal and comprehensive coordination among federal agencies is needed to help increase efficiency 

and effectiveness related to consumer product safety oversight and address challenges related to 

fragmentation and overlap. 

The oversight of consumer product safety involves a number of federal 

agencies. New laws and agencies have been established over time, 

resulting in a patchwork system with many agencies having regulatory 

and enforcement authorities for different consumer products or different 

parts of the same product. Further, as globalization and technological 

advances expand the range of products available in U.S. markets, the 

challenge of regulating the thousands of product types has become 

increasingly complex.

As GAO reported in November 2014, eight agencies have direct 

regulatory oversight responsibilities for consumer product safety: the 

Consumer Product Safety Commission (CPSC), Department of Housing 

and Urban Development (HUD), Environmental Protection Agency, Food 

and Drug Administration, National Highway Traffic Safety Administration, 

Nuclear Regulatory Commission, Pipeline and Hazardous Materials 

Safety Administration, and the U.S. Coast Guard (within the Department

of Homeland Security). CPSC is charged with protecting the public from 

unreasonable risk of injury or death associated with the use of thousands

of types of consumer products. For example, CPSC regulates children’s 

products (e.g., toys and cribs); certain off-road recreational vehicles (e.g., 

all-terrain vehicles), and other household products (e.g., power tools and 

home appliances). Other agencies have jurisdiction over certain 

categories of products, such as automobiles, boats, drugs, cosmetics, 

medical devices, and pesticides. These eight agencies conduct a range of 

regulatory activities to oversee these products, including risk assessment, 

rulemaking, and enforcement. 

GAO also reported in November 2014 that at least 12 other agencies play 

a support role in consumer product safety in various areas, such as public 

health and law enforcement. One of these agencies is the Department of 

Commerce’s National Institute of Standards and Technology (NIST).1

 

1

The other agencies are the Federal Communications Commission; Federal Emergency 

Management Agency; National Institutes of Health; Health Resources and Services 

Administration; Centers for Disease Control and Prevention; Federal Aviation 

Administration; National Transportation Safety Board; Occupational Safety and Health 

Administration; U.S. Customs and Border Protection; Bureau of Alcohol, Tobacco, 

Firearms and Explosives; and Federal Trade Commission.

According to NIST, the agency is a nonregulatory federal research

laboratory, and its mission is to promote U.S. innovation and industrial

competitiveness by advancing measurement science, standards, and

Why This Area Is 

Important
 

Page 65 GAO-15-404SP Fragmentation, Overlap, and Duplication

technology in ways that enhance economic security and improve our

quality of life. In addition, under the America COMPETES Act of 2007, 

NIST currently oversees the markings of toy and imitation firearms to 

distinguish them from real firearms. 

GAO reported in November 2014 that oversight of consumer product 

safety is fragmented across agencies, and jurisdiction overlaps or is 

unclear for certain products. Agencies reported that the involvement of 

multiple agencies with various expertise can help ensure more 

comprehensive oversight by addressing a range of safety concerns. 

However, agencies also noted that fragmentation and overlap can result 

in some inefficiencies, including the challenges of sharing information 

across agencies, inefficient use of resources, and unclear roles resulting 

in potential regulatory gaps. 

Specifically, GAO found that NIST’s oversight of toy and imitation firearm 

markings to distinguish them from real firearms may not be efficient, as it 

does not align with the agency’s primary mission and expertise in the 

area of scientific measurement and standards. NIST staff noted that 

because most toy and imitation firearms are imported, the implementing 

regulations are enforced almost entirely by the Department of Homeland 

Security’s Customs and Border Protection (CBP), which, unlike NIST, has 

a presence at ports of entry. As such, NIST staff stated that the regulation 

and oversight of toy and imitation firearm markings may be administered 

better by another federal agency, such as CPSC, which also oversees 

toys and other consumer products and has a presence at ports of entry. 

However, this would require a statutory change. Neither NIST nor CPSC 

has conducted formal cost estimates for carrying out this oversight 

responsibility, but NIST estimates that it spent $10,104 in fiscal year 2014 

on this function. However, continued regulation of the marking of toy and 

imitation firearms by NIST rather than CPSC does not leverage each 

agency’s expertise and therefore may not be the most efficient use of 

scarce federal resources. 

In another example, oversight of products that can be used on 

recreational boats is fragmented between the Coast Guard and CPSC, 

and the jurisdiction for some products can be unclear and can result in 

potential regulatory gaps. Coast Guard staff told GAO that because of 

limited staff resources, the Coast Guard, through regulation, has chosen 

to limit the scope of its product recall activities to four categories of aftermarket boating equipment (i.e., equipment not installed by the original 

equipment manufacturer). Unlike the Coast Guard, CPSC does not have 

legal jurisdiction over recreational boats and associated equipment, but 

CPSC officials stated that they have authority over some products that 

can be used either on or off of a boat—such as boating gloves, a camping 

stove, or a refrigerator. The Coast Guard and CPSC both acknowledged 

a potential regulatory gap for certain boating equipment based on the 

Coast Guard’s limited scope of oversight of after-market equipment and 

CPSC’s lack of authority to regulate equipment associated with 

recreational boats. Coast Guard staff said that coordination with CPSC 

What GAO Found
 

Page 66 GAO-15-404SP Fragmentation, Overlap, and Duplication

works well but has been infrequent—one or two times a year at most—

and at times the Coast Guard has gone for years without coordinating 

with CPSC. 

GAO’s work on collaboration suggests that collaborating agencies should 

clarify roles and responsibilities and, if appropriate, document their 

agreement on how they will be collaborating.2

GAO found that although the agencies it reviewed for its November 2014 

report collaborate on a variety of issues, agencies also reported that they 

face challenges when they work collaboratively. These challenges include 

staying informed about the regulatory activities of other agencies, 

coordinating on jurisdictional issues, and considering options to share 

data rather than purchasing the same data under multiple contracts. In 

addition, while agencies reported collaborating using a variety of

mechanisms to address specific topics—such as nanotechnology or 

environmental health and safety risks to children—no coordinating 

mechanism exists to address federal consumer product safety efforts 

comprehensively. The inefficiencies GAO found suggest the need for 

greater collaboration across all agencies with a role in product safety 

oversight. Such collaboration, in turn, could help reduce some negative 

effects of fragmentation and overlap. There may also be instances where 

more formal arrangements would be beneficial. 

 Because no formal 

coordination mechanism exists between the Coast Guard and CPSC, 

there is a potential risk that hazards related to products for which 

jurisdiction is unclear may not be regulated. In addition, because of the 

potential gap in jurisdiction, it may at times be unclear which agency has 

regulatory responsibility for some products that may present safety risks, 

which underscores the need for strong communication between the two 

agencies.

In past work, GAO has noted that interagency mechanisms or strategies 

to coordinate programs that address crosscutting issues may reduce

potentially duplicative, overlapping, and fragmented efforts. In October

2005, GAO identified practices that can help enhance and sustain

collaboration among federal agencies, and in September 2012, GAO 

identified key considerations for implementing collaborative mechanisms.3

 

2

GAO, Managing for Results: Key Considerations for Implementing Interagency 

Collaborative Mechanisms, 

More specifically, GAO concluded that while collaborative mechanisms 

differ in complexity and scope, they all benefit from certain key features, 

such as having clear roles and responsibilities and involving all relevant 

participants. Additionally, GAO’s prior work found that agencies that 

articulate their agreements in formal documents can strengthen their

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

3

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

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

and GAO-12-1022. 
 

Page 67 GAO-15-404SP Fragmentation, Overlap, and Duplication

commitment to working collaboratively and that written agreements are

most effective when they are regularly updated and monitored.

4

Although a number of agencies have an oversight role in consumer 

product safety, no single entity has the expertise or authority to address 

the full scope of product safety activities. Moreover, some oversight 

agencies are independent and not subject to the Office of Management 

and Budget’s interagency planning process and review of draft rules 

within the executive branch. Formal collaboration—both between two

agencies to address a specific issue and across multiple agencies to

provide comprehensive oversight—can be useful in strengthening agency

commitments in working together. Without a collaborative mechanism to 

facilitate communication across the relevant agencies and to help enable 

them to collectively address crosscutting issues, the agencies may be 

missing opportunities to better leverage resources and address 

challenges, including those related to fragmentation and overlap.

GAO 

noted that not all collaborative arrangements need to be documented

through written guidance and agreements, particularly those that are

informal. However, GAO has found that at times it can be helpful to

document key agreements related to the collaboration.

To help strengthen consumer product safety oversight coordination and 

increase efficiency and effectiveness, in November 2014 GAO suggested 

that Congress take the following two actions:

• Consider transferring the oversight of the markings of toy and 

imitation firearms in section 5001 of title 15 of the U.S. Code from the 

National Institute of Standards and Technology (within the 

Department of Commerce) to the Consumer Product Safety 

Commission.

• Consider establishing a formal comprehensive oversight mechanism 

for consumer product safety agencies to address crosscutting issues 

as well as inefficiencies related to fragmentation and overlap such as 

communication and coordination challenges and jurisdictional 

questions between agencies. Different types of formal mechanisms 

could include, for example, creating a memorandum of understanding 

to formalize relationships and agreements or establishing a task force 

or interagency work group. As a starting point, Congress may wish to 

obtain agency input on options for establishing more formal 

coordination. 

In November 2014, GAO also recommended that to clarify roles and 

facilitate greater communication and strengthen oversight of associated 

equipment related to recreational boats, the U.S. Coast Guard and 

Consumer Product Safety Commission should take the following action:

 

4

GAO-12-1022. 

Actions Needed and 

Potential Financial or 

Other Benefits
 

Page 68 GAO-15-404SP Fragmentation, Overlap, and Duplication

• Establish a formal approach to coordination (such as a memorandum 

of understanding) to facilitate information sharing and better 

leveraging of resources.

Estimating potential cost savings is difficult because of the lack of 

consistent budget data we received from agencies on their consumer 

product safety oversight activities. For example, not all agencies were 

able to separate out their costs for conducting specific oversight activities. 

However, implementing these matters and recommendation could still 

strengthen coordination among oversight agencies and, for example, 

ensure that they address cross-cutting issues in a comprehensive 

manner.

GAO provided a draft of its November 2014 report on which this analysis 

is based to 20 agencies (8 direct oversight agencies and 12 agencies with 

indirect oversight) for their review and comment. CPSC, the Department 

of Homeland Security, HUD, and NIST agreed with GAO’s matters to 

Congress and recommendation, while the remaining agencies neither 

agreed nor disagreed. CPSC suggested that GAO clarify that its matter to 

Congress refers to requirements under section 5001 of title 15 of the U.S. 

Code and stated that it would be willing to accept responsibility for 

oversight of the markings of toy and imitation firearms provided that the 

transfer of authority from NIST includes a corresponding increase in 

appropriations. CPSC also stated that it would be comfortable with the 

establishment of a formal collaboration mechanism to address oversight 

in areas of shared or fragmented jurisdiction provided that such an 

approach does not compromise the agency’s independence. Both CPSC 

and the Department of Homeland Security (U.S. Coast Guard) indicated 

that they support and plan to pursue the recommendation to establish a 

formal approach to coordination. In commenting on a draft of this report 

section, the Coast Guard noted that in its discussions with CPSC, it 

became apparent that, due to the infrequency of issues that arise 

because of a gap in oversight on associated equipment, a formal 

Memorandum of Understanding was not necessary. The Coast Guard 

added that the two agencies agreed that a formal policy document 

between the responsible offices within each agency would be a more 

appropriate format. The Coast Guard stated that the formal policy 

document is being drafted and will be completed by April 30, 2015. 

Additionally, in commenting on a draft of this report section, HUD stated 

that it would welcome the opportunity to participate in the implementation 

of a formal comprehensive oversight mechanism for consumer product 

safety. GAO also received technical comments from a number of 

agencies, which were incorporated as appropriate. 

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

product in the related GAO products section. To identify agencies that 

conduct consumer product safety oversight and to delineate their roles 

and responsibilities, GAO reviewed various sources, such as laws and 

regulations, Federal Register notices for proposed and final rulemaking 

Agency Comments 

and GAO’s Evaluation

How GAO Conducted 

Its Work
 

Page 69 GAO-15-404SP Fragmentation, Overlap, and Duplication

from August 2008 through October 2013, and agency websites. GAO 

then disseminated a questionnaire to the agencies it identified to confirm 

their roles and responsibilities related to consumer product safety 

oversight, identify any other relevant agencies with which they coordinate, 

and identify examples of potential fragmentation, overlap, and duplication 

in oversight. GAO also interviewed federal agencies, consumer groups, 

and industry groups to gather information on the extent of fragmentation, 

overlap, and duplication; their benefits and challenges; and options to 

address them. GAO analyzed agency and other documentation as 

available. 

Table 2 in appendix V lists the eight agencies with direct oversight 

responsibilities for consumer product safety, including descriptions of the 

agencies’ roles and examples of products they regulate. We do not 

include budgetary information because we were not able to obtain 

consistent budget data from each of the eight agencies. For example, not 

all agencies were able to break out the budgets for their oversight 

activities related to consumer product safety, with some agencies 

providing their entire agency budgets and others providing limited 

estimates. GAO found that some of the agencies listed 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.

Consumer Product Safety Oversight: Opportunities Exist to Strengthen 

Coordination and Increase Efficiencies and Effectiveness. GAO-15-52. 

Washington D.C.: November 19, 2014.

For additional information about this area, contact Alicia Puente Cackley 

at (202) 512-8678 or cackleya@gao.gov.

Related GAO 

Products

Contact Information
Page 70 GAO-15-404SP Fragmentation, Overlap, and Duplication

5. Nonemergency Medical Transportation

To mitigate the effects of overlap, the Department of Transportation should take steps to enhance federal, 

state, and local coordination among 42 programs that provide nonemergency medical transportation to 

individuals who cannot provide their own transportation due to age, disability, or income constraints. 

Access to transportation services is essential for millions of Americans to 

fully participate in society and to access human services, including 

education, job training, and medical care. In particular, transportation to 

medical care, including nonemergency medical transportation (NEMT), is 

becoming more important as an increasing number of people develop 

conditions that require access to medical services, the percentage of the

population that is older continues to grow, and more servicemembers 

return from wars needing medical care.1

In June 2012, GAO reported that a number of federal programs are 

authorized to use federal funds for “transportation-disadvantaged” 

individuals in accessing human service programs, including NEMT. 

Federal agencies, including the Departments of Agriculture (USDA), 

Education (Education), Health and Human Services (HHS), Housing and 

Urban Development (HUD), Transportation (DOT), and Veterans Affairs 

(VA), have programs that provide funding to state and local agencies that 

can be used for NEMT to help individuals access medical services. In 

December 2014, GAO reported that in some cases data were not 

available or NEMT was incidental to a program’s mission. However, one 

of the six departments (HHS) was able to provide estimates indicating 

that its spending totaled at least $1.3 billion in fiscal year 2012—most of 

The transportationdisadvantaged population generally includes those individuals who 

cannot provide their own transportation due to age, disability, or income 

constraints. Although the size of this population can vary over time, this 

population is large. According to the U.S. Census Bureau (Census 

Bureau), people with disabilities often rely on forms of government 

assistance to remain active in the community, including transportation to 

medical appointments and services. The Census Bureau reported there 

were almost 57 million people with disabilities in 2010 with about 38 

million of these people having a severe disability. In addition, the Census 

Bureau estimated that in 2010 there were about 40 million people age 65 

and over and about 46 million people in poverty. The Census Bureau has 

also estimated that, in 2012, 3.6 million of the 21 million veterans had a 

service-connected disability. Some or all of these individuals may have 

need of NEMT to access medical services.

 

1 NEMT is defined in this report section as those federal programs that provide 

nonemergency, nonmilitary, surface transportation services of any kind to beneficiaries or 

clients for the purpose of receiving medical care. This includes transportation in a private 

vehicle or public transportation, such as a bus, to medical appointments or services.

Why This Area Is 

Important
 

Page 71 GAO-15-404SP Fragmentation, Overlap, and Duplication

this attributable to Medicaid.2 In June 2012, GAO recommended that the 

federal Interagency Transportation Coordinating Council on Access and 

Mobility (Coordinating Council)—the body tasked with developing policies 

and procedures for coordinating federal transportation and human-service 

programs and chaired by the Secretary of DOT—take actions to enhance 

federal, state, and local coordination activities. The Coordinating Council 

has taken some actions to address human service-transportation program 

coordination. In 2012, GAO found that there had been a lack of activity at 

the leadership level of the Coordinating Council and the absence of key 

guidance documents for furthering agency coordination efforts. To better 

promote and enhance federal, state, and local coordination activities, we 

recommended the Coordinating Council complete and publish a strategic 

plan and report on the progress of recommendations made in the 

Coordinating Council's 2005 Report to the President. The Coordinating 

Council has taken actions to address our recommendations. For example, 

the Coordinating Council developed a strategic plan that covered 2011 

through 2013, and in 2013 it published a progress report providing an 

update on accomplishments and progress that had been made on the 

recommendations made in the 2005 report. Among other things, the 

strategic plan identified the Coordinating Council's priorities and 

objectives over the covered period, identified the council's strategic goal, 

and outlined various strategies for achieving the goal. The goal was to 

continue to improve mobility, employment opportunities, and access to 

community services for persons who are transportation disadvantaged. 

The priorities included demonstrating federal leadership on transportation 

coordination and expanding the coordinated human service-transportation 

infrastructure. Strategies for demonstrating federal leadership in 

coordination included developing and approving cost-sharing guidance 

that facilitated the sharing of vehicles and rides. Strategies for expanding 

the coordination of human service-transportation infrastructure included 

strengthening the coordinated planning process, in part by improving 

stakeholder participation. The progress report provided updates on five 

recommendations that were made in the council's 2005 report to the 

President.3 In general, progress had been made in a number of areas, 

including establishing a coordinated human service-transportation 

planning process and developing a policy statement about vehicle 

sharing.

 

2

The amount reported as spent by Medicaid includes spending by those states that have 

selected to report NEMT as an optional service, but does not include spending by states 

that chose to report NEMT as an administrative expense. Data on the number of states 

that report NEMT as an optional service, an administrative expense, or both were not 

available since CMS does not break out this information. It should be noted that CMS 

began tracking NEMT expenses for states that cover this cost as an administrative 

expense in the fourth quarter of fiscal year 2013.

3

Coordinating Council on Access and Mobility, Report to the President, Human Service 

Transportation Coordination, Executive Order 13330 (2005). 
 

Page 72 GAO-15-404SP Fragmentation, Overlap, and Duplication

In December 2014, GAO found that fragmentation, overlap, and the 

potential for duplication exist across NEMT programs. Forty-two programs 

across six federal departments—HHS, Education, HUD, DOT, VA, and 

USDA—can provide funding for NEMT service, although NEMT is not 

their primary mission. Twenty-one of these programs, including Medicaid, 

are administered or overseen by HHS. The Department of Education 

(Education) administers seven programs; HUD administers six programs 

(three of which are statutory components of the Community Development 

Block Grant program); DOT administers four programs; VA administers 

three programs; and USDA administers one program. Overlap exists 

because programs that provide NEMT have similar goals and target 

potentially similar beneficiaries. Both Medicaid and VA have similar goals 

of helping their respective beneficiaries access medical services (some 

individuals could be eligible for both Medicaid and VA), serve potentially 

similar beneficiaries—those individuals with disabilities, who are low 

income or who are elderly—and engage in similar activities, such as 

providing NEMT transportation directly or indirectly. In addition, the 

potential for duplication in NEMT programs exists because two or more 

programs provide the same services to the same beneficiaries.

GAO’s December 2014 report also found that coordination of NEMT 

programs at the federal level is limited. The Coordinating Council has 

taken some actions to improve coordination, such as developing a 

strategic plan. The strategic plan identified the council’s goals, priorities, 

and objectives for 2011 through 2013. However, the council has provided 

limited leadership—for example, it has not met since 2008. In addition, 

the council has not issued key guidance documents that could promote 

coordination, including an updated strategic plan, and finalized a costsharing policy that would allow agencies to identify and allocate costs 

among programs. In March 2011, GAO found that agencies providing 

similar transportation services to similar client groups may lead to 

duplication and overlap when coordination does not occur.4

The strategic plan that the Coordinating Council issued covers 2011 

through 2013 but expired in 2013, and has not yet been updated. 

According to a Coordinating Council official, a decision has not been 

made as to whether a new plan will be prepared to continue to implement 

many of the priorities identified in the 2011 through 2013 strategic plan. 

GAO has previously found that a number of key practices enhance and 

sustain collaboration, including strategic plans.

 

5

 

4

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

Dollars, and Enhance Revenue, 

 In addition, the goals and 

priorities outlined in the previous strategic plan did not specifically 

address NEMT. Instead, the goals focused on such things as improved 

mobility and employment opportunities, and the priorities focused on such 

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

5

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

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

What GAO Found
 

Page 73 GAO-15-404SP Fragmentation, Overlap, and Duplication

things as demonstrating federal leadership on transportation coordination 

and expanding the coordinated human service-transportation 

infrastructure. In the context of NEMT, by not updating or issuing a new 

strategic plan the Coordinating Council may be missing an opportunity to 

identify and align goals and strategies for increased NEMT coordination 

with the benefits of coordination, such as increased program efficiency or 

reduced costs.

In addition, Coordinating Council officials said the Heath, Wellness, and 

Transportation working group is trying to analyze the cost of trips and cost 

sharing, which according to a Coordinating Council official, remain a 

barrier to coordination. The absence of a key document, such as a policy 

on cost sharing, impacts the ability of agencies to identify and allocate 

costs among programs and services. Coordinating Council officials told 

GAO that a draft cost-sharing policy had been formulated; however, this 

policy has not been finalized. According to these officials, there are no 

plans at the current time to finalize this policy, and the Coordinating 

Council plans to leave the draft cost-sharing plan as it is until it 

determines where the Coordinating Council’s efforts will be focused over 

the next couple of years. Without developing federal cost allocation 

principles for transportation providers, federal agencies may be unable to 

address cost-sharing issues across agencies. A cost-sharing policy could 

also help facilitate ride and vehicle sharing.

GAO found that states and localities use a variety of ways to facilitate 

coordination of transportation and human service programs, including 

programs that provide NEMT. These include, for example, state and 

regional coordinating bodies, cost and ride sharing, and one-call/one-click 

centers.6

 

6

Ride sharing refers to the sharing of vehicles and rides. One-call/one-click centers are 

central information sources that individuals can call into or access from their computers to 

obtain information on transportation options in a locality.

However, GAO found that two programs—Medicaid and VA 

NEMT programs—largely do not participate in NEMT coordination 

activities in the states GAO visited. GAO found a number of challenges to 

coordination for these programs. For example, both programs are 

designed to serve their own populations of eligible beneficiaries. In 

addition, officials at the Centers for Medicare & Medicaid Services, which 

administers Medicaid, told GAO that using certain coordination 

strategies—in particular, cost or ride sharing—could increase the risk of 

Medicaid funds being spent for individuals who do not qualify for Medicaid 

benefits. The officials explained that, without proper controls, cost or ride 

sharing with other non-Medicaid programs could allow for improper 

payments for individuals who do not qualify for Medicaid. Medicaid and 

VA are important to NEMT, as they provide services to potentially over 90 

million individuals. Given the significance of these programs to the 

provision of NEMT service, coordination that does not include these 

programs makes it more difficult for the Coordinating Council to achieve 

its goal of promoting interagency cooperation to enhance the access of 
 

Page 74 GAO-15-404SP Fragmentation, Overlap, and Duplication

transportation-disadvantaged persons to both more and cost-effective

transportation services.

To promote and enhance federal, state, and local NEMT coordination 

activities, GAO recommended in December 2014 that the Secretary of 

Transportation, as chair of the Coordinating Council, convene a meeting 

of the member agencies of the Coordinating Council and take the 

following three actions:

• Complete and publish a new or updated strategic plan that, among 

other things, clearly outlines a strategy for addressing NEMT and how 

it can be coordinated across federal agencies that fund NEMT 

service.

• Finalize and issue a cost-sharing policy and clearly identify how it can 

be applied to programs under the purview of member agencies of the 

Coordinating Council that provide funding for NEMT. 

• Using the ongoing work of the Health, Wellness, and Transportation 

working group and other appropriate resources (1) identify the 

challenges associated with coordinating Medicaid and VA NEMT 

programs with other federal programs that fund NEMT, (2) develop 

recommendations for how these challenges can be addressed while 

still maintaining program integrity and fraud prevention, and (3) report 

these recommendations to appropriate committees of Congress. To 

the extent feasible, the Coordinating Council should implement those 

recommendations that are within its legal authority.

Financial benefits associated with these actions cannot be quantified 

because federal departments do not separately track spending for NEMT 

services. However, implementation of these actions could improve 

coordination at the federal level to help ensure that those who provide 

NEMT services can achieve the benefits of coordination, such as reduced 

trip costs and more efficient use of vehicles.

GAO provided a draft of its December 2014 report to DOT, USDA, 

Education, HHS, HUD, and VA. DOT stated that it concurred in part with 

recommendations to develop a new strategic plan and to finalize a costsharing policy. It concurred with the NEMT recommendation to identify 

and report to Congress challenges with NEMT coordination, and said it 

agreed that more work is needed to increase coordination activities with 

all HHS agencies, especially Centers for Medicare & Medicaid Services. 

DOT also said the Federal Transit Administration (FTA) is asking its 

technical assistance centers to assist in developing responses to NEMT 

challenges. Regarding development of a strategic plan, DOT said efforts 

were under way at FTA to develop a new 2-year Coordinating Council 

implementation strategy. As part of developing this strategy, FTA would 

determine what governing framework is most effective and what, if any, 

updates were needed to the strategic plan. Regarding the cost-sharing 

policy, DOT said expanding upon past efforts and building on the 2011 

Actions Needed and 

Potential Financial or 

Other Benefits

Agency Comments 

and GAO’s Evaluation
 

Page 75 GAO-15-404SP Fragmentation, Overlap, and Duplication

Transportation Research Board’s cost-sharing study,7

GAO provided a draft of this report section to DOT, USDA, Education, 

HHS, HUD, and VA. None of the agencies had comments.

FTA plans to 

further refine a cost-sharing model with the Coordinating Council. 

However, DOT said final acceptance of the policy by non-DOT council 

members would depend on their receptiveness to adopting a cost-sharing 

strategy. USDA and Education had no comments on the report. HHS, 

HUD, and VA made technical comments, which were incorporated as 

appropriate.

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

products in the related GAO product section. GAO searched the Catalog 

of Federal Domestic Assistance for 2013 to identify NEMT programs that 

offer transportation services. Program information was verified with 

department officials, who provided spending data, when available. GAO 

interviewed program officials from USDA, Education, HHS, HUD, DOT, 

and VA. GAO spoke with the Coordinating Council and reviewed relevant 

Coordinating Council reports. GAO visited selected states and 

interviewed state and local officials, and interviewed representatives from 

relevant industry and advocacy groups. States were chosen based on a 

variety of considerations, including geographic diversity and existence of 

a coordinating body. 

Table 3 in appendix V 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. 

Transportation-Disadvantaged Populations: Nonemergency Medical 

Transportation Not Well Coordinated, and Additional Federal Leadership 

Needed. GAO-15-110. Washington D.C.: December 10, 2014.

Transportation-Disadvantaged Populations: Federal Coordination Efforts 

Could Be Further Strengthened. GAO-12-647. Washington D.C.: June 20, 

2012. 

For additional information about this area, contact David Wise at (202) 

512-2834 or wised@gao.gov. 

 

7

Transit Cooperative Research Program, Transportation Research Board, Sharing the 

Costs of Human Services Transportation, Volume 1: The Transportation Services Cost 

Sharing Toolkit, TCRP Report 144 (2011), and Transit Cooperative Research Program, 

Transportation Research Board, Sharing the Costs of Human Services Transportation, 

Volume 2: Research Report, TCRP Report 144 (2011).

How GAO Conducted 

Its Work

Related GAO 

Products

Contact Information
Page 76 GAO-15-404SP Fragmentation, Overlap, and Duplication

Health

6. DOD US Family Health Plan

To potentially save millions of dollars and eliminate duplication within the Department of Defense’s health care 

system, Congress should terminate the statutorily required US Family Health Plan because it offers military 

beneficiaries the same health care benefit offered by other Department of Defense health care contractors. 

The Department of Defense’s (DOD) annual health care costs are 

projected to reach $70 billion by 2028.1 As health care consumes an 

increasingly large portion of the overall DOD budget, it is important for 

DOD to operate its health care system efficiently, while also ensuring 

high-quality care. In fiscal year 2013, DOD offered health care coverage 

to about 9.6 million eligible beneficiaries through TRICARE, its regionally 

structured health care program, at a cost of almost $50 billion.2

Separately, in certain locations, TRICARE Prime is also offered to 

approximately 134,000 enrollees through the US Family Health Plan 

(USFHP), a statutorily required component of DOD’s Military Health 

System, at a cost of more than $1 billion in fiscal year 2013.

 For each 

of the three TRICARE regions in the United States (North, South, and 

West), DOD contracts with private sector companies—referred to as 

managed care support contractors—to administer TRICARE’s benefit 

options, including TRICARE Prime, its managed care option.

3

 The 

USFHP was initially incorporated into the Military Health System in 1982 

when enacted legislation transferred ownership of certain U.S. Public 

Health Service hospitals to specific health care providers, referred to as 

designated providers under the program.4 During the implementation of 

the TRICARE program in the 1990s, Congress required the designated 

providers to offer the TRICARE Prime benefit to their enrollees in 

accordance with the National Defense Authorization Act (NDAA) for 

Fiscal Year 1997.

5

 

1

Congressional Budget Office, Long-Term Implications of the 2014 Future Years Defense 

Program, Pub. No. 4616 (November 2013). 

 However, the USFHP has largely remained 

2

TRICARE-eligible beneficiaries include active duty personnel and their dependents, 

medically eligible Reserve and National Guard personnel and their dependents, and 

retirees and their dependents and survivors. 

3

The statutory basis for the USFHP is the National Defense Authorization Act (NDAA) for 

Fiscal Year 1997 Pub. L. No. 104-201, §§ 721-727, 110 Stat. 2422, 2592-2597 (1996) 

codified, as amended, at 10 U.S.C. § 1073 Note. All beneficiaries who are eligible for DOD 

health care and who are under the age of 65, except active duty servicemembers, are 

eligible for USFHP enrollment. However, each year the number of USFHP enrollees may 

not exceed 110 percent of the previous year’s enrollee population.

4

The Military Construction Authorization Act, 1982, deemed these facilities to be facilities 

of the uniformed services, then known as Uniformed Services Treatment Facilities. See 

Pub. L. No. 97-99, § 911, 95 Stat. 1359, 1386 (1981).

5

NDAA for Fiscal Year 1997, Pub. L. No. 104-201, § 723(a).

Why This Area Is 

Important
 

Page 77 GAO-15-404SP Fragmentation, Overlap, and Duplication

unchanged since the NDAA for Fiscal Year 1997, and its role has not 

since been reassessed within the Military Health System. 

Today, the USFHP is an association of six designated providers located 

throughout the country. Each of the designated providers—and their 

respective service areas—is located within one of the three TRICARE 

regions that are served by a managed care support contractor. The figure 

below illustrates the location of the USFHP designated providers relative 

to the locations of the three TRICARE regions. 

Location of Six US Family Health Plan (USFHP) Designated Providers within the Three TRICARE Regions

Note: TRICARE is organized in three regions across the United States—North, South, and West. 

Within these regions, the Department of Defense contracts with managed care support contractors to 

develop provider networks and to administer TRICARE’s benefit options. Alaska and Hawaii are 

located in TRICARE’s West region.
 

Page 78 GAO-15-404SP Fragmentation, Overlap, and Duplication

In July 2014, GAO reported that the USFHP’s role within DOD’s Military 

Health System is duplicative because it offers military beneficiaries the 

same TRICARE Prime benefit that is offered by the managed care 

support contractors across much of the same geographic service areas 

and through many of the same providers.6

• The USFHP designated providers and the TRICARE managed care 

support contractors are both required by law to offer the same 

TRICARE Prime benefit.

Specifically,

7

 

• Four of the six USFHP designated providers have more than 80 

percent of their service area’s zip codes included in areas where the

managed care support contractors also offer TRICARE Prime.8

 

• Several of the USFHP designated providers had a 40 percent to 50 

percent overlap with the TRICARE managed care support contractors’ 

provider networks, while the remaining designated providers had a 

network overlap ranging from 20 percent to 37 percent. 

Furthermore, the USFHP operates as a distinct statutory program that is 

not integrated with the rest of the Military Health System. This limits

DOD’s ability to increase efficiency through its goal of maximizing the use 

of its direct care system of military hospitals and clinics. USFHP enrollees 

are generally precluded from receiving care at military treatment facilities 

due to the program’s payment structure, a fixed-price capitation payment 

that is intended to cover all of the health care costs of enrollees.9

 

6

Although the USFHP’s role is duplicative because it offers the same TRICARE Prime 

benefit that is offered by the managed care support contractors, beneficiaries must choose 

to enroll with the USFHP designated providers or with the managed care support 

contractors—they are not allowed to enroll with both; therefore, there are no current 

concerns that DOD is incurring duplicate costs for individual beneficiaries. 

In 

contrast, TRICARE’s managed care support contractors are required to 

optimize the use of the direct care system for their Prime enrollees as part 

of an integrated Military Health System. For example, the TRICARE 

managed care support contractors first assign Prime enrollees to a 

Primary Care Manager located at a military treatment facility until the 

facility’s enrollment capacity has been reached, at which point enrollees 

7

Specifically, section 723(a) of the NDAA for Fiscal Year 1997 requires designated 

providers to offer enrollees the health benefit option prescribed by section 731 of the 

NDAA for Fiscal Year 1994. This section refers to the TRICARE Prime benefit option 

applicable to the managed care support contractors, which is to be as uniform as possible 

throughout the United States. Both provisions are codified, as amended, at 10 U.S.C. § 

1073 note.

8

The remaining two designated providers had 41 percent and 57 percent of their service 

area zip codes included in areas where the managed care support contractors offer 

TRICARE Prime. These two designated providers are located in areas that have few or no 

military treatment facilities or Base Realignment and Closure sites, sites where managed 

care support contractors are required to establish Prime geographic service areas. 

9

Under capitation payments, health care plans are prospectively paid a fixed monthly rate 

per enrollee to provide or arrange for most health care services. 

What GAO Found
 

Page 79 GAO-15-404SP Fragmentation, Overlap, and Duplication

are assigned to a Primary Care Manager from the contractors’ civilian 

provider networks. Given the extent of the designated providers’ overlap 

with the managed care support contractors’ Prime Service Areas, which 

are generally around military treatment facilities, thousands of USFHP 

enrollees are precluded from using the direct care system.

The duplication and related overlap between the USFHP and the 

managed care support contractors’ offering of the TRICARE Prime option 

has been long-standing in part because the program’s role has not been 

reassessed since TRICARE was implemented in the 1990s. DOD officials 

told GAO that there is not a function that the USFHP designated 

providers serve that the managed care support contractors could not 

perform. However, because the USFHP is statutorily required, DOD does 

not have the authority to eliminate it. Additionally, officials with all three 

managed care support contractors—who currently serve more than 4.5 

million Prime enrollees—stated that they likely would have the capacity 

and capability to provide TRICARE coverage to all of the current USFHP 

enrollees. 

As a result of the USFHP’s duplicative role, DOD has incurred added 

costs by paying the USFHP designated providers to simultaneously 

administer the same benefit to the same population of eligible 

beneficiaries in many of the same locations as the managed care support 

contractors. Although DOD would incur health care costs for the USFHP 

enrollees regardless of with whom they are enrolled, DOD must also pay 

administrative costs and profits to two different groups of contractors for 

providing the same TRICARE Prime benefit. DOD also incurs other 

expenses for the USFHP through support contracts, including a data 

support contract that is exclusive to the USFHP designated providers and 

does not exist for the managed care support contractors. Further, DOD 

must expend resources managing various aspects of the USFHP, 

including the annual negotiation of capitation payments—a process that 

lasts approximately 8 months. Eliminating the USFHP would allow DOD 

to potentially realize savings and better focus its resources on managing 

other aspects of the TRICARE program.

GAO suggested in its July 2014 report that to eliminate unnecessary 

program duplication and achieve increased efficiencies and potential 

savings within the integrated Military Health System, Congress should

• terminate the Secretary of Defense’s authority to contract with the 

USFHP designated providers in a manner consistent with a 

reasonable transition of affected USFHP enrollees into TRICARE’s 

regional managed care program or other health care programs, as 

appropriate. 

DOD could potentially realize both savings and increased efficiencies with 

the elimination of this program. However, the actual cost of the program’s 

duplication is unknown. This is because the USFHP contracts are 

statutorily required to be treated as commercial item contracts under the 

Actions Needed and 

Potential Financial or 

Other Benefits
 

Page 80 GAO-15-404SP Fragmentation, Overlap, and Duplication

Federal Acquisition Regulation (FAR), and this designation prohibits DOD 

from requiring the designated providers to provide certified cost or pricing 

data.10 Furthermore, according to DOD officials, the designated providers 

also have been unwilling to share uncertified cost or pricing data when 

the department has requested it. As a result, even though DOD 

negotiates amounts for administrative costs and profits as part of the 

designated providers’ capitation payments, it does not know how much of 

the approximately $1 billion annual payment ultimately goes toward the 

designated providers’ administrative costs and profit and how much goes 

to the actual costs of providing health care services to USFHP enrollees. 

GAO obtained a breakdown of the average capitation payments DOD 

made to the designated providers for USFHP enrollees for fiscal year 

2013 and estimated that the negotiated administrative costs and profit 

margins were approximately $27 million of the total cost of the program 

for that year (2.4 percent of $1.1 billion). GAO also obtained the costs of 

relevant USFHP support contracts, including a data support contract that 

is expected to cost $21 million over 5 years. Based on these cost data, 

GAO concluded DOD would potentially save millions of dollars if the 

USFHP were eliminated. Furthermore, eliminating this statutorily required 

program would help support DOD’s efforts to control rising health care 

costs and increase efficiencies by freeing up departmental resources that 

could be better used to manage and oversee the TRICARE program.

In commenting on the July 2014 report on which this analysis is based, 

DOD stated that since GAO’s suggestion to eliminate the USFHP was 

addressed to Congress, the department deferred to Congress to consider 

it. DOD confirmed that GAO’s factual determinations about the USFHP 

were correct. DOD also reiterated GAO’s statement that if the USFHP 

were eliminated, it would be important to make provisions to carefully 

transition USFHP enrollees to other health care programs.

GAO provided a draft of this report section to DOD 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 

product listed in the related GAO product section. To conduct this work, 

GAO reviewed requirements relevant to the USFHP and the TRICARE 

program, including those established in federal laws and regulations, 

 

10See Pub. L. No. 104-201, § 722(b)(2). Offerors competing for commercial item contracts 

may not be required to provide certified cost or pricing data during contract negotiations. 

FAR § 15.403-1(b)(3). Section 2.101 of the FAR defines cost or pricing data as all facts 

that buyers and sellers would reasonably expect to affect price negotiations. In 

acquisitions where certified cost or pricing data are required, section 15.406-2 of the FAR 

provides that contractors must certify that required cost or pricing data are accurate, 

complete, and current as of a specified date. 

Agency Comments 

and GAO’s Evaluation

How GAO Conducted 

Its Work
 

Page 81 GAO-15-404SP Fragmentation, Overlap, and Duplication

contracts, policy manuals, and benefit handbooks.11

Table 4 in appendix V 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.

To assess the extent 

to which the USFHP designated providers and the TRICARE managed 

care support contractors engage in the same activities or strategies to 

provide the same services to the same target recipients or individuals, 

GAO reviewed and applied its framework for assessing fragmentation, 

overlap, and duplication. Additionally, GAO interviewed officials from the 

six USFHP designated providers and the three managed care support 

contractors to learn about the benefits, geographic service areas, and 

provider networks of the respective contractors. To understand the costs 

of the program, GAO interviewed DOD officials and officials from DOD’s 

actuarial contractors to obtain the information that was available, albeit 

limited, about the costs of the USFHP. GAO requested DOD’s contractor 

provide it with a breakdown of the average capitation payments paid to 

the designated providers for fiscal year 2013, which included amounts 

that were expected to cover the costs of health care services provided to 

USFHP enrollees, as well as the administrative costs and profit margins 

for the designated providers. Finally, GAO obtained information from 

DOD officials about the resources they use to manage the program, and 

DOD’s annual process for negotiating the designated provider capitation 

payments. 

Defense Health Care: US Family Health Plan Is Duplicative and Should

Be Eliminated. GAO-14-684. Washington, D.C.: July 31, 2014.

For additional information about this area, contact Debra A. Draper at 

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

 

11GAO did not assess the department’s compliance with program requirements. 

Related GAO 

Products

Contact Information
 

Page 82 GAO-15-404SP Fragmentation, Overlap, and Duplication

7. Medicare Postpayment Claims Reviews

To prevent inappropriate duplicative postpayment claims reviews by contractors, the Centers for Medicare & 

Medicaid Services should monitor the Recovery Audit Data Warehouse—the database developed in part to 

prevent duplicative reviews—and develop more complete guidance on contractors’ responsibilities. 

GAO has designated Medicare as a high-risk program because of its size, 

complexity, and susceptibility to mismanagement and improper 

payments.1 In fiscal year 2014, the Centers for Medicare & Medicaid 

Services (CMS)—the agency within the Department of Health and Human 

Services (HHS) that administers the Medicare program—estimated it 

made improper payments of $46 billion in the Medicare fee-for-service 

(FFS) program.2

• Medicare Administrative Contractors (MAC), which process and pay 

claims, and conduct postpayment claims reviews to help ensure 

payment accuracy and ensure that providers with a history of billing 

errors comply with Medicare billing requirements; 

One activity CMS conducts to reduce improper Medicare 

payments is the review of paid FFS claims and related documentation 

from providers. CMS uses several different types of contractors to 

conduct postpayment claims reviews: 

• Zone Program Integrity Contractors (ZPIC), which investigate 

potential fraud;

• Recovery Auditors (RA), tasked with identifying on a postpayment 

basis improper payments in claims not previously reviewed by other 

contractors; and

 

1

See GAO, High-Risk Series: An Update, GAO-15-290 (Washington, D.C.: February 

2015). Improper Medicare payments include payments made for treatments or services 

that were not covered by program rules, that were not medically necessary, or that were 

not provided to beneficiaries in the way that they were billed to Medicare. An improper 

payment is any payment that should not have been made or that was made in an incorrect 

amount (including overpayments and underpayments) under statutory, contractual, 

administrative, or other legally applicable requirements. This definition includes any 

payment to an ineligible recipient, any payment for an ineligible good or service, any 

duplicate payment, any payment for a good or service not received (except where 

authorized by law), and any payment that does not account for credit for applicable 

discounts. Improper Payments Elimination and Recovery Act of 2010, Pub. L. No. 111-

204, § 2(e), 124 Stat. 2224, 2227, (2010) codified at 31 U.S.C. § 332. Note: Office of 

Management and Budget guidance also instructs agencies to report as improper

payments any payments for which insufficient or no documentation was found.

2

To meet the requirements of the Improper Payments Information Act of 2002 as 

amended, CMS uses its Comprehensive Error Rate Testing program to estimate Medicare 

FFS improper payments. Medicare FFS, or original Medicare, consists of Medicare Parts 

A and B. Medicare Part A covers hospital and other inpatient stays. Medicare Part B is 

optional insurance and covers physician, outpatient hospital, home health care, certain 

other services, and the rental or purchase of durable medical equipment (DME), including 

wheelchairs, prosthetics, orthotics, and supplies. 

Why This Area Is 

Important
 

Page 83 GAO-15-404SP Fragmentation, Overlap, and Duplication

• the Comprehensive Error Rate Testing (CERT) contractor, which 

reviews claims used to annually estimate the Medicare FFS improper 

payment rate. 

These types of contractors were established under different laws and for 

varying purposes, creating the potential for the same paid claim to be 

reviewed more than once by different contractors, which GAO defined in 

its July 2014 report as a duplicative claims review.3 CMS officials 

indicated and GAO agrees that duplicative claims reviews may be 

appropriate under some circumstances; however, other duplicative claims 

reviews are inappropriate, which GAO reported could create an 

unnecessary burden on providers and contractors.4

In part to prevent RAs from duplicating other contractors’ claims reviews, 

CMS developed the Recovery Audit Data Warehouse. MACs, ZPICs, the 

CERT contractor, and other entities can enter the claims they reviewed 

into the Recovery Audit Data Warehouse, and the database stores them 

as permanently excluded claims (or exclusions). In addition, ZPICs and 

law enforcement entities can upload claims into the Recovery Audit Data 

Warehouse that they may, though not necessarily will, select for 

postpayment review as part of a fraud investigation. The database stores 

these claims as suppressions, which makes them temporarily unavailable 

for RA review. RAs enter the claims they are considering for review into 

the Recovery Audit Data Warehouse, and the database then checks to 

see if any of those claims match excluded or suppressed claims and are, 

therefore, not available for the RAs to review. 

In July 2014, GAO determined that CMS does not have sufficient 

information to determine whether its contractors are conducting 

inappropriate duplicative claims reviews and that CMS has conducted 

insufficient data monitoring to prevent the RAs from conducting 

inappropriate duplicative reviews. CMS does not have reliable data to 

estimate the total number of duplicative claims reviews by all four types of 

contractors, in part because CMS did not design the Recovery Audit Data 

Warehouse to capture this information. For example, the Recovery Audit 

Data Warehouse does not show whether contractors other than RAs, 

such as a MAC and a ZPIC, duplicated each others’ claims reviews. 

GAO also found that not all of the four types of contractors consistently 

enter data into the database. For example, GAO found that, in 2012, five 

of the six ZPICs had not entered any claims into the Recovery Audit Data 

 

3

In 2012, the RAs performed 83 percent of the roughly 1.4 million postpayment claims 

reviews conducted that year. GAO did not include the Supplemental Medicare Review 

Contractor in its study. This contractor type, established by CMS in 2012, conducts largevolume medical reviews nationwide for specific Medicare-covered services.

4

For example, it is appropriate for the CERT contractor to review a claim that has already 

been reviewed by another contractor because it must select a random sample of claims to 

estimate the Medicare improper payment rate.

What GAO Found
 

Page 84 GAO-15-404SP Fragmentation, Overlap, and Duplication

Warehouse as exclusions, although these ZPICs had performed 

postpayment claims reviews. CMS officials told us they do not monitor 

contractors’ entry of exclusions and suppressions to ensure this 

information is accurate or complete and that if ZPICs did not exclude 

claims they reviewed, the claims would be available for an RA to review, 

which could lead to inappropriate duplication.5 Representatives from one 

RA reported that, in 2011, it had to halt reviews on 2,000 claims because 

the ZPIC had not informed the RA of an ongoing investigation either by 

suppressing affected claims in the Recovery Audit Data Warehouse or 

through any other methods of coordination. Checking the accuracy of 

data is part of a strong internal control environment and provides an 

agency with assurance that the data needed for operations are reliable 

and complete.6

In addition, GAO determined in July 2014 that CMS has issued guidance 

for some but not all contractors about when duplicative reviews are 

permitted. CMS has issued guidance for RAs and the CERT contractor 

about whether they may conduct duplicative claims reviews. For 

example, CMS’s manual for the CERT contractor states that it should 

select and review a random sample of claims regardless of whether they 

have been reviewed by other contractors, in order to establish the 

Medicare improper payment rate accurately.

 If the Recovery Audit Data Warehouse information on 

excluded claims is inaccurate, as GAO found is sometimes the case, the 

Recovery Audit Data Warehouse’s effectiveness in preventing the RAs 

from conducting inappropriate duplicative claims reviews is limited.

7

 

5

CMS conducts a quarterly review of a random sample of claims that RAs entered into the 

Recovery Audit Data Warehouse to ensure the information is timely and accurate.

 However, GAO found that 

CMS has not developed complete guidance for ZPICs and MACs about 

whether they are permitted to duplicate other contractors’ claims reviews. 

CMS’s Medicare Program Integrity Manual states that ZPICs should work 

with other contractors to avoid duplication of efforts, but does not address 

whether reviewing a claim that another contractor had reviewed would be 

considered a duplication of efforts. Representatives from a ZPIC and 

some CMS officials stated that ZPICs are allowed to conduct duplicative 

claims reviews, but some CMS officials stated that ZPICs may not 

duplicate reviews conducted by RAs or MACs. CMS’s Medicare Program 

Integrity Manual also states only that MACs are not permitted to duplicate 

the ZPICs’ claims reviews and does not address whether MACs are 

permitted to duplicate RA claims reviews. Although a CMS official stated 

that MACs are not permitted to conduct duplicative reviews, 

representatives from two of the three MACs we spoke with believed that 

CMS permitted them to duplicate some contractors’ reviews. Written 

guidance stating explicitly which contractors may conduct duplicative 

claims reviews is important to prevent inappropriate duplication among 

6

See GAO/AIMD-00-21.3.1 and GAO-01-1008G. 

7

Also, CMS’s Medicare Program Integrity Manual states that RAs are prohibited from 

reviewing claims that have been reviewed by other contractors. 
 

Page 85 GAO-15-404SP Fragmentation, Overlap, and Duplication

the contractors. It is also consistent with federal internal control 

standards, which call for agencies to establish control activities that 

enforce management’s directives.8

In order to improve the efficiency and effectiveness of Medicare 

postpayment claims review efforts and to prevent inappropriate 

duplicative claims reviews among Medicare contractors, in July 2014 

GAO recommended that the Administrator of CMS take the following two 

actions: 

• monitor the Recovery Audit Data Warehouse to ensure that all 

postpayment review contractors are submitting required data and that 

the data the database contains are accurate and complete; and

• develop complete guidance to define contractors’ responsibilities 

regarding duplicative claims reviews, including specifying whether and 

when MACs and ZPICs can duplicate other contractors’ reviews.

Because GAO found that CMS does not have sufficient information to 

determine whether its contractors are conducting inappropriate 

duplicative claims reviews, the extent of any inappropriate duplication and 

the potential costs due to any resulting unnecessary burden on providers 

and contractors could not be determined. However, taking these actions 

should help ensure that Medicare contractors conduct efficient and 

effective postpayment claims reviews and avoid inappropriate duplication.

In commenting on the July 2014 report on which this analysis is based, 

HHS agreed with GAO’s findings and concurred with GAO’s 

recommendations that CMS monitor the Recovery Audit Data Warehouse 

and develop complete guidance to define contractors’ responsibilities 

regarding duplicative claims reviews. HHS also described steps it plans 

to take to remedy the issues GAO identified. For example, HHS stated it 

would update its guidance for contractors and would explore ways for 

HHS and contractors to be alerted when data are not entered into the 

Recovery Audit Data Warehouse within a certain time frame. 

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

comment, and HHS had no comments.

The information contained in this analysis is based on findings from 

GAO’s July 2014 report listed in the related GAO products section. To 

conduct this work, GAO reviewed CMS documents to identify 

requirements for contractors to prevent inappropriate duplicative claims 

reviews. To assess whether the Recovery Audit Data Warehouse could 

 

8

See GAO/AIMD-00-21.3.1 and GAO-01-1008G, sections related to control activities.

Actions Needed and 

Potential Financial or 

Other Benefits

Agency Comments 

and GAO’s Evaluation

How GAO Conducted 

Its Work
 

Page 86 GAO-15-404SP Fragmentation, Overlap, and Duplication

be used to estimate the number of times in 2012 that a contractor 

reviewed a claim for which an RA had also initiated a review, GAO 

reviewed relevant documentation and data from the Recovery Audit Data 

Warehouse, and interviewed CMS officials. GAO also interviewed CMS 

officials about what types of duplicative claims reviews the agency 

considers appropriate and inappropriate, the reliability of the data the 

agency had on duplication, and the agency’s efforts to limit inappropriate 

duplicative claims reviews. GAO interviewed representatives from all 4 

RAs, the CERT contractor, and a nongeneralizable sample of 3 of the 16 

MACs and 3 of the 6 ZPICs to learn about any steps the contractors take 

to prevent duplication. GAO selected 2 of the 12 MACs that process Part 

A and B claims and 1 of the 4 MACs that process claims for DME. GAO 

selected those MACs because they had been in operation for at least 6 

months, performed postpayment claims reviews in 2012, and were 

geographically diverse. GAO selected ZPICs that had been in operation 

for at least 1 year and whose service areas included some of the same 

states served by the 3 MACs in the sample.

Medicare Program Integrity: Increased Oversight and Guidance Could 

Improve Effectiveness and Efficiency of Postpayment Claims Reviews. 

GAO-14-474. Washington, D.C.: July 18, 2014. 

Medicare Program Integrity: Increasing Consistency of Contractor 

Requirements May Improve Administrative Efficiency. GAO-13-522. 

Washington, D.C.: July 23, 2013.

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

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

Related GAO 

Products

Contact Information
Page 87 GAO-15-404SP Fragmentation, Overlap, and Duplication

8. Programs for Serious Mental Illness

To help ensure that the eight federal agencies administering over 100 

programs supporting individuals with serious mental illness are able to 

develop an overarching perspective in order to understand the breadth of 

programs and resources used—including any potential gaps or overlap—

greater coordination of federal efforts is needed from the Department of 

Health and Human Services, and within it, the Substance Abuse and 

Mental Health Services Administration, which is required to promote 

coordination of programs relating to mental illness throughout the federal 

government. 

Mental illness is reported to be widespread in the United States. An 

estimated 43.8 million people—18.5 percent of adults in the United 

States—suffered from a mental illness in 2013, according to the 2013 

National Survey on Drug Use and Health administered by Substance 

Abuse and Mental Health Services Administration (SAMHSA). Among 

those, about 10 million people—4.2 percent of adults in the United 

States—suffered from a serious mental illness, which generally includes 

conditions such as schizophrenia, bipolar disorder, major depression, and 

severe posttraumatic stress disorder.1 The federal government provides a 

range of programs for those with a mental illness, including programs 

addressing broad social issues, such as homelessness, that can 

generally support individuals with serious mental illness as well as other 

programs that specifically target people with serious mental illness. 

In a December 2014 report, GAO found that 112 federal programs across 

eight federal agencies—Department of Defense (DOD), Department of 

Education, Department of Health and Human Services (HHS), 

Department of Housing and Urban Development, Department of Justice, 

 

1

For the purposes of this report section, GAO defines individuals with serious mental 

illness as adults who currently or at any time in the past year have had a diagnosable 

mental, behavioral, or emotional disorder (excluding developmental and substance use 

disorders) of sufficient duration to meet certain diagnostic criteria, as specified within the 

Diagnostic and Statistical Manual of Mental Disorders, that resulted in serious functional 

impairment, substantially interfering with or limiting one or more major life activities. 

Individuals with serious mental illness may also include those with a specific diagnosis; for 

example, individuals diagnosed with schizophrenia, schizoaffective disorder, bipolar 

disorder, or major depression. In addition, GAO defined individuals with serious emotional 

disturbance as children and adolescents from birth up to age 18 who currently or at any 

time during the past year have had a diagnosable mental, behavioral, or emotional 

disorder of sufficient duration to meet diagnostic criteria specified within the Diagnostic 

and Statistical Manual of Mental Disorders that resulted in functional impairment, which 

substantially interferes with or limits the child’s role or functioning in family, school, or 

community activities. Throughout this report section, when GAO refers to programs 

generally supporting or specifically targeting individuals with serious mental illness, it is 

referring to programs supporting or targeting individuals with either serious mental illness 

or serious emotional disturbance.

Why This Area Is 

Important

What GAO Found
 

Page 88 GAO-15-404SP Fragmentation, Overlap, and Duplication

Department of Labor, Social Security Administration, and Department of 

Veterans Affairs (VA)—were supporting individuals with serious mental 

illness in fiscal year 2013. The purposes and populations served by these 

programs varied widely, from the provision of support services, such as 

case management, to research, and from children to incarcerated adults. 

A subset of these programs—30 programs administered by five 

agencies—were identified by agencies as specifically targeting individuals 

with serious mental illness. Across these 30 programs, the agencies 

reported obligations of about $5.7 billion for fiscal year 2013.2

According to SAMHSA’s enabling legislation, as amended, it is required 

to promote coordination of programs relating to mental illness throughout 

the federal government. In addition, SAMHSA’s 2011-2014 strategic plan 

acknowledges the need for coordination, noting that no single program, 

either within HHS or anywhere else in the federal government, can solve 

the problems of homelessness, joblessness, educational challenges, and 

community cohesion for people with mental illness, including those with 

serious mental illness.

Half of the 

30 targeted programs—across four agencies (DOD, Department of 

Justice, HHS, and VA)—identified the same primary program purpose, 

the provision of support services to individuals with serious mental illness. 

With multiple agencies involved in administering the many programs 

supporting individuals with serious mental illness, the potential exists for 

overlapping or duplicative efforts. 

3

Although SAMHSA recognizes the need to coordinate, such coordination 

related to serious mental illness has been largely absent. While agencies 

said they participate in committees that could allow them to coordinate 

efforts regarding mental health, these committees do not focus 

specifically on, and have taken little action regarding, serious mental 

illness. For example, the Secretary of HHS established the Behavioral 

Health Coordinating Council (BHCC) in 2010 to bring together members 

from agencies within HHS to focus on behavioral health issues, but the 

council did not include officials from other federal agencies. The BHCC 

had six subcommittees that addressed selected topics, and three of these 

subcommittees specifically address substance use. One of the six 

 

 

2

The majority of these funds—84 percent—were obligated by DOD and VA for treatment 

and support services (among other things) for servicemembers, and veterans and their 

families. GAO’s review excluded programs that may reimburse providers for mental health 

services, such as Medicaid and Medicare or TRICARE. The Office of Management and 

Budget reported that federal spending on mental health services generally through 

Medicaid—a joint federal and state health care program—and Medicare was 

approximately $40 billion for fiscal year 2012. 

3

Substance Abuse and Mental Health Services Administration, Leading Change: A Plan 

for SAMHSA’s Roles and Actions 2011-2014, HHS Publication No. (SMA) 11-4629 

(Rockville, Md.: 2011). SAMHSA has also released their strategic plan for 2015-2018: 

Substance Abuse and Mental Health Services Administration, Leading Change 2.0: 

Advancing the Behavioral Health of the Nation 2015-2018, HHS Publication No. (PEP) 14-

LEADCHANGE2, 2014 (Rockville, Md.: 2014). 
 

Page 89 GAO-15-404SP Fragmentation, Overlap, and Duplication

subcommittees has done work that was related to serious mental illness, 

based on information HHS provided on recent actions taken by the 

BHCC. SAMHSA officials said that they had plans to establish a 

subcommittee within the BHCC devoted to addressing serious mental 

illness and that they expected this group to have an initial meeting in early 

2015. However, consistent with the BHCC, the subcommittee is only 

expected to coordinate within HHS, not across federal agencies. 

Although staff in these programs targeting serious mental illness reported 

taking steps to coordinate their individual programs, GAO found that 

coordination efforts among agency leadership to address serious mental 

illness are lacking. While coordination at the program level is important, it 

does not take the place of, or achieve the level of, leadership that GAO 

has previously found to be key to successful coordination. The absence 

of this high-level coordination hinders the federal government’s ability to 

develop an overarching perspective of its programs supporting and 

targeting individuals with serious mental illness. Without interagency 

coordination supported by agency leadership, agencies do not have the 

necessary information to assess the reach and effectiveness of their 

programs or to determine whether or where there may be gaps, overlap, 

or duplication in services for individuals with serious mental illness.

To understand the full breadth of federal programs and the scope of 

federal resources expended on programs supporting those with serious 

mental illness, GAO recommended in December 2014 that HHS—which 

includes SAMHSA—establish a mechanism to facilitate intra- and 

interagency coordination across programs that support individuals with 

serious mental illness.

In commenting on the December 2014 report on which this analysis is 

based, HHS did not concur with this recommendation to establish a 

mechanism to facilitate intra- and interagency coordination, citing the 

coordination that was already occurring at the program level. GAO 

acknowledged that coordination at the program level is important but 

noted that it cannot take the place of coordination at higher levels that 

would provide the perspective needed to assess the reach and 

effectiveness of all of the federal government’s programs targeting 

individuals with serious mental illness. 

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

comment. HHS did not provide comments on this issue.

Actions Needed and 

Potential Financial or 

Other Benefits

Agency Comments 

and GAO’s Evaluation
 

Page 90 GAO-15-404SP Fragmentation, Overlap, and Duplication

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

product listed in the related GAO product section. To identify federal 

programs supporting those with serious mental illness, the extent to which 

federal agencies are coordinating, and the extent to which federal 

agencies evaluate or monitor programs, GAO developed a web-based 

questionnaire.4

Table 5 in appendix V 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.

The web-based questionnaire asked questions about 

program goals, target populations, services offered, performance 

information and evaluations, coordination, and funding in fiscal year 2013. 

GAO identified eight agencies frequently cited as having relevant 

programs supporting individuals with serious mental illness and 

administered the questionnaire to those agencies. The eight federal 

agencies selected for the web-based questionnaire were DOD, 

Department of Education, HHS, Department of Housing and Urban 

Development, Department of Justice, Department of Labor, Social 

Security Administration, and VA. GAO supplemented the questionnaire 

responses with follow-up interviews and questions to each of the 

agencies to obtain additional information.

Mental Health: HHS Leadership Needed to Coordinate Federal Efforts 

Related to Serious Mental Illness. GAO-15-113. Washington, D.C.: 

December 18, 2014.

For additional information about this area, contact Linda T. Kohn at (202) 

512-7114, or kohnl@gao.gov.

 

 

4

We defined a federal program as a program, activity, or initiative that may include, but is 

not limited to, (1) grants to state, local, tribal, nonprofit, or research entities; (2) contracts 

with service providers; or (3) services directly provided to beneficiaries by the federal 

agency itself. We excluded health benefit programs—such as Medicaid, Medicare, or 

TRICARE—that may reimburse for various mental health services. 

How GAO Conducted 

Its Work

Related GAO 

Products

Contact Information
Page 91 GAO-15-404SP Fragmentation, Overlap, and Duplication

Homeland Security/Law Enforcement

9. Vulnerability Assessments of Critical 

Infrastructure 

The Department of Homeland Security could mitigate potential duplication or gaps by consistently capturing 

and maintaining data from overlapping vulnerability assessments of critical infrastructure and improving data 

sharing and coordination among the offices and components involved with these assessments. 

The extensive damage and long recovery from disasters like Hurricanes 

Katrina and Sandy, as well as the terrorist attacks of September 11, 2001, 

highlight the vulnerability of critical infrastructure to various hazards.1

Over the last several years, at least five Department of Homeland 

Security (DHS) offices and components have undertaken a mix of 

regulatory and voluntary activities to assess critical infrastructure assets 

and systems for vulnerabilities that could render them susceptible to 

threats and hazards.2 Given the number of offices and components 

conducting or requiring vulnerability assessments of critical infrastructure, 

the potential exists for duplication or overlap between and among the 

various efforts. 

In its September 2014 report, GAO found that DHS offices and 

components were not consistently capturing and maintaining data on their 

vulnerability assessment activities in a way that allows DHS to readily 

identify potential duplication or overlap among activities conducted. As a 

result, DHS is not positioned to track its activities to determine whether its 

assessment efforts are potentially duplicative or leave gaps among the 

critical infrastructure assessed. According to the National Infrastructure 

Protection Plan (NIPP), managing risk entails data interoperability 

standards to enable an efficient information exchange through defined 

data standards and requirements.3

 

1

Critical infrastructure includes assets and systems, whether physical or virtual, so vital to 

the United States that their incapacity or destruction would have a debilitating impact on 

security, national economic security, national public health or safety, or any combination of 

those matters.

Among other things, these standards 

2

These five DHS offices and components include the U.S. Coast Guard, the Federal 

Protective Service, the Transportation Security Administration (TSA), the Infrastructure 

Security Compliance Division (ISCD), and the Protective Security Coordination Division 

(PSCD). ISCD and PSCD are both within DHS’s Office of Infrastructure Protection which 

leads and coordinates national programs and policies on critical infrastructure issues. 

According to DHS, a vulnerability assessment is a process for identifying physical features 

or operational attributes that render an entity, asset, system, network, or geographic area 

open to exploitation or susceptible to a given hazard that has the potential to harm life, 

information, operations, the environment, or property.

3

DHS, 2013 National Infrastructure Protection Plan, Partnering for Critical Infrastructure 

Security and Resilience (Washington, D.C.: December 2013). The NIPP provides the 

overarching approach for integrating the nation’s critical infrastructure security and 

resilience activities into a single national effort.

Why This Area Is 

Important

What GAO Found
 

Page 92 GAO-15-404SP Fragmentation, Overlap, and Duplication

are to include a foundation for an information-sharing environment that 

has common data requirements. 

GAO’s analysis of DHS vulnerability assessment data showed that, from 

October 2010 to September 2013, DHS offices and components 

conducted more than 5,300 assessments covering various types of 

assets and systems. In addition to DHS-led assessments, as many as 

7,600 asset owners and operators were required to perform selfassessments to comply with security-related regulatory regimes. The 

table below shows the extent to which DHS offices or components 

conducted or required vulnerability assessments across the various 

sectors. 

Overlap across Sectors where Department of Homeland Security (DHS) Offices and Components Conduct Vulnerability 

Assessments or Required Asset Owners/Operators to Conduct Vulnerability Assessments, Fiscal Years 2011-2013

Critical infrastructure sector

DHS office or component

Coast Guard

Federal 

Protective 

Service

Infrastructure 

Security 

Compliance 

Division

Protective 

Security 

Coordination 

Division

Transportation 

Security 

Administration

Chemical   

Commercial facilities    

Communications  

Critical manufacturing   

Dams  

Emergency services  

Information technology   

Nuclear reactors, materials & waste 

Food & agriculture    

Defense industrial base    

Energy     

Healthcare & public health  

Financial services   

Water & wastewater systems   

Government facilities     

Transportation systems    

Source: GAO analysis of DHS data. | GAO-15-404SP

The analysis of the data and information from DHS officials also showed 

that DHS assessment activities of different offices and components 

overlapped across several critical infrastructure sectors during the 3-year 

period. For example, as the previous table shows, six critical 

infrastructure sectors were ones in which at least four of the five offices 

and components conducted or required vulnerability assessments. The 

potential for overlap or duplication was also confirmed to GAO 

anecdotally by Coast Guard, the Protective Security Coordination Division 

(PSCD), and Transportation Security Administration (TSA) field personnel 

who reported observing what they called federal fatigue, or a perceived 

weariness among critical infrastructure owners and operators who had 
 

Page 93 GAO-15-404SP Fragmentation, Overlap, and Duplication

been repeatedly approached or required by multiple federal agencies and 

DHS offices and components to participate in or complete assessments. 

DHS officials expressed concern that this “fatigue” may diminish future 

cooperation from asset owners and operators.

To determine whether DHS had conducted or required vulnerability 

assessments at the same assets or systems within those sectors, GAO 

compared records of assessment-related activities based on name and 

location, as no unique numeric identifiers were available. This analysis 

showed that the various data sets DHS offices and components used did 

not share common formats or defined data standards that would enable 

identification of matches across data sets. DHS officials acknowledged 

that DHS-wide interoperability standards do not exist for them to follow 

that would facilitate comparisons among the different data sets. Across 

the sets of data from the various offices and components, asset names 

and addresses generally were not entered in a standardized way or were 

not available in some cases. In addition, some records showed assets 

that were listed at the same address in more than one DHS data set but 

did not have names that matched. Similarly, some company names 

appeared to be the same or similar on multiple DHS data sets but were 

listed at different street addresses, on different streets, or had post office 

boxes instead of physical addresses. In some cases, company or asset 

names were missing altogether. 

GAO determined that without consistent assessment data across DHS 

offices and components on the names and addresses of assets already 

assessed, DHS could not reasonably ensure that it could identify potential 

overlap or duplication in coverage of its vulnerability assessment 

activities. In addition, DHS is not fully positioned to track its activities to 

better ensure effective risk management across the spectrum of assets 

and systems as called for by the NIPP. 

In addition to the lack of consistent data on assessments, GAO reported 

in September 2014 that DHS lacks department-wide processes to 

facilitate data sharing and coordination, as appropriate, among the 

various offices and components that conduct or require vulnerability 

assessments. The NIPP calls for standardized processes to promote 

integration and coordination of information sharing through, among other 

things, jointly developed standard operating procedures. However, GAO 

found that while different components within DHS use various data 

systems to maintain their assessment-related data, the offices and 

components have no process for sharing the data for assessments that 

they conduct, as appropriate. 

For example, DHS’s Office of Infrastructure Protection has a system that 

stores the results of surveys and assessments conducted by its PSCD 

personnel, while TSA has a separate system that serves as a centralized 

online repository of TSA’s information. However, access to each others’ 

systems is limited or restricted, and there is no other mechanism that 

consolidates and maintains basic information on the assessment activities 

of each office or component, such as the names and addresses of assets 
 

Page 94 GAO-15-404SP Fragmentation, Overlap, and Duplication

assessed. DHS reports that it is in the early stages of addressing this 

issue, according to DHS’s comments on GAO’s September 2014 report. 

For example, one DHS component is developing a secure system to 

serve as a single interface through which certain mission partners enter 

and retrieve vulnerability assessment information.

In addition, GAO found that DHS lacks a department-wide process to 

facilitate coordination among the various offices and components involved 

in vulnerability assessment activities. DHS officials stated that they 

generally rely on field-based personnel to inform their counterparts at 

other offices and components about planned assessment activities and 

share information as needed on what assets may have already been 

assessed. For example, PSCD officials stated that they send e-mail 

notifications to partners advising them of planned assessments and may 

also alert DHS counterparts depending on assets covered and their areas 

of responsibility. Likewise, Coast Guard officials reported that locally 

based area maritime security committee meetings provide a forum for 

Coast Guard field personnel to share information about planned and 

completed assessment-related activities with other DHS components, as 

needed.4

Not having processes for sharing information or coordinating on 

assessments or consistent data standards and requirements can affect 

DHS offices’ and components’ ability to identify potential overlap or 

duplication in their assessment activities. For example, even if consistent 

data standards and requirements were in place, the lack of a process for 

facilitating the sharing of assessment data among offices and 

components can hinder DHS’s ability to analyze what facilities have or 

have not been assessed because officials using one set of data are not 

readily able to access and compare the data of other offices and 

components. Similarly, having a process for sharing assessment data but 

not having consistent data standards and requirements would likewise 

hinder DHS’s ability to maximize the use of data already collected, as one 

office’s or component’s data may not be compatible with another. 

However, absent field-based coordination or sharing activities 

such as these, it is unclear whether all facilities in a particular geographic 

area or sector are covered. 

Consequently, without consistent data standards and requirements and 

processes for DHS offices and components to share data and coordinate 

with each other in their critical infrastructure vulnerability assessment 

activities, DHS cannot provide reasonable assurance that it can identify 

potential overlap, duplication, or gaps in coverage. This could ultimately 

 

4

The area maritime security committees are authorized by section 102 of the Maritime 

Transportation Security Act of 2002, as codified at 46 U.S.C. § 70112(a)(2) and 

implemented at 33 C.F.R. pt. 103. Typically composed of members from federal, state, 

and local law enforcement agencies; maritime industry and labor organizations; and other 

port stakeholders, these committees are responsible for, among other things, identifying 

critical infrastructure and operations, identifying risks, and providing advice to the Coast 

Guard for developing the associated area maritime security plan. 
 

Page 95 GAO-15-404SP Fragmentation, Overlap, and Duplication

affect DHS’s ability to work with its partners to enhance national critical 

infrastructure security and resilience, consistent with the NIPP.

To promote efficiency and effectiveness in activities to advance critical 

infrastructure security and resilience, GAO recommended in September 

2014 that the Secretary of Homeland Security direct the Under Secretary 

for the National Protection and Programs Directorate to work with other 

DHS offices and components to 

• develop an approach to ensure that vulnerability data gathered on 

critical infrastructure assets and systems are consistently collected 

and maintained across DHS to facilitate the identification of potential 

duplication and gaps in critical infrastructure coverage, and

• develop and implement ways that DHS can facilitate data sharing and 

coordination of vulnerability assessments to minimize the risk of 

potential duplication or gaps in coverage.

Estimating potential cost savings is difficult because of the lack of 

consistent assessment data to determine the extent of actual duplication 

or overlap that currently exists in carrying out these various assessment 

activities. Moreover, some of the agencies could not separate out the 

costs of the vulnerability assessments from other activities. However, 

implementing these recommendations could enhance the ability of DHS 

offices and components to identify and minimize any potential duplication 

or gaps that exist in assessment coverage.

In commenting on the September 2014 report on which this analysis is 

based, DHS concurred with GAO’s recommendations and indicated it 

planned to take steps to respond to them. Specifically, DHS noted that a 

sub-Interagency Policy Committee of the National Security Council was 

taking steps to identify what policies and guidance are needed to support 

the identification of information that could be shared across the critical 

infrastructure protection community. DHS anticipates this guidance will 

provide departments and agencies with a common approach to critical 

infrastructure data and information. DHS also noted it plans to build upon 

ongoing internal initiatives such as developing a single assessment 

methodology with a strategic integrated approach as well as use one of 

its information systems as a means for mission partners across DHS and 

others to share and identify what facilities have been assessed. As part of 

this effort, DHS stated it also plans to convene stakeholders across DHS 

to assess current data collection efforts and develop and implement 

coordination plans. 

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

comment. DHS provided no additional comments.

Actions Needed and 

Potential Financial or 

Other Benefits

Agency Comments 

and GAO’s Evaluation
 

Page 96 GAO-15-404SP Fragmentation, Overlap, and Duplication

The information contained in this analysis is based on findings from 

products listed in the related GAO products section. To determine the 

extent to which the same critical infrastructure was assessed by different 

entities within DHS, GAO obtained and analyzed data for the October 

2010 to September 2013 time period on the assessments conducted by 

each DHS office or component using their respective tools and methods 

and the facilities regulated under the Maritime Transportation Security Act 

of 2002 and Chemical Facilities Anti-Terrorism Standards. For its analysis 

GAO used a statistical software program and manual data matching to 

compare data on over 25,000 assessment-related activities. To determine 

how DHS offices and components share information and coordinate with 

each other on vulnerability assessments of critical infrastructure, GAO 

collected and analyzed documentation from DHS offices and components 

on their processes; procedures; and systems for gathering, storing, 

sharing, and using information collected during assessments of critical 

infrastructure. GAO also interviewed officials from DHS offices and 

components involved in conducting assessments of critical infrastructure.

Table 6 in appendix V lists the various assessment tools and methods

used or required by DHS offices and components that 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.

Critical Infrastructure Protection: DHS Action Needed to Enhance 

Integration and Coordination of Vulnerability Assessment Efforts. 

GAO-14-507. Washington, D.C.: September 15, 2014. 

For additional information about this area, contact Chris Currie at (404) 

679-1875 or curriec@gao.gov. 

How GAO Conducted 

Its Work

Related GAO 

Products

Contact Information
Page 97 GAO-15-404SP Fragmentation, Overlap, and Duplication

Information Technology

10. DHS Processing of FOIA Requests

To address duplication in the processing of Freedom of Information Act requests, the Department of Homeland 

Security should determine the viability of re-establishing an agreement between two of its component agencies 

that process immigration files. 

The Freedom of Information Act (FOIA) requires federal agencies to 

provide the public with access to government information on the basis of 

the principles of openness and accountability in government. Each year, 

federal agencies release information in response to hundreds of 

thousands of FOIA requests. The Department of Homeland Security 

(DHS) is one of the many agencies that respond to these requests. The 

department receives and processes requests for information related to 

immigration, border crossings, law enforcement, natural disasters, 

maritime accidents, and agency management, among other topics. This 

information is compiled and maintained throughout the department and its 

seven component agencies. DHS reported processing approximately 

200,000 FOIA requests in fiscal year 2013—the most of any federal 

government agency. 

The department has experienced an increase in requests received every 

year since 2009, and it also has reported the largest backlog of 

unprocessed requests of any federal agency.1 At the end of fiscal year 

2013, approximately half of all reported backlogged federal FOIA 

requests (about 50,000 of 95,000) belonged to DHS. Among the most 

frequent FOIA requests made to DHS are those for immigration files. 

These files usually contain various types of information pertaining to 

immigrants, including asylum applications, law enforcement records, and 

border crossing documents. As such, they may contain information and 

records that are generated by various DHS components or other 

agencies. For example, three DHS component agencies—U.S. 

Citizenship and Immigration Services (USCIS), Customs and Border 

Protection (CBP), and Immigration and Customs Enforcement (ICE)—

create most of the documents included in immigration files.

GAO reported in November 2014 that two DHS component agencies—

USCIS and ICE—process certain immigration-related requests twice. 

USCIS is the custodian of immigration files, and all FOIA requests for 

such files are either initiated with, or referred to, this component for 

processing. However, GAO found that certain requests are first 

processed by USCIS and then by ICE. Contributing to this duplication is 

the absence of an agreement between the two components to process all 

immigration-related requests. 

 

1

Backlogs are requests that are pending at an agency at the end of the fiscal year that are 

beyond the statutory time period for a response.

Why This Area Is 

Important

What GAO Found
Page 98 GAO-15-404SP Fragmentation, Overlap, and Duplication

To process a FOIA request for an immigration file, the USCIS staff 

member to whom the request is assigned first manually enters the 

requester’s data, such as a name and address, into USCIS’s FOIA 

system to establish a record of the request. Next, the staff member 

retrieves and scans the documents in the requested file and reviews the 

documents. If all of the documents were generated by USCIS, the staff 

member makes redactions as needed, sends the documents to the 

requester, and closes out the request. Further, if the FOIA request covers 

files containing documents generated by CBP, then USCIS is able to 

process the request on the basis of an agreement to that effect with CBP.

By having USCIS process such requests for CBP documents, the two 

components avoid duplication in their response to a FOIA request.

On the other hand, USCIS and ICE do not have such an agreement for 

documents generated by ICE. Thus, the USCIS staff member is to identify 

any such documents and make them available to ICE’s FOIA staff for 

their separate processing.2

The figure depicts the duplication that occurs in USCIS’s and ICE’s 

downloading and re-entering of data to respond to FOIA requests for 

immigration files.

In doing so, USCIS and ICE currently engage 

in duplicative processing of FOIA requests for those immigration files 

containing documents related to law enforcement activities that were 

generated by ICE. To facilitate ICE’s review of such files, USCIS staff 

transfer copies of the ICE-generated documents to a temporary electronic 

storage drive that USCIS maintains. According to USCIS officials, ICE 

has been granted access to this electronic storage drive so that it can 

retrieve files containing the documents that it generates. ICE retrieves the 

documents, and the ICE staff then re-enter the data to create a new FOIA 

request in ICE’s FOIA processing system. The staff then proceed with 

processing the requested documents and release them to the requester—

in essence, undertaking a new, and duplicate, effort to respond to the 

FOIA request.

 

2

Where applicable, USCIS also refers the immigration file documents to other agencies, 

such as the Department of State or Federal Bureau of Investigation, for further processing.
Page 99 GAO-15-404SP Fragmentation, Overlap, and Duplication

Referral Process for Documents in an Immigration File

a

USCIS processes all CBP documents in the file under a service level agreement. 

b

Other agencies may include the Department of State, the Federal Bureau of Investigation, and the 

Federal Bureau of Prisons.

In its November 2014 report, GAO noted that, in prior years, up until April 

2012, the two components had an agreement whereby USCIS processed 

ICE’s documents contained in an immigration file. However, the 

components’ officials stated that, since that agreement ended, the 

components have not made plans to enter into another such agreement. 

According to ICE’s FOIA Officer, USCIS’s processing of ICE’s documents 

in immigration files was viewed as being too costly. While there would be 

costs associated with USCIS processing ICE’s documents in immigration 

files, the potential exists for additional costs to be incurred in the 

continued duplicate processing of such files.
Page 100 GAO-15-404SP Fragmentation, Overlap, and Duplication

Furthermore, the duplicate processing of a single FOIA request by USCIS 

and ICE staff contributes to an increase in the time needed to respond to 

a FOIA request for immigration files. Because USCIS does not send the 

immigration file to ICE until it has completed its own processing of the 

relevant documents—which, according to USCIS, takes on average 20 

working days—ICE usually does not receive the file to begin its own 

processing until the 20-day time frame established by the 1996 e-FOIA 

amendments3 for responding to a request, has passed.4 The average 

time for USCIS to close a request as of fiscal year 2013 was 19.73 days, 

while the average time for ICE to close a request was 52.79 days.

To improve the management of DHS FOIA requests, GAO recommended 

in November 2014 that the Secretary of Homeland Security take the 

following action:

• Determine the viability of re-establishing the service-level agreement 

between USCIS and ICE to eliminate duplication in the processing of 

immigration files. If the benefits of doing so would exceed the costs, 

re-establish the agreement.

GAO was unable to estimate the financial benefits associated with this 

action due to the lack of reliable cost data from DHS. However, the 

implementation of this recommendation would likely help DHS ensure that 

its resources are used efficiently to process FOIA request. 

In commenting on the November 2014 report on which this analysis is 

based, DHS concurred with GAO’s recommendation. The department 

noted that a working group would be formed to determine the viability of 

re-establishing the service level agreement on FOIA processing between 

its components. Further, in February 2015, the department stated that it 

had begun taking action in this regard.

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

comment. In response, DHS provided technical comments that reflected 

the ICE FOIA Officer’s general disagreement with our characterization of 

“duplication” as it related to ICE’s processing of the FOIA requests 

received from USCIS. Specifically, the official stated that ICE records in 

immigration files are not processed by USCIS and that there is no 

duplicative processing of records. However, GAO stands by its finding in 

this report that duplication occurs because, when a FOIA request for 

 

3

Electronic Freedom of Information Act Amendments of 1996, Pub. L. No. 104-231,110 

Stat. 3048 (1996).

4

The typical 20-day time period may be extended to 30 days in unusual circumstances, 

such as when a request involves a voluminous amount of records or requires consultation 

with another agency.

Actions Needed and 

Potential Financial or 

Other Benefits

Agency Comments 

and GAO’s Evaluation
Page 101 GAO-15-404SP Fragmentation, Overlap, and Duplication

immigration files is received, two components—USCIS and ICE—must 

separately process the request.

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

the product listed in the related GAO product section. To determine if 

duplication existed, GAO examined policies and procedures, viewed 

demonstrations of how automated systems are used to manage and 

process requests, and interviewed agency officials to clarify workflow. 

GAO also evaluated the processes against recommended practices 

discussed in its previously issued reports that addressed duplication in 

federal government programs.

Freedom of Information Act: DHS Should Take Steps to Improve Cost 

Reporting and Eliminate Duplicate Processing. GAO-15-82. Washington, 

D.C.: November 19, 2014. 

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

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

How GAO Conducted 

Its Work

Related GAO 

Products

Contact Information
Page 102 GAO-15-404SP Fragmentation, Overlap, and Duplication

International Affairs

11. Federal and States’ Export Promotion

Because federal and state export promotion efforts overlap, the Department of Commerce should take steps to 

enhance collaboration among them to promote economic development while ensuring the most efficient use of 

limited federal resources. 

Given the importance of U.S. exports in supporting economic growth, in 

2010, the President announced the National Export Initiative (NEI) 

doubling U.S. exports in the next 5 years.1 The Office of Management 

and Budget (OMB) subsequently identified this goal as 1 of 14 interim 

crosscutting priority goals under the GPRA Modernization Act.2 The NEI 

identifies increased coordination among the federal government and their 

nonfederal partners as a priority and a tool for increasing exports.3

Congress called for such coordination more than two decades ago in the 

Export Enhancement Act of 1992, which directed the President to 

establish the interagency Trade Promotion Coordinating Committee 

(TPCC) to coordinate U.S. government export promotion and export 

financing activities and develop a U.S. government-wide strategic plan for 

carrying out such federal programs.4 This law also called for the TPCC, 

chaired by the Secretary of Commerce, to review efforts by the states to 

promote U.S. exports and propose ways to develop cooperation between 

federal and state efforts.5

 

1

The President launched the National Export Initiative in his January 2010 State of the 

Union Address. Subsequently, in Executive Order 13534 (Mar. 11, 2010), the President 

established a new body, the Export Promotion Cabinet, to develop and coordinate the 

implementation of the NEI. 75 Fed. Reg. 12433. The Export Promotion Cabinet is 

coordinated by a White House official, has most of the same member agencies as the 

Trade Promotion Coordinating Committee (TPCC), and is to coordinate its efforts with the 

TPCC. For a list of TPCC member agencies, see 

http://export.gov/advocacy/eg_main_022762.asp.

2

The GPRA Modernization Act calls upon OMB to develop long-term, outcome-oriented 

goals for a limited number of crosscutting policy areas and to provide information on how 

they will be achieved. Parts of the act did not come into effect until the fiscal year 2015 

budget was issued, but the act required OMB to develop interim goals starting with the 

2013 budget. Pub. L. No. 111-352, 124 Stat. 3866 (2011) (amending the Government 

Performance and Results Act of 1993, Pub. L. No. 103-62, 107 Stat. 285 (1993)). For 

information on each of the interim crosscutting priority goals provided in the President’s 

budget, see GAO, Managing for Results: GAO’s Work Related to the Interim Crosscutting 

Priority Goals under the GPRA Modernization Act, GAO-12-620R (Washington, D.C.: May 

31, 2012). 

3

In September 2010, the Export Promotion Cabinet issued the Report to the President on 

the National Export Initiative, which is its plan for doubling U.S. exports in 5 years. All 

further references to the NEI in this report section include the Export Promotion Cabinet 

and its activities. 

4

Pub.L. No.102-429, § 201, 106 Stat. 2186 (1992), codified at 15 U.S.C. § 4727. 

5

Pub.L. No.102-429, § 201. 

Why This Area Is 

Important
Page 103 GAO-15-404SP Fragmentation, Overlap, and Duplication

Many federal and state agencies operate a wide variety of programs 

across the country and overseas that are intended, at least in part, to 

assist U.S. companies in entering foreign markets, or in expanding their 

existing presence in markets abroad. Export promotion activities include 

efforts to raise awareness about exporting and to provide businesses with 

export counseling, training, and information on market opportunities; help 

connecting with potential buyers abroad; and help obtaining financing. 

Responsibility for federal export promotion is widely dispersed. Some of 

the 20 TPCC member agencies directly assist small businesses to export 

overseas, including the Department of Commerce (Commerce) and Small 

Business Administration (SBA), whose activities are similar to those of 

state governments. 6

The TPCC Secretariat is housed in Commerce’s International Trade 

Administration (ITA) and takes the lead in coordinating the activities of 

federal export promotion activities and implementing the NEI through an 

annual National Export Strategy. In fiscal year 2013, Commerce’s ITA 

dedicated $267.5 million (59 percent) of its total budget to export 

promotion. The ITA also manages the U.S. Commercial Service (CS) as 

part of its Global Markets unit. In most states, CS is the primary 

government entity providing federal export promotion services to 

nonagricultural businesses through CS’s network of domestic and 

international trade professionals.

 

7While CS’s mission identifies small 

businesses as a particular focus of its export promotion efforts, CS 

assists companies of all sizes. SBA’s key roles in export promotion are to 

conduct outreach and provide training, counseling, and export financing 

for small businesses. SBA’s Office of International Trade, which provides 

export financing and promotion services to small businesses, had fiscal 

year 2013 total program costs of approximately $9.8 million.8 (See table 7 

in appendix V.) The total amount of money spent on federal export 

promotion is unclear because comparable budget information for federal 

agencies involved in export promotion is not readily available.9

Every state government conducts some export promotion activities, 

though they vary in size and scope. For example, the five state trade 

 

 

6

Throughout this report, GAO uses the term “small businesses” in keeping with SBA’s 

definition of a small business as an enterprise that is independently owned and operated, 

organized for profit, and not dominant in its field. SBA’s definition of a small business also 

sets industry-specific standards for other factors, including maximum number of 

employees and annual revenue, to identify how large a company may be and still qualify 

for SBA assistance. 

7

See 15 U.S.C. § 4721. 

8

Additionally, according to the Congressional Research Service, SBA’s export-related 

loans amounted to approximately $1.2 billion in fiscal year 2013. Congressional Research 

Service, Small Business Administration Trade and Export Promotion Programs, R43155 

(Washington, D.C.: Jan. 22, 2014). 

9

GAO, Export Promotion: Better Information Needed About Federal Resources, 

GAO-13-644 (Washington, D.C.: July 17, 2013).
Page 104 GAO-15-404SP Fragmentation, Overlap, and Duplication

offices GAO visited for its May 2014 report had budgets for export 

promotion that ranged from $1.9 million to over $5 million annually for 

fiscal year 2013. According to a 2013 survey administered by the State 

International Development Organizations (SIDO)10, of the 14 states that 

responded 90 percent had budgets ranging from $420,000 to $1.75 

million. State-level trade functions can be housed in various state 

government entities, including governors’ offices, state departments of 

commerce, and state departments of economic development.11 State 

trade offices often have both domestic and international staff; while 

domestic staff generally are state employees, international staff may be 

state employees or contractors.

Commerce and SBA provide some of the same types of export promotion 

services, such as outreach, counseling, and training, and trade leads, as 

most states do through their state trade offices. Like the state trade 

offices in the five states GAO visited, most of the 28 state trade offices 

that responded to SIDO survey also provide export promotion outreach, 

counseling and training, and trade leads. While not all states provide all 

services, the survey results showed that state trade offices provide a 

range of export promotion services.

In addition to providing similar services, the federal agencies—including 

Commerce and SBA— offering export promotion services at the state 

level and most state trade offices primarily serve small businesses. 

According to Commerce, the majority of its customers are small 

businesses, although firms of any size may request its services. SBA, by 

law, offers services exclusively to small businesses. In 2012, 97 percent 

of the over 301,000 identified U.S. exporters were small and mediumsized businesses.12 In the 2013 SIDO survey, of the 22 state trade offices 

that responded to one question, most reported that small businesses 

were their primary clients.13

 

10 SIDO is a nonprofit, nonpartisan organization, affiliated with The Council of State 

Governments (CSG), and is comprised of international economic development 

practitioners and professionals from state and related organizations across the country. 

SIDO provides state trade promotion professionals with a forum for collaboration and 

sharing best practices as well as advocates for states’ international trade development 

issues so that U.S. companies remain globally competitive. 

Four of the five state trade offices that GAO 

visited said they work primarily with small businesses, although three said 

they also serve some larger companies.

11In this report section, GAO refers to all state government entities providing export 

promotion as “state trade offices.” 

12U.S. Census Bureau, 2012 Preliminary Profile of U.S. Exporting Companies 

(Washington, D.C.: Dec. 4, 2013). 

13Twenty-eight states responded to the 2013 SIDO survey; however, not all states 

provided a response to all survey questions. 

What GAO Found
Page 105 GAO-15-404SP Fragmentation, Overlap, and Duplication

Overlapping export promotion efforts can have both positive and negative 

effects. For example, officials at both U.S. Export Assistance Centers 

(USEAC) and state trade offices that GAO visited said that they are 

operating at capacity in terms of resources to meet the demand for their 

export promotion services.14 Consequently, officials at two USEACs and 

two state trade offices that GAO visited viewed the provision of similar 

services by different organizations as positive for beneficiaries of these 

services because the overlap meant that more resources were available 

to companies looking for help exporting.

15

However, as GAO previously concluded, without enhanced collaboration, 

overlap may have a negative effect in that limited resources may not be 

used in the most effective and efficient manner.16 For example, GAO has 

reported that while SBA and the Export-Import Bank of the United States 

(Ex-Im)17 offer similar financial products for small businesses, many 

lenders prefer to work with only one agency and very few lenders use 

both agencies’ products. Thus, clients may only be able to access one 

agency’s products through their regular bank.18

According to federal and state officials with whom GAO spoke, factors 

affecting their level of collaboration included physical proximity, level of 

Furthermore, small 

business beneficiaries of export promotion services could be confused 

about how to access available services and unclear about who could best 

meet their needs. GAO found that the extent of collaboration between 

federal and state trade offices in the five states it visited ranged from no 

collaboration in one state, to very little collaboration in another, to close 

collaboration between federal and state export promotion providers in 

three states. 

 

14USEACs are the more than 100 domestic offices where Commerce’s CS operates, 

including where SBA, the Export-Import Bank, and sometimes state trade offices have 

staff colocated with Commerce’s staff. USEACs were established to act as “one-stop 

shops” that would provide coordinated guidance on export promotion services and 

available financing. SBA’s field staff—Export Finance Specialists—are colocated with 

Commerce in 19 USEACs throughout the United States.

15GAO previously reported that Commerce and the majority of states provide many of the 

same types of export promotion services, but that some states have limited budgets and 

staff. Partly as a result of this limited capacity, most states reported that Commerce’s 

services are important to their export promotion capabilities and have partnered with 

Commerce’s offices. See GAO, Export Promotion: Commerce Needs Better Information to 

Evaluate Its Fee-Based Programs and Customers, GAO-09-144 (Washington, D.C.: Mar. 

4, 2009). 

16GAO, Entrepreneurial Assistance: Opportunities Exist to Improve Programs’ 

Collaboration and Performance Management for Financial Assistance Programs, 

GAO-14-335T (Washington, D.C.: Feb. 6, 2014). 

17The Export-Import Bank of the United States (Ex-Im Bank) is the official export credit 

agency of the United States. Ex-Im Bank’s mission is to assist in financing the export of 

U.S. goods and services to international markets. 

18GAO, Export Promotion: Small Business Administration Needs to Improve Collaboration 

to Implement Its Expanded Role, GAO-13-217 (Washington, D.C.: Jan. 30, 2013).
Page 106 GAO-15-404SP Fragmentation, Overlap, and Duplication

communication, and resource levels. In addition, state offices report to 

their own executive and legislative bodies, and state trade offices 

determine their own priorities and are not obligated to collaborate with 

federal agencies. States that do choose to collaborate with federal 

partners in trade promotion primarily interact with Commerce but also 

collaborate with SBA, both to varying degrees.

The TPCC has three initiatives designed to advance federal-state 

collaboration in promoting U.S. exports by strengthening and expanding 

networks of state and local governments and other partners—Export 

Outreach Teams, Global Cities Exchange, and a Commerce-SIDO 

agreement—as shown in the figure below. 

TPCC Initiatives to Promote Federal-State Collaboration in Export Promotion

GAO found that results of these efforts have been limited, however, in 

part because their implementation has not consistently followed key 

collaboration practices. In prior work, GAO found that collaboration is 

generally enhanced by following key practices, such as articulating 

common outcomes; agreeing on roles and responsibilities; monitoring, 

evaluating, and reporting on results; and coordinating resource planning. 

In the five states visited, GAO found weaknesses in the implementation of 

Export Outreach Teams. For example, in some cases, activities were 

missing key participants and were inconsistent with the activities’ 

objectives, in part because SBA was not fully monitoring implementation 

of the teams across its 68 district offices. Similarly, GAO found that 

TPCC’s involvement in the Brookings Institution’s Global Cities Exchange 

initiative to engage metropolitan areas in export promotion had unknown 

implications for federal export promotion efforts and resources because 

Commerce lacked a means to monitor the initiative’s results.19

 

19The Brookings Institution is nonprofit public policy organization based in Washington, 

D.C. 

Finally, an 

agreement between Commerce (the TPCC Chair) and SIDO expired 

without achieving its collaboration objective or enhancing client 

information sharing so states could share credit with Commerce for 

helping companies make export sales. According to Commerce, by law, it 

cannot release its clients’ confidential commercial information, and its 

policy is to make determinations on releasing information case by case, 
Page 107 GAO-15-404SP Fragmentation, Overlap, and Duplication

but it does not provide formal guidance to staff on what information 

sharing is allowable.

When federal and state governments provide overlapping export 

promotion services to similar clients, one result can be that more 

resources are available to companies looking for help exporting. 

However, given the current environment of constrained government 

resources, without effective collaboration, overlapping export promotion 

programs may not operate as efficiently and effectively as possible. The 

three TPCC initiatives have demonstrated that opportunities exist to 

enhance federal-state collaboration, including improving local networks of 

export promotion service providers, expanding activities to better include 

metropolitan area economic development agencies, and working with 

national organizations representing state and local governments. 

Renewed effort by the TPCC agencies to implement these initiatives with 

greater attention to key collaboration practices can help improve the 

support available to small businesses that take advantage of similar 

federal and state export promotion services, and thereby bolster federal 

and state efforts to achieve national export goals.

To improve federal-state collaboration in providing export promotion 

services in accordance with the National Export Initiative and the Export 

Enhancement Act of 1992, in May 2014 GAO recommended that the 

Secretary of Commerce, as Chair of the TPCC, take the following three 

actions:

• Improve implementation of the Export Outreach Teams to better 

achieve their intended outcomes. This could include taking steps, 

including better monitoring, to ensure that key local participants are 

invited, that meetings are held as expected, and that the Export 

Outreach Teams seek to both increase awareness of available export 

resources and enhance interagency and intergovernmental 

collaboration. 

• Take steps consistent with key practices for collaboration to enhance 

TPCC agencies’ partnering on export promotion with nonfederal 

entities, such as SIDO and Global Cities. This could include 

reassessing and strengthening the TPCC’s intergovernmental 

partnerships by clarifying expected outcomes, defining roles and 

responsibilities, monitoring results, and planning resource needs.

• Take steps consistent with key practices to enhance, where possible, 

federal information sharing with state trade offices on Commerce’s 

export promotion activities. This could include more formal guidance 

to Commerce staff on the circumstances, in light of legal restrictions, 

in which information can be shared with state trade offices and other 

nonfederal entities, and exploring ways for clients to give permission 

to release information useful to such nonfederal entities. 

While no data are available to quantify the financial benefit of improved 

federal-state collaboration on export promotion, over half of Commerce’s 

Actions Needed and 

Potential Financial or 

Other Benefits
Page 108 GAO-15-404SP Fragmentation, Overlap, and Duplication

total ITA fiscal year 2013 budget of $452.3 million was devoted to export 

promotion. 

In commenting on the May 2014 report on which this analysis is based, 

Commerce concurred with GAO’s overall assessment that collaboration 

can be enhanced through strategic management. On August 8, 2014, 

Commerce provided an action plan in response to GAO’s 

recommendations. However, it is not clear the agency’s plans will 

address GAO’s findings. For example, Commerce and SBA determined 

that Export Outreach Teams would be more effective with a narrower 

focus on conducting outreach events with businesses rather than internal 

planning events with partners. GAO believes that narrowing the focus 

would address only one of the program’s two objectives—increasing 

awareness of available export resources. This approach would not 

address the second objective—enhancing interagency and 

intergovernmental collaboration. Examples of Export Outreach Team 

activities that address the second objective include sharing best practices 

for client services, and developing referral protocols that include 

information about federal, state, and local agency responsibilities and the 

circumstances under which a business would be referred from one 

agency to another. With regard to information sharing, Commerce 

decided that maintaining a case-by-case approach is preferable to issuing 

more formal guidance because officials believe that issuing formal 

guidance could be counterproductive and result in its USEAC officials 

adopting a more conservative stance than they might otherwise. 

Commerce believes a case-by-case approach will allow it to continue to 

assess what flexibility exists in each instance to share information. As 

Commerce builds out a new Customer Relationship Management (CRM) 

system, it will explore the feasibility of adding a check box for customers 

to indicate whether Commerce can share their information with key 

nonfederal partners. GAO will continue to monitor Commerce activities 

related to its three recommendations. 

GAO provided a draft report section to Commerce and SBA for review 

and comment. Commerce and SBA provided technical comments, some 

of which reiterated comments made about our 2014 report, and in 

response we made changes to this report when appropriate.

The information contained in this analysis is based on findings in GAO’s 

May 2014 report listed in the related GAO products section. To determine 

the main characteristics of federal and state export promotion efforts, 

including their collaboration, GAO compared their services, types of 

clients, and performance measures using information collected from 

documents and interviews from CS, SBA, and state trade offices in five 

states (Florida, Minnesota, Oregon, Pennsylvania, and Virginia). GAO 

chose these states based upon the following criteria: presence of relevant 

Commerce and SBA officials; participation in export promotion initiatives 

GAO was evaluating; state trade office presence overseas; extent of 

state-level export promotion activities according to Commerce officials in 

Agency Comments 

and GAO’s Evaluation

How GAO Conducted 

Its Work
Page 109 GAO-15-404SP Fragmentation, Overlap, and Duplication

Washington, D.C.; and state trade office staff size (mix of large and 

small). GAO chose these five locations to better understand and test 

federal initiatives to advance collaboration with state trade offices at the 

local level. This allowed GAO to assess federal implementation efforts 

overall, but these five locations are not representative of the situations in 

each of the individual 50 states.

GAO also analyzed data collected by the State International Development 

Organizations (SIDO) in its annual member surveys for 2012 and 2013.20

GAO also determined the extent to which CS and state trade offices 

share operational costs and clients. GAO gained additional insights into 

how CS and state trade offices work together in providing their services 

by examining 2012 data in Commerce’s Client Tracking System.21

Table 7 in appendix V lists the programs GAO identified that might have

similar or overlapping objectives, provide similar services, or be 

fragmented across government missions. Overlap and fragmentation 

might not necessarily lead to actual duplication, and some degree of 

overlap and duplication may be justified.

Export Promotion: Trade Agencies Should Enhance Collaboration with 

State and Local Partners. GAO-14-393. Washington, D.C.: May 21, 2014.

Export Promotion: Better Information Needed About Federal Resources, 

GAO-13-644. Washington, D.C.: July 17, 2013. 

Export Promotion: Small Business Administration Needs to Improve 

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

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

For additional information about this area, contact Kimberly Gianopoulos 

at (202) 512-8612 or gianopoulosk@gao.gov. 

 

20To assess the reliability of the survey data from the SIDO, GAO interviewed the SIDO 

representatives responsible for developing and implementing the survey, performed a 

formal review of the survey questionnaire for methodological quality, and performed data 

testing. GAO determined that some of the survey data were reliable for the purposes of 

this report.

21On the basis of interviews with knowledgeable agency officials and GAO’s assessment 

of the data for missing data, outliers, and obvious errors, we concluded that all data 

elements we assessed in the export successes data provided to us by Commerce were 

sufficiently reliable for the purposes of this report. 

Related GAO 

Products

Contact Information
Page 110 GAO-15-404SP Fragmentation, Overlap, and Duplication

Science and the Environment

12. Oceanic and Atmospheric Observing 

Systems Portfolio

The National Oceanic and Atmospheric Administration should analyze its portfolio of observing systems to 

determine the extent to which unnecessary duplication may exist. 

The National Oceanic and Atmospheric Administration (NOAA), in the 

Department of Commerce, is the federal agency responsible for 

managing and operating a large portfolio of observing systems. An 

observing system is a collection of one or more sensing elements that 

reside on a fixed or mobile platform, such as a buoy or satellite, which 

gathers data on or measures specific environmental variables or 

“parameters.” The nation depends on observing systems to help produce 

a wide variety of products, including weather forecasts and tsunami 

warnings. In November 2014, GAO examined a subset of NOAA’s entire 

observing system portfolio, 41 ocean, coastal, and Great Lakes observing 

systems which collect data on 75 environmental parameters, including 

sea surface temperature, salinity, and wave direction. NOAA estimates it 

spent an average of approximately $430 million annually to operate and 

maintain this subset of ocean, coastal, and Great Lakes observing 

systems in fiscal years 2012 through 2014. This is approximately 9 

percent of NOAA’s total annual appropriations for these years.

GAO found in November 2014 that NOAA had not assessed whether 

there is unnecessary duplication in its observing systems portfolio. As a 

result, the agency may be missing opportunities to reduce unnecessary 

duplication and achieve cost savings. Since 2010, some of NOAA’s 

planning documents have indicated a need to reduce systems costs by 

eliminating unnecessary duplication.1 For example, one of the agencywide objectives in NOAA’s 2010 strategic plan was to collect accurate 

and reliable data for the agency’s entire observing system portfolio. The 

plan said that pursuing this objective would include reducing the costs of 

observations through, among other things, “reducing unnecessarily 

duplicative capabilities.”2

 

1

According to NOAA officials, duplication in data collection can sometimes be necessary if 

the data are needed to meet a critical mission need, such as providing a back-up to the 

primary data source if it failed. 

Similarly, NOAA’s 2012 implementation plan for 

its objective to produce accurate observation data included as a shortterm outcome “[r]educed, consolidated, and/or closed observing sites and 

sensors based on quality and utility of observations supporting all NOAA 

2

NOAA, NOAA’s Next-Generation Strategic Plan (Silver Spring, Md.: Dec. 2010).

Why This Area Is 

Important

What GAO Found
Page 111 GAO-15-404SP Fragmentation, Overlap, and Duplication

needs.”3

GAO also found in November 2014 that multiple observing systems 

among the subset of NOAA’s ocean, coastal, and Great Lakes observing 

systems measure several of the same environmental parameters, as 

shown in the table below. For example, 21 of NOAA’s 41 ocean, coastal, 

or Great Lakes observing systems currently collect data on sea surface 

temperature. 

NOAA officials could not, however, provide examples of any 

observing sites that have been reduced, consolidated, or closed since the 

agency developed the 2012 implementation plan, even though these 

outcomes were to be accomplished in fiscal years 2012 or 2013. 

Environmental Parameters Measured Most Often by National Oceanic and 

Atmospheric Administration’s Ocean, Coastal, and Great Lakes Observing Systems 

Environmental parameter

Number of observing systems 

collecting data for this parameter

Sea surface temperature 21

Ocean surface winds: speed 14

Ocean temperature: profiles 12

Ocean surface winds: direction 11

Salinity: surface 11

Ocean currents: speed, surface 10

Ocean currents: speed, profiles 9 

Atmospheric pressure: sea level 8 

Ocean currents: direction, surface 8 

Ocean currents: direction, profiles 7 

Source: GAO analysis of NOAA documentation. | GAO-15-96

According to NOAA officials, there are a variety of reasons why multiple 

observing systems would measure the same parameters, such as to 

collect the data from different locations, at different times, or with different 

degrees of accuracy, or to maintain continuity of data collection in the 

event that one system failed. In addition, NOAA officials told GAO they do 

not believe unnecessary duplication in data collection in the agency’s 

observing systems portfolio is a significant problem. NOAA officials, 

however, could not provide documentation of any analysis of whether 

unnecessary duplication exists in the data collected by its ocean, coastal, 

and Great Lakes observing systems. Without analyzing whether there is 

unnecessary duplication or opportunities to reduce or consolidate 

observations, NOAA cannot know if there are opportunities to reduce 

costs associated with its observing systems portfolio. In NOAA’s written

comments on the report, the agency said it is developing the NOAA 

Observing Systems Integrated Analysis (NOSIA) model, which may 

 

3

NOAA, NGSP Implementation Plan: Enterprise Objective: Accurate and Reliable Data 

from Sustained and Integrated Earth Observing Systems FY 2013-2019 (Nov. 26, 2012).
Page 112 GAO-15-404SP Fragmentation, Overlap, and Duplication

provide them with the capability to determine whether unnecessary 

duplication exists. 

To help identify opportunities to reduce unnecessary duplication and 

achieve cost savings in NOAA’s observing systems portfolio, GAO 

recommended in November 2014 that the Secretary of Commerce should 

• direct the NOAA Administrator to analyze the extent to which 

unnecessary duplication exists in NOAA’s portfolio of observing 

systems. 

Because NOAA has not yet analyzed its observing systems portfolio, it is 

difficult to estimate the potential cost savings associated with any 

unnecessary duplication that may exist. As a result, GAO cannot quantify 

potential financial benefits associated with the recommended action.

GAO provided a draft of its November 2014 report to the Department of 

Commerce and NOAA for comment. In its written comments, NOAA, 

providing comments on behalf of the Department of Commerce, generally 

agreed with GAO’s recommendation to analyze the extent to which 

unnecessary duplication exists in NOAA’s portfolio of observing systems. 

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

Commerce and NOAA for review and comment. The Department of 

Commerce and NOAA did not provide comments on this report section. 

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

product in the related GAO product section. For that report, to identify the

environmental parameters most often measured, GAO analyzed the 

number of environmental parameters measured by each of NOAA’s 41 

ocean, coastal, and Great Lakes observing systems. To determine annual 

operations and maintenance costs for these systems, GAO reviewed 

documentation collected by NOAA, interviewed agency officials, and took 

steps to assess the reliability of the cost data. GAO also reviewed agency 

documentation (such as strategic and implementation plans) and 

interviewed NOAA officials to determine the extent to which NOAA had 

taken steps to assess whether unnecessary duplication exists in its 

observing systems portfolio.

Table 8 in appendix V lists the observing systems 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.

Actions Needed and 

Potential Financial or 

Other Benefits

Agency Comments 

and GAO’s Evaluation

How GAO Conducted 

Its Work
Page 113 GAO-15-404SP Fragmentation, Overlap, and Duplication

NOAA’s Observing Systems: Additional Steps Needed to Achieve an 

Integrated, Cost-Effective Portfolio, GAO-15-96. Washington, D.C.: Nov. 

17, 2014.

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

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

Related GAO 

Products

Contact Information
Page 114 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities

Section II: Areas in Which GAO Has 

Identified Other Cost Savings or Revenue 

Enhancement Opportunities

This section summarizes 12 areas 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 115 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities

Defense

13. Defense Facilities Consolidation and 

Disposal 

To help identify opportunities for saving costs by consolidating or disposing of unutilized or underutilized 

facilities, the Department of Defense should ensure that data on the utilization of DOD facilities—which were 

collectively valued at around $850 billion in fiscal year 2013—are complete and accurate. 

The Department of Defense (DOD) manages a global real property 

portfolio that, according to DOD, consisted of more than 562,000 facilities 

located at over 4,800 sites worldwide as of fiscal year 2013. These 

facilities cover more than 24.7 million acres and have a replacement 

value of about $850 billion.1 Operating and maintaining unutilized (i.e., 

vacant) and underutilized (i.e., partially vacant) facilities consumes 

valuable resources that could be eliminated from DOD’s budget or used 

by DOD for other purposes.2

DOD’s Real Property Management Program is governed by statute,

To the extent that DOD is able to identify

unutilized or underutilized facilities, additional cost savings might be 

realized through facilities’ consolidation or disposal.

3 as 

well as by DOD regulations, directives, and instructions that establish real 

property accountability and financial reporting requirements. These laws, 

regulations, directives, and instructions require DOD and the military 

departments to maintain a number of data elements, such as utilization 

rate and status, about their facilities to help ensure efficient property 

management and thus help identify potential facility consolidation or 

disposal opportunities.4

 

1

Department of Defense, Base Structure Report—Fiscal Year 2014 Baseline. For more 

information on the number of assets and the plant replacement value by military service, 

see table 9 in appendix V.

The military departments maintain databases to 

track their real property assets and upload their property inventory 

2

Operating facilities incur costs, such as maintenance and repair costs, utilities, pest 

control, and grounds maintenance, some of which continue regardless of the use of the 

facility, according to a DOD official.

3

Section 2721 of Title 10 of the United States Code directs the Secretary of Defense to 

prescribe regulations, to, among other things, have the records of fixed property of the 

military departments maintained on a quantitative and monetary basis, to the extent 

practical.

4

According to a DOD official, the utilization rate shows the percentage of a facility that is 

used (0 to 100) and is based on information such as occupancy, square footage being 

used, and various mission functions being performed within the facility. The status of a 

facility indicates whether it is needed to perform the installation’s mission. For example, an 

active status indicates that the facility is needed for 6 months or more a year to perform a 

mission, and inactive status indicates that the facility is not currently needed to perform a 

mission. 

Why This Area Is 

Important
Page 116 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

records to the overall DOD database called the Real Property Assets 

Database.5

In September 2014 GAO reported that DOD’s Real Property Assets 

Database contained utilization data for only 53 percent of DOD’s facilities. 

Previously, GAO had found that DOD did not maintain complete and 

accurate data concerning the utilization of its facilities. The Office of the 

Secretary of Defense’s (OSD) guidance requires that up-to-date utilization 

rates be maintained for all categories of its real property asset records. In 

September 2014, GAO found that the percentage of total real property 

assets with a reported utilization rate had increased from 46 percent to 53 

percent since fiscal year 2010, reflecting some improvements DOD made 

to the accuracy of the data. However, DOD continues to collect 

incomplete and inaccurate utilization data and may be missing 

opportunities to realize cost savings from identifying excess space among 

almost a quarter of a million facilities that could potentially be 

consolidated or disposed of.

In addition to incomplete utilization data, GAO reported in September 

2014 that DOD’s Real Property Assets Database contained inaccurate 

utilization data that did not reflect the actual usage rate of the facilities, 

although DOD subsequently made some improvements in the data. In 

reviewing DOD’s Real Property Assets Database, in September 2014 

GAO found a number of buildings reporting a zero utilization rate 

(indicating the facility was not used) while in an active status (indicating 

that the facility was needed for its current mission), which may indicate 

inaccurate records or opportunities for facility consolidation or disposal.6

Military service officials acknowledged at the time of GAO’s September 

2014 review that data errors exist in the databases and said that because 

For example, as of September 30, 2013, OSD reported 7,596 buildings 

across the four military services with inconsistent or inaccurate reported 

utilization, 6,391 of which were Army buildings. OSD and Army officials 

stated that the reason for this large amount of unused buildings in an 

active status may be that many of the Army’s building utilization rates 

were erroneously changed to zero when the Army uploaded its real 

property records into the Army’s current database for managing its real 

property. 

 

5

The military departments consist of the Department of the Army, Department of the Air 

Force, and the Department of the Navy, with the Navy including the military service of the 

Marine Corps.

6

DOD facilities can be buildings, structures, or linear structures. Buildings are roofed and 

floored facilities enclosed by exterior walls and consisting of one or more levels that is 

suitable for single or multiple functions. Structures are facilities other than a building or 

linear structure constructed on or in the land (e.g., tower, storage tank, wharf, and pier). 

Linear structures are facilities whose function requires that they traverse land (e.g., 

runway, road, rail line, pipeline, fence, pavement, and electrical distribution line).

What GAO Found
Page 117 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

the utilization data are often missing, out of date, or inaccurate, the 

installations rely on physical verifications of facilities’ utilization to identify 

consolidation or disposal opportunities. However, physical verifications 

are performed as a result of requests for space or other common real 

property management processes, such as changes to mission or 

personnel at the installation, rather than being used to proactively identify 

excess space that can be disposed of or consolidated. Real property 

inventories are required to be conducted every 5 years under DOD 

Instruction 4165.14 Real Property Inventory (RPI) and Forecasting (Jan. 

17, 2014). In September 2014 GAO found that the services’ real property 

inventory databases did not always have accurate information on when 

real property inventories were completed—for example, some showed 

invalid inspection dates, such as prior to 1775 or after 2015. During the 

course of GAO’s September 2014 review, GAO told Army officials’ about 

these inaccurate dates, and they responded that they would explore why 

the dates were incorrect and correct them.

In September 2011, GAO recommended, and reiterated in September 

2014, that DOD develop and implement a methodology for calculating 

and recording utilization data for all types of facilities, and modify 

processes to update and verify the accuracy of reported utilization data to 

reflect a facility’s true status. DOD partially concurred with the 

recommendation, stating that it had already begun some efforts to 

improve utilization data. DOD also recognized the need for further 

improvements in the collection and reporting of utilization data across the 

department. However, we noted in response that DOD did not specify 

what actions it had completed to date or the time frames for completing 

efforts to improve the collection and reporting of utilization data. Without 

complete and accurate utilization data, use of the military departments’ 

databases to identify consolidation or disposal opportunities could result 

in missed opportunities for potential cost avoidance or cost savings. 

In addition, in September 2014, GAO found that OSD does not have a 

strategic plan, with goals and metrics, to manage DOD’s real property 

efficiently and facilitate identifying opportunities for consolidating 

unutilized or underutilized facilities. According to a DOD directive, it is 

DOD policy that DOD real property be managed to promote the most 

efficient and economic use of DOD real property assets, and in the most 

economical manner consistent with defense requirements. In addition, 

GAO’s prior work has shown that organizations need sound strategic 

management planning in order to identify and achieve long-range goals 

and objectives. GAO’s prior work also identified critical elements that 

should be incorporated into strategic plans to establish a comprehensive, 

results-oriented management framework, such as long-term goals, 

strategies to achieve the goals, and metrics or performance measures to 
Page 118 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

gauge progress.7 However, OSD officials stated at the time of GAO’s 

September 2014 review that there was no OSD strategic plan to manage 

DOD’s real property nor had OSD established department-wide goals, 

strategies to achieve the goals, or metrics to gauge progress for how it 

intended to manage its real property in the most efficient manner, noting 

that DOD had been focused on other priorities. GAO concluded that, 

among other things, such real property management goals could focus on 

correcting inaccurate and incomplete facility utilization data to provide 

better visibility on the status of facilities and to identify opportunities for 

consolidating unutilized or underutilized facilities and reducing operations 

and maintenance costs. Without a strategic plan, it will be difficult for OSD 

to effectively manage its facilities and utilize them efficiently.

To better identify consolidation or disposal opportunities and manage 

utilization of its facilities, in September 2011, GAO recommended that 

DOD take the following action:

• Modify processes to update and verify the accuracy of reported 

utilization data to reflect a facility’s true status. 

GAO reiterated this recommendation in its September 2014 report and 

stated that the action would help provide reasonable assurance that the 

utilization data are complete and accurate and better position the 

department to use the databases to identify consolidation or disposal 

opportunities.

In addition, to better enable DOD to manage its real property inventory 

effectively and efficiently, GAO recommended in September 2014 that 

DOD take the following action:

• Establish a strategic plan as part of a results-oriented management 

framework that includes, among other things, long-term goals, 

strategies to achieve the goals, and use of metrics to gauge progress 

to manage DOD’s real property and to facilitate DOD’s ability to 

identify all unutilized and underutilized facilities for potential 

consolidation or disposal opportunities. 

Without a way to better collect complete and accurate utilization data and 

without a strategic plan to help manage DOD’s efforts in improving its 

utilization data, DOD may be limited in their ability to achieve the full 

potential of cost savings. Moreover, GAO was not able to ascertain 

 

7

See, for example, GAO, Depot Maintenance: Improved Strategic Planning Needed to 

Ensure That Army and Marine Corps Depots Can Meet Future Maintenance 

Requirements, GAO-09-865 (Washington, D.C.: Sept. 17, 2009); Depot Maintenance: 

Improved Strategic Planning Needed to Ensure That Air Force Depots Can Meet Future 

Maintenance Requirements, GAO-10-526 (Washington, D.C.: May 14, 2010); and Depot 

Maintenance: Improved Strategic Planning Needed to Ensure That Navy Depots Can 

Meet Future Maintenance Requirements, GAO-10-585 (Washington, D.C.: June 11, 

2010).

Actions Needed and 

Potential Financial or 

Other Benefits
Page 119 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

financial benefits of taking this action because DOD lacks reliable data to 

identify facilities that are unutilized and underutilized. DOD also does not 

have reliable data on how much it costs to operate and maintain 

individual facilities. Therefore, even if data were available to identify which 

facilities were actually unutilized or underutilized, GAO would not be able 

to provide a reliable cost savings estimate of how much DOD would save 

from not operating or maintaining these facilities. For these reasons, GAO 

cannot quantify the potential financial benefits associated with the 

recommended actions. Nevertheless, the cost of operating and 

maintaining unutilized and underutilized buildings could potentially be 

reduced with improvements to the completeness and accuracy of 

utilization data, which may assist DOD in identifying consolidation or 

disposal opportunities. Thus, without fully implementing the September 

2011 recommendation, DOD may not have reasonable assurance that 

the utilization data are complete and accurate, which could limit the 

military services from identifying consolidation opportunities and realizing 

potential cost avoidance from no longer operating and maintaining more 

facility space than needed. Further, without a strategic plan, OSD and the 

military services will be challenged in managing their real property in an 

efficient and economical manner, and in identifying opportunities for 

consolidation and disposal.

In commenting on GAO’s September 2011 report on which this analysis is 

based, DOD partially concurred with the recommendation. DOD 

recognized the need for further improvements in the collection and 

reporting of utilization data across the department and stated that it had 

begun some efforts to improve utilization data, as discussed above. 

However, DOD did not specify what actions it had completed to date or 

the time frames for completing efforts to improve the collection and 

reporting of utilization data. In commenting on GAO’s September 2014 

report, DOD concurred with the recommendation to establish a strategic 

plan. Further, in November 2014, DOD responded to a requirement in 

Section 2814 of the National Defense Authorization Act for Fiscal Year 

2014 to submit a report to include, among other things, DOD’s strategy, 

progress, and obstacles for maximizing efficient utilization of existing 

facilities and current efforts to systematically collect, process, and analyze 

data on efficient utilization. DOD submitted a report that identified military 

service plans for efficient utilization but does not provide information on a 

strategic plan to identify all underutilized and unutilized facilities, as GAO 

recommended. According to a DOD official, as of February 2015, DOD 

has developed a strategic plan for identifying underutilized and unutilized 

assets and is currently coordinating with the military services to establish 

an implementation approach.

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

for review and comment. The department did not provide comments on 

this report section.

Agency Comments 

and GAO’s Evaluation
Page 120 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

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

reports listed in the related GAO products section and additional work 

GAO conducted. To determine the extent to which DOD has improved the 

accuracy and completeness of facility utilization data in the Real Property 

Assets Database and the military services have improved the data 

contained in their respective real property inventory databases to identify 

potential consolidation or disposal opportunities, GAO analyzed selected 

data fields containing the military services’ real property records from 

OSD’s Real Property Assets Database. In September 2014, GAO 

selected the same data fields it had used as part of its methodology and 

analysis for its September 2011 report and determined a revised number 

of unutilized facilities. In addition, GAO reviewed prior GAO reports that 

discuss the accuracy and reliability of DOD’s real property assets 

database and the military department real property databases that supply 

inventory records to the real property assets database. 

Table 9 in appendix V lists the programs GAO identified that might have 

opportunities for cost savings. 

Defense Infrastructure: DOD Needs to Improve Its Efforts to Identify 

Unutilized and Underutilized Facilities. GAO-14-538. Washington, D.C.: 

September 8, 2014.

Excess Facilities: DOD Needs More Complete Information and a Strategy 

to Guide Its Future Disposal Efforts. GAO-11-814. Washington, D.C.: 

September 19, 2011.

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

(202) 512-4523 or leporeb@gao.gov.

How GAO Conducted 

Its Work

Related GAO 

Products

Contact Information
Page 121 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities

14. DOD Headquarters Reductions and 

Workforce Requirements

The Department of Defense could potentially achieve hundreds of millions of dollars in cost savings and help to 

ensure that headquarters organizations are properly sized to meet their assigned missions by re-evaluating its 

ongoing headquarters-reductions efforts and conducting periodic reassessments of workforce requirements. 

The Department of Defense (DOD) has many organizations with multiple 

layers of headquarters management, and at times these organizations 

possess complex and overlapping relationships. At the departmental 

level, such layers include, but are not limited to, the Office of the 

Secretary of Defense (OSD), the Joint Staff, and the military service 

secretariats and staffs, which are the highest level organizations in DOD 

responsible for managing and overseeing the major elements of the 

department. Beyond these organizations, DOD has other commands, 

such as the functional combatant commands, which assist in carrying out 

DOD’s worldwide responsibilities and providing unique capabilities, such 

as conducting global operations to deter and detect strategic attacks 

against the United States and its allies, in support of DOD’s six 

geographic combatant commands and four military services. 

The total authorized positions and costs to support the headquarters 

operations for OSD, the Joint Staff, the military service secretariats and 

staffs, and the functional combatant commands was almost 27,000 

authorized military and civilian positions and $4.7 billion in fiscal year 

2013.1 Total personnel and costs to support headquarters operations 

have grown at many organizations; for example, authorized positions at 

the functional combatant commands increased from about 5,700 

personnel in fiscal year 2004 to more than 10,500 personnel in fiscal year 

2013, and costs to support headquarters operations increased from about 

$215 million in fiscal year 2001 to about $1.2 billion in fiscal year 2013.2

Like the rest of the federal government, DOD is operating in a constrained

budget environment and is facing difficult decisions about how to allocate 

 

 

1

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. Costs to support headquarters operations primarily reflect the costs for civilian 

personnel and contract services. These costs do not include the costs associated with 

military personnel basic pay and allowances and other military personnel costs. It 

excludes obligations of funding provided for DOD’s overseas contingency operations. All 

costs in this report section are in nominal dollars.

2

GAO limited its analysis of authorized military and civilian positions to fiscal years 2004 

through 2013 because U.S. Special Operations Command could not provide data on its 

authorized military and civilian positions for fiscal years 2001 through 2003. 

Why This Area Is 

Important
 

Page 122 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

its resources to meet its global mission requirements.3 Acknowledging the 

significant growth in headquarters, the department has sought to reduce 

its headquarters staff across the department. In July 2013, the Secretary 

of Defense directed a 20 percent cut in management headquarters 

spending throughout the department.

4 The reduction included spending 

within headquarters organizations such as OSD, the Joint Staff, the 

military services’ secretariats and military staffs, and the combatant 

commands.

5

GAO has identified several actions related to DOD’s management of its 

headquarters resources. In its February 2012 annual report on 

duplication, overlap, and fragmentation, GAO reported that DOD should

review and identify further opportunities for consolidating or reducing the 

size of headquarters organizations. In March 2012, GAO recommended 

that DOD revise DOD Instruction 5100.73, Major DOD Headquarters 

Activities, to include all major DOD headquarters activity organizations. 

DOD has begun the process of updating this Instruction, but had not 

revised it as of January 2015. GAO also reported that DOD should 

continue to examine opportunities to consolidate or eliminate defense 

headquarters organizations that are geographically close or have similar 

missions. Moreover, in its April 2014 annual report on duplication, 

overlap, and fragmentation, GAO reported that DOD should conduct 

comprehensive, periodic evaluations of whether the combatant 

commands are sized and structured to efficiently meet assigned missions; 

DOD has not addressed this suggested action. DOD’s progress to 

address these actions can be found in GAO’s Action Tracker. 

These cuts, according to the Secretary’s guidance, were 

designed to streamline DOD’s management of its headquarters through 

efficiencies and elimination of spending on lower-priority activities. In 

2014, DOD reported that reductions to management headquarters staffs 

across the department would result in a savings of $5.3 billion over 5 

years (through fiscal year 2019). However, the specific details about how 

DOD will achieve these reductions were not clear as of January 2015.

In June 2014, GAO found that DOD’s headquarters reduction plans were 

based on unreliable information and also could be excluding much of the 

total resources devoted to headquarters because the department focused 

its efforts on the portion of the headquarters designated as management 

headquarters. DOD defines management headquarters, or major DOD 

 

3

Among other constraints, the Budget Control Act of 2011 established requirements for 

automatic budget sequestration, setting caps on the levels of DOD spending from fiscal 

years 2013 to 2021. See Pub. L. No. 112-25 (2011).

4

Some DOD officials use the terms management headquarters and major DOD 

headquarters activities interchangeably. For purposes of this report section, GAO also 

uses the terms interchangeably. 

5

Deputy Secretary of Defense Memorandum, 20% Headquarters Reductions (July 31, 

2013). 

What GAO Found
 

Page 123 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

headquarters activities, as headquarters 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.

6

DOD officials told GAO that the Secretary of Defense provided general 

guidance about what should be considered management headquarters 

for the commands to use when identifying their total headquarters 

budgets, directing that organizations should identify reductions amounting 

to 20 percent of management headquarters budgets.7

GAO found that DOD considers less than a quarter of the positions at the 

functional combatant commands—2,500 of 10,500 total authorized 

positions—to be management headquarters even though many positions 

appear to be performing management headquarters functions such as 

planning, budgeting, and developing policies. As such, more than three 

quarters of the headquarters positions at the functional combatant 

commands are potentially excluded from DOD’s directed reductions. DOD 

officials reported that many of these positions were excluded from 

management headquarters totals because they were performing tasks 

and functions that were more operationally focused. However, GAO found 

that the commands excluded resource management personnel that 

manage component command funding and personnel that manage and 

support the development, acquisition, and fielding of critical items for 

select forces, even though these personnel perform headquarters-specific 

functions. 

The guidance 

focused on budgets but also stated that organizations should strive to 

reduce personnel by a like amount. However, because the department 

did not have complete and reliable information on the resources being 

devoted to management headquarters, DOD relied on self-reported and 

potentially inconsistent data from each individual component when 

implementing planned headquarters reductions. 

GAO found differences, as well, in what proportion of personnel were 

considered management headquarters among DOD organizations. 

Compared to the functional combatant commands, the service 

component commands had a larger percentage of authorized positions 

included in their management headquarters totals—about 80 percent of 

their total headquarters authorized positions—even though their primary 

mission is to support the functional combatant command, and many have 

an operationally focused mission. DOD acknowledged that its 

management headquarters data were not complete and reliable, but 

noted that it does not have a reliable alternate source for capturing this 

information. 

 

6

Department of Defense Instruction 5100.73, Major DOD Headquarters Activities (Dec. 1, 

2007) (incorporating change 2, June 12, 2012). 

7

The 20 percent reduction applied to the total headquarters budgets to include 

government civilian personnel who work at headquarters and associated costs including 

contract services, facilities, information technology, and others that support headquarters 

functions.
 

Page 124 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

GAO concluded that the department may not achieve meaningful savings 

unless it re-evaluates its decision to base its headquarters reduction 

plans on unreliable management headquarters information. Given that 

unreliable information on management headquarters formed the 

foundation of DOD’s reduction efforts, the department did not have a 

reliable starting point for its headquarters reductions in the functional 

combatant commands and also across the department. GAO based its 

conclusion, in part, on the long-standing issues with accounting for such 

headquarters resources that date back to at least 1997. When evaluating 

organizational consolidation, the key to any consolidation initiative is the 

identification of and agreement on specific goals, with the goals of the 

consolidation being evaluated against a realistic assessment of how the 

consolidation can achieve them. GAO further noted that any consolidation 

initiatives must be grounded in accurate and reliable data. As a result, 

unless DOD reevaluates its decision to focus reductions to management 

headquarters and establishes a clearly defined and consistently applied 

starting point on which to base reductions, the department will be unable 

to track and reliably report its headquarters reductions and ultimately may 

not realize significant savings. 

In a second report, published in January 2015, GAO found that other toplevel DOD headquarters organizations it reviewed—OSD, the Joint Staff, 

and the secretariats and staffs for the Army, Navy, and Air Force, and 

Headquarters, Marine Corps—do not determine their workforce 

requirements as part of a systematic requirements-determination process, 

nor do they have procedures in place to ensure that they periodically 

reassess these requirements as outlined in DOD and other guidance. 

GAO noted that current personnel levels for these headquarters 

organizations are traceable to statutory limits enacted in the 1980s and 

1990s to force efficiencies and reduce duplication. Although Congress set 

these statutory limits, GAO reported that the President has declared a 

national emergency each year since fiscal year 2002, which had the 

effect of waiving the limits for the military departments. If the limits had 

been in force in fiscal year 2013, the Army and Navy would have 

exceeded them by 17 percent and 74 percent, respectively. Moreover, the 

limits have little practical utility because of statutory exceptions for certain 

categories of personnel and because the limits exclude personnel in 

supporting organizations that perform headquarters-related functions. For 

example, the organizations that support the Army Secretariat and Army 

Staff are almost three times as large as the Secretariat and Staff, but 

personnel who perform headquarters-related functions in these 

organizations are excluded from the limits. 

Many of the DOD organizations GAO reviewed have recognized 

problems with requirements determination and are beginning to take 

steps to modify their related requirement-determination processes. For 

example, GAO reported that OSD, the Navy, and the Marine Corps are 

taking steps to modify their processes, but their efforts are not complete. 

Without a systematic determination of workforce requirements and 

periodic reassessment of them, DOD will not be well positioned to 

proactively identify efficiencies and limit personnel growth within these 
 

Page 125 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

headquarters organizations. Moreover, until DOD determines workforce

requirements, Congress will not have critical information needed to reexamine statutory limits enacted decades ago.

Based in part on GAO’s body of work on DOD headquarters, Congress 

required DOD to report on how it intended to address management 

challenges across a range of headquarters organizations not limited to 

those organizations GAO reviewed. Specifically, Congress directed DOD 

to develop a plan for implementing a periodic review and analysis of 

DOD’s personnel requirements for management headquarters in section 

905 of the Carl Levin and Howard P. ‘Buck’ McKeon National Defense 

Authorization Act for Fiscal Year 2015 and report on this plan no later 

than 120 days after enactment.

8 The review is to include a description of 

current headquarters size, structure and critical capabilities; an 

assessment of current systems to track how headquarters personnel are 

managed; and a proposed timeline on how they would go about adopting 

a periodic reassessment. The review not only applies to the organizations 

that GAO reviewed, but also the Defense Agencies, such as the Defense 

Finance and Accounting Service and the Defense Intelligence Agency; 

the combatant commands; DOD field activities such as the Defense 

Human Resource Activity and the DOD Education Activity; and the 

National Guard Bureau. Providing the information required by Congress 

could increase visibility into the size and structure of DOD headquarters 

organizations, but it may not capture all headquarters personnel because 

of the fundamental challenges with how DOD defines management 

headquarters. GAO previously reported that focusing reductions on 

management headquarters budgets and personnel, which tend to be 

inconsistently defined and often represent a small portion of the overall 

headquarters, shields much of the resources identified for potential 

reduction. GAO reported that focusing reductions on management 

headquarters did not provide a good designation of total headquarters 

resources and made recommendations to improve DOD’s management 

headquarters reduction efforts. At a time of growing economic and fiscal 

constraints and changing national security challenges, it is critical for 

DOD to take a comprehensive approach in its headquarters reductions to 

ensure meaningful savings are achieved. 

To improve the management of DOD’s headquarters-reduction efforts 

and to allow the department to respond to congressional reporting 

requirements, GAO recommended in June 2014 that the Secretary of 

Defense take the following three actions: 

• Re-evaluate the decision to focus reductions on management 

headquarters.

 

8

See Pub. L. No. 113-291, § 905 (2014).

Actions Needed and 

Potential Financial or 

Other Benefits
 

Page 126 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

• Set a clearly defined and consistently applied starting point as a 

baseline for the reductions.

• Track reductions against the baselines in order to provide reliable 

accounting of savings and reporting to Congress.

To ensure that OSD, the Joint Staff, and the military secretariats and staff 

are properly sized to meet their assigned missions and use the most costeffective mix of personnel, and to better position DOD to identify 

opportunities for more efficient use of resources, GAO recommended in 

January 2015 that the Secretary of Defense take the following two 

actions: 

• Conduct a systematic determination of workforce requirements for 

these organizations, which should include an analysis of mission, 

functions, and tasks, and the minimum personnel needed to 

accomplish those missions, functions, and tasks.

• Establish and implement procedures to conduct periodic 

reassessments of workforce requirements.

Estimating definitive cost savings in this area is challenging because net 

savings will depend on how DOD defines and implements headquarters 

reductions. GAO previously noted that the total costs devoted to support 

headquarters operations at the commands it reviewed—OSD, the Joint 

Staff, the military service secretariats and staffs, and the functional 

combatant commands—was $4.7 billion in fiscal year 2013. If the 

department broadened its headquarters-reduction efforts to total 

headquarters budgets at these commands GAO reviewed, DOD could 

potentially save $47 million less any implementation costs for every 1 

percent it reduces those headquarters. Importantly, these organizations 

represent a small fraction of the total headquarters resources of the 

department, so department-wide savings could be much larger if DOD 

altered its approach. Therefore, if the department were to implement 

significantly larger reductions to total headquarters budgets, once the 

reductions were in place and after implementation costs, DOD could 

potentially have net savings in the hundreds of millions of dollars a year. 

In commenting on GAO’s June 2014 report on which this analysis is 

based, DOD partially concurred with the recommendation that the 

Secretary of Defense re-evaluate the decision to focus reductions on 

management headquarters to ensure the department’s efforts ultimately 

result in meaningful savings. DOD stated that this department-wide 

recommendation would garner greater savings, but raised concerns that 

the recommendation seemed to be outside the scope of the review, which 

focused on the functional combatant commands. DOD also raised 

concerns with GAO’s distinction between management headquarters and 

the functions that personnel in these positions perform. The department 

stated that while the Secretary of Defense’s reductions were focused on 

management headquarters, the military services were allowed to reduce 

below-the-line organizations—those not designated as management 

Agency Comments 

and GAO’s Evaluation
 

Page 127 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

headquarters—which includes elements of the combatant commands. 

While GAO’s review was focused on the functional combatant 

commands, the issue it identified is not limited to these commands and 

illustrates a fundamental challenge facing the department in its efforts to 

reduce headquarters overhead. Moreover, the intent of the 

recommendation was to focus on positions not included in the commands’ 

assessment of management headquarters positions. Given the longstanding issues with accounting for management headquarters, GAO 

maintains that the recommendation for the Secretary to re-evaluate the 

decision to focus the department’s reduction efforts on management 

headquarters is appropriate. 

In commenting on GAO’s January 2015 report, DOD partially concurred 

with the recommendation that the Secretary of Defense direct that OSD, 

the Joint Staff, and the military service secretariats and staff conduct a 

systematic determination of their workforce requirements. DOD stated 

that the January 2015 report lacks perspective when characterizing the 

department’s headquarters staff, stating that it is appropriate for the 

department to have a complex and multilayered headquarters structure 

given the scope of its missions. However, the department has repeatedly 

recognized the need to streamline its headquarters structure. For 

example, in 2010, the Secretary of Defense expressed concerns about 

the dramatic growth in DOD’s headquarters and support organizations 

that had occurred since 2001, and initiated a series of efficiency initiatives 

aimed at stemming this growth. DOD further stated that it will continue to 

use the processes and prioritization that is part of the Planning, 

Programming, Budgeting, and Execution process to determine workforce 

requirements, and will also investigate other methods for aligning 

personnel to missions and priorities. DOD stated that it is currently 

conducting Business Process and System Reviews of the OSD Principal 

Staff Assistants, defense agencies, and DOD field activities to aid in 

documenting mission responsibilities to resource requirements, but the 

department did not provide any details specifying whether any of these 

actions would include a workforce analysis to systematically determine 

workforce requirements rather than continuing to rely on historic 

personnel levels and existing statutory limits as the basis for those 

requirements. Moreover, according to DOD’s implementation guidance for 

the Business Process and Systems Review, which GAO references in its 

report, this review is focused on business processes and supporting 

information technology systems within certain defense headquarters 

organizations, rather than a systematic determination of workforce 

requirements for those organizations. Given the importance of being well 

positioned to identify opportunities for efficiencies and to reduce the 

potential for headquarters-related growth, GAO maintains that the 

recommendation for the Secretary to direct OSD, the Joint Staff, and the 

military service secretariats and staff to conduct a systematic 

determination of their workforce requirements is appropriate.

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

comment. DOD provided technical comments, which were incorporated 

as appropriate.
 

Page 128 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

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

reports listed in the related GAO products section. For its June 2014 

report, GAO analyzed data on functional combatant command resources, 

to include authorized positions and costs to support headquarters 

operations. GAO reviewed guidance and documentation on DOD’s 

planned headquarters reductions and examined whether this information 

addressed some key questions GAO previously had developed for an 

agency to consider when evaluating proposals to consolidate 

management functions. GAO also interviewed officials at the functional 

combatant commands and their respective service component commands 

to discuss specific headquarters positions and organizations that could be 

affected by DOD’s planned reductions. For its January 2015 report, GAO 

analyzed data on authorized positions and costs to support headquarters 

operations for OSD, the Joint Staff, and the military service secretariats. 

GAO also reviewed guidance and documentation on steps to implement 

DOD’s 20 percent reductions to headquarters budgets starting in fiscal 

year 2015, the first budget for which DOD was able to include the 

reductions. 

Table 10 in appendix V lists the programs GAO identified that might have 

opportunities for cost savings.

Defense Headquarters: DOD Needs to Reassess Personnel 

Requirements for the Office of Secretary of Defense, Joint Staff, and 

Military Service Secretariats. GAO-15-10. Washington, D.C.: January 21, 

2015.

Defense Headquarters: DOD Needs to Reevaluate Its Approach for 

Managing Resources Devoted to the Functional Combatant Commands. 

GAO-14-439. Washington, D.C.: June 26, 2014.

2014 Annual Report: Additional Opportunities to Reduce Fragmentation, 

Overlap, and Duplication and Achieve Other Financial Benefits. 

GAO-12-342SP. Washington, D.C.: April 8, 2014.

Defense Headquarters: DOD Needs to Periodically Review and Improve 

Visibility of Combatant Commands’ Resources. GAO-13-293. 

Washington, D.C.: May 15, 2013.

Defense Efficiencies: Action Needed to Improve Evaluation of Initiatives. 

GAO-14-134. Washington, D.C.: January 17, 2013. 

Defense Management: Actions Needed to Ensure National Guard and 

Reserve Headquarters Are Sized to Be Efficient. GAO-14-71. 

Washington, D.C.: November 12, 2013.

Defense Management: Opportunities Exist to Improve Information Used 

in Monitoring Status of Efficiency Initiatives. GAO-13-105R. Washington, 

D.C.: December 4, 2012.

How GAO Conducted 

Its Work

Related GAO 

Products
 

Page 129 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

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.

2012 Annual Report: Opportunities to Reduce Duplication, Overlap and 

Fragmentation, Achieve Savings, and Enhance Revenue. 

GAO-12-342SP. Washington, D.C.: February 28, 2012.

Defense Headquarters: Total Personnel and Costs Are Significantly 

Higher Than Reported to Congress. GAO/NSIAD-98-25. Washington, 

D.C.: October 30, 1997.

For additional information about this area, contact John H. Pendleton at Contact Information (202) 512-3489 or pendletonj@gao.gov.
Page 130 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities

Energy

15. Strategic Petroleum Reserve

The Department of Energy could potentially realize savings by reexamining the appropriate size of the 

Strategic Petroleum Reserve—which was valued at about $45 billion as of December 2014—and depending 

on the outcome of the analysis, selling crude oil from the reserve and using the proceeds to fund other national 

priorities. 

Almost 4 decades ago, in response to the Arab oil embargo and 

recession it triggered, Congress passed legislation establishing the 

Strategic Petroleum Reserve (SPR) to release oil to the market during 

supply disruptions and protect the U.S. economy from damage. The SPR 

is owned by the federal government and operated by the Department of 

Energy (DOE) and is the world’s largest government-held emergency 

stockpile of crude oil. According to DOE, the SPR held almost 691 million 

barrels of crude oil valued at about $45 billion as of December 2014.

1

Decreasing reliance on imported crude oil has potential implications for 

the SPR. After decades of generally falling U.S. crude oil production, 

technological advances have contributed to increasing U.S. production. 

Monthly crude oil production has increased by almost 68 percent from 

2008 through April 2014, and increases in production in 2012 and 2013 

were the largest annual increases since the beginning of U.S. commercial 

crude oil production in 1859, according to the Energy Information 

Administration (EIA).

In 

total, over the period from fiscal years 2000 through 2013, the federal 

government spent about $500 million to purchase crude oil for the SPR. 

In addition, operating and maintenance costs for the SPR amounted to 

about $2.5 billion over this period. According to DOE officials, SPR 

infrastructure is aging, may need to be relocated, and will need to be 

replaced soon.

2 Meanwhile, net crude oil imports—imports minus 

exports—have declined from a peak of about 60 percent of consumption 

in 2005 to 30 percent in the first 5 months of 2014. According to some 

forecasts, net imports are expected to remain well below 2005 levels into 

the future. 

In September 2014, GAO found that DOE had taken steps to assess 

aspects of the SPR but had not recently reexamined its size. The SPR is 

a significant national asset, and it is important for federal agencies tasked 

with overseeing such assets to examine how, if at all, changing conditions 

affect their programs. In the past, GAO has found that federal programs 

 

1

DOE calculated the market value of the SPR as of December 2014 using crude oil prices 

for three marker crudes: (1) West Texas Intermediate; (2) Brent; and (3) Louisiana Light 

Sweet. 

2

EIA is a statistical agency within the Department of Energy that collects, analyzes, and 

disseminates independent information on energy issues. 

Why This Area Is 

Important

What GAO Found
 

Page 131 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

should be reexamined if there have been significant changes in the 

country or the world that relate to the reason for initiating the program.3 In 

that report, GAO further found that many federal programs and policies 

were designed decades ago to respond to trends and challenges that 

existed at the time of their creation, and that agencies should reexamine 

their programs if conditions change. In September 2014, GAO found that 

DOE had taken some steps to reexamine some aspects of the SPR. For 

example, in March 2014, DOE conducted a test sale of SPR crude oil to 

evaluate the SPR’s ability to draw down and distribute SPR crude oil 

through one of its distribution systems. As a member of the International 

Energy Agency (IEA), the United States is required to maintain public and 

private reserves of at least 90 days of net imports and to release these 

reserves and reduce demand during oil supply disruptions.4 DOE officials 

said that the last time they conducted a comprehensive reexamination of 

the SPR was in 2005 because the SPR only recently met the IEA 

requirement to maintain 90 days of imports. However, without such a 

reexamination, DOE cannot be assured that the SPR is holding an

appropriate amount of crude oil. As shown in the figure, IEA data show 

that U.S. reserves as of September 2014 are in excess of this 

international obligation; specifically, the SPR held reserves of 106 days, 

and private industry held reserves of 141 days for a combined total of 247 

days. The figure presents one scenario where U.S. reserves are expected 

to continue to be in excess in the future.5

 

3

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

GAO-05-325SP (Washington, D.C.: Feb. 1, 2005).

4

The IEA was established in 1974 to help coordinate the responses of oil-consuming 

industrialized countries to oil supply disruptions and other energy-related problems. 

Based in Paris, the IEA is an autonomous organization within the framework of the 

Organization for Economic Cooperation and Development and is currently made up of 29 

member countries: Australia, Austria, Belgium, Canada, Czech Republic, Denmark, 

Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Japan, Republic of 

Korea, Luxembourg, the Netherlands, New Zealand, Norway, Poland, Portugal, Slovak 

Republic, Spain, Sweden, Switzerland, Turkey, the United Kingdom, and the United 

States. 

5

The figure presents a forecast where U.S. reserves are expected to be in excess under 

the EIA’s reference case, a business-as-usual estimate that assumes current laws and 

policies remain unchanged. 
 

Page 132 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

United States’ Historic and Estimated Compliance with International Energy Agency Obligation to Hold Reserves 

Note: Data for 2015 and later are based on September 2014 reserve levels reported by the 

International Energy Agency and forecast changes in net imports from the Energy Information 

Administration’s (EIA) reference case forecast, a business-as-usual estimate that assumes current 

laws and policies remain unchanged. EIA’s forecast includes several cases, highlighting uncertainty 

about future conditions which are not depicted in this figure. 

a

As of September 2014.

In view of recent changes in market conditions and in tandem with DOE’s 

ongoing activities to assess other aspects of the SPR, GAO 

recommended in September 2014 that the Secretary of Energy 

• undertake a comprehensive reexamination of the appropriate size of 

the SPR in light of current and expected future market conditions. 

If DOE were to assess the appropriate size of the SPR and find that it 

held excess crude oil, the excess crude oil could be sold to fund other 

national priorities. For example, if DOE found that 90 days of imports was 

an appropriate size for the SPR, it could sell crude oil worth $6.7 billion 

Actions Needed and 

Potential Financial or 

Other Benefits
 

Page 133 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

and use the proceeds to fund other national priorities.6 In addition, GAO 

estimates that DOE may be able to reduce its operating costs by about 

$25 million per year, based on GAO’s calculation of the amount of oil in 

excess of 90 days of net imports as of September 2014 and DOE’s 

assessment of its annual operating cost for the SPR at $.25 per barrel. In 

addition, in light of recent crude oil price volatility, if DOE were to find that 

the SPR held excess oil, it may benefit from assessing how best to 

execute a sale, taking into consideration factors such as effects on crude 

oil prices and potential revenue raised. Conducting a reexamination of the 

size of the SPR could also help inform DOE’s decisions about how or 

whether to replace existing infrastructure. 

In commenting on the September 2014 report on which this analysis is 

based, DOE concurred with GAO's recommendation and stated that a 

broad, long-range review of the SPR is needed. 

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

comment. On February 13, 2015, DOE’s Office of Fossil Energy provided 

written comments and stated that DOE has initiated the process for 

conducting a comprehensive reexamination of the appropriate size of the 

SPR. Specifically, DOE is reviewing the scope of a proposed strategic 

review to determine future actions and establish specific timeframes for 

completing the study. Among other things, this review is anticipated to 

take into consideration what the role of the SPR should be relative to U.S. 

energy and economic security goals and objectives and International 

Energy Program requirements; what the optimal configuration of the SPR 

should be; and whether existing legal authorities are adequate to ensure 

the SPR can meet both current and future U.S. energy and economic 

security goals and objectives. 

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

report listed in the related GAO products section. For that report, GAO 

reviewed literature and agency documents, interviewed DOE officials, and 

summarized the views of a nonprobability sample of stakeholders 

including academic, industry, and other experts. 

Table 11 in appendix V lists the programs GAO identified that might have 

opportunities for cost savings. 

 

6

This estimate is GAO’s calculation of the amount of oil in excess of 90 days of net 

imports as of September 2014 and the average crude oil price of three marker crudes: (1) 

West Texas Intermediate; (2) Brent; and (3) Louisiana Light Sweet as of December 2014. 

In 2011, the Congressional Budget Office analyzed a budget reduction option that would 

reduce the SPR’s holdings by about 10 percent during the 2012-2016 period and then 

maintain a reserve of 650 million barrels. They estimated that this would have generated 

roughly $6 billion over 5 years. See Congressional Budget Office, Reducing the Deficit: 

Spending and Revenue Options, Pub. No. 4212 (Washington, D.C.: March 2011).

Agency Comments 

and GAO’s Evaluation

How GAO Conducted 

Its Work
 

Page 134 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

Changing Crude Oil Markets: Allowing Exports Could Reduce Consumer 

Fuel Prices, and the Size of the Strategic Reserves Should Be 

Reexamined. GAO-14-807. Washington, D.C.: September 30, 2014. 

For additional information about this area, contact Frank Rusco at (202) 

512-3841 or ruscof@gao.gov.

Related GAO 

Products

Contact Information
Page 135 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities

Energy

16. U.S. Enrichment Corporation Fund

Congress may wish to consider permanent rescission of the entire $1.6 billion balance of the U.S. Enrichment 

Corporation Fund—a revolving fund in the U.S. Treasury—because its purposes have been fulfilled. 

The U.S. Enrichment Corporation (USEC) was established under the 

Energy Policy Act of 1992 as a government corporation to provide 

uranium enrichment services for the U.S. government and utilities that 

operate nuclear power plants, a service that was previously provided by 

the Department of Energy and its predecessor agencies. The Energy 

Policy Act of 1992 also established a revolving fund in the U.S. Treasury, 

the USEC Fund, for carrying out USEC’s purposes. In 1996, the USEC

Privatization Act authorized USEC’s sale to the private sector. USEC was 

then privatized on July 28, 1998, and became a subsidiary of the new 

private company USEC, Inc.1 The USEC Privatization Act also provided 

that “expenses of privatization” were to be paid from certain accounts, 

including the USEC Fund. One week before privatization, Public Law 105-

204 was enacted,2 which reserved approximately $373 million from 

certain accounts, including the USEC Fund, for disposition of depleted 

uranium stored at government-owned enrichment plants operated by 

USEC.3 After privatization, the USEC Fund’s remaining balance of $1.2 

billion was retained on the accounting books of the Treasury, and the 

balance of the USEC Fund is expected to be over $1.6 billion in 2015. 

The purposes for which the USEC Fund was authorized after privatization 

have been fulfilled, and GAO has not identified any other purposes for 

which the USEC Fund is currently available. GAO therefore has 

determined that the entire $1.6 billion balance of the USEC Fund is likely 

available for permanent rescission.4

 

1

USEC Privatization Act, Pub. L. No. 104-134, tit. III, ch. 1, subch. A, 110 Stat. 1321-35 

(1996), codified as amended at 42 U.S.C. §§ 2297h-2297h-13 (2012).

As part of a 2001 legal opinion, GAO 

determined that the USEC Fund was available for two purposes: (1) 

environmental clean-up expenses associated with the disposition of 

2

Pub. L. No. 105-204, 112 Stat. 681 (1998), amended by Pub. L. No. 107-206, § 502, 116 

Stat. 820, 851-52 (2002).

3

Depleted uranium is a byproduct of the enrichment process that is generally considered 

to be low-level radioactive waste. 

4

Rescission of amounts from special fund receipts are usually temporary reductions. If the 

reduced amount is permanently appropriated, it becomes available in the following year. 

An exception is when the legislation makes clear that the amounts are permanently 

canceled or rescinded, in which case the amounts are returned to the General Fund of the 

U.S. Treasury. Office of Management and Budget, Circular No. A-11, Preparation, 

Submission, and Execution of the Budget § 20 19-20 (2014).

Why This Area Is 

Important

What GAO Found
 

Page 136 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

depleted uranium pursuant to Public Law 105-2045 (“the Act”) and (2) 

expenses of USEC privatization pursuant to the USEC Privatization Act.6

Regarding the first authorized purpose, environmental clean-up expenses 

pursuant to the Act, the construction of intended facilities associated with 

the disposition of depleted uranium has been completed. The Act 

reserved, but did not appropriate, a portion of the USEC Fund to finance 

the construction and operation of facilities to treat and recycle (convert) 

depleted uranium hexafluoride (DUF6) at gaseous diffusion plants in 

Portsmouth, Ohio, and Paducah, Kentucky, that USEC leased from the 

Department of Energy (DOE) and was operating at the time of the 

legislation.

 

7 At the time of the Act, USEC indicated in its financial 

statements that the amount available pursuant to the Act was 

approximately $373 million. However, in DOE’s June 2004 written 

response to public comments on the Environmental Impact Statement for 

its proposed DUF6 conversion facility at the Paducah Gaseous Diffusion 

Plant, DOE stated that it had requested that funds be appropriated from 

the general fund instead of from the USEC Fund for the design and 

construction of the project.8

Regarding the second authorized purpose, to pay for expenses of USEC 

privatization, privatization was completed in 1998. GAO determined in 

2001 that “expenses of privatization” were defined as expenses related to 

the July 28, 1998, transfer of ownership of USEC to private investors. 

This definition specifies a discrete event, and not a continuing status, and 

therefore would not include costs incurred years after the privatization 

date. Further, from fiscal years 2002 through 2004, the President’s 

budget stated that the only authorized use of the USEC Fund was to pay 

any remaining expenses associated with the transfer of ownership of the 

government-owned USEC to private investors and that these expenses 

were estimated to be less than $1 million. In addition, the President’s 

budget for fiscal years 2009 through 2015 did not include a narrative 

stating that the USEC Fund could only be used to pay any remaining 

expenses associated with transfer of ownership of USEC (as it had in 

fiscal years 2002 through 2004). Instead, the President’s budget for fiscal 

Both DUF6 conversion facilities at the 

Portsmouth and Paducah gaseous diffusion plants have since been fully 

constructed and are operating.

 

5

Pub. L. No. 105-204, 112 Stat. 681 (1998), amended by Pub. L. No. 107-206, § 502, 116 

Stat. 820, 851-52 (2002).

6

USEC Privatization Act, 42 U.S.C. §§ 2297h-2297h-13 (2012).

7

DUF6 is a product of the enrichment process and is generally considered a low-level 

radioactive waste. DUF6 must be chemically converted into a more stable and safe 

uranium compound before long-term storage.

8

DOE stated that, because the Act did not appropriate the funds it set aside, there was no 

advantage to requesting funds from the USEC Fund rather than from the general fund. 

Furthermore, using funds from the USEC Fund would have required DOE to prepare a 

plan related to the disposition of depleted uranium. We did not identify any subsequent 

appropriations from the USEC Fund for the design and construction for the project.
 

Page 137 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

years 2009 through 2015 characterized the balance of the USEC Fund as 

“unavailable.” Finally, in 2014 USEC completed a corporate restructuring 

under Chapter 11 bankruptcy protection.9

In an April 2014 report to Congress—Analysis of Available and 

Prospective Domestic Enrichment Technologies for National Security 

Needs—DOE’s National Nuclear Security Administration stated that the 

USEC Fund was one of two sources of funding that it was exploring to 

finance research, development, and demonstration of national nuclear 

security-related enrichment technologies in light of USEC’s decision to 

cease its enrichment operations.

 It emerged from that process 

under a new name, Centrus Energy Corp., and is not currently operating 

a commercial-scale enrichment facility.

10

GAO’s prior work has emphasized the importance of transparency in 

federal agencies’ budget presentations because such information helps 

Congress have a clear understanding of how new funding requests relate 

to funding decisions for existing projects with continuing resource 

needs.

 This is not one of the authorized 

purposes of the USEC Fund. Furthermore, GAO determined in 2001 that 

the USEC Fund was not available to cover the costs of a similar proposal 

by DOE in October 2000 to build an advanced centrifuge technology 

demonstration plant for gas centrifuge uranium enrichment because such 

costs did not constitute “expenses of privatization.”

11

 

9

In recent years, USEC’s financial condition has deteriorated, due in part to decreased 

commercial demand for low-enriched uranium and high production costs associated with 

using energy-intensive enrichment technology, which is more than 60 years old. USEC 

filed for Chapter 11 bankruptcy protection in March 2014 in order to strengthen its balance 

sheet and restructure its debt.

DOE’s effort to utilize USEC Fund monies instead of general 

fund appropriations to support a research and development effort would 

diminish transparency in budgeting. The House of Representatives 

included language to permanently rescind the USEC Fund in H.R. 4923, 

Energy and Water Development and Related Agencies Appropriations 

Act, 2015, which passed the House on July 10, 2014. However, the 

rescission was not included in P.L. 113- 235, Consolidated and Further 

Continuing Appropriations Act, 2015. As of March 2015, legislation 

containing a similar rescission has not been introduced in the 114th

Congress. 

10The Consolidated Appropriations Act, 2014, includes authority for the Secretary of 

Energy to transfer up to $56,650,000 of funding from within the National Nuclear Security 

Administration to its Weapons Activities account to further the research, development, and 

demonstration of national nuclear security-related enrichment technologies.

11See, for example: GAO, Army Corps of Engineers: Budget Formulation Process 

Emphasizes Agencywide Priorities, but Transparency of Budget Presentation Could Be 

Improved, GAO-10-453 (Washington, D.C.: Apr. 2, 2010); Veterans’ Benefits: More 

Transparency Needed to Improve Oversight of VBA’s Compensation and Pension Staffing 

Levels, GAO-05-47 (Washington, D.C.: Nov. 15, 2004); and Budget Issues: Budgeting for 

Federal Insurance Programs, GAO/T-AIMD-98-147 (Washington, D.C.: Apr. 23, 1998).
 

Page 138 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

Congress may wish to permanently rescind the entire $1.6 billion balance 

of the U.S. Enrichment Corporation (USEC) Fund.

GAO provided a technical statement of facts for DOE’s review in May 

2014. GAO received technical comments from DOE and incorporated 

them as appropriate.

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

comment on January 30, 2015. DOE did not provide comments on our 

findings or recommendations, nor did they provide technical comments.

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

January 2001 legal opinion and findings in the related technical 

assistance provided to Congress in May 2014 in the form of a budget 

justification review. The objective of GAO’s budget justification review is 

to provide pertinent and timely information that Congress can use during 

budget deliberations by raising questions about specific programs in the 

President’s proposed budget. GAO reviewed DOE and U.S. budget 

documents and consulted prior GAO work on this topic. GAO conducted 

its work from April 2014 to May 2014 in accordance with all sections of 

GAO’s Quality Assurance Framework that are relevant to its objectives. 

The framework requires that GAO plan and perform the engagement to 

meet its stated objectives and to discuss any limitations in its work. GAO 

believes that the information and data obtained, and the analysis 

conducted, provide a reasonable basis for any findings and conclusions in 

this product. 

Table 12 in appendix V lists the programs GAO identified that might have 

opportunities for cost savings or revenue enhancement.

USEC Portsmouth Gaseous Diffusion Plant “Cold Standby” Plan. 

B-286661. Washington, D.C.: January 19, 2001.

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

(202) 512-3841 or trimbled@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 139 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities

General Government

17. Tax Policies and Enforcement, 2015

By more effectively using data to manage various enforcement programs, the Internal Revenue Service could 

bolster tax compliance and potentially collect hundreds of millions of dollars in additional revenue. 

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. Given that individual income tax misreporting accounts for 

the largest portion of the tax gap, even small changes in IRS’s 

enforcement programs could result in hundreds of millions of dollars of 

increased revenue.

In a series of reports in 2014, GAO identified areas where IRS could 

improve its enforcement programs and collect additional tax revenue. 

Auditing tax returns is a critical part of IRS’s strategy to ensure tax 

compliance and address the tax gap. Most audits are correspondence 

audits, which are done by mail, where examiners review taxpayer 

correspondence and related documentation such as receipts, expense 

invoices, and payments. For audits closed in fiscal year 2012, 

correspondence audits accounted for 

• 1.1 million (76 percent) of the total 1.5 million individual tax return 

audits, and 

• $9.2 billion (60 percent) of the total $15.3 billion in recommended 

additional taxes due and refunds disallowed for those audits.

However, in its June 2014 report, GAO found that unrealistic time frames 

included in IRS audit notices had contributed to taxpayer burden and IRS 

inefficiencies.2

 

1

GAO, High-Risk Series: An Update, 

In recent years, IRS experienced backlogs in responding 

to taxpayers—dramatically increasing in 2013—causing taxpayer 

frustration and generating unnecessary phone calls. For example, 

notices issued in 2013 stated that IRS would specify a date to respond, 

which was usually within 30 to 45 days of the date of the notice, but the 

GAO-15-290 (Washington, D.C.: Feb. 11, 2015).

2

GAO, IRS Correspondence Audits: Better Management Could Improve Tax Compliance 

and Reduce Taxpayer Burden, GAO-14-479 (Washington, D.C.: June 5, 2014).

Why This Area Is 

Important

What GAO Found

IRS Correspondence 

Audits: Better 

Management Could 

Improve Tax Compliance 

and Reduce Taxpayer 

Burden 
 

Page 140 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

agency consistently had taken several months to do so. In some cases, 

refunds were delayed. The unclear notices generated phone calls from 

taxpayers about audit time frames that IRS examiners were not prepared 

to answer, leaving examiners with less time to conduct the audits. IRS's 

subsequent revisions to the notices—which were intended to make the 

time frame more realistic--were not based on analysis of historical data, 

nor did IRS have plans to analyze data to ensure the agency is 

responding in a timely manner consistent with the revised notices. 

In commenting on this submission, IRS noted that the timing of this audit 

coincided with delays caused by significant budget issues during fiscal 

years 2013 and 2014. According to IRS, the agency continues to recover 

from budget-related setbacks. For example, IRS reports that the Small 

Businesses/Self-Employed division has improved its responsiveness to 

answering taxpayer replies within the timeframe stated in their 

acknowledgment letters. IRS also reports revising phone scripts to better 

inform taxpayers of delays in processing correspondence and initiating 

programming changes to allow for flexibility in providing taxpayers with 

more accurate response timeframes in acknowledgement letters. 

According to IRS, these letter changes will be effective in January 2016. 

GAO has asked IRS for more information and will continue to monitor 

progress on actions intended to reduce the need for taxpayer calls, 

ensure IRS is providing taxpayers with more realistic response time 

frames, and is using agency resources more efficiently.

In that same 2014 report, GAO also found that IRS could benefit from 

more information on performance that is clearly linked to IRS’s strategic 

goals. IRS’s strategic plan includes goals for achieving compliance results 

at the lowest costs while minimizing taxpayer burden by using data to 

inform resource allocation decisions. Further, Standards for Internal 

Control in the Federal Government—as well as performance 

management practices—call for agencies to take the following actions: 

establish program objectives and performance measures that clearly link 

to agency-wide goals; use accurate and complete performance 

information and document resource allocation decisions; and promptly 

evaluate program review findings to determine appropriate actions in 

response to any improvement recommendations.3

• had no documented criteria on how staff are to use correspondence 

audit program data to make decisions, such as the number of audits 

to undertake or which tax issues to audit;

 However, IRS

• did not have documented program objectives or linkages between the 

performance measures and IRS-wide strategic goals for compliance, 

cost, and taxpayer burden; 

 

3

GAO, Auditing and Financial Management: Standards for Internal Control in the Federal 

Government, GAO/AIMD-00-21.3.1 (Washington, D.C.: Nov. 1, 1999).
 

Page 141 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

• had incomplete correspondence audit measures and data; 

• did not leverage some potentially useful, available decision-making 

data that could provide a more complete picture of audit compliance 

results and costs—such as data on actual revenue collections and 

costs related to answering taxpayer calls and collecting additional 

taxes assessed from audits; and 

• did not have a plan or time frames to evaluate whether it should act 

on the recommendations of a recent program review that may 

improve the selection of tax returns for audit and better allocate 

examiner resources.

Without tools—such as documented criteria, linkages between 

performance measures and strategic goals, complete data, and an 

established plan and evaluation timeline—IRS risks making poor resource 

decisions on how many audits to do overall and which specific 

compliance issues to audit. Further, because it does not have a 

reasonable assurance that it is making decisions cost effectively and 

taking action to make progress towards the agency’s goals, IRS risks 

missing noncompliance, unnecessarily burdening many taxpayers, and 

wasting resources. 

Congress has limited annual contributions to individual retirement 

accounts (IRA) to prevent the tax-favored accumulation of unduly large 

balances, but there is no total limit on IRA accumulations.4

 In its October 

2014 report, GAO estimated that hundreds of taxpayers have 

accumulated tens of millions of dollars in their IRA balances, likely by 

investing in assets unavailable to most investors, such as private 

stocks—which may be initially valued very low and if successful, may 

offer high potential investment returns.5

 

4

IRAs serve dual roles by (1) providing a way for individuals not covered by a pension 

plan to save for retirement and (2) providing a place for retiring workers or individuals 

changing jobs to roll over, or transfer, their employer-sponsored plan balances. Two types 

of IRAs are geared toward individuals—each with its own federal income tax benefits: 

traditional IRAs and Roth IRAs. Traditional IRA contributions, subject to certain limitations, 

can be deducted from taxable earnings. Taxes on earnings are deferred until distribution. 

In contrast, Roth IRA contributions, also subject to certain limitations, are made after tax 

and distributions are tax free.

 Individuals who invest in these 

assets using certain types of IRAs, such as Roth IRAs, can escape 

taxation on investment gains. In addition, hard-to-value, nonpublicly

traded assets—particularly those under direct control of the IRA owner—

also pose a higher risk of the IRA owner engaging in prohibited, 

nonretirement-related IRA transactions. 

5

GAO, Individual Retirement Accounts: IRS Could Bolster Enforcement on Multimillion 

Dollar Accounts, but More Direction from Congress Is Needed, GAO-15-16 (Washington, 

D.C.: Oct. 20, 2014).

Individual Retirement 

Accounts: IRS Could 

Bolster Enforcement on 

Multi-Million Dollar 

Accounts, but More 

Direction from Congress Is 

Needed 
 

Page 142 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

To move forward with a service-wide strategy to target enforcement 

efforts, IRS must first conduct research to understand how many 

taxpayers (and the amounts associated with IRA assets) are at risk of 

noncompliance. Research identifying the numbers and types of 

custodians and taxpayers holding such hard-to-value assets could also 

help IRS target outreach activities and strategies (such as reminder 

notices) for improving compliance with IRA asset valuation and prohibited 

transaction requirements. Beginning for tax year 2015, IRS will require 

IRA custodians to report additional data about hard-to-value nonpublic 

assets on annual information returns, Form 5498 IRA Contribution 

Information. Identifying these taxpayers (and amounts associated with 

such IRA assets) would provide data for use in examination selection. 

However, efficient use of the new IRA asset-type data for examination 

selection depends on IRS approving its plan to digitize the data from 

paper forms. 

IRS officials said IRA valuation cases are audit-intensive and difficult to 

litigate because of the subjective nature of valuation. In addition, an 

improper valuation made many years prior to its discovery by IRS may fall 

outside the 3-year statute of limitations for assessing taxes owed.6

 

Furthermore, according to IRS, noncompliant activity and prohibited 

transactions are not reflected on any filed tax return and are also difficult 

to detect within the 3-year statute of limitation period. As IRS gathers 

more information about IRA asset-type data from the Form 5498, it will be 

clearer whether the 3-year statute of limitations should be changed for tax 

assessments with regard to IRAs. 

Income earned through partnerships and S corporations accounts for 

billions of dollars of unpaid taxes, and their share of business activity is 

growing.7

GAO found that IRS has limited information on the effectiveness of its 

examinations in detecting income misreporting by partnerships. For 

example, IRS estimated that 3 percent to 22 percent of identified 

 In May 2014, GAO found that IRS does not know the full extent 

of partnership and S corporation income misreporting. Using IRS’s 

compliance research studies on flow-through income misreporting by 

individual taxpayers and considering various caveats and uncertainties, 

GAO estimated a rough order of magnitude of the misreporting to be $91 

billion per year in lost tax revenue for tax years 2006 through 2009. 

 

6

Generally, IRS has 3 years from the date a return is filed (whether the return is filed on 

time or not) to make an assessment of tax liability. 26 U.S.C. § 6501(a). The statute of 

limitations is extended in certain situations, including when a taxpayer submits a 

fraudulent return or omits reporting a certain amount of gross income on the return.

7

Partnerships and S corporations are flow-through entities, which are entities that 

generally do not pay taxes themselves on income, but instead, pass income or losses to 

their partners and shareholders, who must include that income or loss on their income tax 

returns. 

Partnerships and S 

Corporations: IRS Needs 

to Improve Information to 

Address Tax 

Noncompliance 
 

Page 143 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

misreporting by partnerships was double counted due to income flowing 

from one partnership to another or to other related parties. Further, IRS 

does not know how income misreporting by partnerships affects taxes 

paid by partners. As a result, IRS does not have reliable information 

about its compliance results to fully inform decisions about allocating

examination resources across different types of businesses. Without 

reliable information on the extent of partnership misreporting, or the 

results of its partnership examinations, IRS cannot make fully informed 

decisions about whether its allocation of enforcement resources across 

business types is justified and whether or not to update one of its major 

partnership examination selection tools, the discriminate income function 

formula. 

IRS’s processes for selecting returns to examine could also be improved. 

IRS officials told GAO that having more return information available 

electronically might improve examination selection; however, not all 

partnership and S corporation line items from paper returns are digitized. 

Further, enhancing digitization of paper-filed partnership and S 

corporation returns would involve costs to IRS. In the absence of funding 

for transcription, one way to increase digitization is a statutory mandate 

requiring increased electronic filing (e-filing) of tax and other returns.8

 

Expanding the mandate would increase digitized data available for 

examination selection. Improving IRS’s selection of partnership and S 

corporation returns to examine would also benefit compliant taxpayers 

whose returns may otherwise be selected for examination and would 

reduce IRS’s tax return processing costs.

In September 2014, GAO found that IRS audits few large partnerships 

and most audits result in no change to the partnership's return.9

 For 

those large partnership audits that did result in a change to the 

partnership’s return, the aggregate amount across all audits was minimal. 

According to IRS auditors, the audit results may be due to challenges 

such as finding the sources of income within multiple tiers while meeting 

the administrative tasks required by the Tax Equity and Fiscal 

Responsibility Act of 1982 (TEFRA) within specified time frames.10

 

8

Currently, certain large partnerships and S corporations are required by statute to e-file. 

26 U.S.C. § 6011(e)(2) and 26 C.F.R. § 301.6011-5. About 65 percent of partnerships and 

S corporations e-filed in 2011.

 For 

example, IRS auditors said that it can sometimes take months to identify 

the partner authorized to represent the partnership in the audit, therefore 

9

GAO defines large partnerships as those with 100 or more direct and indirect partners 

and $100 million or more in assets. Direct partners are partners that have a direct interest 

in the large partnership during the tax year. Direct partners may include taxable partners 

(such as a corporation or individual) and nontaxable partners (such as a partnership) that 

also have direct partners. Indirect partners are partners that have an interest in a 

partnership through interest in another partnership or other form of pass-through entity. 

10Pub. L. No. 97-248, §§ 401–407, 96 Stat. 324, 648–671 (1982). 

Large Partnerships: With 

Growing Number of 

Partnerships, IRS Needs 

to Improve Audit Efficiency 
 

Page 144 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

reducing time available to conduct the audit (TEFRA does not require 

large partnerships to identify this partner on tax returns). Also under 

TEFRA, unless the partnership elects to be taxed at the entity level 

(which few do), IRS must pass audit adjustments through the ultimate 

partners. IRS officials stated that the process of determining each 

partner's share of the adjustment is paper and labor intensive. When 

hundreds of partners' returns have to be adjusted, the costs involved limit 

the number of audits IRS can conduct. Adjusting the partnership return 

instead of the partners' returns would reduce these costs; however, 

without legislative action, IRS's ability to do so is limited.

Understanding the reasons for the poor audit results is difficult because 

IRS (1) does not have activity codes that track audits of large 

partnerships returns, and (2) does not break out the audit results because 

the activity codes are not specific enough to identify large partnerships by 

asset and partner size.11 Addressing these issues could help IRS 

officials better allocate audit resources. In addition, IRS does not 

distinguish between field audits (which examine the partnership’s tax 

return and supporting documentation) and campus audits (which pass 

through any audit adjustments as a result of the field audit to the partners’ 

tax returns) when counting the number of large partnership audits. 

Instead, IRS counts both field audits and campus audits when calculating 

its audit rate for all partnerships, which misrepresents the number of 

audits that actually verify information reported on tax returns. According to 

Standards for Internal Control in the Federal Government, managers 

need accurate and complete information to help ensure efficient and 

effective use of resources.12 A single, consistently applied definition 

could assist IRS in establishing agreement on the scope of large 

partnership audit efforts and in ensuring that audit results can be 

assessed. Likewise, modifying IRS’s current activity codes in order to 

identify large partnership returns, and breaking out field and campus audit 

rate data in order to accurately measure audit results, would allow IRS to 

analyze and plan resource usage for large partnership audits more 

efficiently and effectively. 

In June 2014, GAO found that IRS does not calculate actual Return on 

Investment (ROI) to evaluate the performance of its initiatives once they 

are implemented; consequently, it does not have that data to inform 

decisions about allocating resources to those initiatives in the future. 

According to IRS officials, one reason they do not calculate actual ROI for 

enforcement initiatives is because it is difficult to determine which staff 

 

11These activity codes focus on whether a partnership reported having less or more than 

11 partners, as well as reported gross receipts above or below $100,000. IRS has two 

activity codes for partnerships that pay an entity-level tax at the end of an IRS audit, and 

that had returns processed prior to January 1988.

12GAO/AIMD-00-21.3.1

IRS 2015 Budget: Return 

on Investment Data 

Needed to Better Set 

Priorities 
 

Page 145 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

have actually worked on a particular initiative over a multiyear period. In 

addition, IRS officials cite difficulties in tracking ROI-related information 

on funded initiatives because of difficulties in matching information 

between IRS systems for formulating and executing its budget. Given 

these difficulties and the need to make numerous assumptions, the 

officials believe that any feasible estimates would be too uncertain to be 

useful.

Comparing projected ROI to actual ROI is consistent with project 

management concepts, internal control standards, Office of Management 

and Budget guidance, and GAO’s prior work on performance 

management.13 In December 2012, GAO demonstrated how IRS 

planners could review actual ROI across different enforcement programs 

and across different groups of cases within these programs to better 

inform resource allocation decisions.14 GAO also recommended IRS 

identify research efforts that would enhance its ability to estimate ROI for 

specific enforcement activities, including initiatives.15 In addition, IRS 

established “funded program codes” (previously known as internal order 

codes) as a mechanism to track specific initiatives—such as merchant 

card and cost basis reporting—which could be used when estimating the 

ROI of future initiatives. While not the only factor in making resource 

decisions, actual ROI could provide useful insights on an initiative’s 

productivity. 

GAO suggests that Congress should consider the following:

• Revisiting the use of IRAs to accumulate large balances and 

considering ways to improve the equity of the existing tax expenditure 

on IRAs. Options could include limits on (1) the types of assets 

permitted in IRAs, (2) the minimum valuation for an asset purchased 

in an IRA, or (3) the amount of assets that can be accumulated in 

IRAs and employer-sponsored plans that get preferential tax 

treatment. 

• Expanding the mandate that partnerships and S corporations 

electronically file their tax returns in order to cover a greater share of 

filed returns.

 

13Office of Management and Budget (OMB), Preparation and Submission of Strategic 

Plans, Annual Performance Plans, and Annual Program Performance Results, OMB 

Circular A-11 (Washington, D.C.: June 2008); OMB, Guidelines and Discount Rates for 

Benefit-Cost Analysis of Federal Programs, OMB Circular A-94 (Washington, D.C.: 

undated); GAO, Tax Administration: IRS Needs to Further Refine Its Tax Filing Season 

Performance Measures, GAO-03-143 (Washington, D.C.: Nov. 22, 2002). 

14GAO, Tax Gap: IRS Could Significantly Increase Revenues by Better Targeting 

Enforcement Resources, GAO-13-151 (Washington, D.C.: Dec. 05, 2012).

15One important research effort is to estimate the revenue and costs associated with 

“marginal” enforcement cases—cases that would not have been worked if slightly fewer 

resources had been devoted to a particular enforcement activity.

Actions Needed and 

Potential Financial or 

Other Benefits
 

Page 146 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

• Altering the TEFRA audit procedures to require partnerships that have 

more than a certain number of direct and indirect partners to pay any 

tax owed due to audit adjustments at the partnership level.

In its June 2014 report, GAO recommended that the Commissioner of 

Internal Revenue 

• collect data to analyze whether IRS is responding to taxpayers within 

the time frames cited in the revised audit notices; 

• further revise IRS notices (if delays continue) to provide more realistic 

response times based on the data and take other appropriate actions 

to ensure efficient use of IRS tax examiner resources;

• establish formal program objectives; 

• ensure that the program measures reflect those objectives;

• clearly link those measures with strategic IRS-wide goals for ensuring 

compliance in a cost-effective way while minimizing taxpayer burden; 

• document how decisions are to be made using performance 

information; 

• track and use other program data that have not been used; and

• develop a plan and timeline for implementing recommendations to 

improve the selection of correspondence audit workload and 

allocation of examiner resources, or develop justifications for not 

implementing the recommendations.

In its October 2014 report, GAO recommended that the Commissioner of 

Internal Revenue take the following actions:

• Approve plans to fully compile and digitize the new data from 

electronic and paper-filed Form 5498s to ensure the efficient use of 

the information on nonpublicly traded IRA assets.

• Conduct research using the new Form 5498 data to identify IRAs 

holding nonpublic asset types and use that information for an IRSwide strategy to target enforcement efforts. 

• Build on research data regarding IRAs holding nonpublic assets, and 

identify options to provide outreach targeting taxpayers with nonpublic 

IRA assets and their custodians, such as reminder notices that 

engaging in prohibited transactions can result in loss of the IRA’s taxfavored status.

• Add an explicit caution in the IRA publication for taxpayers about the 

potential risk of committing a prohibited transaction when investing in 

nonpublicly traded assets or directly controlling IRA assets.

• Work in consultation with the Department of the Treasury on a 

legislative proposal to expand the statute of limitations on IRA 

noncompliance to help IRS pursue valuation-related misreporting and 

prohibited transactions that may have originated outside the current 

statute’s 3-year window.
 

Page 147 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

In its May 2014 report, GAO recommended that the Commissioner of 

Internal Revenue take the following actions:

• Develop and implement a strategy to better estimate (1) the extent 

and nature of partnership misreporting, and (2) the effectiveness of 

partnership examinations in detecting this misreporting.

• Use the better information on noncompliance and program 

effectiveness to determine whether (1) the differences in examination 

rates across different types of business entities are justified, and (2) 

an improved tool for selecting partnerships for examination should be 

developed.

In its September 2014 report, GAO recommended that the Commissioner 

of Internal Revenue 

• track the results of large partnership audits by (1) defining a large 

partnership based on asset size and number of partners; (2) revising 

the activity codes to align with the large partnership definition; and (3) 

accounting separately for field audits and campus audits. 

In its June 2014 report, GAO recommended that the Commissioner of

Internal Revenue 

• calculate actual ROI for implemented initiatives, compare the actual 

ROI to projected ROI, and provide the comparison to budget decision 

makers for initiatives where IRS allocated resources; and 

• use actual ROI calculations as part of resource allocation decisions.

IRS could collect additional revenue and generate other cost savings 

which GAO believes could be achieved by implementing its 

recommendations; for example, by using better data to target 

correspondence audits, as even a small percentage increase of additional 

taxes due could result in hundreds of millions of dollars of additional 

revenue. Further, more efficient use of the new IRA asset-type data could 

improve examination selection of IRAs that have accumulated tens of 

millions of dollars in balances. Other actions, such as developing a 

strategy to better estimate the extent of partnership misreporting and 

effectiveness of partnership examinations, could generate additional cost 

savings by achieving program efficiencies and better enforcing tax laws.

In commenting on the five reports issued in May, June, September, and 

October of 2014 on which these analyses are based, IRS agreed with 13 

of the 17 recommendations presented, but did not state whether it agreed 

or disagreed with 4. For those 13 it agreed with, IRS said it is taking 

action to address them or further action is contingent on funding. For 

example, in its response to GAO’s recommendation to establish formal 

program objectives for correspondence audits while ensuring that the 

program measures reflect those objectives, and clearly link those 

measures with strategic IRS-wide goals, IRS agreed to ensure that the 

program objectives and measures established would be linked with the 

Agency Comments 

and GAO’s Evaluation
 

Page 148 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

IRS-wide goals. Thus, if implemented effectively, IRS’s action should 

address the intent of these three recommendations.

IRS did not agree or disagree with four of GAO’s recommendations, but 

acknowledged related actions it is taking to address three of these four 

recommendations. First, in response to GAO’s recommendation that IRS 

develop a plan and timeline for implementing recommendations to 

improve the selection of correspondence audit workload and allocation of 

examiner resources, IRS responded it will pursue efforts to improve its 

workload selection and maximize resource usage, but it did not comment 

on whether it would develop a plan and timeline for implementing the 

recommendations. IRS recently noted that the Office of Compliance 

Analytics has developed a planning tool to optimize distribution of 

planned starts based on several weighted measures. According to IRS, 

the tool is being tested in fiscal year 2015. GAO continues to believe it is 

important that IRS develop a plan and timeline for implementing these 

recommendations or document and justify its reasons for not doing so. As 

noted in GAO’s June 2014 report, without timely follow-up on the 

recommendations, it will be difficult to hold IRS managers accountable for 

ensuring that any improvements needed are made. Furthermore, IRS 

may delay or miss opportunities to better select workload, allocate 

resources, reduce taxpayer burden, or otherwise improve the 

correspondence audit results without implementing these 

recommendations. 

Second, in response to GAO’s recommendation to calculate ROI for 

implemented initiatives, compare the actual ROI to projected ROI and 

provide the comparison to budget decision makers, IRS agreed that ROI 

is one of several factors relevant to making resource allocation decisions. 

However, IRS noted that determining the impact of an initiative will always 

rely on estimates, as the results of an initiative are the difference between 

actual results and what would have occurred in the absence of the 

initiative, which cannot be measured. Given the difficulty IRS has in 

attributing revenues to specific employees hired under an initiative, 

officials believe that any feasible estimate would need to be based on 

numerous assumptions and, therefore would be too uncertain to be 

useful. For this reason, IRS does not consider this additional analysis an 

effective use of its scarce research resources. GAO agrees that any 

post-implementation assessment of an initiative’s results would be an 

estimate. The difficulty and reliability of such assessments would likely 

vary depending on the specifics of each initiative. GAO’s previous 

recommendation--that IRS undertake research to improve all of its 

enforcement resource allocation decisions--would also enhance its ability 

to estimate initiative results.16

 

16

In the interim, IRS should be able to 

provide some information of use to Congress, such as whether funds that 

GAO-13-151. 
 

Page 149 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

were requested for initiatives were actually used in the manner that IRS 

originally proposed. 

Third, in response to GAO’s recommendation to develop and implement a 

strategy to better estimate the extent and nature of partnership 

misreporting, and the effectiveness of partnership examinations in 

detecting this misreporting, IRS stated that it had not fully evaluated 

GAO’s recommendations and expressed concern regarding actions 

requiring a significant expenditure of resources. 

Fourth and finally, IRS reiterated this same point concerning GAO’s 

recommendation to use the better information on noncompliance and 

program effectiveness to determine whether the differences in 

examination rates across different types of business entities are justified, 

and whether an improved tool for selecting partnerships for examination 

should be developed. However, IRS reported it would consider all of 

GAO’s recommendations and would identify appropriate actions while 

keeping resource limitations in mind. It is these very resource 

limitations—which were noted in GAO’s May 2014 report—that 

underscore the importance of GAO’s recommendations to develop better 

information for making resource allocation decisions.

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

comment. IRS provided comments, which were incorporated as 

appropriate.

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

products in the related GAO products section. For the related products 

listed, 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.

Individual Retirement Accounts: IRS Could Bolster Enforcement on MultiMillion Dollar Accounts, but More Direction from Congress Is Needed. 

GAO-15-16. Washington, D.C.: October 20, 2014. 

Large Partnerships: With Growing Number of Partnerships, IRS Needs to 

Improve Audit Efficiency. GAO-14-732. Washington, D.C.: September 18, 

2014. 

IRS 2015 Budget: Long-Term Strategy and Return on Investment Data 

Needed to Better Manage Budget Uncertainty and Set Priorities. 

GAO-14-605. Washington, D.C.: June 12, 2014.

IRS Correspondence Audits: Better Management Could Improve Tax 

Compliance and Reduce Taxpayer Burden. GAO-14-479. Washington, 

D.C.: June 5, 2014. 

How GAO Conducted 

Its Work

Related GAO 

Products
 

Page 150 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

Partnerships and S Corporations: IRS Needs to Improve Information to 

Address Tax Noncompliance. GAO-14-453. Washington, D.C.: May 14, 

2014.

Tax Gap: IRS Could Significantly Increase Revenues by Better Targeting 

Enforcement Resources. GAO-13-151. Washington, D.C.: December 5, 

2012.

For additional information about this area, contact James R. McTigue, Jr. Contact Information at (202) 512-9110 or mctiguej@gao.gov.
Page 151 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities

General Government

18. DOD TRICARE Improper Payments To achieve potential cost savings associated with billions of dollars of improper payments, the Department of 

Defense should implement a more comprehensive improper payment measurement methodology and develop 

more robust corrective action plans for the military health care program known as TRICARE. 

Improper payments—payments that were made in an incorrect amount or 

should not have been made at all—contribute to excess health care 

costs. In fiscal year 2013, the Department of Defense (DOD) spent $21 

billion for the purchased care portion of TRICARE, which provides 

medical care to eligible military service members, retirees, and their 

families through civilian providers in civilian facilities.1 The Defense 

Health Agency (DHA), which administers TRICARE, estimated that

improper payments made up 0.3 percent of that $21 billion—$68 million. 

Such a low improper payment estimate likely understates the amount of 

improper payments. In comparison to DHA’s low estimate, the Centers for 

Medicare & Medicaid Services (CMS), the agency within the Department 

of Health and Human Services (HHS) that administers the nation’s largest 

federal health care program—Medicare fee-for-service (FFS)—estimated 

that improper payments made up about 10.1 percent of the program’s 

$357 billion in payments—approximately $36 billion that same year.2

 

Federal agencies annually report improper payment estimates and 

improper payment rates for certain programs as a requirement of the 

Improper Payments Information Act of 2002 (IPIA), as amended, and 

subsequent implementing guidance from the Office of Management and 

Budget (OMB).3

 

1

TRICARE includes several benefit options to provide health care to military service 

members, retirees, and their families. Medical care under TRICARE is provided by DOD 

personnel in military treatment facilities, or through civilian providers in civilian facilities, 

which is known as TRICARE’s purchased care system. Private sector contractors—

referred to as TRICARE purchased care contractors—develop and maintain the private 

health care provider networks that make up the purchased care system, as well as 

process and pay claims.

 The extent of agencies’ reported improper payments 

depends, in part, on how they test program components for errors. While 

OMB’s implementation guidance provides parameters for developing 

statistically valid estimates, it does not specifically dictate how agencies 

2

Medicare is the federally financed health insurance program for persons age 65 or over, 

certain individuals with disabilities, and individuals with end-stage renal disease. Medicare 

consists of four parts: Parts A and B are known as Medicare fee-for-service; Part C is the 

private plan alternative to Medicare fee-for-service under which beneficiaries receive 

benefits through private health plans; and Part D is the outpatient prescription drug 

benefit. Separate error rates are reported for Part C and Part D.

3

Pub. L. No. 107-300, 116 Stat. 2350 (2002), as amended by the Improper Payments 

Elimination and Recovery Act of 2010, Pub. L. No. 111-204, 124 Stat. 2224 (2010) and 

the Improper Payments Elimination and Recovery Improvement Act of 2012, Pub. L. No. 

112-248, 126 Stat. 2390 (2013). TRICARE and Medicare fiscal year improper payment 

estimates represent payments from the prior year. Fiscal year 2013 estimates were the 

most recently available at the time GAO did its work. 

Why This Area Is 

Important
 

Page 152 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

should test for improper payments. IPIA, as amended, also requires 

agencies to report the root causes of their improper payments and identify 

corrective actions to address them. The corrective actions agencies 

develop depend, in part, on the improper payments identified by their 

measurement methodology.

As GAO reported in February 2015, DHA’s methodology for measuring 

improper payments in the TRICARE program in fiscal year 2013 did not 

capture certain improper payments and was less comprehensive than the 

methodology used for Medicare FFS. Specifically, DHA’s approach to 

measuring TRICARE improper payments examines whether the 

TRICARE purchased care contractors (TPCC), which process and pay 

submitted claims, do so in accordance with TRICARE policies. To 

determine a TPCC’s claims processing performance, DHA uses another 

contractor—the TRICARE claims review contractor—to examine a 

sample of paid and denied claim records, including any documentation 

used by the TPCC to adjudicate the claim. For example, the claims 

review contractor verifies that the beneficiary and provider were eligible, 

the claimed services were covered TRICARE benefits, the TPCC 

calculated correct pricing and cost sharing, and prior authorization and 

medical necessity were documented when necessary. However, 

according to DHA and claims review contractor officials GAO spoke with, 

medical record documentation is only included in the improper payment 

claims review if the TPCC conducted a medical review to determine 

medical necessity as part of its original claim processing. Furthermore, in 

cases where a medical review was conducted, the claims review 

contractor does not typically re-evaluate the TPCC’s medical review 

decision, but only ensures that the documentation exists. DHA’s improper 

payment measurement methodology also does not independently validate 

that the medical records support the diagnosis or procedure codes 

submitted on the claim. 

As a result, while DHA’s methodology is designed to identify improper 

payments resulting from TPCC claims processing compliance errors, it 

does not comprehensively capture errors that occur at the provider level 

or errors that can only be identified through an examination of underlying 

medical record documentation. The table below provides examples of the 

information verified and not verified by the TRICARE improper payment 

measurement methodology.

What GAO Found
 

Page 153 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

Examples of Information Verified by TRICARE Improper Payment Measurement Methodologies

Type of information reviewed

Verified by TRICARE 

measurement 

methodology

Contractor claims processing review

Beneficiary eligibility for services ●

Claim was properly executed (e.g., appropriate provider or beneficiary signatures on the claim) ●

Services indicated on claim were an appropriate program benefit ●

Procedure code reflects diagnosis and information on claim ●

Other insurance liability reflected in payment ●

No duplicate payments in claim history ●

Correct pricing and cost sharing used to calculate payment ●

Medical record review

Evidence of medical necessity—medical record supports that services paid were medically necessary ○

Verification of correct coding—medical record supports that correct procedure and diagnosis codes were 

used ○

Documentation of provider services—provider has documentation to support the services claimed ○

Legend: ● = Measurement methodology verifies, ○ = Measurement methodology does not verify

Source: GAO analysis of Defense Health Agency information. | GAO-15-404SP

DHA officials reported that TRICARE has other postpayment mechanisms 

in place as part of its audit programs to examine medical records and 

thus identify the types of improper payments that the TRICARE claims 

review program does not. However, the results of the other mechanisms

are not reflected in the estimated improper payment rates that DHA 

reports.

By comparison, the methodology used by CMS to measure Medicare 

FFS’s improper payments does identify improper payments that can only 

be identified through medical record reviews because CMS conducts 

more comprehensive reviews that examine underlying medical records for 

each of a sample of Medicare claims. Nearly all of the 10.1 percent or $36 

billion in Medicare FFS improper payments that CMS estimated for fiscal 

year 2013 were for issues that could only be identified through a medical 

record review. OMB’s IPIA implementation guidance allows for variation 

in how agencies test for improper payments. However, several other 

federal programs that pay for services based on claims submitted by 

beneficiaries or providers also conduct more comprehensive reviews that 

include examination of the underlying documentation for each sampled

claim to determine the validity of payment as part of their efforts to 

estimate improper payments under IPIA. Most private health insurers also 

identify improper payments by conducting postpayment claims reviews, 

according to organizations we spoke to with knowledge of claims review 

practices. Many such private health insurance reviews require 

examination of a patient’s underlying medical record to verify appropriate 

payment. The HHS Office of Inspector General, which conducts Medicare 

program integrity activities, also acknowledges that reviewing the 

underlying medical records is needed to verify appropriate payment.
 

Page 154 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

Consequently, because DHA does not examine underlying medical 

record documentation to determine if payments for claims are proper, 

DHA’s reported fiscal year 2013 TRICARE improper payment rate of 0.3 

percent likely understates the amount of improper payments in the 

TRICARE program, including potential overpayments that could be 

recouped to provide cost savings for the federal government. In addition, 

TRICARE’s reported improper payment estimates are not comparable to 

Medicare’s estimates despite similar program features. TRICARE and 

Medicare are at similar risk for improper payments because both health 

care programs pay providers on a fee-for-service basis, the programs’ 

providers overlap, both programs depend on contractors to process and 

pay claims, and TRICARE uses some of Medicare’s coverage and 

payment policies. If TRICARE had an error rate similar to that of 

Medicare—10.1 percent—measuring TRICARE improper payments in the 

more comprehensive approach used by Medicare could result in roughly 

$2 billion in identified TRICARE improper payments. 

Further, DHA may be missing opportunities to achieve cost savings by 

preventing future TRICARE improper payments. Without a robust 

measure of improper payment rates in the TRICARE program, DHA 

cannot effectively identify root causes and take steps to address practices 

that contribute to improper payments and excess spending. The root 

causes and related corrective actions that DHA reported in fiscal year 

2013 to fulfill IPIA requirements are limited to addressing issues of 

contractor noncompliance with claims processing requirements. These 

reported root causes do not address underlying causes of improper 

payments that are not related to contractor compliance, such as errors 

made by providers who may not fully understand or comply with DHA 

policies. Developing a more comprehensive method for measuring

TRICARE improper payments, similar to that used for Medicare, could 

allow DHA to potentially realize savings through recouped overpayments 

and prevention of further improper payments in the future. 

To assess and address the full extent of improper payments in the 

TRICARE program, GAO recommended in February 2015 that the 

Secretary of Defense take the following two actions:

• Implement a more comprehensive TRICARE improper payment 

measurement methodology that includes medical record reviews, as 

done in other parts of its existing audit programs.

• Once a more comprehensive improper payment methodology is 

implemented, develop more robust corrective action plans that 

address underlying causes of improper payments, as determined by 

the medical record reviews. 

GAO was not able to quantify the potential financial benefits of taking 

these actions because other factors may prevent direct comparison to 

Medicare’s improper payment findings. However, implementing a robust 

measure of improper payment rates in the TRICARE program could help 

Actions Needed and 

Potential Financial or 

Other Benefits
 

Page 155 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

to ensure efficient use of resources and help address practices that 

contribute to improper payments and excess spending. 

In commenting on the February 2015 report on which this analysis is 

based, DOD concurred with our recommendations and outlined the steps 

the department will take prior to implementation, including conducting 

discussions within the department; developing implementation plans; and 

hiring or contracting for the needed workforce to begin implementing the 

recommendations. DOD noted that taking these steps would take time. 

Given the potentially high cost of improper payments, GAO believes DOD 

should move expeditiously. 

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

comment. DOD did not have comments on this issue.

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

product in the related GAO products section. To examine the extent to 

which the measurements and corrective actions are comparable, GAO 

reviewed TRICARE and Medicare fiscal year 2013 improper payment 

estimates, measurement methodologies, and root causes and corrective 

actions, as reported in DOD’s and HHS’s agency financial reports, as well 

as other methodological documentation and relevant DHA and CMS 

guidance.4

In addition, to understand how the TRICARE measurement methodology 

compares to other claims-based programs, GAO interviewed 

representatives and reviewed documentation from four organizations with 

knowledge of the claims review practices of private health insurance 

plans; reviewed the improper payment measurement methodologies of 

Medicare and eight other federal claims-based payment programs,

GAO reviewed relevant laws related to federal improper 

payment reporting and related OMB guidance to understand improper 

payment error rate requirements. GAO also interviewed relevant DHA 

and CMS officials and their respective contractors responsible for 

measuring TRICARE and Medicare improper payments. 

5

 

4

DOD and HHS published their fiscal year 2014 TRICARE and Medicare improper 

payment estimates in November 2014, after GAO completed the majority of work for this 

review. Therefore, fiscal year 2014 improper payment reporting is outside the scope of this 

review. In addition, the fiscal year 2014 rates reported did not change the key findings of 

this review. 

as 

reported in their respective fiscal year 2013 agency financial reports; and 

examined improper payment reviews conducted by the HHS Office of 

Inspector General. GAO also reviewed internal control standards for the 

federal government and findings from prior GAO reports to examine the 

5 GAO chose these eight programs because they involved federal payments, either 

directly by the agency or through a claims administrator, based on claims for services 

rendered.

Agency Comments 

and GAO’s Evaluation

How GAO Conducted 

Its Work
 

Page 156 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

extent to which TRICARE and Medicare identify root causes of improper 

payments and develop effective corrective action plans to reduce them. 

Table 13 in appendix V lists the programs GAO identified that might have 

opportunities for cost savings.

Improper Payments: TRICARE Measurement and Reduction Efforts 

Could Benefit From Adopting Medical Record Reviews. GAO-15-269. 

Washington, D.C.: February 18, 2014.

For additional information about this area, contact Vijay A. D’Souza at 

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

Related GAO 

Products

Contact Information
Page 157 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities

Health

19. Medicare Payments to Certain Cancer 

Hospitals 

To achieve almost $500 million per year in program savings, Congress should consider modifying how 

Medicare pays certain cancer hospitals. 

In 2013, traditional Medicare—which covered roughly 38 million 

beneficiaries—spent about $179 billion on hospital services. To control 

costs and reward efficiency, Medicare pays the majority of hospitals using 

an approach known as the inpatient and outpatient prospective payment 

systems (PPS). Under a PPS, hospitals are paid a predetermined amount

based on the clinical classification of each service they provide to 

beneficiaries. However, beginning in 1983, in response to concern that 

certain cancer hospitals would experience payment reductions under 

such a system, Congress required the establishment of criteria under 

which 11 cancer hospitals (see figure) are currently exempted from the 

inpatient PPS and receive payment adjustments under the outpatient 

PPS. Generally, Medicare pays these PPS-exempt cancer hospitals 

(PCH)—which are all teaching hospitals—based on their reported costs. 

Why This Area Is 

Important
 

Page 158 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

Prospective Payment System (PPS)-Exempt Cancer Hospitals (PCH), Location and Effective Date

Since PCHs were first established in the early 1980s, cancer care and 

Medicare’s payment system have changed significantly. Advances in 

techniques and drugs have increased treatment options and allowed for 

more localized delivery of care. Along with these developments, the 

primary setting for cancer care has shifted from the inpatient setting to the 

outpatient setting. For example, patients now typically have 

chemotherapy and radiation treatments without staying overnight in a 

hospital. In addition, in 2007, the Centers for Medicare & Medicaid 

Services (CMS)—the agency within the Department of Health and Human 

Services (HHS) that administers the Medicare program—refined the 

inpatient PPS methodology to better account for variation in the severity 

and complexity of beneficiaries in its payment calculations. Medicare’s 

current payment system better recognizes the resource intensity of 

hospital care than the system put in place in 1983.

In a February 2015 report, GAO’s analysis of 2012 Medicare data found a 

number of similarities and differences between PCHs and PPS teaching 

hospitals. For instance, unlike beneficiaries treated at PPS teaching 

hospitals, nearly all beneficiaries treated at PCHs had a diagnosis of 

cancer. However, at both PCHs and PPS teaching hospitals the health 

What GAO Found
 

Page 159 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

status of Medicare beneficiaries with cancer was not markedly different 

and the resources needed to care for inpatient cancer beneficiaries were 

also clinically similar. 

In addition, compared with how PPS teaching hospitals are paid, the 

methodologies for paying PCHs provide little incentive for efficiency. 

Under a PPS, Medicare pays hospitals a predetermined amount based on 

the clinical classification of each service they provide. PPS hospitals can 

retain any amount Medicare pays that exceeds their costs. In contrast, as 

required by the exemption, Medicare pays PCHs for inpatient services 

based on their reported costs, subject to an upper limit, as well as 

potential add-on payments. For outpatient care, Medicare payments to 

PCHs are composed of PPS service-specific rates and an upward 

payment adjustment based on reported costs. 

GAO reported that, had PCH beneficiaries received inpatient and 

outpatient services at nearby PPS teaching hospitals, Medicare may have 

realized substantial savings in 2012. GAO estimated that for inpatient 

care that year, CMS paid PCHs 42.3 percent more per discharge, on 

average, than it would have typically paid PPS teaching hospitals in the 

same geographic area to treat equally complex cancer beneficiaries.1 The 

estimated differences in Medicare payment between PCHs and local PPS 

teaching hospitals varied greatly across the PCHs, with the largest 

payment difference at 90.9 percent and the smallest payment difference 

at 6.7 percent. Overall, the difference between the amount Medicare paid 

PCHs and the estimated amount Medicare would have paid PPS 

hospitals for treating comparable cancer patients suggests that Medicare 

would have saved about $166 million in 2012.2

In the outpatient setting, Medicare payment adjustments to PCHs resulted 

in overall reimbursements that were 37 percent higher, on average, than 

payments Medicare would have made to teaching hospitals under the 

outpatient PPS for the same set of services. Again, the size of the 

payment adjustment varied widely across PCHs, ranging from 13 percent 

to 51 percent. For the majority of PCHs, Medicare increased payments by 

more than 25 percent over PPS rates. GAO calculated that, if PCHs were 

paid for outpatient services in the same way as PPS teaching hospitals—

and forgone payment adjustment amounts had been returned to the 

Supplementary Medical Insurance Trust Fund rather than redistributed to 

 

 

1

GAO used a regression model to predict what the typical Medicare payment per 

discharge for PCH beneficiaries would have been if they had been treated at PPS 

teaching hospitals in the same core based statistical area (CBSA). The average estimated 

payment per discharge had a margin of error of 1.0 percent at a 95 percent confidence 

level, with no individual CBSA margin of error exceeding 1.6 percent. The 42.3 percent 

overall payment difference had a margin of error at the 95 percent confidence level of plus 

or minus 1.5 percentage points.

2

GAO estimated this savings amount within a range of plus or minus $4 million at a 95 

percent confidence level. This savings estimate covers 9 of the 11 PCHs due to missing 

2012 data for 2 PCHs. 
 

Page 160 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

PPS hospitals under current requirements—Medicare would have saved 

about $303 million in 2012. 

GAO also found that, compared with PPS teaching hospitals, the PCH 

group had a higher median Medicare inpatient profit margin and a similar

median outpatient profit margin.3

In its February 2015 report, GAO concluded that Medicare PPS or an 

alternative payment system may be reasonable for PCHs. Because 

Medicare’s payment methodology for PCHs lacks strong incentives for 

cost containment, Medicare expenditures in 2012 were substantially 

higher than they would have been had PCH cancer beneficiaries been 

treated at local PPS teaching hospitals. Until Medicare pays PCHs in a 

way that encourages greater efficiency, Medicare remains at risk for 

overspending.

In addition, GAO examined whether an 

increased focus on treating cancer patients affects hospitals’ profitability. 

Its analysis of the PPS inpatient and outpatient data showed no 

relationship between the share of Medicare payment derived from treating 

cancer beneficiaries and Medicare profit margins. Furthermore, PCHs 

generally had positive all payer margins—profit margins that include both 

private and public payers—which could be attributable, in part, to how 

PCHs account for administrative costs. 

To help HHS better control Medicare spending and encourage efficient 

delivery of care, and to generate cost savings from any reductions in 

outpatient payments to PCHs, GAO recommended that Congress 

consider taking the following action:

• Require Medicare to pay PCHs as it pays PPS teaching hospitals, or 

provide the Secretary of Health and Human Services with the 

authority to otherwise modify how Medicare pays PCHs, and provide 

that all forgone outpatient payment adjustment amounts be returned 

to the Supplementary Medical Insurance Trust Fund. 

GAO estimated that if, in 2012, PCH beneficiaries had received inpatient 

and outpatient services at nearby PPS teaching hospitals, and if the 

forgone outpatient adjustments were returned to the Supplementary 

Medical Insurance Trust Fund, Medicare may have realized annual 

savings of almost $500 million.4

 

3

The comparison group of PPS teaching hospitals consists of those without National 

Institutes of Health-designated comprehensive cancer centers. 

4

This savings estimate is composed of $166 million for inpatient services, which is 

estimated within a range of plus or minus $4 million at a 95 percent confidence level, and 

$303 million for outpatient services. The inpatient estimate did not include all PCHs due to 

missing data for 2012. 

Actions Needed and 

Potential Financial or 

Other Benefits
 

Page 161 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

Other than technical comments, which were incorporated as appropriate, 

HHS did not comment on GAO’s February 2015 report. In addition, GAO 

provided a draft of this report section to HHS for review and comment. 

HHS did not have comments on this issue.

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

product in the related GAO product section. In developing those findings, 

GAO divided Medicare fee-for-service beneficiaries into two groups—

beneficiaries with cancer and beneficiaries without cancer—using cancer 

diagnosis codes provided by CMS to analyze 2011 and 2012 Medicare 

claims data. To compare hospital characteristics, GAO analyzed 2012 

Medicare cost report data. Because data limitations precluded a direct 

comparison of Medicare inpatient payments, GAO used a regression 

analysis to model payment per discharge for Medicare beneficiaries who 

were treated for cancer at PPS teaching hospitals located in the same 

geographic locations as PCHs. GAO included each beneficiary’s 

Medicare severity diagnosis-related group and the core based statistical 

area (CBSA) in which the hospital was located as independent variables.

GAO used this model to predict what the typical Medicare payment per 

discharge for PCH beneficiaries would have been if they had been treated 

at PPS teaching hospitals in the same CBSA and compared the results to 

inpatient PCH payments per discharge. To compare Medicare outpatient 

payments, GAO calculated the overall percentage payment adjustment to 

PCHs, which represented the difference in Medicare payments between 

PCHs and local PPS teaching hospitals. Furthermore, GAO determined 

Medicare inpatient and outpatient profit margins, as well as all payer 

margins, for PCHs and PPS teaching hospitals. Table 14 in appendix V 

lists the program GAO identified that may have opportunities for cost 

savings.

Medicare: Payment Methods for Certain Cancer Hospitals Should Be 

Revised to Promote Efficiency. GAO-15-199. February 20, 2015.

For additional information about this area, contact James Cosgrove at 

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

Agency Comments 

and GAO’s Evaluation

How GAO Conducted 

Its Work

Related GAO 

Products

Contact Information
Page 162 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities

20. State Medicaid Sources of Funds

To potentially save hundreds of millions of dollars, the Centers for Medicare & Medicaid Services should 

ensure that states report accurate and complete data on state Medicaid sources of funds so that it may better 

oversee states’ financing arrangements that can increase costs for the federal government. 

Medicaid is a critical health care program for tens of millions of low 

income and medically needy individuals, and is growing in size as new 

populations become eligible for the program as a result of the Patient 

Protection and Affordable Care Act.1 In 2014, Medicaid provided health 

care coverage to an estimated 65 million low-income individuals at an 

estimated total cost of $508 billion. On average, the federal share of 

Medicaid service expenditures is about 57 percent. By 2020, Medicaid 

expenditures are projected to total $725 billion, with federal expenditures 

alone totaling $436 billion. Medicaid is structured as a federal and state 

partnership where each partner bears a certain portion of program costs, 

according to a formula in law. It involves significant and growing 

expenditures for the federal government and states, and states have used 

various sources of funds to help finance their share of the program. The 

federal government matches each state’s Medicaid expenditures for 

services on the basis of the state’s federal medical assistance 

percentage.2

States’ financing of the nonfederal share is subject to federal limits and 

requirements. For example, states must use state funds to finance at 

least 40 percent of the nonfederal share of total Medicaid expenditures 

each year.

 

3

 

1

Under the Patient Protection and Affordable Care Act, states may expand Medicaid 

eligibility to nonpregnant, nonelderly adults who are not eligible for Medicare and who 

meet certain income requirements.

This limit is applied in the aggregate, that is, across each 

state’s entire Medicaid program, and not for individual payments. States 

have financed the nonfederal share of Medicaid payments in large part 

through state general funds, and have depended on other sources of 

funds—such as taxes on health care providers and funds from local 

government providers or local governments on behalf of providers—to 

2

The federal medical assistance percentage is based on a formula established by law 

under which the federal share of a state’s Medicaid expenditures for services generally 

may range from 50 to 83 percent. States with lower per capita income receive a higher 

federal medical assistance percentage for services. 

3

State funds that may be used to meet the requirement that at least 40 percent of the 

nonfederal share of total annual Medicaid expenditures be derived from state funds 

include state general funds, health care provider taxes imposed by the state, provider 

donations received by the state, and intra-agency funds from non-Medicaid state 

agencies. The remaining 60 percent of the nonfederal share for total annual Medicaid 

expenditures can be derived from local governments, including funds from counties, cities, 

and local hospital districts, as well as directly from local-government-owned or –operated 

providers, such as county hospitals.

Why This Area Is 

Important
 

Page 163 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

finance the remainder. Provider taxes must be broad-based, must be 

uniformly imposed, and must not hold providers harmless; that is, they 

must not provide a direct or indirect guarantee that providers will receive 

all or a portion of tax payments back. Taxes that are at or below 6 percent 

of the individual provider’s net patient service revenues are considered 

not to have provided an indirect guarantee that providers will receive their 

tax payments back.

GAO’s prior work has found that flexibility in federal financing and 

payment requirements has enabled states to create various financing 

arrangements that may have the effect of shifting costs to the federal 

government. For example, GAO has found that states have established 

complex financing arrangements to make excessive payments to certain 

providers in order to maximize federal funds and rely less on state 

general funds. These arrangements often involved large Medicaid 

supplemental payments—payments that are separate from the regular 

payments states make, often on a lump-sum basis and not paid on the 

basis of health care claims—to providers that supplied funds to finance 

the nonfederal share of these payments. This enabled states to obtain 

billions of dollars in additional federal matching funds without a 

commensurate increase in state general funds. These types of 

arrangements may be permissible under certain conditions; however, the 

flexibility states have to require individual providers to finance the entire 

nonfederal share of payments may create incentives for states to overpay 

providers that contribute funds to finance the nonfederal share, in order to 

reduce state obligations. 

While states generally administer the Medicaid program, they are subject 

to the oversight of the Centers for Medicare & Medicaid Services (CMS), 

an agency within the Department of Health and Human Services (HHS). 

Its responsibilities include ensuring that federal Medicaid matching funds 

are provided for eligible expenditures, the federal government and states 

share in the financing of the Medicaid program as established by law and 

that payments are economical and efficient, and beneficiaries have 

access to care. In some cases after identifying financing arrangements 

that have enabled states to shift large shares of Medicaid costs to health 

care providers and local governments, CMS has taken action to ensure 

the financing was appropriate, resulting in federal cost savings because 

states were no longer making excessive payments when required to 

contribute to the nonfederal share of the payments. In recent years a 

number of proposals have been made to curtail states’ ability to tax health 

care providers for purposes of financing the nonfederal share of Medicaid 

payments.4

 

4

For example, proposals were made in the President’s budget in 2013, the National 

Commission on Fiscal Responsibility and Reform in 2010, and the Congressional Budget 

Office in 2008. 

The proposals, which estimated federal savings in the tens of 

billions of dollars, have sought to lower the tax rate threshold. If the 

threshold is lowered below the current 6 percent, states would have less 
 

Page 164 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

provider tax revenue to finance their nonfederal share. If the states were 

unable to replace this funding with other eligible sources of its nonfederal 

share, then states would have fewer dollars to make Medicaid 

expenditures. The federal liability would be reduced because the federal 

government would be matching a lower amount of state Medicaid 

expenditures.

In July 2014, GAO found that states’ reliance on funds from providers and 

local governments to finance the nonfederal share of Medicaid payments 

was significant and increasing, according to an analysis of trends in 

sources of funds used to finance the nonfederal share as reported by 

states. In state fiscal year 2012, states nationwide financed on average 

26 percent, or over $46 billion of the approximately $180 billion in the 

nonfederal share of total Medicaid payments—both regular and 

supplemental—with funds from health care providers and local 

governments. Among states, the reliance on providers and local 

governments to finance the nonfederal share of Medicaid payments 

varied widely. In the 48 states that reported using these sources, the 

percentage of funds from providers and local governments ranged from 

less than 1 percent to 53 percent. Nationwide, the reliance on these 

sources increased by over 21 percent from state fiscal year 2008 through 

state fiscal year 2012. 

These sources were used to fund Medicaid supplemental payments to a 

greater extent than other types of payments, and this reliance is growing. 

For Medicaid supplemental payments, the percentage of the nonfederal 

share financed with funds from providers and local governments 

increased from 57 percent (or $8.1 billion) in state fiscal year 2008 to 70 

percent (or $13.6 billion) in state fiscal year 2012.5

Also in July 2014, GAO’s analysis of arrangements involving financing of 

the nonfederal share of Medicaid payments with funds from provider 

taxes or local governments in three selected states illustrated how 

Medicaid costs can be shifted from the state to the federal government 

and, to a lesser extent, to health care providers and local governments.

Several states relied 

on health care providers and local governments for the entire nonfederal 

share of supplemental payments in 2012.

6

 

5

Federal law requires that no more than 60 percent of the nonfederal share is financed by 

local governments, and the remaining 40 percent can include state general funds and 

health care provider taxes imposed by the state. This requirement is applied on the basis 

of total annual Medicaid program spending and not on individual payments or types of 

payments. Assessing whether states were compliant with federal limits and requirements 

related to nonfederal sources of funds for Medicaid payments was not within the scope of 

this review. 

The use of funds from providers and local governments is, as previously 

6

The three selected states were California, Illinois, and New York. States were chosen 

based on the size of the state’s Medicaid program and whether the state had made 

changes in sources of funds to finance the nonfederal share, among other things.

What GAO Found
 

Page 165 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

described, allowable under federal rules, but it can also have implications 

for federal costs. By increasing providers’ Medicaid payments, and 

requiring providers receiving the payments to supply all or most of the 

nonfederal share, states claimed an increase in federal matching funds 

without a commensurate increase in state general funds. For example, 

GAO found that one state increased Medicaid payments to nursing 

facilities by $220 million and financed the nonfederal share of the 

payment increase with a provider tax on nursing facilities. The payment 

increase and provider tax resulted in an estimated $110 million increase 

in federal matching funds and no increase in state general funds. The net 

payment increase to the facilities, after paying the taxes, was $105 

million.

GAO has also found that CMS has not ensured that its data on sources of 

funds states used to finance Medicaid are accurate and complete. States 

have been required to report the amount of funds collected from health 

care provider taxes and provider donations since 1992. CMS has not 

assessed the accuracy and completeness of the data it collects from 

states on the amount of health care provider taxes and provider donations 

states use to finance the nonfederal share of Medicaid payments. CMS 

officials said in March 2014 that the agency could not attest to the 

accuracy of the data that states reported on their use of provider taxes 

and donations, but that states were likely underreporting their use of 

these sources of funds.

When GAO compared the provider tax data reported to CMS in 2012 with 

state responses to a GAO questionnaire, it found evidence of incomplete 

reporting. Specifically, 6 of the 47 states that reported in the questionnaire 

that they had at least one health care provider tax or provider donation in 

effect that year did not report a tax or donation to CMS in 2012.7

To oversee the Medicaid program and assess the need for and make 

changes to the program, CMS, federal policymakers, and other 

stakeholders need accurate and complete information on provider 

CMS 

also does not collect complete data from all states on the amount of local 

government funds used to finance the nonfederal share of total annual 

Medicaid expenditures. Although federal requirements limit the 

percentage of the nonfederal share that states may finance with funds 

from local governments, states are not required to submit data on the 

amount of funds from these sources. 

 

7

Six states—Arizona, the District of Columbia, New Jersey, South Dakota, Utah, and 

Virginia—did not report to CMS any health care provider taxes and provider donations as 

the nonfederal share of Medicaid expenditures. However, these states reported to GAO 

that they levied provider taxes in state fiscal year 2012.

Four states—Alaska, Delaware, Hawaii, and New Mexico—reported in the GAO 

questionnaire that they did not have any health care provider tax, fee, and/or assessment 

or provider donation in effect during state fiscal year 2012 and therefore would not have 

reported information about these sources of the nonfederal share to CMS.
 

Page 166 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

payments and sources of funds to finance the nonfederal share. Without 

such information, it is difficult to track trends in financing the nonfederal 

share, to ensure compliance with current limits and requirements on 

financing the nonfederal share, and to examine the extent to which the 

federal government’s increased spending is commensurate with an 

increase in net payments realized by providers for the delivery of health 

care services to Medicaid beneficiaries. Without a better understanding of 

the scope and implication of state financing arrangements, policymakers 

do not know the extent to which states’ financing arrangements may be 

shifting Medicaid costs to the federal government or providers.

To better oversee federal limits and requirements on financing the 

nonfederal share, and to examine the extent to which the federal 

government’s increased spending is commensurate with increased 

payments to providers for health care services, GAO recommended in 

July 2014 that the Administrator of CMS 

• develop a data collection strategy that ensures that states report 

accurate and complete data on all sources of funds used to finance 

the nonfederal share of Medicaid payments. 

This action could result in potential savings by ensuring CMS has the 

data necessary to identify potential noncompliance with and better 

enforce federal limits and requirements on financing the nonfederal share. 

In addition, through a better understanding of the scope and implications 

of state financing arrangements, Congress could better identify the need 

for any policy changes, for example to reduce cost shifting in the 

program and incentives to overpay providers that are financing the 

nonfederal share of Medicaid payments, and to ensure proper use of 

federal Medicaid funds. Estimating the potential savings that could be 

realized from developing a data collection strategy is difficult because the 

lack of data on Medicaid financing precludes the ability to oversee 

compliance with current limits and requirements on financing the 

nonfederal share and because of uncertainty regarding changes in 

federal Medicaid policy that could result. However, the savings could be 

in the hundreds of millions of dollars, based on the expected growth in 

program spending and the ability of states to rely on sources of funds 

other than state general funds.

In commenting on a draft of the July 2014 report on which this analysis is 

based, HHS stated that it is working to identify needs for improvement in 

current payment and financing review processes. HHS’s acknowledgment 

is consistent with GAO’s recommendation to develop a data collection 

strategy that ensures states report accurate and complete data on all 

sources of funds used to finance the nonfederal share of Medicaid 

payments. 

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

comment. In an email received on March 11, 2015, HHS reiterated its 

Actions Needed and 

Potential Financial or 

Other Benefits

Agency Comments 

and GAO’s Evaluation
 

Page 167 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

comments from a draft of the July 2014 report. HHS also provided 

technical comments, which were incorporated as appropriate.

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

products in the Related GAO Products section. To determine the extent to 

which states have relied on funds from health care providers and local 

governments to finance the nonfederal share of Medicaid payments, GAO 

sent a questionnaire to all states and the District of Columbia and 

received responses from all of them. The questionnaire collected

information on each state’s use of funds from health care providers and 

local governments, state general funds, and other sources to finance the 

nonfederal share of Medicaid payments from state fiscal year 2008 

through state fiscal year 2012, and the type of Medicaid payments—for 

example, regular or supplemental—to which the funds were applied. GAO 

did not independently verify the data reported by states in the 

questionnaire; however, it reviewed published data submitted by state 

Medicaid programs to CMS and to outside researchers to assess the 

reasonableness of the data reported. 

To analyze financing arrangements involving financing of the nonfederal 

share with funds from provider taxes or funds from local governments, 

GAO selected three states—California, Illinois, and New York—based on 

the size of the state’s Medicaid program and whether the state had made 

changes in sources of funds to finance the nonfederal share (among 

other things), and then selected one financing arrangement in each of the 

three states. Findings from these three states are not generalizable to 

other states. In these three states, GAO obtained and analyzed Medicaid 

payment data from before and after an increase in funds from health care 

providers or local governments that occurred during state fiscal years 

2008 through 2012 to determine the effect of the change on the amounts 

of Medicaid payments states made to providers and on the amounts of 

state general funds, funds from local governments, and federal funds 

used to finance these payments. To determine the extent to which CMS 

collects data to oversee states’ use of various sources of funds, GAO 

asked CMS officials about the data they collect, the reliability of the data, 

and their oversight of state financing of the nonfederal share. GAO also 

reviewed relevant federal laws, regulations, and guidance. 

Table 15 in appendix V lists the programs GAO identified that might have 

opportunities for cost savings or revenue enhancement.

Medicaid: Completed and Preliminary Work Indicates That Transparency 

around State Financing Methods and Payments to Providers Is Still 

Needed for Oversight. GAO-14-817T. Washington, D.C.: July 29, 2014.

Medicaid Financing: States’ Increased Reliance on Funds from Health 

Care Providers and Local Governments Warrants Improved CMS Data 

Collection. GAO-14-627. Washington, D.C.: July 29, 2014.

How GAO Conducted 

Its Work

Related GAO 

Products
 

Page 168 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

Medicaid: More Transparency of and Accountability for Supplemental 

Payments Are Needed. GAO-13-48. Washington, D.C.: November 26, 

2012.

Medicaid: Ongoing Federal Oversight of Payments to Offset 

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

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

Medicaid: CMS Needs More Information on the Billions of Dollars Spent 

on Supplemental Payments. GAO-08-614. Washington, D.C.: May 30, 

2008.

Medicaid Financing: Federal Oversight Initiative Is Consistent with 

Medicaid Payment Principles but Needs Greater Transparency. 

GAO-07-214. Washington, D.C.: March 30, 2007.

Medicaid: Improved Federal Oversight of State Financing Schemes Is 

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

For additional information about this area, contact Katherine Iritani at Contact Information (202) 512-7114 or iritanik@gao.gov. 
Page 169 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities

Income Security

21. Children’s Disability Reviews

To prevent an estimated $3.1 billion dollars in potential overpayments over 5 years, the Social Security 

Administration needs to conduct timely disability reviews to better ensure that only eligible children receive 

cash benefits from the Supplemental Security Income program. 

The Social Security Administration (SSA) administers Supplemental 

Security Income (SSI), a nationwide federal assistance program that 

provides cash benefits to eligible low-income individuals with disabilities, 

including children, as well as certain individuals who are aged or blind. In 

2013, SSA paid almost $53 billion in SSI benefits to about 8 million 

recipients, of which about $10.3 billion was paid to about 1.3 million 

children. During the early and mid-1990s, the SSI program grew at an 

unprecedented rate for children due, in part, to legal developments that 

expanded program eligibility for children with mental impairments. 

To ensure that only recipients who remain disabled continue to receive 

benefits, SSA is required to conduct periodic continuing disability reviews 

(CDR).1 These reviews assess whether recipients are still eligible for 

benefits based on several criteria, including their current medical 

condition. When reviews are not conducted as scheduled, some 

recipients, including children, may receive benefits for which they are no 

longer eligible, potentially costing taxpayers billions of dollars in 

overpayments.

From fiscal years 2000 to 2011, the number of childhood CDRs fell from 

more than 150,000 to about 45,000 (70 percent), according to GAO’s 

June 2012 analysis of SSA data.2

 

1

SSA’s regulations pertaining to CDRs for SSI can be found at 20 C.F.R. § 416.989 et 

seq. For individuals under age 18, a disability is a medically determinable physical or 

mental impairment that results in marked and severe functional limitations, and is 

expected to result in death or which has lasted or can be expected to last for a continuous 

period of at least 12 months. 42 U.S.C. § 1382c(a)(3)(C)(i) and 20 C.F.R. § 416.906. 

More specifically, CDRs for children 

under age 18 with mental impairments—a group that comprises a 

growing majority of all child SSI recipients—declined from more than 

84,000 to about 16,000 (an 80 percent decrease). In recent years, SSA 

has cited resource limitations and a greater emphasis on processing 

2

Under Title XVI of the Social Security Act, SSA is generally required to (1) conduct a 

CDR at least every 3 years on all child recipients under age 18 whose impairments are 

likely to improve (or, at the Commissioner’s option, recipients whose impairments are 

unlikely to improve) (42 U.S.C. § 1382c(a)(3)(H)(ii)(I)); (2) conduct a CDR within 12 

months after the birth of a child who was granted benefits in part because of low birth 

weight (42 U.S.C. § 1382c(a)(3)(H)(iv)); and (3) redetermine, within 1 year of the 

individual’s 18th birthday (or whenever the Commissioner determines the individual is 

subject to a redetermination), the eligibility of any individual who was eligible for SSI 

childhood payments in the month before attaining age 18, by applying the criteria used in 

determining initial eligibility for adults (42 U.S.C. § 1382c(a)(3)(H)(iii)). 

Why This Area Is 

Important

What GAO Found
 

Page 170 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

initial claims and requests for hearings appeals as reasons for the 

decrease in the number of CDRs conducted.3

GAO reported in June 2012 that a large proportion of childhood CDRs 

were overdue.4 For example, CDRs for about one-half of all child 

recipients with mental impairments (435,000) were overdue, according to 

GAO’s analysis of SSA data.5

 

3

In January 2014, SSA reported that it was behind schedule in assessing the continued 

eligibility of all Disability Insurance (DI) and SSI recipients and had accumulated a backlog 

of 1.3 million CDRs. 

Of these, about 344,000 (79 percent) had 

exceeded the scheduled date by at least a year; about 205,000 (47 

percent) exceeded their date by 3 years; and about 24,000 (6 percent) 

exceeded the scheduled date by 6 years. GAO also identified several 

cases that exceeded their scheduled date by 13 years or more. Of the 

24,000 childhood CDRs pending 6 years or more, GAO found that about 

70 percent (over 17,000) were for children who, at initial determination, 

SSA classified as “medical improvement possible,” meaning they were 

considered likely to medically improve within 3 years. Twenty-five percent 

(over 6,000) of these pending CDRs were for children deemed medically 

expected to improve within 6 to 18 months of their initial determination 

(see fig.). Of these cases, GAO identified nine recipients who were 

expected to medically improve but whose CDR had been pending for 13 

years or more. Reviews of children who are expected to medically 

improve are more productive than reviews of children who are not 

expected to medically improve because they have a greater likelihood of 

benefit cessation and thus yield higher cost savings over time. 

4

Although SSA is responsible for administering these programs, initial determinations of 

disability are generally made by state agencies, known as disability determination services 

offices. In general, disability determination services staff consider the likelihood of a 

recipient’s medical improvement when setting the time frame for when SSA should 

conduct a CDR based on authorized time frames specified in the Social Security Act and 

SSA regulations. Improvement categories and general CDR time frames are (1) “medical 

improvement expected,” 6 to 18 months; (2) “medical improvement possible,” 3 years; and 

(3) “medical improvement not expected,” 5 to 7 years. 

5

A total of about 861,000 child recipients with mental impairments were receiving SSI 

benefits as of December 2011. 
 

Page 171 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

Childhood CDRs Pending for at Least 6 Years, by Anticipated Medical Improvement 

Category, for Children with Mental Impairments, as of August 1, 2011

Note: Percentages do not equal 100 percent due to rounding. Time frames for when SSA should 

conduct a CDR are set by state disability determination services staff and are based on the likelihood 

of a recipient’s medical improvement.

SSA officials report that the agency has placed a higher priority on 

conducting CDRs for recipients of DI—the agency’s other disability

program—although our analysis of SSA data shows that children’s SSI 

benefits are more likely to be ceased after review.6 Specifically, SSA 

officials told us that it is more cost-effective to conduct adult DI CDRs 

than childhood SSI CDRs, because ceasing benefits for a young adult DI 

recipient may potentially represent decades of saved benefits. 

Additionally, because DI benefit payments are, on average, almost twice 

as much as SSI childhood payments, SSA officials told us that CDRs of 

adult DI cases generally produce greater lifetime savings. SSA reported 

that it ceased about 12 percent of all adult DI claims that received a CDR. 

However, GAO’s analysis of SSA’s data showed that 32 percent of child 

SSI claims that received a CDR were ceased in fiscal year 2011. For 

example, of those childhood CDRs conducted for children under age 18 

with mental impairments, SSA ceased benefits for about 28 percent on 

average in fiscal year 2011, with personality disorders and speech and 

language delay having the highest cessation rates, 39 percent and 38 

percent, respectively.7

 

6

DI provides monthly cash benefits to eligible individuals unable to work because of a 

long-term disability and who meet certain work requirements, whereas SSI provides 

monthly cash benefits to people with disabilities on the basis of need, regardless of their 

work history.

Despite these high cessation rates, SSA and state 

7

The cessation rates cited in this paragraph reflect “initial cessations,” meaning that the 

agency concluded at the end of the CDR that the claimant involved no longer met the 

eligibility standards to continue receiving benefits, and therefore started the process to 

cease benefits. Claimants may have subsequently availed themselves of an appeals 

process, which could have resulted in a reversal of the initial cessation. 
 

Page 172 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

disability determination services officials have acknowledged that the 

agency has not conducted reviews for child recipients in a timely manner. 

If these reviews are not conducted in sufficient numbers, the agency will 

continue to struggle to contain growth in benefit payments, placing added 

burden on already strained federal resources. 

GAO recommended in June 2012 that the Commissioner of Social 

Security

• Direct the Deputy Commissioner of Quality Performance to eliminate 

the existing CDR backlog of cases for children with impairments who 

are likely to improve and, on an ongoing basis, conduct CDRs at least 

every 3 years for all children with impairments who are likely to 

improve, as resources are made available for these purposes.

If this recommendation were implemented, SSA could potentially save 

$3.1 billion over 5 years by preventing overpayments to children with 

mental impairments, according to GAO’s analysis of fiscal year 2011 

data.

8 This recommendation would also likely result in additional cost 

savings from preventing overpayments to children with physical 

impairments, which are not accounted for in the estimate. SSA’s Office of 

the Inspector General and SSA have also estimated savings that could be 

achieved from conducting CDRs. In September 2011, SSA’s Office of the 

Inspector General estimated that SSA had paid about $1.4 billion in SSI 

benefits to approximately 513,000 recipients under age 18 who should 

have not received them—some of whom had been pending reviews for 5 

or more years. The Inspector General estimated that SSA will continue to 

make improper payments of approximately $461.6 million annually until 

these reviews are completed. Furthermore, SSA estimates a net program 

savings of about $9, on average, for every $1 invested in conducting 

CDRs.

In commenting on the June 2012 report on which this analysis is based, 

SSA generally agreed that it should complete more CDRs for SSI children 

but emphasized that it is constrained by limited funding and competing 

workloads. Moving forward, one of the goals in SSA’s Fiscal Year 2014-

2018 Strategic Plan is to strengthen the integrity of the agency’s 

programs. In line with this goal, SSA requested additional program 

integrity funding for fiscal year 2015 to enable the agency to conduct 

more CDRs, and Congress made these funds available. While additional 

funding may help address the CDR backlog, GAO continues to have

 

8

To perform this analysis, GAO considered two potential sources of cost savings: (1) 

addressing the CDR backlog for children with mental impairments who are expected to 

medically improve or for whom medical improvement is possible and (2) conducting future 

CDRs for these recipients, as scheduled. We considered such factors as the average 

cessation rate after appeals, average benefit amount, average amount of time in benefit 

receipt before age 18, and average cost of performing a CDR. 

Actions Needed and 

Potential Financial or 

Other Benefits

Agency Comments 

and GAO’s Evaluation
 

Page 173 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

concerns about the agency’s ability to manage its resources in a manner 

that adequately balances its service delivery priorities with its stewardship 

responsibility. Because SSA has noted that it considers SSI childhood 

CDRs to be a lower priority than other CDRs, it is unclear whether the 

agency will use new increases in funding to review children most likely to 

medically improve—reviews that could yield a high return on investment.

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

comment. SSA provided technical comments, which were incorporated as 

appropriate.

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

products in the related GAO products section and additional work GAO 

conducted. For the June 2012 report, GAO interviewed SSA officials; 

reviewed relevant federal laws, regulations, and guidance; and analyzed 

SSA data on CDRs conducted from fiscal years 2000 to 2011. For the 

April 2014 testimony, GAO reviewed SSA data from March and April 

2014. To estimate potential cost savings, GAO used fiscal year 2011 data 

to estimate the savings that could be realized from (1) addressing the 

CDR backlog for children with mental impairments who are expected to 

medically improve or for whom medical improvement is possible and (2) 

conducting future CDRs for these recipients, as scheduled.

Table 16 in appendix V lists the program GAO identified that might have 

opportunities for cost savings.

Social Security Disability Programs: SSA Could Take Steps to Improve Its 

Assessment of Continued Eligibility. GAO-14-492T. Washington, D.C.: 

April 9, 2014.

Supplemental Security Income: Better Management Oversight Needed for 

Children’s Benefits. GAO-12-497. Washington, D.C.: June 26, 2012.

For additional information about this area, contact Daniel Bertoni at (202) 

512-7215 or bertonid@gao.gov.

How GAO Conducted 

Its Work

Related GAO 

Products

Contact Information
Page 174 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities

22. Supplemental Nutrition Assistance 

Program Fraud and Abuse

States should be able to more effectively fight fraud among beneficiaries of the Supplemental Nutrition 

Assistance Program—which provided more than $76 billion in benefits in fiscal year 2013—by using data to 

better focus investigative efforts on high-risk households. 

In fiscal year 2013, the federal government provided more than $76 billion 

in benefits to help about 48 million people purchase food through the 

Supplemental Nutrition Assistance Program (SNAP). Since fiscal year 

2009, SNAP has experienced an over 50 percent increase in distributed 

benefits and an over 40 percent increase in recipients following the Great 

Recession. Rapid program growth can increase the potential for fraud 

unless appropriate agency controls are in place to help minimize these 

risks. Furthermore, program officials have had long-standing concerns 

that some recipients falsify information to improperly receive benefits, or 

misuse their benefits to solicit or obtain non-food goods, services, and 

cash—a practice known as trafficking.1 The Office of Management and 

Budget has designated SNAP as a “high error” program due to the 

estimated dollar amount in improper payments for fiscal year 2013, which 

increased from $1.7 billion in 2009 to $2.6 billion in 2013.2

The goal of SNAP, formerly known as the federal Food Stamp Program, 

is to help low-income individuals and households obtain a more nutritious 

diet. The federal government pays the full cost of the benefits. It also

shares the responsibility and costs of administering the program with the 

states. Specifically, the Food and Nutrition Service (FNS), within the 

Department of Agriculture, is responsible for promulgating program 

regulations and ensuring that states comply with these regulations by 

issuing guidance and monitoring their activity. FNS also determines which 

retailers are eligible to accept SNAP benefits and investigates and 

resolves cases of retailer fraud. State officials, on the other hand, are 

responsible for determining the eligibility of individuals and households, 

According to a 

September 2012 U.S. Department of Agriculture Office of Inspector 

General report, the magnitude of program abuse due to recipient fraud is 

unknown because states do not have uniform ways of compiling the data 

that would provide such information.

 

1

Intentional program violations, such as trafficking, may result in temporary or permanent 

disqualification from the program. 7 U.S.C. § 2015(b), 7 C.F.R. § 273.16. Furthermore, 

under federal law, it is illegal for a person to knowingly use, transfer, acquire, or possess 

SNAP benefits in any manner that is contrary to the laws and regulations that govern the 

SNAP program. 7 U.S.C. § 2024(b). The statute applies to program recipients and 

retailers as well as people not participating in the program.

2

This dollar amount represents benefits distributed in error due to administrative as well as 

recipient errors, not all of which can be attributed to fraud.

Why This Area Is 

Important
 

Page 175 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

calculating the amount of their monthly benefits, and issuing such benefits 

on an electronic benefit transfer (EBT) card in accordance with program 

rules. States are also responsible for investigating possible violations by 

benefit recipients and pursuing and acting on those violations that are 

deemed intentional.3 States may pursue disqualification and repayment of 

ill-gotten or misused benefits in cases where a recipient has intentionally 

violated program rules. Intentional program violations include acts of 

fraud, such as making false or misleading statements in order to obtain 

benefits and trafficking. Trafficking activities may involve a recipient

selling their EBT card to another person who does not return the card. A 

recipient may then report the trafficked EBT card as lost or stolen to state 

agencies or EBT management contractors and receive a new card that

can be used for future transactions when the benefits are replenished the 

next month. 

In August 2014, GAO reported that FNS requires that states examine 

replacement card data as a potential indicator of trafficking, but states 

reported difficulties using the data as a fraud detection tool. In 2014, FNS 

began requiring states to monitor replacement card data and send notices 

to those SNAP households requesting excessive replacement cards, 

defined as at least four cards in a 12-month period. Officials in the 11 

states that GAO interviewed reported tracking recipients who make 

excessive requests for replacement EBT cards, as required by FNS, but 

said they have not had much success in detecting fraud through that 

method as many of the replacement card requests are due to unstable 

living situations or misunderstanding how to use the EBT card rather than 

trafficking. While 4 states reported that they had not initiated any 

trafficking investigations as a result of the monitoring, 5 states reported 

low success rates for such investigations, and 1 state had just started

tracking the data. Only 1 state reported some success using the data to 

pursue trafficking. Furthermore, officials from 7 of the 11 states reported 

that the current detection approach specified by FNS often leads them to 

people who make legitimate requests for replacement cards for reasons 

such as unstable living situations or a misunderstanding of how to use the 

SNAP EBT card. FNS is aware of states’ concerns about the 

effectiveness of this effort, but it continues to stress that monitoring these 

data is worthwhile.

In August 2014, GAO reported on an alternative, more targeted approach 

to analyzing high-risk replacement card data that may offer states a way 

to better use the data as a fraud detection tool. Specifically, GAO 

analyzed fiscal year 2012 replacement card data in three selected 

states—Michigan, Massachusetts, and Nebraska—using an approach 

aimed at better identifying SNAP households requesting replacement 

cards that are at higher risk of trafficking benefits. GAO’s approach took 

 

3

7 C.F.R. § 273.16.

What GAO Found
 

Page 176 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

into account FNS’s regulation that defines excessive replacement cards 

as at least four requested in a year. However, GAO also considered the 

monthly benefit period of replacement card requests by focusing on 

SNAP households receiving replacement cards in four or more unique 

monthly benefit periods in a year. SNAP benefits are allotted on a 

monthly basis, and a recipient who is selling the benefits on their EBT 

card and then requesting a replacement card would generally have only 

one opportunity per month to do so. If a SNAP recipient is requesting a 

replacement card because they have just sold their EBT card and its 

associated SNAP benefits, it is unlikely that there would be more benefits 

to sell until the next benefit period. As a result, additional replacement 

card requests in the same benefit period may not indicate increased risk 

of trafficking. For SNAP households from the three selected states that 

received replacement cards in four or more monthly benefit periods, GAO 

then analyzed related purchase transaction data for trafficking indicators 

based on certain suspicious transaction types used by FNS and state 

SNAP officials. Through these analyses, GAO found that 73 percent of 

households that received replacement cards in four or more monthly 

benefit periods also made purchases indicating potential SNAP 

trafficking.

The current FNS regulation includes households for review that received 

at least four replacement cards at any time in the previous year, including 

households receiving four cards in the same monthly benefit period. 

However, GAO’s analysis indicates that the number of benefit periods 

with replacement cards may be a better indicator of trafficking risk than 

simply the number of requested replacement cards. Furthermore, this 

more targeted approach may reduce the number of households for further 

review. For example, GAO’s approach in the three states reduced the

number of households for further review by 33 percent compared to the 

current FNS regulation. 

As reported in August 2014, GAO identified 7,537 SNAP recipient 

households in these three selected states that both received replacement 

cards in four or more monthly benefit periods in fiscal year 2012, and 

made transactions considered to be potential signs of trafficking around 

the time of replacement card issuance, as shown in the table below. 

These 7,537 households made over $26 million in total purchases with 

SNAP benefits during fiscal year 2012. 
 

Page 177 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

SNAP Households Receiving Excessive Replacement Cards and Making Transactions Potentially Indicative of Trafficking in 

Fiscal Year 2012

State 

SNAP households with:

4+ replacement cards

Replacement cards

in 4+ benefit periods

Suspicious transactions

and cards in 4+ benefit periods

Michigan 8,190 4,935 3,183

Massachusetts 6,380 4,786 4,008

Nebraska 697 549 346

Total 15,267 10,270 7,537

Source: GAO analysis of Supplemental Nutrition Assistance Program (SNAP) transaction data. | GAO-15-404SP

GAO analyzed the data for trafficking indicators based on suspicious 

transaction types already used by FNS and state SNAP officials, such as 

unusually large-dollar transactions or even-dollar transactions. GAO 

found that by comparing the number of benefit periods with replacement 

cards and the total number of transactions flagged for potential trafficking, 

states may be able to better identify those households that may be at 

higher risk of trafficking. For example, as shown in the figure below, while 

there were 4,935 SNAP households in Michigan that received excessive 

replacement cards, GAO identified just 39 households that received

excessive replacement cards and made transactions resulting in 10 or 

more trafficking flags. While state SNAP officials may not want to limit 

their investigations to such a small number of households, this type of 

analysis may help provide a starting point for identifying higher priority 

households for further review. The more targeted approach may also be 

particularly helpful given that states reported having limited resources for 

conducting investigations. 

FNS officials stated that, in light of the challenges using replacement card 

data as a fraud detection tool, they are working on how to better link 

excessive replacement card requests to potential trafficking. To inform 

these efforts, FNS has commissioned a study focused on detecting 

indications of potential trafficking by those requesting excessive 

replacement cards. However, FNS officials reported that it is too early to 

provide additional guidance or draw conclusions about the effectiveness 

of current efforts, but said they intend to provide more guidance to states 

once they have further data to inform a fraud detection methodology. A 

crucial element to an effective fraud prevention framework is resources 

and tools to continually monitor and detect potential fraud. Given 

limitations to state investigative resources, efficient antifraud activities and 

detection tools are critical.
 

Page 178 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

Targeting Potential Supplemental Nutrition Assistance Program (SNAP) Benefit Trafficking Using Replacement Card and 

Transaction Data to Identify Higher Risk Households in Michigan, Fiscal Year 2012

To help states better pursue SNAP recipient fraud, GAO recommended in 

August 2014 that the Secretary of Agriculture direct the Administrator of 

FNS to 

• establish additional guidance to help states analyze SNAP transaction 

data to better identify SNAP recipient households receiving 

replacement cards that are potentially engaging in trafficking, and 

assess whether the use of replacement card benefit periods may 

better focus this analysis on high-risk households potentially engaged 

in trafficking.

According to a September 2012 U.S. Department of Agriculture Office of 

Inspector General report, the magnitude of SNAP program abuse due to 

recipient fraud is unknown because states do not have uniform ways of 

compiling the data that would provide such information. As a result, the 

extent of recipient fraud that may be detected through an effective 

replacement card tool is also unknown. For these reasons, GAO cannot 

Actions Needed and 

Potential Financial or 

Other Benefits
 

Page 179 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

quantify the potential financial benefits associated with the recommended 

actions.

In commenting on the August 2014 report on which this analysis is based, 

FNS agreed with the recommendation and reported that efforts are under

way to address it. For example, as of August 2014, FNS had 

commissioned studies to help inform its efforts to assist states in 

developing better recipient fraud detection tools, including potentially 

issuing new guidance.

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

comment. FNS provided written comments. In their comments FNS stated 

that they are continuing efforts to help states better identify trafficking and 

effectively utilize replacement card data as a potential indicator. 

Specifically, FNS reported completing its analysis of recipient fraud 

prevention and detection in 2 of 7 state agencies currently being reviewed 

(New York and Pennsylvania) in 2014, resulting in over 100 

recommendations to strengthen state trafficking prevention strategies. 

Furthermore, FNS reported that it conducted data mining activities of 

state household and SNAP transaction data in these two states to create 

models to help better detect program fraud. FNS also reported that an 

analysis conducted with their contractor indicated replacement card data 

was the single greatest indicator of potential trafficking in New York. FNS 

reported that it will provide additional technical assistance in fiscal year 

2015 to help states implement the results of these studies. Furthermore, 

FNS stated that it is continuing the effort to study fraud prevention in 2015 

and plans to deliver final reports for the remaining 5 state agencies being 

reviewed, including South Carolina, Wisconsin, California (Los Angeles 

County), Kansas, and Texas, by September 30, 2015.

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

product listed in the related GAO products section. To determine how 

selected state agencies are pursuing SNAP recipient fraud, GAO 

interviewed knowledgeable state and local officials in 11 states about 

their recipient antifraud work and obtained related documentation. These 

11 states were selected based on geographic dispersion, SNAP payment 

error rates, percentage of the total number of SNAP households 

nationwide, and the percentage of recipients they reported as disqualified 

from the program due to noncompliance. GAO selected the 11 states to 

review to achieve variation on each of these selection criteria. To assess 

the effectiveness of replacement card data as a state fraud detection tool, 

GAO analyzed replacement card data for SNAP households in 3 of the 11 

selected states—Michigan, Massachusetts, and Nebraska. GAO selected 

these three states to include high, medium, and low percentages of the 

total number of SNAP households nationwide. GAO analyzed fiscal year 

2012 data to determine the number of households receiving replacement 

cards in four or more monthly benefit periods. GAO then obtained fiscal 

year 2012 transaction data from FNS for those households and analyzed 

the transaction data for suspicious transactions indicating potential 

Agency Comments 

and GAO’s Evaluation

How GAO Conducted 

Its Work
 

Page 180 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

trafficking that occurred during the same benefit period when a household 

received a replacement card. GAO tested the transaction data for six 

different suspicious transaction types that were reported as commonly 

used by FNS and state SNAP officials to identify potential trafficking. At 

the request of SNAP officials to maintain confidentiality over their fraud 

detection methods, GAO did not include descriptions of all six transaction 

tests in the report. 

Table 17 in appendix V lists the programs GAO identified that might have 

opportunities for cost savings.

Supplemental Nutrition Assistance Program: Enhanced Detection Tools 

and Reporting Could Improve Efforts to Combat Recipient Fraud. 

GAO-14-641. Washington, D.C.: August 21, 2014.

For additional information about this area, contact Seto J. Bagdoyan at 

(202) 512-6722 or bagdoyans@gao.gov.

Related GAO 

Products

Contact Information
Page 181 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities

Information Technology

23. Federal Software Licenses

In order to achieve hundreds of millions of dollars in government-wide savings, federal agencies should apply 

better management of software licenses and the Office of Management and Budget should issue a directive to 

assist agencies in doing so. 

The federal government plans to spend almost $80 billion on information 

technology (IT) products and services in fiscal year 2015, such as 

purchases of software licenses. According to the Information Technology 

Infrastructure Library’s Guide to Software Asset Management, software 

licenses are legal rights to use software in accordance with terms and 

conditions specified by the software copyright owner.

1 Federal agencies 

engage in thousands of licensing agreements annually. The Office of 

Management and Budget (OMB) and the 24 federal agencies covered by 

the Chief Financial Officers Act of 1990 have key roles and 

responsibilities for overseeing IT investment management.2 OMB is 

responsible for working with agencies to ensure investments are 

appropriately planned and justified pursuant to the Clinger-Cohen Act of 

1996.3 The law also places responsibility for managing investments with 

the heads of agencies and establishes chief information officers to advise 

and assist agency heads in carrying out this responsibility.4

Two executive orders contain information for federal agencies relative to 

the management of software licenses. In particular, Executive Order

13103 specifies that each agency shall adopt policies and procedures to 

ensure that the agency uses only computer software not in violation of 

copyright laws.5

 

1

Colin Rudd, ITIL v.3 Guide to Software Asset Management © (2009), ISBN 

9780113311064. Reprinted with permission from ITIL. The guide is available at: 

http://www.axelos.com/Publications-Library/IT-Service-Management-ITIL/.

These procedures may include information on preparing 

agency software inventories. Additionally, as part of Executive Order 

13589, on promoting efficient spending, agencies are required to assess 

current device inventories and usage, and establish controls to ensure 

2

The 24 major federal agencies covered by the Chief Financial Officers Act of 1990 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; Environmental 

Protection Agency; General Services Administration; National Aeronautics and Space 

Administration; National Science Foundation; Nuclear Regulatory Commission; Office of 

Personnel Management; Small Business Administration; Social Security Administration; 

and U.S. Agency for International Development.

3

40 U.S.C §§ 11302-11303.

4

40 U.S.C §§ 11312, 11313, and 11315. 

5

Executive Order 13103, Computer Software Piracy, 63 Fed. Reg. 53273 (Sept. 30, 

1998).

Why This Area Is 

Important
 

Page 182 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

that they are not paying for unused or underutilized IT equipment, 

installed software, or services. 6

The objective of software license management is to manage, control, and 

protect an organization’s software assets, including management of the 

risks arising from the use of those software assets.

 

7 Proper management 

of software licenses helps to minimize risks by ensuring that licenses are 

used in compliance with licensing agreements and cost-effectively 

deployed, and that software purchasing and maintenance expenses are 

properly controlled. In addition, effective management can help avoid 

purchasing too few licenses, which results in noncompliance with license 

terms and may cause the imposition of additional fees.

In May 2014, GAO reported on federal agencies’ management of 

software licenses and the potential for achieving significant savings 

government-wide.

8 Specifically, GAO found OMB and the vast majority of 

agencies reviewed did not have adequate policies for managing software 

licenses. While OMB had a policy on a broader IT management initiative 

that is intended to assist agencies in gathering information on their IT 

investments, including software licenses, it did not guide agencies in 

developing comprehensive license management policies comprised of the 

seven elements identified in GAO’s May 2014 report. 9

 

6

Executive Order 13589, Promoting Efficient Spending, 76 Fed. Reg. 70863 (Nov. 9, 

2011).

Of the 24 major 

federal agencies, 2 had comprehensive policies that included the 

establishment of clear roles and central oversight authority for managing 

enterprise software license agreements, among other things; 18 had 

policies but they were not comprehensive; and 4 had not developed any 

policy. The weaknesses in agencies’ policies were due, in part, to the lack 

7

Colin Rudd, ITIL v.3 Guide to Software Asset Management © (2009), ISBN 

9780113311064. Reprinted with permission from ITIL. The guide is available at: 

http://www.axelos.com/Publications-Library/IT-Service-Management-ITIL/.

8

GAO, Federal Software Licenses: Better Management Needed to Achieve Significant 

Savings Government-Wide, GAO-14-413 (Washington, D.C.: May 22, 2014).

9

The seven elements that a comprehensive software license policy should specify are (1) 

identify clear roles, responsibilities, and central oversight authority within the department 

for managing enterprise software license agreements and commercial software licenses; 

(2) establish a comprehensive inventory (80 percent of software license spending and/or 

enterprise licenses in the department) by identifying and collecting information about 

software license agreements using automated discovery and inventory tools; (3) regularly 

track and maintain software licenses to assist the agency in implementing decisions 

throughout the software license management life cycle; (4) analyze software usage and 

other data to make cost-effective decisions; (5) provide training relevant to software 

license management; (6) establish goals and objectives of the software license 

management program; and (7) consider the software license management life-cycle 

phases (i.e., requisition, reception, deployment and maintenance, retirement, and disposal 

phases) to implement effective decision making. GAO identified these elements by 

interviewing six recognized software license management experts from the private and 

federal sectors and then comparing and synthesizing the information. 

What GAO Found
 

Page 183 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

of a priority for establishing software license management practices and a 

lack of direction from OMB. GAO concluded that without an OMB 

directive and comprehensive agency policies, it will be difficult for the 

agencies to consistently and effectively manage software licenses.

Additionally, GAO reported that federal agencies were generally not 

following the leading practices GAO identified for managing software 

licenses.10

Summary of Results for 24 Major Agencies’ Implementation of Software Licenses Management Leading Practices

In May 2014, GAO identified five leading practices: centralizing 

management; establishing a comprehensive inventory of licenses; 

regularly tracking and maintaining comprehensive inventories using 

automated discovery and inventory tools and metrics; analyzing the 

software license data to inform investment decisions and identify 

opportunities to reduce costs; and providing appropriate personnel with 

sufficient training on software license management. The table below lists 

the leading practices and the number of agencies that had fully, partially, 

or not implemented them. 

Leading practice Fully implemented Partially implemented Not implemented

Centralized management 4 15 5 

Established software license inventory 2 20 2 

Tracking and maintaining inventory 0 20 4 

Analyzing software license data 0 15 9 

Providing sufficient training 0 5 19 

Source: GAO analysis of agency data as reported in GAO-14-413. | GAO-15-404SP

The inadequate implementation of leading practices in software license 

management was partially due to weaknesses in agencies’ policies. As a 

result, agencies are limited in their ability to analyze software license data 

to more cost-effectively buy and maintain software licenses and to 

ascertain the software applications most widely used across the federal 

government. Consequently, while some agencies were able to identify 

millions in savings for software through ad hoc processes, the potential 

exists for even greater savings and additional opportunities to reduce 

software license spending and duplication than what agencies had 

reported, including the following examples:

• In fiscal year 2012, one major federal agency reported saving 

approximately $181 million by consolidating its enterprise license 

agreements even though its oversight process was ad hoc.

 

10In its May 2014 report, GAO identified five leading practices for software license 

management by interviewing six recognized software license management experts from 

the private and federal sectors and then comparing and synthesizing the practices that 

were identified.
 

Page 184 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

• In fiscal year 2013, another major agency reported cost savings of 

approximately $33 million by consolidating major IT contracts, 

including Cisco and Microsoft licenses, to achieve efficiencies. 

• Finally, in fiscal year 2012, a major agency reported that it negotiated 

an enterprise license agreement to reduce costs associated with 

software products used, providing the agency approximately $13 

million in cost savings in fiscal year 2012 and $37 million in net cost 

avoidance for fiscal year 2013. 

Until OMB and the agencies focus on improving policies and processes, 

they will not have the data to manage software licenses and will likely 

continue to miss opportunities to reduce costs.

GAO recommended in May 2014 that the Director of OMB 

• issue a directive to the agencies on developing comprehensive 

software licensing policies comprised of the seven elements of a 

comprehensive policy. 

GAO also made recommendations to the 24 reviewed agencies to 

improve their policies and practices for managing software licenses by 

including all elements of comprehensive policies for the management of 

software licenses or adopting leading practices. Specifically, GAO 

recommended the following:

• Twenty-two of the 24 agencies should develop an agency-wide 

comprehensive policy for the management of software licenses that 

addresses the weaknesses we identified.11

• Twenty of the 24 agencies should employ a centralized software 

license management approach that is coordinated and integrated with 

key personnel for the majority of agency software license spending 

and/or enterprise-wide licenses.12 

• Twenty-two of the 24 agencies should establish a comprehensive 

inventory of software licenses using automated tools for the majority 

of agency software license spending and/or enterprise-wide 

licenses.13 

 

11GAO did not make recommendations to the Departments of Homeland Security and 

Labor.

12GAO did not make recommendations to the Department of Housing and Urban 

Development, General Services Administration, National Science Foundation, and U.S. 

Agency for International Development.

13GAO did not make recommendations to the Department of Housing and Urban 

Development and National Science Foundation.

Actions Needed and 

Potential Financial or 

Other Benefits
 

Page 185 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

• Each of the 24 agencies should regularly track and maintain a 

comprehensive inventory of software licenses using automated tools 

and metrics. 

• Each of the 24 agencies should analyze agency-wide software license 

data, such as costs, benefits, usage, and trending data, to identify 

opportunities to reduce costs and better inform investment decision 

making. 

• Each of the 24 agencies should provide software license management 

training to appropriate agency personnel addressing contract terms 

and conditions, negotiations, laws and regulations, acquisition, 

security planning, and configuration management. 

Taking these actions—a total of 136 actions across OMB and the 24 

agencies—should provide greater assurance that OMB and the agencies 

will identify opportunities to reduce software license spending and 

duplication, and therefore realize the full potential of cost savings for the 

federal government. Due to the lack of agency-wide data on software 

licenses, such as inventories and costs, it is not possible to estimate the 

full extent of potential cost savings associated with the implementation of 

these management practices and policies. The federal government has 

so far achieved at least $250 million in savings, but GAO’s analysis 

suggests that implementing these recommendations could result in 

additional savings. 

In commenting on GAO’s May 2014 report, OMB disagreed with GAO’s 

recommendation to issue a directive. In particular, OMB cited two 

additional management initiatives that it asserted have significant bearing 

in the area of software licensing that were not included in GAO’s report.14

 

14These two initiatives are known as “Maximizing Use of SmartBuy and Avoiding 

Duplication” and “Cross Agency Priority Goal: Cybersecurity.” 

While GAO agrees that OMB’s initiatives collectively represent important 

management tools for agencies, they are not enough to guide agencies in 

developing comprehensive license management policies. Additionally, of 

the 24 agencies that GAO made specific recommendations to, 11 agreed, 

5 partially agreed, 2 neither agreed nor disagreed, and 6 had no 

comments. In a subsequent GAO report in September 2014, GAO 

described OMB and agencies’ current and planned actions to address 

these recommendations. GAO found that 21 agencies planned to fully 

address all recommendations. Three agencies reported that they planned 

to address most recommendations but not all, primarily because they 

partially disagreed with the prior report’s findings or did not provide 

information on their efforts to address the recommendations made. 

Finally, OMB continued to disagree with GAO’s recommendation to issue 

a directive to help guide agencies’ management of software licenses and 

as a result, does not have plans to address this recommendation. GAO 

Agency Comments 

and GAO’s Evaluation
 

Page 186 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

maintains that OMB should develop a directive because as GAO’s May 

2014 report shows, only 2 of the 24 major agencies have comprehensive 

policies in place, and only 2 have comprehensive license inventories. 

Until this gap in guidance is addressed, agencies will likely continue to 

lack visibility into what needs to be managed. In summary, of the 136 

recommendations made in the May 2014 report, agencies have planned 

actions for 129 recommendations, no actions are planned for 6, and the 

status is unknown for 1.

Recently, GAO provided a draft of this report section to OMB and the 24 

major agencies for review and comment. OMB and 22 of the major 

agencies stated that they have no comment. One agency (the 

Department of Housing and Urban Development), in written comments, 

stated that it would be in full compliance with software license 

management policies and industry best practices once corrective actions 

have been fully implemented. 

The remaining agency (the Department of Energy), in written comments, 

maintained the position that it has an agency-wide comprehensive policy 

for the management of software licenses. The department further stated 

that GAO failed to recognize the federal government’s improvement 

actions to leverage current federal initiatives, and agreed with OMB’s 

response to GAO in the May 2014 report. However, GAO continues to 

believe that actions are needed at the Department of Energy to address 

weaknesses. As noted in the May 2014 report, the department has 

visibility into only 45 percent of its licenses due in part to its decentralized 

management approach. Until the department adopts a more centralized 

approach, it will likely not be adequately positioned to take advantage of 

OMB’s current initiatives. 

The information contained in this analysis is based primarily on findings 

from the May 2014 report listed in the related GAO products section. 

GAO assessed policies from the 24 Chief Financial Officers Act agencies 

and OMB against software licensing policy measures. Specifically, GAO 

obtained and analyzed policy documents, such as agency and 

departmental guidance, policies, procedures, and standard operating 

procedures, and compared them to the seven elements. GAO also 

obtained information through interviews with officials responsible for 

software license management activities. Further, to assess the extent to 

which OMB has appropriate guidance on software license management, 

GAO collected and analyzed OMB guidance on the PortfolioStat and 

Strategic Sourcing initiatives to determine its efforts to oversee federal 

agencies’ management of software licenses. GAO then compared these 

efforts to relevant statutes and executive orders and also interviewed 

OMB officials to identify their views on whether the relevant guidance for 

software license management to federal agencies is appropriately 

established. GAO also analyzed and compared agencies’ software 

inventories and management controls to leading practices, and 

interviewed responsible officials. To identify sound licensing policy 

measures and leading practices, GAO interviewed recognized private 

How GAO Conducted 

Its Work
 

Page 187 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

sector and government software license management experts and then 

compared and synthesized the practices that were identified. To describe 

agencies’ current or planned actions for the September 2014 

correspondence listed in the related GAO products section, GAO 

obtained and reviewed OMB and the 24 major agencies’ reported 

statement of actions about their efforts to address the recommendations 

and also gathered relevant information from agencies’ comments on 

GAO’s May 2014 report.15

Federal Software Licenses: Most Agencies Have Reported Planned 

Actions to Address Our Prior Recommendations on Software License 

Management. GAO-14-835R. Washington, D.C.: September 23, 2014.

Federal Software Licenses: Better Management Needed to Achieve 

Significant Savings Government-Wide. GAO-14-413. Washington, D.C.: 

May 22, 2014.

For additional information about this area, contact Carol R. Cha at (202) 

512-4456 or chac@gao.gov. 

 

15Federal agencies are required to submit to specified congressional committees a written 

statement of actions taken on GAO’s recommendations. 31 U.S.C. § 720.

Related GAO 

Products

Contact Information
Page 188 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities

Social Services

24. Disaster Relief Fund Administrative Costs

Cost savings of millions of dollars could be realized if Federal Emergency Management Agency officials 

enhance their oversight of the agency’s administrative costs obligated from the Disaster Relief Fund for major 

disasters. 

Presidents declared 650 major disasters during the 10 fiscal years from 

2004 through 2013, which was 32 percent more than the 494 major 

disasters declared during the preceding 10 fiscal years. This growth in 

major disaster declarations has led to increased federal obligations, 

including increased administrative costs from the Federal Emergency 

Management Agency's (FEMA) Disaster Relief Fund (DRF). For each 

major disaster, FEMA obligates funds from the DRF to cover its 

administrative costs—that is, costs that support the delivery of disaster 

assistance. Examples of FEMA administrative costs include the salary 

and travel costs for the disaster workforce, rent and security expenses 

associated with field operation locations, and supplies and information 

technology for field operation staff. FEMA obligated $12.7 billion from the 

DRF to cover its administrative costs for the 650 major disasters declared 

during fiscal years 2004 through 2013.

In December 2014, GAO reported that FEMA’s average annual 

administrative cost percentage (i.e., the percentage of total costs devoted 

to administrative costs) for major disasters had doubled since fiscal year 

1989. As shown in the figure below, FEMA’s average administrative cost 

percentage was 18 percent in fiscal year 2013 compared to an average of 

7 percent in fiscal year 1989.1

 

1

GAO calculated a major disaster’s administrative cost percentage by dividing FEMA’s 

administrative cost obligations by total obligations for the disaster. The annual average 

administrative cost percentage is the average of the administrative cost percentages of 

disasters that were declared during that fiscal year.

Why This Area Is 

Important

What GAO Found
 

Page 189 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

Average Annual Administrative Cost Percentages for 1,332 Major Disasters Declared during Fiscal Years 1989 through 2013

GAO further reported that, since fiscal year 2010, FEMA officials have 

taken actions intended to better manage and control the agency’s 

administrative costs for major disasters. For example, in November 2010, 

the FEMA Administrator issued guidance to managers responsible for 

overseeing administrative costs that included best practices for

determining staffing levels for field operations.2

Administrative Cost Goals. In September 2012, GAO reported that 

FEMA’s November 2010 management guide included target ranges for 

administrative cost percentages—for example, small disasters have an 

administrative cost percentage target range of 12 percent to 20 percent.

However, since fiscal year 

2010 there has not been a significant decrease in FEMA’s administrative 

costs. As discussed below, in past reports GAO identified some steps 

FEMA officials could take to more efficiently and effectively meet the 

agency’s goals to reduce and better control administrative costs for major 

disasters.

3

 

2

FEMA, Achieving Efficient JFO Operations: A Guide for Managing Staffing Levels and 

Administrative Costs (Washington, D.C.: November 2010).

However, the agency does not consider the targets formal guidance and 

does not hold its officials accountable for meeting the targets. FEMA did 

not require that the targets be met because, according to FEMA officials, 

3

According to the management guide, FEMA categorizes major disasters using three 

event levels—essentially small, medium, or large—based on the amount of federal 

funding obligated for disaster assistance. Large disasters have projected disaster 

assistance of $500 million to $5 billion, medium disasters have projected disaster 

assistance from $50 million to $500 million, and small disasters have projected disaster 

assistance of less than $50 million.
 

Page 190 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

the agency’s intent was to provide general guidance rather than to 

stipulate a prescriptive policy or formula. GAO further reported that, 

according to FEMA’s strategic plan, the agency’s ability to analyze and 

evaluate the results of its plans, programs, and organizational initiatives is 

key to managing its strategic and long-range organizational goals. To 

help FEMA control its administrative costs, GAO recommended that 

FEMA implement goals for administrative cost percentages and monitor 

performance to achieve these goals. In July 2014, FEMA issued its 

Strategic Plan for 2014-2018, which includes a goal to reduce its average 

annual percentage of administrative costs, as compared with total 

program costs, by 5 percentage points, by the end of 2018. According to 

FEMA officials, the goal to reduce FEMA’s administrative costs reflects its 

importance to FEMA. In February 2015, FEMA reported that they are in 

the process of implementing GAO’s recommendation and plan to provide 

GAO an update by March 31, 2015.

Based on GAO’s analyses in December 2014, had FEMA met its target 

range for the 650 major disasters declared during fiscal years 2004 

through 2013, the agency’s administrative cost obligations could have 

been reduced by between $2.3 billion and $5.1 billion. Had FEMA met its 

target range for the 209 major disasters declared during fiscal years 2011 

through 2013—that is, the period since FEMA created its administrative 

cost targets—the agency’s administrative cost obligations could have 

been reduced by between $312 million and $841 million.

4

Integrated Plan. In December 2014, GAO reported that FEMA officials 

provided information on several ongoing efforts to reduce and better 

control its administrative costs, such as the November 2010 management 

guide. However, according to FEMA officials, they had not at that time

developed a plan that integrates the steps they are taking to better control 

and reduce costs, and that highlights clear roles and responsibilities, 

performance metrics, milestones, and a monitoring system to assess their 

progress. According to the Project Management Institute’s A Guide to the 

Project Management Body of Knowledge, which provides standards for 

project managers, specific goals and objectives should be 

conceptualized, defined, and documented in the planning process, along 

with the appropriate steps, time frames, and milestones needed to 

FEMA did not 

develop the target ranges until November 2010, and FEMA does not 

require its officials to stay within or below the target ranges. As a result, 

these amounts do not indicate the amount that FEMA could have saved 

during this period. Rather, these amounts can be used as an indication of 

the magnitude of potential cost savings in the future if the target ranges 

are met.

 

4

According to the management guide, small disasters have an administrative cost 

percentage target range of 12 percent to 20 percent. Medium disasters have an 

administrative cost percentage target range of 9 percent to 15 percent. Large disasters 

have an administrative cost percentage target range of 8 percent to 12 percent.
 

Page 191 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

achieve those results.5

In addition, according to FEMA officials, the agency has not designated 

an office or senior officials accountable for controlling administrative 

costs. For example, FEMA officials highlighted that it was unclear who 

had authority and responsibility to monitor and question staffing levels, 

even though staffing is the largest driver of administrative costs. 

According to the Standards for Internal Control in the Federal 

Government, managers should compare actual performance to planned 

or expected results throughout the organization and analyze significant 

differences; it also states that an agency’s organizational structure should 

clearly define key areas of authority and responsibility and establish 

appropriate lines of reporting.

Until FEMA creates a plan that integrates its

initiatives, FEMA will continue to lack assurance that it has an effective 

and efficient plan for reaching its goals to better control and reduce costs. 

6

Tracking Administrative Costs. In December 2014, GAO reported that 

FEMA does not track or analyze its administrative costs for major 

disasters by individual DRF program—including Public Assistance, 

Individual Assistance, and Hazard Mitigation.

As part of an integrated plan, designating 

an office or senior official with sufficient time, responsibility, authority, and 

resources can help improve FEMA’s accountability and progress. 

7

According to FEMA officials, gathering administrative cost data by DRF 

program would require additional resources and technical changes; 

however, the agency has not assessed the costs versus the benefits of 

For example, FEMA could 

tell GAO how much it obligated for its own administrative costs, in total, 

for the Hurricane Sandy disaster response, but not how much it has 

obligated for its administrative costs related to each DRF program. 

Without administrative cost data by program, neither GAO nor FEMA can 

determine whether increases in administrative cost percentages since 

fiscal year 1989 were greater for one program than for another, or greater 

for certain components, such as staffing for a particular DRF program. 

 

5

Project Management Institute, A Guide to the Project Management Body of Knowledge 

(PMBOK® Guide), Fifth Edition (Newtown Square, Pennsylvania: 2013). GAO has used A 

Guide to the Project Management Body of Knowledge to provide criteria in previous 

reports, including GAO, Nonproliferation and Disarmament Fund: State Should Better 

Assure the Effective Use of Program Authorities, GAO-13-83 (Washington, D.C.: Nov. 30, 

2012).

6

GAO/AIMD-00-21.3.1. 

7

The Individual Assistance program provides for the necessary expenses and serious 

needs of disaster victims that cannot be met through insurance or low-interest Small 

Business Administration loans. For example, FEMA may provide temporary housing 

assistance, counseling, unemployment compensation, or medical expenses incurred as a 

result of a disaster. The Public Assistance program provides for debris removal; 

emergency protective measures; and the repair, replacement, or restoration of disasterdamaged, publicly owned facilities and the facilities of certain private nonprofit 

organizations that provide services otherwise performed by a government agency. Hazard 

Mitigation provides additional funds to states to assist communities in implementing longterm measures to help reduce the potential risk of future damages to facilities.
 

Page 192 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

tracking the data. FEMA officials stated that assessing the costs and 

benefits would be helpful, and they agreed that administrative costs 

should be tracked by program. According to Standards for Internal 

Control in the Federal Government, program managers need financial 

data to determine whether they are meeting their goals for accountability 

for effective and efficient use of resources. Further, FEMA’s 2014-2018 

Strategic Plan emphasizes the need for data-driven decision making.8 By 

assessing the costs and benefits of tracking administrative cost data by 

DRF programs, FEMA could determine whether such data could be 

useful for identifying long-term trends, controlling its administrative costs, 

and better tailoring its administrative costs to program delivery.

GAO recommended in September 2012 that the FEMA Administrator take 

the following action:

• Implement goals for administrative cost percentages and monitor 

performance to achieve these goals.

GAO recommended in December 2014 that the FEMA Administrator take 

the following actions:

• Develop an integrated plan to better control and reduce FEMA’s 

administrative costs for major disasters. The plan should include steps 

the agency will take to reduce administrative costs, milestones for 

accomplishing the reduction, and clear roles and responsibilities, 

including the assignment of senior officials or offices responsible for 

monitoring and measuring performance.

• Assess the costs versus the benefits of tracking FEMA’s 

administrative cost data for major disasters by Public Assistance, 

Individual Assistance, Hazard Mitigation, and Mission Assignment, 

and if feasible, track this information.

FEMA may realize cost savings by increasing the efficiency and 

effectiveness of processes related to administrative costs for major 

disasters. However, a precise estimate of cost savings cannot be 

quantified because GAO’s recommendations provided FEMA discretion in 

how it implements the recommendations. For example, GAO 

recommended that FEMA implement goals for administrative cost 

percentages, but GAO did not recommend specific goals. Therefore, it 

would be difficult for GAO to quantify potential cost savings from this 

recommendation.

 

8

FEMA, FEMA Strategic Plan 2014-2018 (July 2014).

Actions Needed and 

Potential Financial or 

Other Benefits
 

Page 193 GAO-15-404SP Cost Savings and Revenue Enhancement Opportunities 

In commenting on the December 2014 report on which this analysis is 

based, FEMA concurred with our recommendations and described 

planned actions to address them. GAO also provided a draft of this report 

section to FEMA for review and comment. In commenting on this report, 

FEMA stated that reducing administrative costs is a priority to the agency 

as reflected in its Strategic Plan for 2014-2018, and by its actions 

underway to address GAO’s recommendations.

The information contained in the analysis is based on findings from 

products listed in the related GAO products section. GAO obtained and 

analyzed FEMA’s obligations data for major disasters; interviewed 

officials from FEMA’s Office of Chief Financial Officer and the Office of 

Response and Recovery; and obtained and analyzed FEMA policies, 

procedures, and guidance specific to administrative costs. 

Table 18 in appendix V lists the programs GAO identified that might have 

opportunities for cost savings. 

Opportunities Exist to Strengthen Oversight of Administrative Costs for 

Major Disasters. GAO-15-65. Washington, D.C.: December 17, 2014.

Opportunities to Achieve Efficiencies and Strengthen Operations. 

GAO-14-687T. Washington, D.C.: July 24, 2014.

Improved Criteria Needed to Assess a Jurisdiction’s Capacity to Respond 

and Recover on Its Own. GAO-12-838. Washington, D.C.: 

September 12, 2012.

For additional information about this area, contact Chris Currie at (404) 

679-1875 or curriec@gao.gov.

Agency Comments 

and GAO’s Evaluation

How GAO Conducted 

Its Work

Related GAO 

Products

Contact Information
 

Page 194 GAO-15-404SP List of Congressional Addressees 

Appendix I: List of Congressional Addressees

The Honorable Thad Cochran

Chairman 

The Honorable Barbara A. Mikulski

Vice Chairwoman

Committee on Appropriations

United States Senate

The Honorable Mike Enzi

Chairman

The Honorable Bernie Sanders

Ranking Member

Committee on the Budget

United States Senate

The Honorable Ron Johnson

Chairman

The Honorable Thomas R. Carper

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 Tom Price

Chairman

The Honorable Chris Van Hollen

Ranking Member

Committee on the Budget

House of Representatives

The Honorable Jason Chaffetz 

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 195 GAO-15-404SP 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. 

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.1

 This report presents 12 areas of fragmentation, 

overlap, or duplication where greater efficiencies or effectiveness in 

providing government services may be achievable. We also highlighted 

12 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.2

 

1

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.

Since then, we continue to 

consider a variety of factors to determine whether such potential 

instances or opportunities identified in our routine audit work warrant 

2

See GAO-14-343SP. 

GAO’s Approach
 

Page 196 GAO-15-404SP Objectives, Scope, and Methodology 

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.

3

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 V that provide a 

detailed listing of federally-funded program names and associated 

budgetary information. While there is no standard definition for what 

constitutes a program, they may include grants, tax expenditures, 

 

3

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

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

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 197 GAO-15-404SP Objectives, Scope, and Methodology 

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 2013 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 approximately 440 actions in the 

188 areas4

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 440 actions within 

their areas of expertise. A core group of GAO staff examined all 

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. 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. 

 

4

To provide a more accurate picture of the progress made in the identified areas, starting 

in 2015, we are reporting the status of each action under each area (see appendix IV). 

New actions are assessed as pending. 

Assessing Status of 

Actions
 

Page 198 GAO-15-404SP Objectives, Scope, and Methodology 

assessments to ensure consistent and systematic application of the 

criteria, and made adjustments, as appropriate. 

We used the following criteria in assessing the status of actions.5

• 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.6

 

• 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, 2015, 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, or GAO’s quality 

assurance framework. Generally accepted government auditing

standards require that we plan and perform the audit to obtain sufficient, 

 

5

Based on subsequent audit work that we conducted, 12 actions reported in 2011 and 8 

actions reported in 2012 were not assessed this year, and we have categorized those 

areas and actions as “consolidated or other.” These actions have either been 

consolidated, redirected from a Congressional to an executive branch action, or revised to 

reflect updated information or data that we obtained. In addition, we added 19 new actions 

to areas on which we reported in 2011-2014, these newly added actions are listed in 

appendix III. The status of new actions has not yet been assessed.

6

On January 6th, 2015 the 114th United States Congress convened and all pending 

legislation from the 113th Congress expired. Therefore, all of the legislative branch actions 

that were assessed as partially addressed under the 113th Congress reverted to not 

addressed because the relevant bill was not enacted into law before the end of the 113th

Congress and no similar bill has passed out of committee in the 114th Congress as of 

March 6, 2015. 
 

Page 199 GAO-15-404SP Objectives, Scope, and Methodology 

appropriate evidence to provide a reasonable basis for our findings and 

conclusions based on our audit objectives. We believe that the evidence 

obtained provides a reasonable basis for our findings and conclusions 

based on our audit objectives. In addition, Area 16: U.S. Enrichment 

Corporation Fund was conducted from April 2014 to May 2014 under 

GAO’s quality assurance framework. We use GAO’s quality assurance

framework when we conduct routine nonaudits, such as technical 

assistance provided to Congress. GAO’s quality assurance framework 

requires that we plan and perform the engagement to meet our stated 

objectives and to discuss any limitations in our work. We maintain that the 

information and data obtained, and the analysis conducted, provide a 

reasonable basis for our findings and conclusions. 
 

Page 200 GAO-15-404SP New Actions 

Appendix III: New Actions of Fragmentation, 

Overlap, and Duplication Added to Existing 

Areas

As part of our April 2015 update of the Action Tracker, we are adding 19

new actions based on GAO reports that fall within the scope of six 

existing areas identified in prior fragmentation, overlap, and duplication 

annual reports. 

Table 1: New Actions to Existing Areas in 2015

Mission

Annual 

Report Area 

Associated 

GAO Product Actions Identified 

Agriculture 2011 Area 1:

Food Safety 

GAO-15-180 Action 1: Congress should consider formalizing the Food Safety Working 

Group through statute to help ensure sustained leadership across food 

safety agencies over time. 

Defense 2013 Area 20:

Joint Basing 

GAO-14-577 Action 1: To help ensure DOD’s approach to joint basing achieves the 

goals as outlined by DOD in its justification for the 2005 BRAC 

recommendation and leverages additional opportunities to reduce 

duplication of effort that could in turn generate cost savings and increased 

efficiencies, Congress should consider directing the Deputy Under 

Secretary of Defense (Installations and Environment), in collaboration with 

the military services and joint bases, to evaluate the purpose of the program 

and determine whether the current goals, as stated in the 2005 BRAC 

Commission recommendation, are still appropriate, or whether goals should 

be revised; communicate these goals to the military services and joint 

bases, and adjust program activities accordingly; provide direction to the 

joint bases on requirements for meeting program goals, including 

determining reporting requirements and milestones; and determine any next 

steps for joint basing, including whether to expand it to other installations.

General 

Government

2011 Area 66:

New Markets 

Tax Credits

GAO-14-500 Action 1: The Secretary of the Treasury should issue guidance on how 

funding or assistance from other government programs can be combined 

with the New Markets Tax Credit (NMTC), including the extent to which 

other government funds can be used to leverage the NMTC by being 

included in the qualified equity investment.

Action 2: The Secretary of the Treasury should ensure that controls are in 

place to limit the risk of unnecessary duplication at the project level in 

funding or assistance from government programs and to limit above market 

rates of return, i.e., returns that are not commensurate with the NMTC 

investor’s risk.

Action 3: The Secretary of the Treasury should ensure that the Community 

Development Financial Institutions Fund reviews the disclosure sheet that 

Community Development Entities (CDE) are required to provide to lowincome community businesses to determine whether it contains data that 

could be useful for the Fund to retain.

Action 4: The Secretary of the Treasury should ensure that the Community 

Development Financial Institutions (CDFI) Fund clarifies the instructions for 

reporting the amount of any equity which may be acquired by the lowincome community business at the end of the 7-year New Markets Tax 

Credit (NMTC) compliance period.

Action 5: The Secretary of the Treasury should also ensure that the 

Community Development Financial Institutions (CDFI) Fund clarifies the 

instructions it provides to Community Development Entities (CDE) about 

reporting loan performance and make the reporting of that data mandatory.
 

Page 201 GAO-15-404SP New Actions 

Mission

Annual 

Report Area 

Associated 

GAO Product Actions Identified 

General 

Government

2011 Area 17:

Tax 

Expenditures

GAO-13-518 Action 1: The Director of the Office of Management and Budget (OMB) 

should review whether all relevant tax expenditures that contribute to a 

cross-agency priority (CAP) goal have been identified, and as necessary, 

include any additional tax expenditures in the list of federal contributors for 

each goal.

Action 2: The Director of the Office of Management and Budget (OMB) 

should assess the contributions relevant tax expenditures are making 

toward the achievement of each cross-agency priority (CAP) goal.

Action 3: The Director of the Office of Management and Budget (OMB) 

should ensure that agencies adhere to OMB’s guidance for website updates 

by providing complete information about the organizations, program 

activities, regulations, tax expenditures, policies, and other activities—both 

within and external to the agency—that contribute to each Agency Priority 

Goal (APG).

Action 4: The Director of the Office of Management and Budget (OMB) 

should include tax expenditures in the federal program inventory effort by 

designating tax expenditure as a program type in relevant guidance.

Action 5: The Director of the Office of Management and Budget (OMB) 

should develop, in coordination with the Secretary of the Treasury, a tax 

expenditure inventory that identifies each tax expenditure and describes its 

definition, its purpose, and its related performance and budget information.

Health 2011 Area 18:

DOD-VA 

Health 

Records 

GAO-14-302 Action 1: To bring transparency and credibility to the Secretaries of 

Veterans Affairs and Defense’s assertion that the Department of Veterans 

Affairs’s (VA) and the Department of Defense’s (DOD) current approach to 

achieving an interoperable electronic health record will cost less and take 

less time than the previous single-system approach, the secretaries should 

(1) develop a cost and schedule estimate for their current approach, from 

the perspective of both departments, that includes the estimated cost and 

schedule of VA’s VistA Evolution program, DOD’s DOD Healthcare 

Management System Modernization (DHMSM) program, and the 

departments’ joint efforts to achieve interoperability between the two 

systems; then, compare the cost and schedule estimates of the 

departments’ current and previous (i.e., single-system) approaches. If the 

results of the comparison indicate that the departments’ current approach is 

estimated to cost more and/or take longer than the single-system approach, 

the secretaries should (1) provide a rationale for pursuing the current 

approach despite its higher cost and/or longer schedule and (2) report the 

cost and schedule estimates of the current and previous approaches, 

results of the comparison of the estimates, and reasons (if applicable) for 

pursuing a more costly or time-consuming approach to VA’s and DOD’s 

congressional authorizing and appropriations committees. 

Action 2: To better position the Departments of Veterans Affairs (VA) and 

Defense (DOD) to achieve an interoperable electronic health record, the 

Secretaries of Veterans Affairs and Defense should develop a plan that, at 

a minimum, describes (1) the clinical domains that the interoperable 

electronic health record will address; (2) a schedule for implementing the 

interoperable record at each VA and DOD location; (3) the estimated cost of 

each major component (i.e., VistA Evolution, DHMSM, etc.) and the total 

cost of the departments’ interoperability efforts; (4) the organizations within 

VA and DOD that are involved in acquiring, developing, and implementing 

the record, as well as the roles and responsibilities of these organizations; 

(5) major risks to the departments’ interoperability efforts and mitigation 

plans for those risks; and (6) the departments’ approach to defining, 

measuring, tracking, and reporting progress toward achieving expected 

performance (i.e., benefits and results) of the interoperable record.
 

Page 202 GAO-15-404SP New Actions 

Mission

Annual 

Report Area 

Associated 

GAO Product Actions Identified 

Action 3: To better position the Interagency Program Office (IPO)for 

effective collaboration between the Departments of Veterans Affairs (VA) 

and Defense (DOD) and to efficiently and effectively fulfill the office’s stated 

purpose of functioning as the single point of accountability for achieving 

interoperability between the departments’ electronic health record systems, 

the Secretaries of Veterans Affairs and Defense should ensure that the IPO 

has authority (1) over dedicated resources (e.g., budget and staff), (2) to 

develop interagency processes, and (3) to make decisions over the 

departments’ interoperability efforts.

Information 

Technology

2013 Area 11:

Geospatial 

Investments

GAO-15-193 Action 1: To better facilitate the coordination of—and accountability for—

the estimated billions of dollars in federal geospatial investments, the 

Director of the Office of Management and Budget (OMB) should improve 

oversight of progress on the National Spatial Data Infrastructure (NSDI). 

OMB should require federal agencies to report on their efforts to establish 

and implement policies for identifying geospatial metadata on the 

Geospatial Platform, and procedures for utilizing the Marketplace feature of 

the Geospatial Platform, before making new investments in geospatial data.

Action 2: To better facilitate coordination of federal investments in address 

data and reduce duplication, the Secretary of the Interior, as the Federal 

Geographic Data Committee (FGDC) Chair, should direct the FGDC 

Steering Committee to create an address data theme with associated 

subcommittees and working groups to assist in furthering a national 

address database.

Action 3: To better facilitate coordination of federal investments in 

geospatial imagery and reduce duplication, the Secretary of the Interior, as 

the Federal Geographic Data Committee (FGDC) Chair, should direct the 

FGDC Steering Committee to direct the National Digital Orthoimagery 

Program to reassess the feasibility of the “Imagery for the Nation” initiative, 

with the goal of identifying discrete steps that could be taken to further a 

national imagery program benefitting governments at all levels.

Action 4: To increase coordination between various levels of government 

and reduce duplication of effort, resources, and costs associated with 

collecting and maintaining accurate address data, Congress should 

consider assessing the impact of the disclosure restrictions of Section 9 of 

Title 13 and Section 412 of Title 39 of the U.S. Code in moving toward a 

national geospatial address database. If warranted, Congress should 

consider revising those statutes to authorize the limited release of 

addresses, without any personally identifiable information, specifically for 

geospatial purposes. Such a change, if deemed appropriate, could 

potentially result in significant savings across federal, state, and local 

governments. 

Source: GAO. l GAO-15-404SP
 

Page 203 GAO-15-404SP Selected Tables 

Appendix IV: Areas Identified in 2011 – 2015 

Annual Reports, by Mission

This enclosure presents the areas we identified in our 2011 – 2015 

annual reports. It also includes our assessment of the progress made in 

each of the approximately 440 actions that we identified in our 2011, 

2012, 2013, and 2014 annual reports 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. 1We have not yet made any assessments of progress for its 

2015 areas. Table 1 presents our assessment of progress made in 

implementing the actions needed in the areas related to fragmentation, 

overlap, or duplication. Table 2 presents our assessment of progress 

made in implementing the actions needed in the areas related to cost 

savings or revenue enhancement. 2

 

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); 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); and GAO, 2014 Annual Report: Additional Opportunities to Reduce 

Fragmentation, Overlap, and Duplication and Achieve Other Financial Benefits. 

GAO-14-343SP (Washington, D.C.: Apr 8, 2014). Twenty actions were categorized as 

“consolidated or other” and were not assessed due to additional audit work or other 

information we considered. 

2

Tables 1 and 2 provide a snapshot of the overall action status for each area, and the 

ordering of the action status assessments does not correlate with the action numbering on 

GAO’s Action Tracker. For more information on the status of individual actions, please see 

GAO’s Action Tracker. 
 

Page 204 GAO-15-404SP Selected Tables 

Table 1: GAO Identified Areas and Assessment of Actions of Fragmentation, Overlap, and Duplication in 2011 – 2015 Annual 

Reports

Mission

Annual 

Report

Areas identified and assessment of actions

Addressed Partially addressed Not addressed Consolidated or other

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

coordination, and inefficient use of resources.a

 

Actions: 

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.

Actions:

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.

Actions: 

2015 Area 1: EPA’s and FDA’s Laboratory Inspections: To avoid potential duplication of certain types 

of laboratory inspections and better leverage limited resources, the Environmental Protection 

Agency and the Food and Drug Administration should develop a formal process to collaborate and 

share information on planned inspections.

Actions: Pending Assessment

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.

Actions: 

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

warfighter urgent needs. 

Actions: 

2011 Area 4: Opportunities exist to avoid unnecessary redundancies and improve the coordination of 

counter-improvised explosive device efforts. 

Actions: 

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

intelligence, surveillance, and reconnaissance capabilities. 

Actions: 

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

purchasing Tactical Wheeled Vehicles. 

Actions: 

2011 Area 7: Improved joint oversight of DOD’s prepositioning programs for equipment and supplies 

may reduce unnecessary duplication. 

Actions: 

2011 Area 8: DOD’s business systems modernization: opportunities exist for optimizing business 

operations and systems.

Actions: 

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. 

Actions: 
 

Page 205 GAO-15-404SP Selected Tables 

Mission

Annual 

Report

Areas identified and assessment of actions

Addressed Partially addressed Not addressed Consolidated or other

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. 

Actions: 

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. 

Actions: 

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. 

Actions: 

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. 

Actions: 

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. 

Actions: 

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. 

Actions: 

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. 

Actions: 

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 

Actions: 

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. 

Actions: 

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. 

Actions: 
 

Page 206 GAO-15-404SP Selected Tables 

Mission

Annual 

Report

Areas identified and assessment of actions

Addressed Partially addressed Not addressed Consolidated or other

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.

Actions: 

2015 Area 2: Ground Radar and Guided Munitions Programs: The Department of Defense should 

take steps to minimize the risk of future duplication within its ground radar and guided munitions 

weapons systems.

Actions: Pending Assessment

2015 Area 3: Weapon System Milestone Decision Process: To improve efficiency, the Secretary of 

Defense should streamline the Department of Defense’s milestone decision process used for major 

weapon system acquisition programs by eliminating reviews that can be duplicative and are not 

highly valued by acquisition officials.

Actions: Pending Assessment

Economic

Development

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

unclear.

Actions: 

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

not accountable for results.

Actions: 

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. 

Actions: 

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.

Actions: 

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

are not maximizing the efficient movement of freight.

Actions: 

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

goals. 

Actions: 

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

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

Actions: 

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 contractor-managed laboratory and nuclear production and 

testing sites, in light of contractors’ historically fragmented approach to providing these functions. 

Actions: 

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.

Actions: 
 

Page 207 GAO-15-404SP Selected Tables 

Mission

Annual 

Report

Areas identified and assessment of actions

Addressed Partially addressed Not addressed Consolidated or other

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.

Actions: 

General

government

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

duplication.

Actions: 

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

efficiency.

Actions: 

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

the government leverage its vast buying power.

Actions: 

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.a 

Actions: 

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.

Actions: 

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.

Actions: 

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).

Actions: 

2015 Area 4: Consumer Product Safety Oversight: More formal and comprehensive coordination 

among federal agencies is needed to help increase efficiency and effectiveness related to 

consumer product safety oversight and address challenges related to fragmentation and overlap.

Actions: Pending Assessment 

2015 Area 5: Nonemergency Medical Transportation: To mitigate the effects of overlap, the 

Department of Transportation should take steps to enhance federal, state and local coordination 

among 42 programs that provide nonemergency medical transportation to individuals who cannot 

provide their own transportation due to age, disability, or income constraints.

Actions: Pending Assessment

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.

a

Actions: 

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

cost-effective.

Actions: 
 

Page 208 GAO-15-404SP Selected Tables 

Mission

Annual 

Report

Areas identified and assessment of actions

Addressed Partially addressed Not addressed Consolidated or other

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. 

Actions: 

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.

Actions: 

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.

Actions: 

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.

Actions: 

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.

Actions: 

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.

Actions: 

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.

Actions: 

2015 Area 6: DOD US Family Health Plan: To potentially save millions of dollars and eliminate 

duplication within the Department of Defense’s health care system, Congress should terminate the 

statutorily required US Family Health Plan because it offers military beneficiaries the same health 

care benefit offered by other DOD health care contractors.

Actions: Pending Assessment

2015 Area 7: Medicare Postpayment Claims Reviews: To prevent inappropriate duplicative 

postpayment claims reviews by contractors, the Centers for Medicare & Medicaid Services should 

monitor the Recovery Audit Data Warehouse—the database developed in part to prevent 

duplicative reviews—and develop more complete guidance on contractors’ responsibilities.

Actions: Pending Assessment

2015 Area 8: Serious Mental Illness Programs: To help ensure that the eight federal agencies 

administering over 100 programs supporting individuals with serious mental illness are able to 

develop an overarching perspective in order to understand the breadth of programs and resources 

used—including any potential gaps or overlap—greater coordination of federal efforts is needed 

from the Department of Health and Human Services, and within it, the Substance Abuse and 

Mental Health Services Administration, which is required to promote coordination of programs 

relating to mental illness throughout the federal government.

Actions: Pending Assessment
 

Page 209 GAO-15-404SP Selected Tables 

Mission

Annual 

Report

Areas identified and assessment of actions

Addressed Partially addressed Not addressed Consolidated or other

Homeland

security/law

enforcement

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

defend against biological threats. 

Actions: 

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

securing the northern border. 

Actions: 

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

investigations, but monitoring is needed to ensure successful implementation.

Actions: 

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.

Actions: 

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

transit agencies to help address overlapping information.

Actions: 

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.

Actions: 

2012 Area 16: Department of Justice Grants: The Department of Justice could improve how it targets 

more than $3 billion to reduce the risk of potential unnecessary duplication across the more than 

11,000 grant awards it makes annually.

Actions: 

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

among four overlapping grant programs.

Actions: 

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.

Actions: 

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.

Actions: 

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 field-based information sharing 

entities that may collect, process, analyze, or disseminate information in support of law 

enforcement and counterterrorism-related efforts—Joint Terrorism Task Forces, Field Intelligence 

Groups, Regional Information Sharing Systems centers, state and major urban area fusion 

centers, and High Intensity Drug Trafficking Areas Investigative Support Centers.

Actions: 

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.

Actions: 
 

Page 210 GAO-15-404SP Selected Tables 

Mission

Annual 

Report

Areas identified and assessment of actions

Addressed Partially addressed Not addressed Consolidated or other

2015 Area 9. Vulnerability Assessments of Critical Infrastructure: The Department of Homeland 

Security could mitigate potential duplication or gaps by consistently capturing and maintaining data 

from overlapping vulnerability assessments of critical infrastructure and improving data sharing and 

coordination among the offices and components involved with these assessments.

Actions: Pending Assessment

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.

Actions: 

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.

Actions: 

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.

Actions: 

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.

Actions: 

2013 Area 11: Geospatial Investments: Better coordination among federal agencies that collect, 

maintain, and use geospatial information could help reduce duplication of geospatial investments 

and provide the opportunity for potential savings of millions of dollars.a

Actions: 

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.

Actions: 

2015 Area 10: DHS Processing of FOIA Requests: To address duplication in the processing of 

Freedom of Information Act requests, the Department of Homeland Security should determine the 

viability of re-establishing an agreement between two of its component agencies that process 

immigration files.

Actions: Pending Assessment

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. 

Actions: 

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

and Nonproliferation Bureaus. 

Actions: 

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.

Actions: 
 

Page 211 GAO-15-404SP Selected Tables 

Mission

Annual 

Report

Areas identified and assessment of actions

Addressed Partially addressed Not addressed Consolidated or other

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.

Actions: 

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

(SBA) and two other agencies could help to limit overlapping export-related services for small 

businesses.

Actions: 

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.

Actions: 

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.

Actions: 

2015 Area 11. Federal and States’ Export Promotion: Because federal and state export promotion 

efforts overlap, the Department of Commerce should take steps to enhance collaboration among 

them to promote economic development while ensuring the most efficient use of limited federal 

resources.

Actions: Pending Assessment

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.

Actions: 

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.

Actions: 

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.

Actions: 

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.

Actions: 

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.

Actions: 

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.

Actions: 
 

Page 212 GAO-15-404SP Selected Tables 

Mission

Annual 

Report

Areas identified and assessment of actions

Addressed Partially addressed Not addressed Consolidated or other

2015 Area 12. Oceanic and Atmospheric Observing Systems Portfolio: The National Oceanic and 

Atmospheric Administration should analyze its portfolio of observing systems to determine the 

extent to which unnecessary duplication may exist.

Actions: Pending Assessment

Social 

Services

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

programs.

Actions: 

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

overlap.

Actions: 

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

transportation-disadvantaged persons. 

Actions: 

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

the potential for overlapping payments but pose administrative challenges.

Actions: 

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.

Actions: 

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.

Actions: 

Training, 

Employment, 

and Education

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

services and consolidating administrative structures could promote efficiencies.

Actions: 

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

effectively.

Actions: 

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

Actions: 

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.

Actions: 

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.

Actions: 

2012 Area 31: Science, Technology, Engineering, and Mathematics Education: Strategic planning is 

needed to better manage overlapping programs across multiple agencies.

Actions: 
 

Page 213 GAO-15-404SP Selected Tables 

Mission

Annual 

Report

Areas identified and assessment of actions

Addressed Partially addressed Not addressed Consolidated or other

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.

Actions: 

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

education should better coordinate to improve program administration and help reduce 

fragmentation.

Actions: 

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.

Actions: 

Source: GAO. | GAO-15-404SP

a

In 2015, we added new actions to this area, which can be found in appendix III.

Table 2: GAO Identified Areas of Cost-Savings and Revenue-Enhancement Opportunities in 2011 – 2015 Annual Reports

Mission 

Annual 

Report

Areas identified and assessment of actions

 Addressed Partially addressed Not addressed Consolidated or other 

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.

Actions: 

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.

Actions: 

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.

Actions: 

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.

Actions: 

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

personnel costs. 

Actions: 

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

systems acquisition programs. 

Actions: 

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

Actions: 
 

Page 214 GAO-15-404SP Selected Tables 

Mission 

Annual 

Report

Areas identified and assessment of actions

 Addressed Partially addressed Not addressed Consolidated or other 

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

of sustaining weapons systems. 

Actions: 

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

unnecessary costs over time.

Actions: 

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.

Actions: 

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

consolidating or reducing the size of headquarters organizations.

Actions: 

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.

Actions: 

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.

Actions: 

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.

Actions: 

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.

Actions: b

2013 Area 20: Joint Basing: DOD needs an implementation plan to guide joint bases to achieve millions 

of dollars in cost savings and efficiencies anticipated from combining support services at 26 

installations located close to one another.a

Actions: 

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.

Actions: 

2015 Area 13: Defense Facilities Consolidation and Disposal: To help identify opportunities for saving 

costs by consolidating or disposing of unutilized or underutilized facilities, the Department of Defense 

should ensure that data on the utilization of DOD facilities—which were collectively valued at around 

$850 billion in fiscal year 2013—are complete and accurate. 

Actions: Pending Assessment

2015 Area 14: DOD Headquarters Reductions and Workforce Requirements: The Department of 

Defense could potentially achieve hundreds of millions of dollars in cost savings and help to ensure 

that headquarters organizations are properly sized to meet their assigned missions by reevaluating 

its ongoing headquarters-reductions efforts and conducting periodic reassessments of workforce 

requirements.

Actions: Pending Assessment
 

Page 215 GAO-15-404SP Selected Tables 

Mission 

Annual 

Report

Areas identified and assessment of actions

 Addressed Partially addressed Not addressed Consolidated or other 

Economic 

development

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

Actions: 

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.

Actions: 

2011 Area 44: The U.S. Army Corps of Engineers should provide Congress with project-level information 

on unobligated balances.

Actions: 

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.

Actions: 

Energy 2011 Area 45: Improved management of federal oil and gas resources could result in approximately $2 

billion over 10 years.

Actions: 

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

could provide billions in revenue for the government.

Actions: 

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.

Actions: 

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.

Actions: 

2015 Area 15: Strategic Petroleum Reserve: The Department of Energy could potentially realize savings 

by reexamining the appropriate size of the Strategic Petroleum Reserve—which was valued at about 

$45 billion as of December 2014—and depending on the outcome of the analysis, selling crude oil 

from the reserve and using the proceeds to fund other national priorities.

Actions: Pending Assessment

2015 Area 16: U.S. Enrichment Corporation Fund: Congress may wish to consider permanent 

rescission of the entire $1.6 billion balance of the U.S. Enrichment Corporation Fund—a revolving 

fund in the U.S. Treasury—because its purposes have been fulfilled.

Actions: Pending Assessment

General 

government

2011 Area 46: Efforts to address governmentwide improper payments could result in significant costs 

savings.

Actions: 

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

save billions of dollars over time.

Actions: 

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

could save billions of dollars annually.

Actions: 
 

Page 216 GAO-15-404SP Selected Tables 

Mission 

Annual 

Report

Areas identified and assessment of actions

 Addressed Partially addressed Not addressed Consolidated or other 

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

fees to produce savings.

Actions: 

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. 

Actions: 

2011 Area 51: Improved cost analysis used for making federal facility ownership and leasing decisions 

could save millions of dollars.

Actions: 

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.

Actions: 

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.

Actions: 

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.

Actions: 

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

and increase debt collected.

Actions: 

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.

Actions: 

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

Actions: 

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

losses of forgiven mortgage debt. 

Actions: 

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. 

Actions: 

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

requirements and increase revenues.

Actions: 

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.

Actions: 

2011 Area 62: IRS could find additional businesses not filing tax returns by using third-party data, which 

show such businesses have billions of dollars in sales.

Actions: 

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.

Actions: 
 

Page 217 GAO-15-404SP Selected Tables 

Mission 

Annual 

Report

Areas identified and assessment of actions

 Addressed Partially addressed Not addressed Consolidated or other 

2011 Area 64: IRS needs an agencywide approach for addressing tax evasion among the at least 1 million 

networks of businesses and related entities.

Actions: 

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

forgone revenue.

Actions: 

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.a

Actions: 

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

Actions: 

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.

Actions: 

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

deductions or credits.

Actions: 

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.

Actions: 

2012 Area 41: General Services Administration Schedules Contracts Fee Rates: Re-evaluating fee 

rates on the General Services Administration’s Multiple Award Schedules contracts could result in 

significant cost savings governmentwide.

Actions: 

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.

Actions: 

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.

Actions: 

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.

Actions: 

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.

Actions: 

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.

Actions: 
 

Page 218 GAO-15-404SP Selected Tables 

Mission 

Annual 

Report

Areas identified and assessment of actions

 Addressed Partially addressed Not addressed Consolidated or other 

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.

Actions: 

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.

Actions: 

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.

Actions: 

2014 Area 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.

Actions: 

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.

Actions: 

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.

Actions: 

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.

Actions: 

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.

Actions: 

2015 Area 17: Tax Policies and Enforcement: By more effectively using data to manage various 

enforcement programs, the Internal Revenue Service could bolster tax compliance and potentially 

collect hundreds of millions of dollars in additional revenue.

Actions: Pending Assessment

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

action by CMS.

Actions: 

2011 Area 72: Federal oversight over Medicaid supplemental payments needs improvement, which 

could lead to substantial cost savings.

Actions: 

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

Actions: 
 

Page 219 GAO-15-404SP Selected Tables 

Mission 

Annual 

Report

Areas identified and assessment of actions

 Addressed Partially addressed Not addressed Consolidated or other 

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

Actions: 

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.

Actions: 

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.

Actions: 

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.

Actions: 

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.

Actions: 

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.

Actions: b

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.

Actions: 

2015 Area 18: DOD TRICARE Improper Payments: To achieve potential cost savings associated with 

billions of dollars of improper payments, the Department of Defense should implement a more 

comprehensive improper payment measurement methodology and develop more robust corrective 

action plans for the military health care program known as TRICARE.

Actions: Pending Assessment

2015 Area 19: Medicare Payments to Certain Cancer Hospitals: To achieve almost $500 million per 

year in program savings, Congress should consider modifying how Medicare pays certain cancer 

hospitals.

Actions: Pending Assessment

2015 Area 20: State Medicaid Sources of Funds: To potentially save hundreds of millions of dollars, the 

Centers for Medicare & Medicaid Services should ensure that states report accurate and complete 

data on state Medicaid sources of funds so that it may better oversee states’ financing arrangements 

that can increase costs for the federal government.

Actions: Pending Assessment
 

Page 220 GAO-15-404SP Selected Tables 

Mission 

Annual 

Report

Areas identified and assessment of actions

 Addressed Partially addressed Not addressed Consolidated or other 

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.

Actions: 

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

funding.

Actions: 

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

TSA personnel costs over the next 5 years.

Actions: 

2011 Area 79: Clarifying availability of certain customs fee collections could produce a one-time savings 

of $640 million.

Actions: 

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.

Actions: 

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.

Actions: 

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.

Actions: 

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.

Actions: 

Income security 2011 Area 80: Social Security needs data on pensions from noncovered earnings to better enforce 

offsets and ensure benefit fairness, estimated to result in $2.4-$6.5 billion savings over 10 years if 

enforced both retrospectively and prospectively. If Social Security only enforced the offsets

prospectively, the overall savings would be less as it would not reduce benefits already received.

Actions: 

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.

Actions: 

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.

Actions: 
 

Page 221 GAO-15-404SP Selected Tables 

Mission 

Annual 

Report

Areas identified and assessment of actions

 Addressed Partially addressed Not addressed Consolidated or other 

2015 Area 21: Children’s Disability Reviews: To prevent an estimated $3.1 billion dollars in potential 

overpayments over 5 years, the Social Security Administration needs to conduct timely disability 

reviews to better ensure that only eligible children receive cash benefits from the Supplemental 

Security Income program.

Actions: Pending Assessment

2015 Area 22: Supplemental Nutrition Assistance Program Fraud and Abuse: States should be able 

to more effectively fight fraud among beneficiaries of the Supplemental Nutrition Assistance 

Program—which provided more than $76 billion in benefits in fiscal year 2013—by using data to 

better focus investigative efforts on high-risk households.

Actions: Pending Assessment

Information 

technology

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

opportunity for potential savings of millions of dollars.

Actions: 

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.

Actions: 

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.

Actions: 

2015 Area 23: Federal Software Licenses: In order to achieve hundreds of millions of dollars in

government-wide savings, federal agencies should apply better management of software licenses 

and the Office of Management and Budget should issue a directive to assist agencies in doing so.

Actions: Pending Assessment

International 

affairs 

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

countervailing duties. 

Actions: 

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.

Actions: 

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.

Actions: 
 

Page 222 GAO-15-404SP Selected Tables 

Mission 

Annual 

Report

Areas identified and assessment of actions

 Addressed Partially addressed Not addressed Consolidated or other 

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.

Actions: 

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.

Actions: 

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.

Actions: 

2015 Area 24: Disaster Relief Fund Administrative Costs: Cost savings of millions of dollars could be 

realized if Federal Emergency Management Agency officials enhance their oversight of the agency’s 

administrative costs obligated from the Disaster Relief Fund for major disasters.

Actions: Pending Assessment

Source: GAO. | GAO-15-404SP

a

In 2015, we added new actions to this area, which can be found in appendix III. 

b

GAO is no longer assessing the status of this action. See GAO’s Action Tracker for more details.
 

Page 223 GAO-15-404SP Lists of Programs Identified 

Appendix V: 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 224 GAO-15-404SP Lists of Programs Identified 

Table 1: Defense Acquisitions Programs: Programs and Related Budgetary Information

Agency Program name Program description

Total Estimated Acquisition Costs

(as of December 2014) 

Department of Defense Defense Acquisitions Major Weapons Systems $1.4 trillion

Source: GAO analysis of DOD data. | GAO-15-404SP

Table 2: Consumer Product Safety: List of Agencies with a Direct Oversight Role 

Agency Role Examples of products regulated

Coast Guard Regulates safety standards for 

recreational boats.

All original equipment installed on boats; limited 

equipment installed after purchase (inboard engines, 

outboard engines, stern drive units, and inflatable life 

jackets)

Consumer Product Safety Commission 

(CPSC) 

Oversees consumer products 

produced or distributed in the 

United States for sale to, or use by, 

consumers in or around a residence 

or school or in recreation or 

otherwise. 

Toys, cribs, power tools that are used by consumers, 

lighters, and household products

Department of Housing and Urban 

Development (HUD)

Mitigates lead-based paint hazards 

in federally assisted housing. It also 

establishes federal standards for 

the design and construction of 

manufactured homes.

Structural materials in manufactured homes such as 

particle board, plywood, drywall, steel frames, and 

windows

Environmental Protection Agency 

(EPA) 

Conducts risk assessments of 

pesticides and registers them for 

use in the United States. Also 

evaluates and manages risks of 

chemicals.

Insect repellents, toilet bowl sanitizers/disinfectants, ant 

traps, and flea powder

Some household products such as window cleaners; 

flame retardants used in furniture and electronics; and 

formaldehyde emissions from composite wood 

products (e.g., kitchen cabinets)

Food and Drug Administration (FDA) Ensures the safety, efficacy, and 

security of human and veterinary 

drugs, biological products, medical 

devices, and electronic products 

that emit radiation. Also ensures the 

safety of cosmetics. Additionally, 

regulates food and tobacco 

products, but are outside the scope 

of this study. 

Prescription drugs, over-the-counter drugs, contact 

lenses, breast pumps, cosmetics such as lipstick and 

eye liner, cell phones, and toy laser products

National Highway Traffic Safety 

Administration (NHTSA)

Sets and enforces safety 

performance standards for motor 

vehicles and motor vehicle 

equipment. 

Motor vehicles, motor vehicle equipment such as tires 

and motorcycle helmets, and child restraint systems 

(when sold for use in vehicles)

Nuclear Regulatory Commission 

(NRC)

Licenses and regulates civilian use 

of certain radioactive materials.

Consumer products that contain NRC-regulated 

materials such as tritium watches, smoke detectors, 

and electron tubes

Pipeline and Hazardous Materials 

Safety Administration (PHMSA)

Ensures that hazardous materials 

are packaged and handled safely 

during transportation.

Hazardous materials (such as consumer fireworks, 

lithium batteries, and compressed gas) in transport 

Source: GAO analysis of agency data. | GAO 15-404SP

Note: Some agencies have broader responsibilities than those listed in the table, which focuses on 

aspects of each agency’s work that relate to consumer product safety.
 

Page 225 GAO-15-404SP Lists of Programs Identified 

Table 3: Nonemergency Medical Transportation (NEMT): List of Federal Programs

Agency Program name Program description 

Department of 

Agriculture

Community Facilities Loans and Grants Program funds are available for health care projects (assisted 

living, nursing homes, etc.) and may be used to purchase 

vehicles to transport patients/residents for medical 

appointments and shopping.

Department of 

Education

State Vocational Rehabilitation Services Program Transport for services to medical appointments.

Centers for Independent Living Transport for services to medical appointments. a

Independent Living State Grants Transport for services to medical appointments. b

Independent Living Services for Older Individuals 

Who Are Blind

Transport for services to medical appointments.

Special Education-Grants for Infants and 

Toddlers

Transport for services to medical appointments.

Supported Employment Services for Individuals 

with Most Significant Disabilities

Transport for services to medical appointments.

Rehabilitation Services American Indians with 

Disabilities

Transport for services to medical appointments.

Department of 

Transportation

Urbanized Area Formula Program NEMT and any other type of trips are allowable, as general 

public transportation trips are not differentiated by purpose.

Formula Grants for Rural Areas NEMT and any other type of trips are allowable, as general 

public transportation trips are not differentiated by purpose.

Enhanced Mobility of Seniors and Individuals with 

Disabilities

Grants and other programs can be developed at the local level 

through the locally developed coordinated planning process that 

can serve to address transportation gaps for seniors and people 

with disabilities and could include partnerships with NEMT 

funded programs like Medicaid.

c

New Freedom Program Grants and other programs can be developed at the local level 

through the locally developed coordinated planning process that 

can serve to address transportation gaps for people with 

disabilities and could include partnerships with NEMT funded 

programs like Medicaid.

Department of 

Health and 

Human 

Services

Special Programs for the Aging, Title III, Part B,

Grants for Supportive Services and Senior 

Centers

These funds are flexible and can be used for both medical and 

non-medical transportation.

Special Programs for the Aging, Title VI, Part A, 

Grants to Indian Tribes, Part B, Grants to Native 

Hawaiians

Transportation to access needed services which may include 

medical appointments and medical treatments.

Comprehensive Community Mental Health 

Services for Children with Serious Emotional 

Disturbances

Transportation to access needed services which may include 

medical appointments for a child with mental health issues.

Coordinated Services and Access to Research 

for Women, Infants, Children and Youth

Transportation services for an eligible individual to access HIVrelated health services, including services needed to maintain 

the client in HIV Medical care, directly or through voucher.

Urban Indian Health Services Vehicle purchase or lease, bus token, taxi fare.

Health Center Program Health centers are required to provide services that enable 

individuals to use the services of the health center (including 

outreach and transportation services).

Special Diabetes Program for Indians Diabetes 

Prevention and Treatment Projects

Public transportation, mileage reimbursement, and purchase of 

motor vehicles.

Substance Abuse and Mental Health ServicesAccess to RecoveryBus tokens/pass, cab fare, gas card.
 

Page 226 GAO-15-404SP Lists of Programs Identified 

Agency Program name Program description 

Transitional Living Program and Maternity Group 

Homes for Homeless Youth

Transport to medical appointments, for employment training, 

school, and other services identified.

Head Start Head Start grantees have flexibility to provide nonemergency 

medical transportation to children to medical and dental 

appointments.

Social Services Block Grants Travel to obtain medical care; may include special modes of 

transportation.

Children’s Health Insurance Program Transportation to primary and preventative health care services 

for eligible low-income women.

Medicaid State Medicaid Agencies are required to assure transportation 

for beneficiaries to covered medical care when the beneficiary 

has no other means of transportation. Depending on the 

claiming authority, the state has many options to structure their 

NEMT program but Federal Financial Participation is only 

available for this specific purpose.

Rural Health Care Services Outreach, Rural 

Health Network Development, and Small Health 

Care Provider Quality Improvement Program

Program funds can be used to support NEMT costs such as 

personnel, contractual services (with NEMT service providers) 

and/or promotion of NEMT services.

HIV Emergency Relief Project Grants Program funds can be used for the provision of transportation 

services for an eligible individual to access HIV-related health 

services, including services needed to maintain the client in HIV

Medical care, directly or through voucher.

HIV Care Formula Grants Program funds can be used for the provision of transportation 

services for an eligible individual to access HIV-related health 

services, including services needed to maintain the client in HIV 

Medical care, directly or through voucher. Services are 

conveyance services provided, directly or through a voucher, to 

a client to enable him or her to access health care services.

HIV Early Intervention Services Program funds can be used for the provision of transportation 

services for an eligible individual to access HIV-related health 

services, including services needed to maintain the client in HIV 

Medical care, directly or through voucher.

Healthy Start Initiative Program funds can be used for bus tokens, taxi vouchers, 

reimbursement of own vehicle.

Community Mental Health Services Block Grant If the individual requires this services and it cannot or is not 

funded by Medicaid, States can use the funding for this service. 

Substance Abuse Prevention and Treatment 

Block Grant

Authorizing legislation neither prescribes nor prohibits funding 

of NEMT. The exception is Interim Final Rule (45 CFR 96. 120-

137) explicitly prescribes transportation for substance using 

pregnant women and women with dependent children.

Maternal and Child Health Services Block Grant 

to the States

If a state identifies this service as one that relates to an 

identified priority need, it may choose to support such an 

activity.

Department of 

Housing and 

Urban 

Development

Congregate Housing Services program The grant can be used for up to 40 percent of the cost of 

supportive services which can include NEMT.

Community Development Block 

Grants/Entitlement Grants

NEMT could qualify as an eligible service.

Community Development Block Grants/Special 

Purpose Grants/Insular Areas

NEMT could qualify as an eligible service. 

Community Development Block Grants/State’s 

program and Non-Entitlement Grants in Hawaii

NEMT could qualify as an eligible service. 

Housing Opportunities for Persons with AIDS NEMT could qualify as an eligible service.

Resident Opportunity & Self-Sufficiency Program Expenses to support residents participating in the program 

obtain medical services such as obtaining eyeglasses for work.
 

Page 227 GAO-15-404SP Lists of Programs Identified 

Agency Program name Program description 

Department of 

Veterans Affairs

Veterans Medical Care Benefits The Beneficiary Travel Program (BT) has authority to provide 

both emergency and non-emergency transport to eligible 

beneficiaries in relation to VA or VA authorized non-VA care.

VA Homeless Providers Grant and Per Diem 

Program 

Funds granted to community homeless providers may be used 

to purchase vehicles to provide NEMT.

Veterans Transportation Program Transportation of Veterans to VA Medical Centers and CBOC’s.

Source: GAO analysis of information from the Departments of Agriculture, Education, Health and Human Services, Housing and Urban Development, Transportation and Veterans Affairs, the Catalog of 

Federal Domestic Assistance, and applicable statutes and regulations. | GAO-15-404SP

Notes: Total federal spending on NEMT is unknown.

a

On July 22, 2014, this program was transferred to HHS by the Workforce Innovation and Opportunity 

Act and is being administered by the Department of Education during this transition.

b

On July 22, 2014, this program was transferred to HHS by the Workforce Innovation and Opportunity 

Act and is being administered by the Department of Education during this transition.

c

The Over-the-Road Bus Program was repealed by MAP-21, effective October 2012. The Federal 

Public Transportation Act of 2012 repealed the New Freedom program (49 U.S.C. § 5317) as a 

separate program and instead merged the program into the Enhanced Mobility of Seniors and 

Individuals with Disabilities program (49 U.S.C. § 5310), effective October 2012.

Table 4: Department of Defense Health Care: Program and Related Budgetary Information

Agency Program name Program description

Fiscal year 2013 

obligations 

Department of Defense (DOD) Health Care Provides health care to eligible military beneficiaries 

worldwide through the TRICARE program. $48,400,000,000

US Family Health Plan Provides the TRICARE Prime benefit to eligible 

military beneficiaries in six areas of the country. $ 1,120,000,000 

Source: Department of Defense. | GAO-15-404SP

Table 5: Serious Mental Illness: List of Programs and Related Budgetary Information

Agency Program name Program description

Fiscal year 2013 

obligations

Department of Defense

Air Force Baseline Psychological Testing for 

Recruits

A screening program completed during basic military 

training at Joint Base San Antonio to identify mental 

health and behavioral problems. 

$800,000a

Virtual Reality Exposure Therapy Selected Air Force medical treatment facilities are 

outfitted with interactive virtual reality systems for use 

in enhanced exposure therapy between behavioral 

health providers and patients suffering from conditions 

such as post-traumatic stress disorder (PTSD), mild 

traumatic brain injury, addictions, phobias, and anger 

management issues.

280,000

Air National Guard Psychological Health Program Provides assessment services, ensures continuity and 

engagement in treatment, and prevents 

servicemembers from falling through the cracks. This 

program does not provide direct treatment services.

14,460,000

Army National 

Guard

Psychological Health Program Provides assessment services, ensures continuity and 

engagement in treatment, and prevents 

servicemembers from falling through the cracks. This 

program does not provide direct treatment services.

14,400,000
 

Page 228 GAO-15-404SP Lists of Programs Identified 

Agency Program name Program description

Fiscal year 2013 

obligations

Navy Overcoming Adversity and Stress 

Injury Support

This is a 10-week comprehensive residential treatment 

program for Active Duty members with combat related 

stress disorders, including PTSD. Includes evidencebased treatment such as cognitive processing therapy, 

along with psychopharmacological interventions and 

complementary alternative treatments.

1,133,000

Department of Health and Human Services

Substance Abuse 

and Mental Health 

Services 

Administration

Community Mental Health Services 

Block Grant

Distributes funding to eligible states and territories for a 

variety of mental health prevention and treatment 

services; planning; administration; and educational 

activities under the state plan for comprehensive 

community-based mental health services for children 

with serious emotional disturbance and adults with 

serious mental illness.

463,809,000b

Consumer and Consumer Support 

Technical Assistance

Provides support for technical assistance to facilitate 

the restructuring of the mental health system by 

promoting consumer directed approaches for adults 

with serious mental illness. 

1,775,000b

Criminal and Juvenile Justice Diverts individuals with serious mental illness from the 

criminal justice system by providing support services 

that connect the individual to behavioral health, 

housing, and job placement services. 

4,754,000b

Mental Health Homelessness 

Prevention

Provides comprehensive services focusing on 

outreach, engagement, intensive case management, 

mental health services, substance abuse treatment, 

benefits support, and linkage to permanent housing.

23,018,000b

Mental Health Transformation 

Grant

Supports state and local governments creation or 

capacity expansion of evidence-based practices 

addressing the prevention of mental illness; traumainformed care; screening, treatment and support 

services for military personnel; and housing and 

employment support. 

8,551,000b

Minority HIV/AIDS Expands behavioral health services to individuals who 

are at risk for or have serious mental illness and/or cooccurring substance use disorder and are at risk or 

living with HIV/AIDS. Supports programs that develop 

or expand behavioral health and primary care networks 

in order to reduce the impact of behavioral health 

problems, HIV risk and HIV-related health disparities.

7,340,000b

Primary and Behavioral Health 

Care Integration

Funds the coordination and integration of primary care 

services into publicly-funded community behavioral 

health settings. The program encourages grantees to 

engage in necessary partnerships, expand 

infrastructure and increase the availability of primary 

health care and wellness services to individuals with 

mental illness.

28,858,000b

Projects for Assistance in 

Transition from Homelessness

Supports services and resources to people with 

serious mental illness, including those with cooccurring substance use disorder, who are 

experiencing homelessness or at risk for 

homelessness. Provides funds for community-based 

outreach, case management, screening and diagnostic 

treatment, alcohol or drug treatment, and a limited set 

of housing services.

61,405,000b
 

Page 229 GAO-15-404SP Lists of Programs Identified 

Agency Program name Program description

Fiscal year 2013 

obligations

Protection and Advocacy for 

Individuals with Mental Illness

Provides grant awards to support protection and 

advocacy systems designated by the governor of each 

state or mayor of the District of Columbia. These 

systems monitor compliance with the Constitution and 

federal and state laws within public and private 

residential care, treatment facilities, and non-medical 

community-based facilities for individuals with serious 

mental illness, children, and youth.

33,571,000b

State and Community Partnerships 

to Integrate Services

Supports the creation of developmentally-appropriate 

local systems of care to improve outcomes of youth 

and young adults with serious mental health 

conditions. The grants fund integration of local systems 

with state, tribal, or territorial levels in areas such as 

education, employment, housing, mental health and 

co-occurring disorders, and decrease contacts with the 

juvenile and criminal system.

2,929,000b

Statewide Consumer Network Provides funding to consumer-driven organizations to 

enhance statewide service system capacity. Promotes 

skill development, business management, and 

partnership building as part of the recovery process for 

mental health consumers.

2,094,000b

Statewide Family Network Provides information, referrals, and support at the state 

and local level to families who have a child with a 

serious emotional disturbance. 

2,810,000b

System of Care Expansion 

Implementation Cooperative

Supports broad-scale operation, expansion and 

integration of systems of care to improve behavioral 

outcomes of children and youth with serious emotional 

disturbances and their families. 

92,085,000

Department of Justice

b

164,200,000

Bureau of Prisons

c

Dual Diagnosis Residential Drug 

Abuse Program

An intensive residential substance abuse treatment 

program providing services for inmates with cooccurring substance use disorders and serious mental 

illnesses. The program is 9-months, unit-based, and 

offers cognitive-behavioral interventions in a modified 

therapeutic community setting.

c

Mental Health Step Down Unit Offers an intermediate level of care for inmates with 

serious mental illness who do not require inpatient 

treatment, but lack the skills to function independently 

in a general population prison. Programs operate as 

modified therapeutic communities and utilize cognitive 

behavioral treatments, cognitive rehabilitation, and 

skills training.

c

Steps Toward Awareness, Growth, 

and Emotional Strength

A unit-based residential psychology treatment program 

that focuses on inmates with serious mental illness and 

a primary diagnosis of Borderline Personality Disorder. 

Uses evidence-based treatments to increase time 

between disruptive behaviors and increase pro-social 

skills, and aims to prepare inmates for transition to less 

secure prison settings or promote successful reentry to 

society.

c
 

Page 230 GAO-15-404SP Lists of Programs Identified 

Agency Program name Program description

Fiscal year 2013 

obligations

Social Security Administration

Office of Retirement 

and Disability Policy

Homeless with Schizophrenia 

Presumptive Disability

Aims to remove barriers to supplemental security 

income for individuals who have been diagnosed with 

schizophrenia or schizoaffective disorder who are 

known to be homeless by helping them through the 

application process and providing presumptive 

disability payments. 

N/Ad

Department of Veterans Affairs

Veterans Health 

Administration

Intensive Community Mental Health 

Recovery

Provides veterans with serious mental illness intensive 

recovery-oriented mental health services in their home 

and community that enable them to live in the 

community of their choosing. Connects veterans with a 

team that may include peer specialists, social workers, 

psychologists and physicians.

142,533,000

Mental Health Residential 

Rehabilitation Treatment

Provides residential rehabilitation and treatment 

services for veterans with mental health and substance 

use disorders, medical conditions and psychosocial 

needs, such as homelessness and unemployment.

The program addresses the goals of rehabilitation, 

recovery, and community integration. It provides 

specific treatment for mental health, substance use 

disorders and medical conditions.

858,119,000

Psychosocial Rehabilitation and 

Recovery Center

Supports recovery and integration into the community 

for veterans with serious mental illness and severe 

functional impairment. Includes individual assessment 

and curriculum planning, skills training classes, family 

education programs, psychiatric services, 

compensated work therapy, and case management 

services.

77,307,000

Re-Engaging Veterans with Serious 

Mental Illness

Identifies veterans with schizophrenia or bipolar 

disorder who have received care but have been lost to 

follow-up (no outpatient visits and no inpatient visits of 

more than 2 days) for at least 1 year. Contact 

information of identified veterans are sent to a social 

worker or psychologist at VA medical centers and 

community outpatient clinics who make efforts to 

locate, contact, assess the needs, and invite the 

veterans to return to care.

e

Specialized PTSD Provides a range of inpatient and outpatient treatments 

for veterans diagnosed with military-based PTSD.

These services use psychotherapies and 

psychopharmacology. Examples of specialty PTSD 

inpatient treatment are: Domiciliary PTSD, Women’s 

Trauma Recovery Program. Specialty PTSD outpatient 

treatment includes Substance Use PTSD and 

Women’s Stress Disorder Treatment Team.

372,364,000

Therapeutic and Supported 

Employment Services

A continuum of recovery-oriented vocational 

rehabilitation programs that help veterans with mental 

health disabilities (including individuals with cooccurring physical disabilities) and a history of 

occupational dysfunction overcome barriers to 

employment and return to the workforce.

133,747,000

VA Specialized Homeless Services A continuum of care designed to assist eligible 

homeless veterans and veterans at risk for 

homelessness. Services include homelessness 

prevention and rapid re-housing; assistance to 

veterans involved with the justice system; community 

case management; and employment assistance.

1,404,890,000
 

Page 231 GAO-15-404SP Lists of Programs Identified 

Agency Program name Program description

Fiscal year 2013 

obligations

Inpatient Mental Health Provides services to veterans with acute and severe 

emotional and/or behavioral symptoms that may cause 

a safety risk to the self or others, and/or may result in 

severely compromised functional status, including 

veterans with serious mental illness. Programs provide 

a range of intensive clinical services (e.g., close safety 

monitoring, close medication management) and 

frequent group therapy and psychoeducation.

1,766,716,000

Legend:

HUD Department of Housing and Urban Development

PTSD post-traumatic stress disorder

VA Department of Veterans Affairs

Source: GAO analysis of questionnaire responses. | GAO-15-404SP

Notes: Obligations are rounded to the nearest thousand.

a

This amount only includes the analytic component. The amount for the clinical component is 

unknown.

b

This amount only includes the obligated funds for the grants, not the obligated amount for the overall 

program.

c

This amount includes all services and programs offered through the Department of Justice’s 

Psychology Services departments. These departments provide routine mental health screening, 

evaluation, grief counseling, individual therapy, group therapy, and crisis intervention. Psychology 

Services departments also provide specialty programming for specific populations.

d

This was a pilot program designed and operated internally by Social Security Administration staff, 

with assistance from partner agencies in the involved communities. There was no obligated funding 

for this program in fiscal year 2013.

e

Case identification was through the Serious Mental Illness Treatment Resource and Evaluation 

Center. Subsequently, targeted outreach was conducted at local medical centers and clinics as part 

of the overall program of care for veterans with serious mental illness.
 

Page 232 GAO-15-404SP Lists of Programs Identified 

Table 6: Department of Homeland Security (DHS) Vulnerability Assessment Tools and Methods

DHS office or 

component Assessment tool or method Description

Protective Security 

Coordination Division 

Infrastructure Survey Tool (IST)

Site Assistance Visit (SAV)

ISTs consist of voluntary assessments that gather information on 

an asset’s current security posture and overall security 

awareness.

SAVs consist of an IST and also identify security and resilience 

gaps and provide options for consideration to mitigate these 

identified gaps.

Federal Protective 

Service (FPS)

Modified Infrastructure Survey Tool 

(MIST)

MIST is a vulnerability assessment based on the IST 

assessment that has been modified to meet specific FPS criteria.

Infrastructure Security 

Compliance Division

(ISCD)

Chemical Facility Anti-Terrorism 

Standards Security Vulnerability 

Assessment (SVA) 

ISCD requires certain chemical facilities to self-report 

vulnerability and other information through the SVA.

Transportation Security 

Administration (TSA) 

Baseline Assessment for Security 

Enhancements (BASE)

Freight Rail Risk Analysis Tool

Joint Vulnerability Assessment (JVA)

Critical Facility Security Review (CFSR) 

BASE assessments are composed of 205 questions for 

reviewing a transit systems security posture.

Freight Rail Risk Analysis Tool assessments began in fiscal year 

2009 focusing on high priority tunnels and bridges based on an 

industry provided list of assets.

TSA and the Federal Bureau of Investigation (FBI) are to 

conduct joint threat and vulnerability assessments at each highrisk U.S. airport at least every 3 years. Airports not identified as 

one of the 34 high-risk airports may receive a JVA through a 

voluntary request, as a host of a National Special Security Event, 

or at the direction of TSA senior leadership.

CFSRs are a walkthrough of a pipeline facility that includes 

asking a common list of questions, discussions with asset 

owners and operators including corporate executives and 

security advisers, reviews of plans to protect the pipeline assets, 

and the adoption of established security guidelines by the 

assets.

United States Coast 

Guard

Maritime Transportation Security Act 

(MTSA) -regulated facility vulnerability 

assessments

Port Security Assessment

MTSA and its implementing regulations require owners and 

operators of maritime facilities to conduct security assessments 

that identify their security vulnerabilities for use in developing 

security plans to mitigate these vulnerabilities.

The Coast Guard conducts voluntary vulnerability assessments 

on 25 port facilities annually at five port locations. These efforts 

are to support risk mitigation strategies.

Source: GAO analysis of DHS documents and interviews with DHS officials. | GAO-15-404SP
 

Page 233 GAO-15-404SP Lists of Programs Identified 

Table 7: Federal Export Promotion: List of Activities and Related Budgetary Information 

Agency or subagency Activity Activity description

Fiscal Year 2013 

budget

Department of Commerce (Commerce)

International Trade 

Administration

Export promotion ITA’s export promotion activities include efforts to raise 

awareness about exporting and to provide businesses 

with export counseling, training, and information on 

market opportunities; help connecting with potential 

buyers abroad; and help obtaining financing.

$267,674,000

Small Business Administration (SBA)

Office of International Trade Export promotion SBA’s export promotion activities include conducting 

outreach and providing training, counseling, and export 

financing for small businesses.

$974,000

Source: Commerce, SBA, and the Congressional Research Service. | GAO-15-404SP

a

Note: The total amount of U.S. government funds expended on federal export promotion is unclear 

because comparable budget information for federal agencies involved in export promotion is not 

readily available.

a

This amount includes salaries and operating expenses only.

Table 8: National Oceanic and Atmospheric Administration’s Estimated Operations 

and Maintenance Costs for the Ocean, Coastal, and Great Lakes Observing 

Systems by Office for Fiscal Year 2013

Observing System Managing Office and System Name Fiscal Year 2013

National Environmental Satellite, Data, and Information Service

a

Geostationary Operational Environmental Satellite N/O/P $ 25,900,000

Jason Ocean Surface Topography Mission (2,3 & CS) 1,600,000 b

Marine Optical Buoy 2,900,000

Polar-Orbiting Operational Environmental Satellite 29,000,000

Suomi National Polar-Orbiting Partnership Satellite 6,600,000

National Marine Fisheries Service

Chesapeake Bay Interpretive Buoy System 800,000

Ecosystem Surveys 6,590,000

Fish Surveys 16,440,000

National Ocean Service

Coral Reef Ecosystem Integrated Observing System/National Coral 

Reef Monitoring Plan

5,200,000

Hydrographic Surveying 25,100,000

Integrated Ocean Observing System High Frequency Radars 5,000,000

National Current Observation Program 1,000,000

National Estuarine Research Reserves System System-Wide 

Management Program 

3,700,000

National Marine Sanctuary System-Wide Monitoring 2,360,000

National Status and Trends Program 1,700,000

National Water Level Observation Network 4,700,000

National Ocean Service-Shoreline 6,100,000

Physical Oceanographic Real-Time System 0 c

Regional Ocean Observing System 18,100,000
 

Page 234 GAO-15-404SP Lists of Programs Identified 

Observing System Managing Office and System Name Fiscal Year 2013

National Weather Service

a

Coastal Weather Buoys 18,240,000

Coastal-Marine Automated Network 680,000

Deep-Ocean Assessment and Reporting of Tsunamis 8,770,000

Global Ocean Observing System Tropical Atmosphere Ocean Array 3,380,000

Pacific Tsunami Warning Center Sea Level Network 120,000

Voluntary Observing Ship 1, 500,000

Office of Oceanic and Atmospheric Research

Airborne Oceanographic Product 50,000

Arctic Observing Network 3,450,000

Ecosystems and Fisheries-Oceanography Coordinated

Investigations

1,000,000

Global Ocean Observing System Argo Profiling Floats 10,300,000

Global Ocean Observing System Global Drifter Program 3,470,000

Global Ocean Observing System Global Sea Level Observing 

System

1,330,000

Global Ocean Observing System Global Tropical Moored Buoy 

Array-Prediction and Research Moored in the Atlantic

1,180,000

Global Ocean Observing System Global Tropical Moored Buoys 

Array-Research Moored for African-Asian-Australian Monsoon 

Analysis

2,820,000

Global Ocean Observing System Ocean Carbon Network 7,000,000

Global Ocean Observing System Ocean Reference Stations 5,910,000

Global Ocean Observing System-Ships of Opportunity 2,050,000

Ocean Acoustic Monitoring System 140,000

Real-time Coastal Observation Network 450,000

Western Boundary Time Series and South Atlantic Meridional 

Overturning Circulation

820,000

Office of Marine and Aviation Operations

NOAA Aircraft 28,000,000

NOAA Ships 153,000,000

Total $416,440,000

Source: National Oceanic and Atmospheric Administration | GAO-15-404SP

a

NOAA’s estimated costs for fiscal year 2013 were based on final appropriations for this year.

b

The estimates reported for here include costs to operate and maintain the Jason-2 mission. 

Development costs for the Jason-3 mission, with the operational environmental satellite scheduled to 

be launched in fiscal year 2015, are not included.

c

The Physical Oceanographic Real-Time System is a cost-sharing program where local partners 

provide funding for the sensor systems and their ongoing maintenance.
 

Page 235 GAO-15-404SP Lists of Programs Identified 

Table 9: DOD Real Property Portfolio: List of Military Services and Facilities’ 

Property Replacement Value

Military service Number of assets Plant replacement value 

Army 270,277 $306,430,000,000 

Navy 111,200 $214,230,000,000 

Marine Corps 47,986 $63,780,000,000 

Air Force 132,422 $259,280,000,000 

Washington Headquarters Services 715 $6,530,000,000 

Total 562,600 $850,250,000,000 

Source: Office of the Secretary of Defense (OSD). | GAO-15-404SP

Table 10: Department of Defense: List of Headquarters Organizations 

Department of Defense 

Office of the Secretary of Defense 

Joint Staff 

Offices of the Secretary of the Army and Army Staff

Office of the Secretary of the Navy and Office of the Chief of Naval Operations

Offices of the Secretary of the Air Force and Air Staff

Headquarters, Marine Corps

U.S. Special Operations Command

U.S. Strategic Command

U.S. Transportation Command

Source: GAO-14-439 and GAO-15-10 | GAO-15-404SP

Table 11: Strategic Petroleum Reserve: List of Programs and Related Budgetary Information

Agency or subagency Program name Program description

FY 2014 actual 

obligations

Department of Energy

a

Office of Fossil Energy Strategic Petroleum Reserve 

(SPR) 

The SPR is a government-held emergency stockpile 

of crude oil. The program funds the management, 

operations, maintenance, and security of SPR 

storage sites, as well as site inspection and 

remediation activities. 

$187,835,037

Office of Fossil Energy SPR Petroleum Account Funds all SPR petroleum acquisitions, associated 

transportation costs, custom duties, terminal 

charges, and other miscellaneous costs. The 

account also holds receipts from any crude oil sales. 

$218,544,500 

Source: DOE. | GAO-15-404SP

a

These obligations include “recoveries of prior year unpaid obligations” that were re-obligated in 

FY2014.
 

Page 236 GAO-15-404SP Lists of Programs Identified 

Table 12: U.S. Enrichment Corporation (USEC) Fund - Program and Financing: Related Budgetary Information 

Organization Purpose

Total Investments: 

Fiscal Year 2015 (Estimate)

Unavailable Balances - 

Offsetting Collections:

Fiscal Year 2015 (Estimate)

United States Enrichment 

Corporation (Fund) 

USEC privatization expenses and 

environmental clean-up expenses 

pursuant to Public Law 105-204

$1,634,000,000 ($1,634,000,000)

Source: Budget of the United States Government, Fiscal Year 2015. U.S. Enrichment Corporation Fund as presented in the Appendix for Other Independent Agencies. | GAO-15-404SP

a

The President’s Budget estimates that the USEC Fund will receive $16 million in offsetting 

collections in fiscal year 2015. However, the President’s Budget also notes that “spending authority 

from offsetting collections [are] precluded from obligation.” 

Table 13: TRICARE benefits: Program and Related Budgetary Information

Agency or subagency Program name Program description

FY 2013

benefits issued

Department of Defense

Defense Health Agency TRICARE Purchased Care TRICARE includes several benefit options to provide 

health care to military service members, retirees, and 

their families, including care provided in military 

treatment facilities or, through the TRICARE 

purchased care program, by civilian providers who are 

reimbursed by the department. 

$21,000,000,000 

Source: Defense Health Agency. | GAO-15-404SP

Table 14: Medicare: Program and Related Budgetary Information

Agency or subagency Program name Program description

Calendar year 2013 

program cost

Centers for Medicare & 

Medicaid Services

Medicare hospital benefits Hospital inpatient and outpatient services 

covered by Medicare Part A and Part B. 

$178,600,000,000 

Source: The Boards of Trustees of the Medicare Trust Funds. | GAO-15-404SP

Table 15: Medicaid Financing: Program and Related Budgetary Information

Agency or subagency Program name Program description

FY 2012

estimated cost

Centers for Medicare & 

Medicaid Services

Medicaid A joint federal-state program that finances 

health care for low-income individuals, 

including children, families, and aged or 

disabled individuals

$431,900,000,000

Source: GAO analysis of Centers for Medicare & Medicaid Services data. | GAO-15-404SP

a

Note: Department of Health and Human Services, 2013 Actuarial Report on the Financial Outlook for 

Medicaid (Washington, D.C.: 2013).

a

The $431,900,000,000 represents $22,600,000,000 in administrative costs, $236,600,000,000 in 

federal share of Medicaid payments, and $172,600,000,000 in state share of Medicaid payments.
 

Page 237 GAO-15-404SP Lists of Programs Identified 

Table 16: Supplemental Security Income: Program and Related Budgetary Information

Agency Program name Program description

FY 2013 

obligations

Social Security 

Administration

Supplemental Security Income The Supplemental Security Income program 

guarantees a minimum level of income to 

financially needy individuals who are aged, blind, 

or disabled.

$ 56,485,774,000

Source: GAO analysis of Social Security Administration data. | GAO-15-404SP 

Table 17: Supplemental Nutrition Assistance Benefits: Program and Related Budgetary Information

Agency or subagency Program Name Program description

FY 2013

benefits issued

U.S. Department of 

Agriculture 

U.S. Department of 

Agriculture Food and 

Nutrition Service

Supplemental Nutrition 

Assistance Program (SNAP) 

SNAP, formerly known as the federal Food 

Stamp Program, aims to help low-income 

individuals and households obtain a more 

nutritious diet.

$76,066,280,000

Source: GAO analysis of Supplemental Nutrition Assistance Program data. | GAO-15-404SP 

Table 18: Department of Homeland Security, FEMA’s Disaster Relief Fund: Related Budgetary Information 

Agency or subagency Program name Program Description

FY 2014 

Appropriation

Federal Emergency 

Management Agency

Disaster Relief Fund To carry out the Robert T. Stafford Disaster 

Relief and Emergency Assistance Act

$6,220,908,000

Source: GAO | GAO-15-404SP 

a

a

Pub. L. No. 113-76, 128 Stat. 5, 263 (2014).

(250785)
This is a work of the U.S. government and is not subject to copyright protection in the 

United States. The published product may be reproduced and distributed in its entirety 

without further permission from GAO. However, because this work may contain 

copyrighted images or other material, permission from the copyright holder may be 

necessary if you wish to reproduce this material separately.
The Government Accountability Office, the audit, evaluation, and 

investigative arm of Congress, exists to support Congress in meeting its 

constitutional responsibilities and to help improve the performance and 

accountability of the federal government for the American people. GAO 

examines the use of public funds; evaluates federal programs and 

policies; and provides analyses, recommendations, and other assistance 

to help Congress make informed oversight, policy, and funding decisions. 

GAO’s commitment to good government is reflected in its core values of 

accountability, integrity, and reliability.

The fastest and easiest way to obtain copies of GAO documents at no 

cost is through GAO’s website (http://www.gao.gov). Each weekday 

afternoon, GAO posts on its website newly released reports, testimony, 

and correspondence. To have GAO e-mail you a list of newly posted 

products, go to http://www.gao.gov and select “E-mail Updates.”

The price of each GAO publication reflects GAO’s actual cost of 

production and distribution and depends on the number of pages in the 

publication and whether the publication is printed in color or black and 

white. Pricing and ordering information is posted on GAO’s website, 

http://www.gao.gov/ordering.htm. 

Place orders by calling (202) 512-6000, toll free (866) 801-7077, or 

TDD (202) 512-2537. 

Orders may be paid for using American Express, Discover Card, 

MasterCard, Visa, check, or money order. Call for additional information.

Connect with GAO on Facebook, Flickr, Twitter, and YouTube. 

Subscribe to our RSS Feeds or E-mail Updates. Listen to our Podcasts. 

Visit GAO on the web at www.gao.gov. 

Contact:

Website: http://www.gao.gov/fraudnet/fraudnet.htm

E-mail: fraudnet@gao.gov

Automated answering system: (800) 424-5454 or (202) 512-7470

Katherine Siggerud, Managing Director, siggerudk@gao.gov, (202) 512-

4400, U.S. Government Accountability Office, 441 G Street NW, Room 

7125, Washington, DC 20548

Chuck Young, Managing Director, youngc1@gao.gov, (202) 512-4800

U.S. Government Accountability Office, 441 G Street NW, Room 7149 

Washington, DC 20548

GAO’s Mission

Obtaining Copies of

GAO Reports and 

Testimony

Order by Phone

Connect with GAO

To Report Fraud, 

Waste, and Abuse in 

Federal Programs

Congressional 

Relations

Public Affairs

Please Print on Recycled Paper.