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26–361 PDF 2017

GAO’S 2017 HIGH RISK REPORT: 34 PROGRAMS 

IN PERIL 

HEARING 

BEFORE THE

COMMITTEE ON OVERSIGHT 

AND GOVERNMENT REFORM 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FIFTEENTH CONGRESS 

FIRST SESSION 

FEBRUARY 15, 2017 

Serial No. 115–15 

Printed for the use of the Committee on Oversight and Government Reform 

( 

Available via the World Wide Web: http://www.fdsys.gov 

http://oversight.house.gov 


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COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

Jason Chaffetz, Utah, Chairman 

John J. Duncan, Jr., Tennessee 

Darrell E. Issa, California 

Jim Jordan, Ohio 

Mark Sanford, South Carolina 

Justin Amash, Michigan 

Paul A. Gosar, Arizona 

Scott DesJarlais, Tennessee 

Trey Gowdy, South Carolina 

Blake Farenthold, Texas 

Virginia Foxx, North Carolina 

Thomas Massie, Kentucky 

Mark Meadows, North Carolina 

Ron DeSantis, Florida 

Dennis A. Ross, Florida 

Mark Walker, North Carolina 

Rod Blum, Iowa 

Jody B. Hice, Georgia 

Steve Russell, Oklahoma 

Glenn Grothman, Wisconsin 

Will Hurd, Texas 

Gary J. Palmer, Alabama 

James Comer, Kentucky 

Paul Mitchell, Michigan 

Elijah E. Cummings, Maryland, Ranking 

Minority Member 

Carolyn B. Maloney, New York 

Eleanor Holmes Norton, District of Columbia 

Wm. Lacy Clay, Missouri 

Stephen F. Lynch, Massachusetts 

Jim Cooper, Tennessee 

Gerald E. Connolly, Virginia 

Robin L. Kelly, Illinois 

Brenda L. Lawrence, Michigan 

Bonnie Watson Coleman, New Jersey 

Stacey E. Plaskett, Virgin Islands 

Val Butler Demings, Florida 

Raja Krishnamoorthi, Illinois 

Jamie Raskin, Maryland 

Peter Welch, Vermont 

Matthew Cartwright, Pennsyvania 

Mark DeSaulnier, California 

JONATHAN SKLADANY, Staff Director 

WILLIAM MCKENNA, General Counsel 

KATIE ROTHER, Senior Counsel 

SHARON CASEY, Deputy Chief Clerk 

DAVID RAPALLO, Minority Staff Director 


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C O N T E N T S 

Page 

Hearing held on February 15, 2017 ....................................................................... 1 

WITNESSES 

The Hon. Gene L Dodaro, Comptroller General of the United States, U.S. 

Government Accountability Office 

Oral Statement ................................................................................................. 4 

Written Statement ............................................................................................ 6 

APPENDIX 

Response from the United States Government Accountbility Office to Questions for the Record .............................................................................................. 100 


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GAO’S 2017 HIGH RISK REPORT: 34 

PROGRAMS IN PERIL 

Wednesday, February 15, 2017 

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM, 

Washington, D.C. 

The committee met, pursuant to call, at 10:02 a.m., in Room 

2154, Longworth House Office Building, Hon. Jason Chaffetz 

[chairman of the committee] presiding. 

Present: Representatives Chaffetz, Duncan, Issa, Jordan, Amash, 

DesJarlais, Massie, Meadows, DeSantis, Ross, Walker, Blum, Hice, 

Grothman, Hurd, Palmer, Mitchell, Cummings, Maloney, Norton, 

Connolly, Kelly, Plaskett, Demings, Krishnamoorthi, Welch, Cartwright, and DeSaulnier. 

Chairman CHAFFETZ. The Committee on Oversight and Government Reform will come to order. And without objection, the chair 

is authorized to declare a recess at any time. 

Today, the committee will examine 34 Federal programs the Government Accountability Office has identified as high risk. Programs 

are selected, among other factors, for risks posed to public health 

or safety, national security, economic growth, and privacy or citizens’ rights. With this hearing, we have an opportunity to better 

understand how to help agencies fully resolve the issues identified. 

Regrettably, many of the areas identified in this year’s high-risk 

list are of no surprise. It’s been 2 years since the GAO last issued 

its high-risk report. They do it for each Congress. Since then, only 

one program was removed. Three programs have been added. More 

concerning, six areas have been listed by GAO as, quote, ‘‘high 

risk,’’ end quote, since the report’s inception 27 years ago. Twentyseven years ago. 

Members on this panel, we need to pay attention to this. These 

are good people doing a lot of good work. They’re telling us, they’re 

screaming at us to actually get something done and address these 

issues. 

The six areas listed since 1990 are significant programs too such 

as Medicare, the DOD weapons system acquisition. These are big, 

weighty issues that need to be addressed. The agencies and these 

programs they administer must be doing better. And at a time 

when the national debt nears $20 trillion, addressing high risk can 

also have a meaningful impact on the fiscal health of the Nation. 

The GAO estimates the progress in high-risk areas during the 

past decade resulted in financial benefits totaling approximately 

$240 billion. It’s an average of roughly $24 billion a year, but 


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there’s much, much more to be done. And thankfully, progress is 

possible, and this year’s report demonstrates that as well. 

GAO is removing one key area from the high-risk list. First 

added in 2003, GAO is removing, quote, ‘‘interagency efforts to establish effective mechanisms for sharing and managing terrorismrelated information,’’ end quote, a very important topic that’s important to all of our future. 

Notable progress also occurred in the Department of Defense’s 

supply chain management and with the National Oceanic and Atmospheric Administration closing data gaps in weather satellite 

data. This progress is welcome news, but I want all the items on 

the high-risk list to be fully resolved as soon as possible. There 

would be nothing better than to have Mr. Dodaro come here and 

say, well, there’s nothing on the high-risk list. But I think you got 

some job security and the people behind you have some job security 

because we aren’t anywhere close to that. 

So there are literally billions of dollars that are wasted through 

poor management, slow response to emerging risks, and failure to 

prioritize. 

I look forward to discussing with the Comptroller General how 

to make significant and sustained progress towards resolving these 

most critical issues. 

And, Mr. Dodaro, we appreciate, you in particular have made 

yourself available at every turn, a great resource and understanding of how the government works and where it’s not working. 

And I also want to thank all the men and women who serve in 

this effort to make our country and make the government as efficient and as effective as possible. We really do rely upon you and 

your staff to take the time and effort that—and when you issue 

these reports and have that perspective, it’s my goal, my intention, 

my commitment that, you know, we need to pay attention to that 

to help fix these problems. You’re identifying them and you’re 

pushing these departments and agencies, but we also play a role 

in Congress to actually put in place the legislation that’s needed in 

order to solve many of these issues. So we really do appreciate you 

in particular and, again, the men and women who serve in the 

GAO. Very, very helpful. 

I’d now like to recognize the ranking member, Mr. Cummings. 

Mr. CUMMINGS. Thank you very much, Mr. Chairman. And I 

thank you for having this hearing today. 

Mr. Dodaro, thank you for this in-depth work that you and all 

the dedicated professionals at the GAO put into updating this highrisk report every Congress. And I join the chairman in thanking 

everybody, because I know that you don’t do this by yourself. Federal employees are very dedicated, giving blood, sweat, and tears 

to make sure the government functions properly and that we maintain this democracy. 

GAO reports, and I quote, ‘‘solutions to high-risk problems potentially save billions of dollars, improve service to the public, and 

strengthen government performance and accountability,’’ end of 

quote. The work at GAO complements this committee’s mission, 

and we are indeed grateful for it. 

I was particularly pleased to see this year’s report highlight that 

progress over the past decade has resulted in financial benefits toVerDate Nov 24 2008 11:05 Aug 25, 2017 Jkt 000000 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 H:\26361.TXT APRIL

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taling approximately $240 billion. That’s a lot of money. Real 

progress has been made and, indeed, it must continue. We can always do better. We cannot afford to go backwards. Unfortunately, 

I fear that we may be on the brink of doing just that. 

Less than a month into office, the President’s actions threaten to 

undermine many governmentwide recommendations the nonpartisan experts at GAO have issued. Progress of three high-risk 

areas in particular are in jeopardy under President Trump’s administration: Managing strategic human capital, modernizing the financial regulatory system, and managing fiscal exposure to the 

risks of climate change. 

First, on January 23, 2017, President Trump issued an executive 

order freezing employee hiring. GAO has stated in the past that 

hiring freezes, quote, ‘‘disrupt agency operations and in some cases 

increase the cost to government,’’ end of quote. In fact, this year’s 

GAO report states, and I quote, ‘‘of the 34 high-risk areas listed, 

15 areas had skill gaps, playing a contributory role,’’ end quote. 

A hiring freeze could hamstring the ability of agencies to address 

the needs of the American citizens, businesses, and consumers. As 

one who represents a lot of employees at Social Security, Mr. 

Dodaro, I hear over and over again where the lack of employees 

has made it so much more difficult for people to do their jobs. 

That’s people who at one time there were four people doing the job, 

then they’ve got one. And at the same time, we in Capitol Hill, 

folks on this panel, we expect them to still be able to produce. And 

what’s happening in those instances is that some people are leaving because they just cannot take it. It could exacerbate skill gaps 

at the Federal agencies, making them less productive and less effective. 

Second, we owe it to the American public to continue implementing GAO’s recommendations to modernize our financial regulatory system. That begins by protecting provisions of Dodd-Frank 

and shield American consumers, not by rolling back those provisions. That makes no sense. GAO recommends implementing the 

remaining Dodd-Frank regulatory rules to ensure the effective 

functioning of reforms to the United States financial regulatory 

system, and I wholeheartedly agree. We must continue to support 

this vital work, not undermine it. 

Finally, in order to protect America from fiscal exposure to the 

risk of climate change, we must address this issue head on. How 

can we work together to solve a problem if President Trump and 

some congressional Republicans do not even acknowledge its existence? Duh. The generations yet unborn deserve better than to be 

burdened by the potentially catastrophic cost of climate change risk 

my colleagues across the aisle seem to ignore. 

I implore my colleagues to fully consider the progress we have 

made on all of these issues and the harm that may be done if we 

go down the path of the current administration. 

I look forward to GAO illuminating all that is at stake today. 

And, again, I want to thank all the employees of GAO for doing 

what you do every single day. 

With that, Mr. Chairman, I yield back. 

Chairman CHAFFETZ. Thank you. 


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I’ll hold the record open for 5 legislative days for members who 

would like to submit a written statement. 

I’d now like to recognize and welcome our witness for today at 

the hearing, the Honorable Gene Dodaro, who is Comptroller General of the United States Government Accountability Office. 

There are a number of people that we’re also going to swear in. 

As we found in the past experiences, as we had very specific questions, there are subject matter experts. But in order to testify, they 

too need to be sworn in. These include: Chris Mihm, managing director for Strategic Issues at GAO; Mark Gaffigan, not to be confused with Jim, the managing director for Natural Resources—I’m 

sure I’m the first one ever to use that line. He’s the managing director for Natural Resources and Environment at the GAO. Barbara Bovbjerg, managing director for Education, Workforce, and Income Security at GAO; George Scott, managing director of Homeland Security and Justice. All of these are at the GAO. Dave 

Powner, director of Information Technology; Greg Wilshusen—I 

hope I pronounced that right—director of Information and Technology; Orice Williams Brown, managing director for Financial 

Markets and Community Investment; Nikki Clowers, managing director for Health Care; and Cathleen Berrick, managing director 

for Defense Capabilities and Management; Paul Francis, managing 

director for Acquisitions and Sourcing; and Kate Siggerud, who is 

managing director for Congressional Relations. Their expertise is 

needed in this hearing. 

Pursuant to committee rules, all witnesses are to be sworn before 

they testify. So we need to do this en masse. If you can please all 

rise and raise your right hands. 

Thank you. 

Do you solemnly swear or affirm that the testimony you’re about 

to give will be the truth, the whole truth, and nothing but the 

truth, so help you God? 

Thank you. Let the record reflect that all the witnesses answered 

in the affirmative. 

Mr. Dodaro, you’re a veteran in doing this. We’ll give you as 

much time or latitude as you like. We do appreciate you being here, 

and we’ll now turn the time to you. 

STATEMENT OF GENE L. DODARO 

Mr. DODARO. Thank you very much, Mr. Chairman. 

Good morning to you, Ranking Member Cummings and members 

of the committee. 

I appreciate the opportunity to discuss our latest edition of the 

high-risk list. As has been pointed out in both of your opening 

statements, there have been areas, many areas, where solid 

progress has been made. In fact, 23 of the 32 areas we had on the 

high-risk list in 2015 have either met or fully met the five criteria 

for coming off the list. Those criteria are leadership, the capacity, 

planning, monitoring, and actually demonstrating some progress, 

which is the most difficult criteria to meet. 

That progress was achieved through a lot of hard work by the 

agency leaders and the staff in those agencies and by the Congress. 

I really want to compliment the Congress over this last 2-year period. Over a dozen pieces of legislation were passed to address indiVerDate Nov 24 2008 11:05 Aug 25, 2017 Jkt 000000 PO 00000 Frm 00008 Fmt 6633 Sfmt 6633 H:\26361.TXT APRIL

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vidual high-risk areas and some governmentwide issues as well. 

And Congress held over 250 hearings on subjects covered by the 

high-risk hearings. 

And this committee in particular is to be commended, Mr. Chairman, Ranking Member Cummings, for the bipartisan approach 

that has been taken to address many of these issues, which is really needed. And so I look forward to working with you to help resolve all these areas. 

I share your interest in getting as many areas off this list as possible. I made that a goal during my confirmation hearing. And, you 

know, we’ll maintain our independence. We’re not going to take 

anything off the list till it’s ready, but we’re trying to do what we 

can to be specific and get them off the list. 

The one area you mentioned, managing information sharing of 

terrorism-related information, has really shown steady progress 

over the years, met all criteria, so it’s coming off the list. But I 

want to assure this committee when something goes off the list, it’s 

not out of sight. So we’re still monitoring and we’ll keep an eye on 

it to make sure we don’t have any regression in that area. 

On the other side, there’s a number of areas that really need 

some substantial attention: Veterans’ health care, which we put on 

the last update in 2015. DOD financial management, which we’ve 

talked about in the past, still needs substantial attention. 

Protecting our information systems from cyber attacks and our 

critical infrastructure throughout the United States is important. 

We first put cybersecurity across the Federal Government on the 

high-risk list in 1997. So it’s the 20th anniversary of us warning 

about this issue, and there’s still a lot that needs to be done. 

Information technology acquisitions and operations, which this 

committee has shown a lot of good oversight in a number of hearings. Two of the subcommittees in particular have been working together on that area, so I commend the committee in that regard. 

And reforming housing finance in the Federal Government. 

Fannie and Freddie are still in conservatorship. They’ve been there 

since 2008. The Federal Government is assuming too much risk in 

the housing market, in my opinion, and things need to be done in 

that area as well. 

We are—as you mentioned, we’re adding three new areas this 

year. I’ll quickly cover them in closing. Number one is Federal activities to work with tribes and their members. Wherever we look, 

if it’s helping them with education, ensuring safety at schools, ensuring adequate health care for Indian tribes and their members, 

or allowing them to take energy resources off their land and put 

them into production so it can generate revenues. There is inadequate Federal oversight and support. We’ve made a number of recommendations, 41. Thirty-nine are still outstanding. This needs attention. 

Secondly is the growth in environmental liability. This is to clean 

up nuclear weapons complex waste as well as disposing of civilian 

waste generated through nuclear power plants. This liability has 

grown. It’s approaching one-half trillion dollars, and we don’t believe that’s even the total estimate yet that’s accurate. The government’s been spending tens of billions of dollars to try to clean up 

this activity over the past several years, but the liability keeps 


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growing. We’ve made a number of recommendations. We need a 

more risk-based approach in this area. 

And then lastly, the decennial census, the 2020 census. If you 

look back on the high-risk list, the census is one we put on the 

2010 census in 2008, and it needs attention. The cost exceeded $12 

billion for the 2020 census. This one’s on track, if you use the old 

methods, to be close to $18 billion. I’m sorry, I think I said trillion. 

It’s $12.3 billion. And on track to be close to that. But they’re trying some innovative measures, which I can talk about in the Q and 

A. But those measures, such as using the internet for response and 

developing innovative ways not to do physical canvassing on streetwalking all the communities introduces a lot of risk, and we think 

there’s—much more needs to be done to manage that risk so we 

have a cost-effective and an effective census, which is very important. 

So, Mr. Chairman, Ranking Member Cummings, I appreciate 

your comments about the GAO workforce. We have a very talented, 

dedicated group of people. We look forward to working with you to 

resolve all the areas on the high-risk list. So thank you for the opportunity to be here. 

[Prepared statement of Mr. Dodaro follows:] 


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For Release on Delivery 

Expected at 10:00 a.m. ET 

Wednesday. February 15, 2017 

GA0-17-375T 

United States Government Accountability Office 

Testimony 

Before the Committee on Oversight and 

Government Reform, House of 

Representatives 

HIGH-RISK SERIES 

Progress on Many 

High-Risk Areas, While 

Substantial Efforts Needed 

on Others 

Statement of Gene L. Dodaro 

Comptroller General of the United States 
8 


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GAO 

Highlights 

Hi~hlights of GA0~17~375T; 'a statement 

before the Committee on Ovetsight and 

Government ~eform, Hou~e of 

Representatives 

Why GAO Did This Study 

The federal government is one .of the 

world's largest and most complex 

entities: atiout $3:9 trillion in outlays in 

fiscal year 2016 funded a broad array 

of programs and operations. GAO's 

high-risk program identifies 

'government operations with greater 

vulnerabilities to fraud, waste, abuse, 

and mismanagement or the need for 

transfOrmation to address economy; 

efficiency, or effectiveness challenges. 

This biennial update describes the 

status of high-risk areas listed in 2015 

and actions that are still needed to 

assure further progress, and identifies 

of!W high-risk areas needing attention 

by Congress and the executive branch. 

Solutions to high-risk problems 

potentially save billions of dollars; 

jmprove service to the public, and 

strengthen government performance 

and accountability. 

GAO uses five criteria to assess 

progress in addressing high-risk areas: 

(1) leadership commitment, (2) agency 

capacity, (3) an action plan. (4) 

monitoring efforts, and (5) 

demonstrated progress. 

What GAO Recommends 

This report contains GAO's views on 

progress made arid what remains to be 

done to bring about lasting solutions 

for each hiQh:rlsk area. Perseverance 

by the executive branch In 

implementing GAO's recommended 

solutions and continued oversight and 

action by Congress are essential to 

achieving greater progress. 

VieW GA0-17~375T c For mot& information, 

contact J, Christopher Mlhm at (202} 512~06 

or mlhmj@gao.gov. 

HIGH-RISK SERIES 

Progress on Many High-Risk Areas, While Substantial 

Efforts Needed on Others 

What GAO Found 

Since GAO's last high-risk update, many of the 32 high-risk areas on the 2015 

list have shown solid progress. Twenty-three high-risk areas, or two-thirds of all 

the areas, have met or partially met all five criteria for removal from the HighRisk List; 15 of these areas fully met at least one criterion. Progress has been 

possible through the concerted efforts of Congress and leadership and staff in 

agencies. For example, Congress enacted over a dozen laws since GAO's last 

report in February 2015 to help address high-risk issues. 

GAO removed 1 high-risk area on managing terrorism-related information, 

because significant progress had been made to strengthen how intelligence on 

terrorism, homeland security, and law enforcement is shared among federal, 

state, local, tribal, international, and private sector partners. Sufficient progress 

was made to remove segments of 2 areas related to supply chain management 

at the Department of Defense (OOD) and gaps in geostationary weather satellite 

data. 

Two high-risk areas expanded-DOD's polar-orbiting weather satellites and the 

Department of the Interior's restructuring of offshore oil and gas oversight. 

Several other areas need substantive attention including VA health care, DOO 

financial management, ensuring the security of federal information systems and 

cyber critical infrastructure, resolving the federal role in housing finance, and 

improving the management of IT acquisitions and operations, 

GAO is adding 3 areas to the High-Risk List, bringing the total to 34: 

Management of Federal Programs That Serve Tribes and Their 

Members. GAO has reported that federal agencies, including the 

Department of the Interior's Bureaus of Indian Education and Indian Affairs 

and the Department of Health and Human Services' Indian Health Service, 

have ineffectively administered Indian education and health care programs 

and inefficiently developed Indian energy resources. Thirty-nine of 41 GAO 

recommendations on this issue remain unimplemented. 

U.S. Government's Environmental Liabilities. In fiscal year 2016 this 

liability was estimated at $447 billion (up from $212 billion in 1997), The 

Department of Energy is responsible for 83 percent of these liabilities and 

DOD for 14 percent. Agencies spend billions each year on environmental 

cleanup efforts but the estimated environmental liability continues to rise. 

Since 1994, GAO has made at least 28 recommendations related to this 

area; 13 are unimplemented. 

• The 2020 Decennial Census. The cost of the census has been escalating 

over the last several decennials; the 2010 Census was the costliest U.S. 

Census in history at about $12.3 billion, about 31 percent more than the 2000 

Census (in 2020 dollars). The U.S. Census Bureau (Bureau) plans to 

implement several innovations-including IT systems-for the 2020 Census. 

Successfully implementing these innovations, along with other challenges, 

risk the Bureau's ability to conduct a cost-effective census. Since 2014, GAO 

has made 30 recommendations related to this area; however, only 6 have 

been fully implemented. 

-------------United States Government Accountability Office 
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GAO's 2017 High-Risk List 

Strengthening the Foundation for Efficiency and Effectiveness 

. Strategic Human Capital Management' 

. Managing Federal Real Property 

. Funding the Nation's Surface Transportation System 

. Modernizing the U.S. Financial Regulatory System and the Federal Role in 

Housing Finance' 

. Restructuring the U.S. Postal Service to Achieve Sustainable Financial 

Viability· 

. Management of Federal Oil and Gas Resources 

. limiting the Federal Government's Fiscal Exposure by Better Managing 

Climate Change Risks 

. Improving the Management of IT Acquisitions and Operations 

. Improving Federal Programs that Serve Tribes and Their Members (new)• 

. 2020 Decennial Census (new) 

. U.S. Government's Environmental liabilities (new)' 

Transfonning 000 Program Management 

. DOD Supply Chain Management 

. DOD Weapon Systems Acquisition 

. DOD Financial Management 

. DOD Business Systems Modernization 

. DOD Support Infrastructure Management' 

. DOD Approach to Business Transformation 

Ensuring Public Safety and Security 

. Ensuring the Security of Federal Information Systems and Cyber Critical 

Infrastructure and Protecting the Privacy of Personally Identifiable 

Information 

. Strengthening Department of Homeland Security Management Functions 

. Ensuring the Effeftive Protection of Technologies Critical to U.S. National 

Security Interests 

. Improving Federal Oversight of Food Safety 

. Protecting Public Health through Enhanced Oversight of Medical Products 

. Transfonning EPA's Processes for Assessing and Controlling Toxic 

Chemicals 

. Mitigating Gaps in Weather Satellite Data 

Managing Federal Contracting More Effectively 

. DOE's Contract Management for the National Nuclear Security 

Administration and Office of Environmental Management 

. NASA Acquisition Managem,ent 

. DOD Contract Manaaement 

Assessing the Efficiency and Effecti~eness of Tax Law Administration 

. Enforcement of Tax Laws 

Modernizing and Safeguarding Insurance and Benefit Programs 

. Medicare Program: 

. Medicaid Program 

. Improving and Modernizing Federal Disability Programs 

. Pension Benefit Guaranty Corporation Insurance Programs 

. National Flood Insurance Program' , 

. Manaaina Risks and lmorovina VA Health Care 

Soui"Cil GAO I GA0-17-317 

alegislation is likely to be necessary in order to effectively address this area. 
10 


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High-Risk Areas 

Making Progress 

Chairman Chaffetz, Ranking Member Cummings and Members of the 

Committee: 

Since the early 1990s, our high-risk program has focused attention on 

government operations with greater vulnerabilities to fraud, waste, abuse, 

and mismanagement or that are in need of transformation to address 

economy, efficiency, or effectiveness challenges. This effort, supported 

by the Senate Committee on Homeland Security and Governmental 

Affairs and by the House of Representatives Committee on Oversight and 

Government Reform, has brought much-needed attention to problems 

impeding effective government and costing billions of dollars each year. 

To help improve these high-risk operations, we have made hundreds of 

recommendations. Executive agencies either have addressed or are 

addressing many of them and, as a result, progress is being made in a 

number of areas. Congress also continues to take important actions. For 

example, Congress enacted over a dozen laws since our last report in 

February 2015 to help make progress on high-risk issues. Progress in 

high-risk areas over the past decade (fiscal year 2007 through fiscal year 

2016) resulted in financial benefits totaling approximately $240 billion or 

an average of about $24 billion per year.' 

Our 2017 high-risk update, which is being released today, describes (1) 

progress made addressing high-risk areas and the reasons for that 

progress, and (2) actions that are still needed to assure further progress. 

It also identifies three new high-risk areas, which include the 

management of federal programs that serve tribes and their members, 

the federal government's environmental liabilities, and the 2020 Census. 2 

Since our last high-risk update, while progress has varied, many of the 32 

high-risk areas on our 2015 list have shown solid progress. One area 

related to sharing and managing terrorism-related information is now 

being removed from the list. 

benefits are based on actions taken in response to our work, such as reducing 

government expenditures, increasing revenues, or reallocating funds to other areas. 

2

GAO, High-Risk Series: Progress on Many High-Risk Areas, While Substantial Efforts 

Needed on Others, GA0-17-317 (Washington, D.C.: Feb.15, 2017). 

Page 1 GA0-17-375T 
11 


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Agencies can show progress by addressing our five criteria for removal 

from the list: leadership commitment, capacity, action plan, monitoring, 

and demonstrated progress. 3 As shown in table 1, 23 high-risk areas, or 

two-thirds of all the areas, have met or partially met all five criteria for 

removal from our High-Risk List; 15 of these areas fully met at least one 

criterion. Compared with our last assessment, 11 high-risk areas showed 

progress in one or more of the five criteria. Two areas declined since 

2015. These changes are indicated by the up and down arrows in table 1. 

Table 1: 2015 High-Risk Areas Rated Against Five Criteria for Removal from GAO's High~Risk List 

(1' indicates one or more areas progressed;"" indicates one or more areas declined since 2015.} 

High-risk area 

Establishing Effective Mechanisms for Sharing and Managing Terrorism~Related 

Information to Protect the Homeland 

Transforming the Environmental Protection Agency's (EPA) Processes for 

Assessing and Controlling Toxic Chemicals 

Improving the Management of IT Acquisitions and Operations 

Ensuring the Security of Federal Information Systems and Cyber Critical 

Infrastructure and Protecting the Privacy of Personally Identifiable Information 

DOD Approach to Business Transformation 

Strategic Human Capital Management 

DOE's Contract Management for the National Nuclear Security Administration and 

Office of Environmental 

Change 

since 2015 

Number of criteria 

Met Partially Not met 

met 

0 

on our high-risk criteria and ratings is in appendix I of our report 

Page 2 GA0-17-375T 
12 


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High-risk area Change 

since 2015 

Number of criteria 

Met Partially Not met 

met 

Ensuring the Effective Protection of Technologies Critical to U.S. National Security 

Interests 

Restructuring the U.S. Postal Service to Achieve Sustainable Financial Viability 

Medicaid Programa 

Limiting the Federal Government's Fiscal Exposure by Better Managing Climate 

Change Risks 

DOD Business Systems Modernization 

DOD Financial Management 

Improving Federal Oversight of Food Safety 

Managing Risks and Improving VA Health Care 

Funding the Nation's Surface Transportation System N/A NIA NIA 

Pension Benefit Guaranty Corporation Insurance Programs NIA NIA NIA 

Legend: NfA =Not applicable 

Source GAO j GA0-17-317 

High-Risk Areas Showing 

Progress 

One High-Risk Designation 

Removed 

Notes: Two high-risk areas received a "not applicable" rating because addressing them primarily 

involves congressional action (Funding the Nation's Surface Transportation System and Pension 

Benefit Guaranty Corporation Insurance Programs). 

"Medicare and Medicaid programs only refer to the Improper Payments programs and we did not rate 

other elements of the Medicare and Medicaid programs. 

Of the 11 high-risk areas showing progress between 2015 and 2017, 

sufficient progress was made in 1 area-Establishing Effective 

Mechanisms for Sharing and Managing Terrorism-Related Information to 

Protect the Homeland-to be removed from the list In two other areas, 

enough progress was made that we removed a segment of the high-risk 

area-Mitigating Gaps in Weather Satellite Data and Department of 

Defense (DOD) Supply Chain Management The other eight areas 

improved in at least one criterion rating by either moving from "not met" to 

"partially met" or from "partially met" to "met" 

We removed the area of Establishing Effective Mechanisms for Sharing 

and Managing Terrorism-Related Information to Protect the Homeland 

from the High-Risk List because the Program Manager for the Information 

Sharing Environment (ISE) and key departments and agencies have 

made significant progress to strengthen how intelligence on terrorism, 

homeland security, and law enforcement, as well as other information 

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(collectively referred to in this section as terrorism-related information), is 

shared among federal, state, local, tribal, international, and private sector 

partners. As a result, the Program Manager and key stakeholders have 

met all five criteria for addressing our high-risk designation, and we are 

removing this issue from our High-Risk List. While this progress is 

commendable, it does not mean the government has eliminated all risk 

associated with sharing terrorism-related infomnation. It remains 

imperative that the Program Manager and key departments and agencies 

continue their efforts to advance and sustain ISE. Continued oversight 

and attention is also warranted given the issue's direct relevance to 

homeland security as well as the constant evolution of terrorist threats 

and changing technology. 

The Program Manager, the individual responsible for planning, 

overseeing, and managing ISE, along with the key departments and 

agencies-the Departments of Homeland Security (DHS), Justice (DOJ), 

State (State), and Defense (DOD), and the Office of the Director of 

National Intelligence (ODNI)-are critical to implementing and sustaining 

ISE4 Following the terrorist attacks of 2001, Congress and the executive 

branch took numerous actions aimed explicitly at establishing a range of 

new measures to strengthen the nation's ability to identify, detect, and 

deter terrorism-related activities. For example, ISE was established in 

accordance with the Intelligence Reform and Terrorism Prevention Act of 

2004 (Intelligence Reform Act) to facilitate the sharing of terrorism-related 

information. 5 Figure 1 depicts the relationship between the various 

stakeholders and disciplines involved with the sharing and safeguarding 

of terrorism-related information through IS E. 

4

The Office of the Program Manager for JSE is situated within and funded through 

amounts appropriated to ODNI. Additional departments and agencies also participate in 

ISE, including Air Force Intelligence, Surveillance, and Reconnaissance; Central 

Intelligence Agency; the Departments of Commerce, Energy, Health and Human Services, 

the Interior, Transportation, and the Treasury; National Counterterrorism Center; National 

Geospatial-lnte!ligence Agency; and National Reconnaissance Office. 

5

See Pub. L. No. 108-458, § 1016, 118 Stat. 3638, 3664-70 (2004) at 6 U.S. C.§ 485. See 

also 6 U.S. C. § 482 (requiring the establishment of procedures for the sharing of 

homeland security information) 

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Figure 1: Elements of the Information Sharing Environment 

Souroe:Oft'lceofthePrcgramManagerforlhelnfofmatlonSharlngE!Wironmeot! GA0-17-317 

The Program Manager and key departments and agencies met the 

leadership commitment and capacity criteria in 2015, and have 

subsequently sustained efforts in both these areas. For example, the 

Program Manager clearly articulated a vision for ISE that reflects the 

government's terrorism-related information sharing priorities. Key 

departments and agencies also continued to allocate resources to 

operations that improve information sharing, including developing better 

technical capabilities. 

The Program Manager and key departments and agencies also 

developed, generally agreed upon, and executed the 2013 Strategic 

Implementation Plan (Implementation Plan), which includes the overall 

strategy and more specific planning steps to achieve ISE. Further, they 

have demonstrated that various information-sharing initiatives are being 

used across multiple agencies as well as state, local, and private-sector 

stakeholders. For example, the project manager has developed a 

comprehensive framework for managing enterprise architecture to help 

share and integrate terrorism-related information among muHiple 

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stakeholders in ISE6 Specifically, the Project lnteroperability initiative 

includes technical resources and other guidance that promote greater 

information system compatibility and performance. 7 Furthermore, the key 

departments and agencies have applied the concepts of the Project 

lnteroperability Initiative to improve mission operations by better linking 

different law enforcement databases and facilitating better geospatial 

analysis, among other things. 

In addition, the Program Manager and key departments and agencies 

have continued to devise and implement ways to measure the effect of 

ISE on information sharing to address terrorist and other threats to the 

homeland. They developed performance metrics for specific informationsharing initiatives (e.g., fusion centers) used by various stakeholders to 

receive and share information. The Program Manager and key 

departments and agencies have also documented mission-specific 

accomplishments (e.g., related to maritime domain awareness) where the 

Program Manager helped connect previously incompatible information 

systems. The Program Manager has also partnered with DHS to create 

an Information Sharing Measure Development Pilot that intends to better 

measure the effectiveness of information sharing across all levels of ISE. 

Further, the Program Manager and key departments and agencies have 

used the Implementation Plan to track progress, address challenges, and 

substantially achieve the objectives in the National Strategy for 

enterprise architecture, or modernization blueprint. is intended to provide a clear and 

comprehensive picture of an entity, whether it is an organization (e.g., federal department 

or agency} or a functional or mission area that cuts across more than one organization 

(e.g., financial management). This picture consists of snapshots of the enterprise's current 

and target operational and technological environments, and contains a road map for 

transitioning from the current to the target environment. 

7

Project lnteroperability refers to a collection of policies and guidance related to 

information interoperabi!ity. Information interoperability is the ability to share and use 

infonnation in a consistent, efficient way across multiple organizations and IT systems to 

accomplish operational missions. From a technical perspective, interoperabillty is 

developed in part by using common technical standards and definitions to manage 

information. 

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Information Sharing and Safeguarding. 8 The Implementation Plan 

contains 16 priority objectives, and by the end of fiscal year 2016, 13 of 

the 16 priority objectives were completed. The Program Manager 

transferred the remaining three objectives, which were all underway, to 

other entities with the appropriate technical expertise to continue 

implementation through fiscal year 2019. 

In our 2013 high-risk update, we listed nine action items that were critical 

for moving ISE forward. In that report, we determined that two of those 

action items-demonstrating that the leadership structure has the needed 

authority to leverage participating departments, and updating the vision 

for ISE-had been completed. In our 2015 update, we determined that 

the Program Manager and key departments had achieved four of the 

seven remaining action items-demonstrating that departments are 

defining incremental costs and funding; continuing to identify 

technological capabilities and services that can be shared collaboratively; 

demonstrating that initiatives within individual departments are, or will be, 

leveraged to benefit all stakeholders; and demonstrating that 

stakeholders generally agree with the strategy, plans, time frames, 

responsibilities, and activities for substantially achieving ISE. 

For the 2017 update, we determined that the remaining three action items 

have been completed: establishing an enterprise architecture 

management capability; demonstrating that the federal government can 

show, or is more fully developing a set of metrics to measure, the extent 

to which sharing has improved under ISE; and demonstrating that 

established milestones and time frames are being used as baselines to 

track and monitor progress. Achieving all nine action items has, in effect, 

addressed our high-risk criteria. 

While this demonstrates significant and important progress, sharing 

terrorism-related information remains a constantly evolving work in 

progress that requires continued effort and attention from the Program 

of the Program Manager for the Information Sharing Environment, Strategic 

Implementation Plan for the National Strategy for Information Sharing and Safeguarding 

(Washington. D.C.: December 2013). In December 2012, the President signed the 

National Strategy for Information Sharing and Safeguarding, which provides guidance on 

implementing policies, standards, and technologies that promote secure and responsible 

national security infonnation sharing. This document builds on the 2010 National Security 

Strategy and the 2007 National Strategy for Information Sharing. The December 2012 

national strategy identifies priority objectives, which have been incorporated into the 

Implementation Plan 

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Manager, departments, and agencies. Although no longer a high-risk 

issue, sharing terrorism-related information remains an area with some 

risk, and continues to be vitally important to homeland security, requiring 

ongoing oversight as well as continuous improvement to identify and 

respond to changing threats and technology. Table 2 summarizes the 

Program Manager's and key departments' and agencies' progress in 

achieving the action items. 

Table 2: Status of Action Items Required to Remove Terrorism-Related Information Sharing from GAO's High-Risk List 

Action items 

Demonstrate that the Information Sharing and Access Interagency Policy Committee has 

needed authority, is leveraging participating departments, and is producing results 

Update the vision for ISE-the infonnation sharing capabilities and procedures that need to 

be in place to help ensure terrorism~related information is accessible and identifiable to 

relevant federal, state, local, private, and foreign partners. 

Demonstrate that departments are defining incremental costs and funding needed to 

complete the responsibilities and activities which substantially achieve !SE. 

Continue to identify technological capabilities and services that can be shared collaboratively 

within and across ISE, consistent with a federated architecture approach. 

Demonstrate that initiatives within individual departments are, or will be, leveraged to benefitall relevant federal, state, local, and private security stakeholders participating in !SE 

Establish an enterprise architecture management capability and demonstrate that it will be 

used to guide selection of projects for substantially achieving ISE 

Demonstrate that stakeholders generally agree with the strategy, plans, time frames, their 

responsibilities, and their activities for substantially achieving ISE 

Demonstrate that the federal government can show the extent to which sharing has 

improved under ISE, or can show it has actions underway to more fully develop a set of 

metrics and processes to measure results achieved, both from individual projects and 

activities, as well as from the overall IS E. 

Action 

item 

status 

Meta 

Meta 

Met 

Met 

Met 

Met 

Met6 

Met 

High-risk category 

Leadership Commitment 

Leadership Commitment 

Capacity to resolve risk 

Capacity to resolve risk 

Action plans that provide 

corrective measures 

Action plans that provide 

corrective measures 

Action plans that provide 

corrective measures 

Monitor and validate the 

effectiveness of corrective 

Demonstrate Met Demonstrated Progress that establiSh"ed m"'ile:-:s7to:-:n-:-es,-a-:-n:-:dc:tccim:-:e-;fr'"'a_m_e_s -.,-e-=-b-e""in-g -us-e-cd:-a-s7b-as-e7!in_e_s-;-to--..,.,-.,---;:---:-c-:-::----

track and monitor progress on individual projects and in substantially achieving the overall 

ISE. 

Source- GAO analysis of Office of the Program Manager for the Information Shanr19 Enwonment and key department ctocurnenls, mterviews. aM pnor GAO reports 1 GA0·17·317 

We determined that these action items were complete in our 2013 high"risk update. 

t>we determined that these action items were complete in our 2015 high-risk update. 

As we have with areas previously removed from the High-Risk List, we 

will continue to monitor this area, as appropriate, to ensure that the 

improvements we have noted are sustained. If significant problems again 

arise, we will consider reapplying the high-risk designation. 

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Two High-Risk Areas 

Narrowed 

Additional Information on Establishing Effective Mechanisms for Sharing 

and Managing Terrorism-Related Information to Protect the Homeland is 

provided on page 653 of the report 

In the 2 years since our last high-risk update, sufficient progress has been 

made in two areas-DOD Supply Chain Management and Mitigating 

Gaps in Weather Satellite Data-that we are narrowing their scope. 

DOD Supply Chain Management 

DOD manages about 4.9 million secondary inventory items, such as 

spare parts, with a reported value of approximately $91 billion as of 

September 2015. Since 1990, DOD's inventory management has been 

included on our High-Risk List due to the accumulation of excess 

inventory and weaknesses in demand forecasting for spare parts. In 

addition to DOD's inventory management, the supply chain management 

high-risk area focuses on materiel distribution and asset visibility within 

DOD. Based on DOD's leadership commitment and demonstrated 

progress to address weaknesses since 2010, we are removing the 

inventory management component from the supply chain management 

high-risk area. Specifically, DOD has taken the following actions: 

Implemented a congressionally mandated inventory management 

corrective action plan and institu1ionalized a performance 

management framework, including regular performance reviews and 

standardized metrics. DOD has also developed and begun 

implementing a follow-on improvement plan. 9 

Reduced the percentage and value of its "on-order excess inventory" 

(i.e., items already purchased that may be excess due to subsequent 

changes in requirements) and "on-hand excess inventory" (i.e., items 

categorized for potential reuse or disposal). DOD's data show that the 

proportion of on-order excess inventory to the total amount of onorder inventory decreased from 9.5 percent at the end offiscal year 

2009 to 7 percent at the end offiscal year 2015, the most recent fiscal 

year for which data are available. During these years, the value of onNational Defense Authorization Act for Fiscal Year 2010 required the Secretary of 

Defense to submit to congressional defense committees a comprehensive plan for 

improving the inventory management systems of the military departments, and Defense 

Logistics Agency with the objective of reducing the acquisition and storage of secondary 

inventory that is excess to requirements. Pub. L No. 111~84 § 328 (2009). 

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order excess inventory also decreased from $1.3 billion to $701 

million. DOD's data show that the proportion of on-hand excess 

inventory to the total amount of on-hand inventory dropped from 9.4 

percent at the end of fiscal year 2009 to 7.3 percent at the end of 

fiscal year 2015. The value of on-hand excess inventory also 

decreased during these years from $8.8 billion to $6.8 billion. 

Implemented numerous actions to improve demand forecasting and 

began tracking department-wide forecasting accuracy metrics in 2013, 

resulting in forecast accuracy improving from 46.7 percent in fiscal 

year 2013 to 57.4 percent in fiscal year 2015, the latest fiscal year for 

which complete data are available. 

Implemented 42 of our recommendations since 2006 and is taking 

actions to implement an additional 13 recommendations, which are 

focused generally on reassessing inventory goals, improving 

collaborative forecasting, and making changes to information 

technology (IT) systems used to manage inventory. 

Additional information on DOD Supply Chain Management is provided on 

page 248 of the report. 

Mitigating Gaps in Weather Satellite Data 

The United States relies on two complementary types of satellite systems 

for weather observations and forecasts: (1) polar-orbiting satellites that 

provide a global perspective every morning and afternoon, and (2) 

geostationary satellites that maintain a fixed view of the United States. 

Both types of systems are critical to weather forecasters, climatologists, 

and the military, who map and monitor changes in weather, climate, the 

oceans, and the environment. Federal agencies are planning or executing 

major satellite acquisition programs to replace existing polar and 

geostationary satellite systems that are nearing or beyond the end of their 

expected life spans. The Department of Commerce's National Oceanic 

and Atmospheric Administration (NOAA) is responsible for the polar 

satellite program that crosses the equator in the afternoon and for the 

nation's geostationary weather satellite program; DOD is responsible for 

the polar satellite program that crosses the equator in the early morning 

orbit. 

Over the last several years, we have reported on the potential for a gap in 

satellite data between the time that the current satellites are expected to 

reach the end of their lifespans and the time when the next satellites are 

expected to be in orbit and operational. We added this area to our HighRisk List in 2013. According to NOAA program officials, a satellite data 

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gap would result in less accurate and timely weather forecasts and 

warnings of extreme events-such as hurricanes, storm surges, and 

floods. Such degraded forecasts and warnings would endanger lives, 

property, and our nation's critical infrastructures. Similarly, according to 

DOD officials, a gap in space-based weather monitoring capabilities could 

affect the planning, execution, and sustainment of U.S. military operations 

around the world. In our prior high-risk updates, we reported on NOAA's 

efforts to mitigate the risk of a gap in its polar and geostationary satellite 

programs. 

With strong congressional support and oversight, NOAA has made 

significant progress in its efforts to mitigate the potential for gaps in 

weather satellite data on its geostationary weather satellite program. 

Specifically, the agency demonstrated strong leadership commitment to 

mitigating potential gaps in geostationary satellite data by revising and 

improving its gap mitigation/contingency plans. Previously, in December 

2014, we reported on shortfalls in the satellite program's gap 

mitigation/contingency plans and made recommendations to NOAA to 

address these shortfalls.'' For example, we noted that the plan did not 

sufficiently address 

strategies for preventing a launch delay, 

timelines and triggers to prevent a launch delay, and 

whether any of its mitigation strategies would meet minimum 

performance levels. 

NOAA agreed with these recommendations and released a new version 

of its geostationary satellite contingency plan in February 2015 that 

addressed the recommendations, thereby meeting the criterion for having 

an action plan. 

We rated capacity as partially met in our 2015 report due to concerns 

about NOAA's ability to complete critical testing activities because it was 

already conducting testing on a round-the-clock, accelerated schedule. 

Since then, NOAA adjusted its launch schedule to allow time to complete 

critical integration and testing activities. In doing so, the agency 

demonstrated that it met the capacity criterion. 

10GAO, Geostationary Weather Satellites: Launch Date Nears, but Remaining Schedule 

Risks Need to be Addressed, GA0-15-60 (Washington, D.C.: Dec. 16, 2014). 

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Progress in Other Areas 

NOAA has also met the criterion for demonstrating progress by mttigating 

schedule risks and successfully launching the satellite. In September 

2013, we reported that the agency had weaknesses in its schedulemanagement practices on its core ground system and spacecraft. We 

made recommendations to address those weaknesses, which included 

sequencing all activities, ensuring there are adequate resources for the 

activities, and analyzing schedule risks. NOAA agreed with the 

recommendations and the Geostationary Operational Environmental 

Satellite-R series (GOES-R) program improved its schedule management 

practices. By early 2016, the program had improved the links between 

remaining activities on the spacecraft schedule, included needed 

schedule logic for a greater number of activities on the ground schedule, 

and included indications on the ground schedule that the results of a 

schedule risk analysis were used in calculating its durations. In addition, 

the program successfully launched the GOES-R satellite in November 

2016. 

Oversight by Congress has been instrumental in reducing the risk of 

geostationary weather satellite gaps. For example, Subcommittees of the 

House Science, Space, and Technology Committee held multiple 

hearings to provide oversight of the satellite acquisition and the risk of 

gaps in satellite coverage. 

As a result, the agency now has a robust constellation of operational and 

backup satellites in orbit and has made significant progress in addressing 

the risk of a gap in geostationary data coverage. Accordingly, there is 

sufficient progress to remove this segment from the high-risk area. 11 

Additional information on Mitigating Gaps in Weather Satellite Data is 

provided on pages 19 and 430 of the high-risk report. 

Below are selected examples of areas where progress has been made. 

Strengthening Department of Homeland Security Management 

Functions. The Department of Homeland Security (DHS) continues 

to strengthen and integrate its management functions and progressed 

from partially met to met for the monitoring criterion. Since our 2015 

high-risk update, DHS has strengthened its monitoring efforts for 

financial system modernization programs by entering into a contract 

11Whi!e we removed this segment from the High-Risk List, we added another segment in 

this area-DOD's Polar-Orbiting Weather Satellites. See page 19 of this statement 

Page 12 
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for independent verification and validation services to help ensure that 

the modernization projects meet key requirements. These programs 

are key to effectively supporting the department's financial 

management operations. 

Additionally, DHS continued to meet the criteria for leadership 

commitment and a corrective action plan. DHS's top leadership has 

demonstrated exemplary support and a continued focus on 

addressing the department's management challenges by, among 

other things, issuing 10 updated versions of DHS's initial January 

2011 Integrated Strategy for High Risk Management. 

The National Defense Authorization Act for Fiscal Year 2017 

reinforces this focus with the inclusion of a mandate that the DHS 

Under Secretary for Management report to us every 6 months to 

demonstrate measurable, sustainable progress made in implementing 

DHS's corrective action plans to address the high-risk area until we 

submit written notification of the area's removal from the High-Risk 

List to the appropriate congressional committees. 12 Similar provisions 

were included in the DHS Headquarters Reform and Improvement Act 

of 2015, 13 the DHS Accountability Act of 2016, 14 and the DHS Reform 

and Improvement Act. 15 Additional information on this high-risk area is 

provided on page 354 of the report. 

Strategic Human Capital Management. This area progressed from 

partially met to met on leadership commitment. The Office of 

Personnel Management (OPM), agencies, and Congress have taken 

actions to improve efforts to address mission critical skills gaps. 

Specifically, OPM has demonstrated leadership commitment by 

publishing revisions to its human capital regulations in December 

2016 that require agencies to, among other things, implement human 

capital policies and programs that address and monitor governmentwide and agency-specific skills gaps. This initiative has increased the 

likelihood that skills gaps with the greatest operational effect will be 

addressed in future efforts. 

L No. 114-328, § 1903(b) codified at6 U S.C § 341(a)(11) 

13H.R.3572, 114th Cong. (as passed by House, Oct 20, 2015). 

14S. 2976, 114th Cong. § 101(b) (as reported by S. Comm. on Homeland Sec. and Gov'tal 

Affairs, June 28, 2016). 

15HR. 6381, 114th Cong. (2016). 

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At the same time, Congress has provided agencies with authorities 

and flexibilities to manage the federal workforce and make the federal 

government a more accountable employer. For example, Congress 

included a provision in the National Defense Authorization Act for 

Fiscal Year 2016 to extend the probationary period for newly-hired 

civilian DOD employees from 1 to 2 years. 16 This action is consistent 

with our 2015 reporting that better use of probationary periods gives 

agencies the ability to ensure an employee's skills are a good fit for all 

critical areas of a particular job. Additional information on this high-risk 

area is provided on page 61 of the report. 

Transforming the Environmental Protection Agency's Processes 

for Assessing and Controlling Toxic Chemicals. Overall, this highrisk area progressed from not met to partially met on two criteriacapacity and demonstrated progress-and continued to partially meet 

the criterion for monitoring due to progress in one program area. The 

Environmental Protection Agency's (EPA) ability to effectively 

implement its mission of protecting public health and the environment 

is critically dependent on assessing the risks posed by chemicals in a 

credible and timely manner. EPA assesses these risks under a variety 

of actions, including the Integrated Risk Information System (IRIS) 

program and EPA's Toxic Substances Control Act (TSCA) program. 

The IRIS program has made some progress on the capacity, 

monitoring, and demonstrated progress criteria. In terms of IRIS 

capacity, EPA has partially met this criterion by finalizing a Multi-Year 

Agenda to better assess how many people and resources should be 

dedicated to the IRIS program. In terms of IRIS monitoring, EPA has 

met this criterion in part by using a Chemical Assessment Advisory 

Committee to review IRIS assessments, among other actions. In 

terms of IRIS demonstrated progress, EPA has partially met this 

criterion as of January 2017 by issuing five assessments since fiscal 

year 2015. 

The Frank R. Lautenberg Chemical Safety for the 21st Century Act 

amended TSCA and was enacted on June 22, 2016. 17 Passing TSCA 

reform may facilitate EPA's effort to improve its processes for 

assessing and controlling toxic chemicals in the years ahead. The 

new law provides EPA with greater authority and the ability to take 

actions that could help EPA implement its mission of protecting 

L No. 114-92, div. A, title XI,§ 1105, 129 Stat 726, 1023-1024, codiffed at 10 

. § 1599e. 

17Pub. L No. 114-182, 130 Stat 448 

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human health and the environment. EPA officials stated that the 

agency is better positioned to take action to require chemical 

companies to report chemical toxicity and exposure data. Officials 

also stated that the new law gives the agency additional authorities, 

including the authority to require companies to develop new 

information relating to a chemical as necessary for prioritization and 

risk evaluation. 

Using both new and previously existing TSCA authorities should 

enhance the agency's ability to gather new information as necessary 

to evaluate hazard and exposure risks. Continued leadership 

commitment from EPA officials and Congress will be needed to fully 

implement reforms. Additional work will also be needed to issue a 

workload analysis to demonstrate capacity, complete a corrective 

action plan, and demonstrate progress implementing the new 

legislation. Additional information on this high-risk area is provided on 

page 417 of the report. 

Managing Federal Real Property. The federal government continued 

to meet the criteria for leadership commitment, now partially meets 

the criterion for demonstrated progress, and made some progress in 

each of the other high-risk criteria. The Office of Management and 

Budget (OMB) issued the National Strategy for the Efficient Use of 

Real Property (National Strategy) on March 25, 2015, which directs 

Chief Financial Officer (CFO) Act agencies to take actions to reduce 

the size of the federal real property porttolio, as we recommended in 

2012. In addition, in December 2016, two real property reform bills 

were enacted that could address the long-standing problem of federal 

excess and underutilized property. The Federal Assets Sale and 

Transfer Act of 2016 may help address stakeholder influence by 

establishing an independent board to identify and recommend five 

high-value civilian federal buildings for disposal within 180 days after 

the board members are appointed, as well as develop 

recommendations to dispose and redevelop federal civilian real 

properties. 16 

Additionally, the Federal Property Management Reform Act of 2016 

codified the Federal Real Property Council (FRPC) for the purpose of 

ensuring efficient and effective real property management while 

reducing costs to the federal government. 19 FRPC is required to 

L. No. 114~287, 130 Stat. 1463. The act excludes properties on military instillations 

among other types of properties. 

19Pub. L. No. 114-318, 130 Stat 1608 

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establish a real property management plan template, which must 

include performance measures, and strategies and government-wide 

goals to reduce surplus property or to achieve better utilization of 

underutilized property. In addition, federal agencies are required to 

annually provide FRPC a report on all excess and underutilized 

property, and identify leased space that is not fully used or occupied. 

In addressing our 2016 recommendation to improve the reliability of 

real property data, GSA conducted an in-depth survey that focused on 

key real property data elements maintained in the Federal Real 

Property Profile, formed a working group of CFO Act agencies to 

analyze the survey results and reach consensus on reforms, and 

issued a memorandum to CFO Act agencies designed to improve the 

consistency and quality of real property data. The Federal Protective 

Service, which protects about 9,500 federal facilities, implemented our 

recommendation aimed at improving physical security by issuing a 

plan that identifies goals and describes resources that support its risk 

management approach. In addition, the Interagency Security 

Committee, a DHS-chaired organization, issued new guidance 

intended to make the most effective use of physical security 

resources. Additional information on this high-risk area is provided on 

page 77 of the report. 

Enforcement of Tax Laws. The Internal Revenue Service's (IRS) 

continued efforts to enforce tax laws and address identity theft refund 

fraud (lOT) have resulted in the agency meeting one criterion for 

removal from the High-Risk List (leadership commitment) and partially 

meeting the remaining four criteria (capacity, action plan, monitoring, 

and demonstrating progress). IDT is a persistent and evolving threat 

that burdens legitimate taxpayers who are victims of the crime. It cost 

the U.S. Treasury an estimated minimum of $2.2 billion during the 

2015 tax year. 

Congress and IRS have taken steps to address this challenge. IRS 

has deployed new tools and increased resources dedicated to 

identifying and combating IDT refund fraud. In addition, the 

Consolidated Appropriations Act, 2016, amended the tax code to 

accelerate Wage and Tax Statement (W-2) filing deadlines to January 

31. 20 We had previously reported that the wage information that 

employers report on Form W-2 was not available to IRS until after it 

issues most refunds. With earlier access to W-2 wage data, IRS could 

20Pub. L. No. 114-113, div. Q, § 201, 129 Stat 2242, 3076 (2015). This change went into 

effect forW-2s reporting payments made in 2016 and filed ln 2017. 

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Congressional Action 

Aided Progress on 

Government-wide HighRisk Issues 

match such information to taxpayers' returns and identify 

discrepancies before issuing billions of dollars of fraudulent IDT 

refunds. Such matching could also provide potential benefits for other 

IRS enforcement programs, such as preventing improper payments 

via the Earned Income Tax Credit. Additional information on this highrisk area is provided on page 500 of the report. 

In addition to being instrumental in supporting progress in individual highrisk areas, Congress also has taken actions to enact various statutes that, 

if implemented effectively, will help foster progress on high-risk issues 

government-wide. These include the following: 

Program Management Improvement Accountability Act: 21 

Enacted in December 2016, the act seeks to improve program and 

project management in federal agencies. Among other things, the act 

requires the Deputy Director of the Office of Management and Budget 

(OMS) to adopt and oversee implementation of government-wide 

standards, policies, and guidelines for program and project 

management in executive agencies. The act also requires the Deputy 

Director to conduct portfolio reviews to address programs on our 

High-Risk List. It further creates a Program Management Policy 

Council to act as an interagency forum for improving practices related 

to program and project management. The Council is to review 

programs on the High-Risk List and make recommendations to the 

Deputy Director or designee. We are to review the effectiveness of 

key efforts under the act to improve federal program management. 

Fraud Reduction and Data Analytics Act of 2015 (FROA): 22 FRDA, 

enacted in June 2016, is intended to strengthen federal anti-fraud 

controls, while also addressing improper payments. 23 FRDA requires 

OMB to use our Fraud Risk Framework to create guidelines for 

federal agencies to identify and assess fraud risks, and then design 

and implement control activities to prevent, detect, and respond to 

L. No. 114-264. 130 Stat 1371 (2016) 

22Pub. L. No.114-186.130 Stat 546 (2016). 

231t is important to note that while all fraud involving a federal payment is considered an 

improper payment, not all improper payments are fraud. However, minimizing fraud risks 

in federal agency programs can help reduce improper payments and enhance program 

integrity. 

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fraud. 24 Agencies, as part of their annual financial reports beginning in 

fiscal year 2017, are further required to report on their fraud risks and 

their implementation of fraud reduction strategies, which should help 

Congress monitor agencies' progress in addressing and reducing 

fraud risks. To aid federal agencies in better analyzing fraud risks, 

FRDA requires OMB to establish a working group tasked with 

developing a plan for the creation of an interagency library of data 

analytics and data sets to facilitate the detection of fraud and the 

recovery of improper payments. This working group and the library 

should help agencies to coordinate their fraud detection efforts and 

improve their ability to use data analytics to monitor databases for 

potential improper payments. The billions of dollars of improper 

payments are a central part of the Medicare Program, Medicaid 

Program, and Enforcement of Tax Laws (Earned Income Tax Credit) 

high-risk areas. 

IT Acquisition Reform, Legislation known as the Federal 

Information Technology Acquisition Reform Act {FITARA): 25 

FITARA, enacted in December 2014, was intended to improve how 

agencies acquire IT and enable Congress to monitor agencies' 

progress and hold them accountable for reducing duplication and 

achieving cost savings. FITARA includes specific requirements 

related to seven areas: the federal data center consolidation initiative, 

enhanced transparency and improved risk management, agency 

Chief Information Officer authority enhancements, portfolio review, 

expansion of training and use of IT acquisition cadres, governmentwide software purchasing, and maximizing the benefit of the federal 

strategic sourcing initiative. Effective implementation of FITARA is 

central to making progress in the Improving the Management of IT 

Acquisitions and Operations government-wide area we added to the 

High-Risk List in 2015. 

24To help managers combat fraud and preserve integrity in government agencies and 

programs, we identified leading practices for managing fraud risks and organized them 

into a conceptual framework. GAO, A Framework for Managing Fraud Risks in Federal 

Programs, GA0-15-593SP (Washington, D.C.: July 28, 2015) 

25FITARA was enacted into law a part of the Carl Levin and Howard P. "Buckn McKeon 

National Defense Authorization Act for Fiscal Year 2015, Pub. L. No. 113-291 (2014), dlv. 

A, title VIII, subtitleD,§§ 831-837, 128 Stat. 3292, 3438-3450. 

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High-Risk Areas 

Highlighted for 

Significant Attention 

Expanding High-Risk 

Area: Mitigating Gaps in 

DOD Weather Satellite 

Data 

DOD's Polar-Orbiting Weather 

Satellites 

In the 2 years since the last high-risk update, two areas-Mitigating Gaps 

in Weather Satellite Data and Management of Federal Oil and Gas 

Resources-have expanded in scope because of emerging challenges 

related to these overall high-risk areas. In addition, while progress is 

needed across all high-risk areas, particular areas need significant 

attention. 

While NOAA has made significant progress, as described earlier, in its 

geostationary weather satellite program, DOD has made limited progress 

in meeting its requirements for the polar satellite program. In 2010, when 

the Executive Office of the President decided to disband a tri-agency 

polar weather satellite program, DOD was given responsibility for 

providing polar-orbiting weather satellite capabilities in the early morning 

orbit This information is used to provide updated information for weather 

observations and models. However, the department was slow to develop 

plans to replace the existing satellites that provide this coverage. 

Because DOD delayed establishing plans for its next generation of 

weather satellites, there is a risk of a satellite data gap in the early 

morning orbit 

The last satellite that the department launched in 2014 called Defense 

Meteorological Satellite Program (DMSP)-19, stopped providing recorded 

data used in weather models in February 2016. A prior satellite, called 

DMSP-17, is now the primary satellite operating in the early morning orbit 

However, this satellite, which was launched in 2006, is operating with 

limitations due to the age of its instruments. DOD had developed another 

satellite, called DMSP-20, but plans to launch that satellite were canceled 

after the department did not certify that it would launch the satellite by the 

end of calendar year 2016. 

The department conducted a requirements review and analysis of 

alternatives from February 2012 through September 2014 to determine 

the best way forward for providing needed polar-orbiting satellite 

environmental capabilities in the early morning orbit In October 2016, 

DOD approved plans for its next generation of weather satellites, called 

the Weather System Follow-on-Microwave program, which will meet the 

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department's needs for satellite information on oceanic wind speed and 

direction to protect ships on the ocean's surface. The department plans to 

launch a demonstration satellite in 2017 and to launch its first operational 

satellite developed under this program in 2022. However, DOD's plans for 

the early morning orbit are not comprehensive. 

The department did not thoroughly assess options for providing its two 

highest-priority capabilities, cloud descriptions and area-specific weather 

imagery. These capabilities were not addressed due to an incorrect 

assumption about the capabilities that would be provided by international 

partners. The Weather System Follow-on-Microwave program does not 

address these two highest-priority capabilities and the department has not 

yet determined its long-term plans for providing these capabilities. As a 

result, the department will need to continue to rely on the older DMSP-17 

satellite until its new satellite becomes operational in 2022, and it 

establishes and implements plans to address the high-priority capabilities 

that the new satellite will not address. Given the age of the DMSP-17 

satellite and uncertainty on how much longer it will last, the department 

could face a gap in critical satellite data. 

In August 2016, DOD reported to Congress its near-term plans to address 

potential satellite data gaps. These plans include a greater reliance on 

international partner capabilities, exploring options to move a 

geostationary satellite over an affected region, and plans to explore 

options for acquiring and fielding new equipment, such as satellites and 

satellite components to provide the capabilities. In addition, the 

department anticipates that the demonstration satellite to be developed 

as a precursor to the Weather System Follow-on-Microwave program 

could help mitigate a potential gap by providing some useable data. 

However, these proposed solutions may not be available in time or be 

comprehensive enough to avoid near-term coverage gaps. Such a gap 

could negatively affect military operations that depend on weather data, 

such as long-range strike capabilities and aerial refueling. 

DOD needs to demonstrate progress on its new Weather Satellite Followon-Microwave program and to establish and implement plans to address 

the high-priority capabilities that are not included in the program. 

Additional information on Mitigating Gaps in Weather Satellite Data is 

provided on page 430 of the high-risk report. 

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Expanding High-Risk 

Area: Management of 

Federal Oil and Gas 

Resources 

Restructuring of Offshore Oil 

and Gas Oversight 

On Apri120, 2010, the Deepwater Horizon drilling rig exploded in the Gulf 

of Mexico, resulting in 11 deaths, serious injuries, and the largest marine 

oil spill in U.S. history. In response, in May 2010, the Department of the 

Interior (Interior) first reorganized its offshore oil and gas management 

activities into separate offices for revenue collection, under the Office of 

Natural Resources Revenue, and energy development and regulatory 

oversight, under the Bureau of Ocean Energy Management, Regulation 

and Enforcement Later, in October 2011, Interior further reorganized its 

energy development and regulatory oversight activities when it 

established two new bureaus to oversee offshore resources and 

operational compliance with environmental and safety requirements. The 

new Bureau of Ocean Energy Management (BOEM) is responsible for 

leasing and approving offshore development plans while the new Bureau 

of Safety and Environmental Enforcement (BSEE) is responsible for lease 

operations, safety, and enforcement 

In 2011, we added Interior's management of federal oil and gas resources 

to the High-Risk List based on three concerns: (1) Interior did not have 

reasonable assurance that it was collecting its share of billions of dollars 

of revenue from federal oil and gas resources; (2) Interior continued to 

experience problems hiring, training, and retaining sufficient staff to 

oversee and manage federal oil and gas resources; and (3) Interior was 

engaged in restructuring its oil and gas program, which is inherently 

challenging, and there were questions about whether Interior had the 

capacity to reorganize while carrying out its range of responsibilities, 

especially in a constrained resource environment 

Immediately after reorganizing, Interior developed memorandums and 

standard operating procedures to define roles and responsibilities, and 

facilitate and formalize coordination between BOEM and BSEE. Interior 

also revised polices intended to improve its oversight of offshore oil and 

gas activities, such as new requirements designed to mitigate the risk of a 

subsea well blowout or spill. In 2013, we determined that progress had 

been made, because Interior had fundamentally completed reorganizing 

its oversight of offshore oil and gas activities. As a result, in 2013, we 

removed the reorganization segment from this high-risk area. 

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However, in February 2016, we reported that BSEE had undertaken 

various reform efforts since its creation in 2011, but had not fully 

addressed deficiencies in its investigative, environmental compliance, and 

enforcement capabilities identified by investigations after the Deepwater 

Horizon incident. 

BSEE's ongoing restructuring has made limited progress enhancing the 

bureau's investigative capabilities. BSEE continues to use preDeepwater Horizon incident policies and procedures. Specifically, BSEE 

has not completed a policy outlining investigative responsibilities or 

updated procedures for investigating incidents-among the goals of 

BSEE's restructuring, according to restructuring planning documents, and 

consistent with federal standards for internal control. The use of outdated 

investigative policies and procedures is a long-standing deficiency. PostDeepwater Horizon incident investigations found that Interior's policies 

and procedures did not require it to plan investigations, gather and 

document evidence, and ensure quality control, and determined that 

continuing to use them posed a risk to the effectiveness of bureau 

investigations. Without completing and updating its investigative policies 

and procedures, BSEE continues to face this risk. 

BSEE's ongoing restructuring of its environmental compliance program 

reverses actions taken to address post-Deepwater Horizon incident 

concerns, and risks weakening the bureau's environmental compliance 

oversight capabilities. In 2011, in response to two post-Deepwater 

Horizon incident investigations that found that BSEE's predecessor's 

focus on oil and gas development might have been at the expense of 

protecting the environment, BSEE created an environmental oversight 

division with region-based staff reporting directly to the headquartersbased division chief instead of regional management. This reporting 

structure was to help ensure that environmental issues received 

appropriate weight and consideration within the bureau. 

Under the restructuring, since February 2015, field-based environmental 

compliance staff again report to their regional directors. BSEE's rationale 

for this action is unclear, as it was not documented or analyzed as part of 

the bureau's restructuring planning. Under federal standards for internal 

control, management is to assess the risks posed by external and internal 

sources and decide what actions to take to mitigate them. Without 

assessing the risk of reversing its reporting structure, Interior cannot be 

sure that BSEE will have reasonable assurance that environmental issues 

are receiving the appropriate weight and consideration, as called for by 

post-Deepwater Horizon incident investigations. 

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When we reviewed BSEE's environmental compliance program, we found 

that the interagency agreements between Interior and EPA designed to 

coordinate water quality monitoring under the National Pollutant 

Discharge Elimination System were decades old. According to BSEE 

annual environmental compliance activity reports, the agreements may 

not reflect the agency's current resources and needs. For example, a 

1989 agreement stipulates that Interior shall inspect no more than 50 

facilities on behalf of EPA per year, and shall not conduct water sampling 

on behalf of EPA. Almost 30 years later, after numerous changes in 

drilling practices and technologies, it is unclear whether inspecting no 

more than 50 facilities per year is sufficient to monitor water quality. 

Nevertheless, senior BSEE officials told us that the bureau has no plans 

to update its agreements with EPA, and some officials said that a 

previous headquarters-led effort to update the agreements was not 

completed because it did not sufficiently describe the bureau's offshore oil 

and gas responsibilities. According to Standards for Internal Control in the 

Federal Government, as programs change and agencies strive to improve 

operational processes and adopt new technologies, management officials 

must continually assess and evaluate internal controls to ensure that 

control activities are effective and updated when necessary. 

BSEE's ongoing restructuring has made limited progress in enhancing its 

enforcement capabilities. In particular, BSEE has not developed 

procedures with criteria to guide how it uses enforcement tools-such as 

warnings and fines--which are among the goals of BSEE's restructuring, 

according to planning documents, and consistent with federal standards 

for internal control. BSEE restructuring plans state that the current lack of 

criteria causes BSEE to act inconsistently, which makes oil and gas 

industry operators uncertain about BSEE's oversight approach and 

expectations. The absence of enforcement climate criteria is a longstanding deficiency. For example, post-Deepwater Horizon incident 

investigations recommended BSEE assess its enforcement tools and how 

to employ them to deter safety and environmental violations. Without 

developing procedures with defined criteria for taking enforcement 

actions, BSEE continues to face risks to the effectiveness of its 

enforcement capabilities. 

To enhance Interior's oversight of oil and gas development, we 

recommended in February 2016 that the Secretary of the Interior direct 

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the Director of BSEE to take the following nine actions as it continues to 

restructure. 26 

To address risks to the effectiveness of BSEE's investigations, 

environmental compliance, and enforcement capabilities, we 

recommended that BSEE complete policies outlining the 

responsibilities of investigations, environmental compliance, and 

enforcement programs, and update and develop procedures to guide 

them. 

To enhance its investigative capabilities, we recommended that BSEE 

establish a capability to review investigation policy and collect and 

analyze incidents to identify trends in safety and environmental 

hazards; 

develop a plan with milestones for implementing the case 

management system for investigations; 

clearly communicate the purpose of BSEE's investigations 

program to industry operators; and 

clarify policies and procedures for assigning panel investigation 

membership and referring cases of suspected criminal 

wrongdoing to the Inspector General. 

To enhance its environmental compliance capabilities, we 

recommended that BSEE 

conduct and document a risk analysis of the regional-based 

reporting structure of its Environmental Compliance Division, 

including actions to mitigate any identified risks; 

coordinate with the Administrator of the Environmental Protection 

Agency to consider the relevance of existing interagency 

agreements for monitoring operator compliance with National 

Pollutant Discharge Elimination System permits on the Outer 

Continental Shelf and, if necessary, update agreements to reflect 

current oversight needs; and 

develop a plan to address documented environmental oversight 

staffing needs. 

26GAO, Oil and Gas Management Interior's Bureau of Safety and Environmental 

Enforcement Restructuring Has Not Addressed Long-Standing Oversight Deficiencies, 

GA0-16-245 (Washington, D.C.: Feb. 10, 2016). 

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Additional High-Risk Areas 

Needing Significant 

Attention 

To enhance its enforcement capabilities, we recommended that BSEE 

develop a mechanism to ensure that it reviews the maximum daily 

civil penalty and adjusts it to reflect changes in the Consumer Price 

Index within the time frames established by statute. 

In its written comments, Interior agreed that additional reforms-such as 

documented policies and procedures-are needed to address offshore oil 

and gas oversight deficiencies, but Interior neither agreed nor disagreed 

with our specific recommendations. Additional information on 

Management of Federal Oil and Gas Resources is provided on page 136 

of the high-risk report. 

Managing Risks and Improving VA Health Care. Since we added 

Department of Veterans Affairs (VA) health care to our High-Risk List 

in 2015, VA has acknowledged the significant scope of the work that 

lies ahead in each of the five areas of concern we identified: (1) 

ambiguous policies and inconsistent processes; (2) inadequate 

oversight and accountability; (3) information technology (IT) 

challenges; (4) inadequate training for VA staff; and (5) unclear 

resource needs and allocation priorities. It is imperative that VA 

maintain strong leadership support, and as the new administration 

sets its priorities, VA will need to integrate those priorities with its 

high-risk related actions. 

VA developed an action plan for addressing its high-risk designation, 

but the plan describes many planned outcomes with overly ambitious 

deadlines for completion. We are concerned about the lack of root 

cause analyses for most areas of concern, and the lack of clear 

metrics and needed resources for achieving stated outcomes. In 

addition, with the increased use of community care programs, it is 

imperative that VA's action plan discuss the role of community care in 

decisions related to policies, oversight, IT, training, and resource 

needs. 

Finally, to help address its high-risk designation, VA should continue 

to implement our recommendations, as well as recommendations 

from others. While VA's leadership has increased its focus on 

implementing our recommendations in the last 2 years, additional 

work is needed. We made 66 VA health care-related 

recommendations in products issued since the VA health care highrisk designation in February 2015, for a total of 244 recommendations 

from January 1, 2010, through December 31,2016. VA has 

implemented 122 (about 50 percent) of the 244 recommendations, but 

over 1 00 recommendations remain open as of December 31, 2016 

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(with about 25 percent being open for 3 or more years). It is critical 

that VA implement our recommendations in a timely manner. 

Additional information on Managing Risks and Improving VA Health 

Care is provided on page 627 of the report. 

DOD Financial Management. The effects of DOD's financial 

management problems extend beyond financial reporting and 

negatively affect DOD's ability to manage the department and make 

sound decisions on mission and operations. In addition, DOD remains 

one of the few federal entities that cannot demonstrate its ability to 

accurately account for and reliably report its spending or assets. 

DOD's financial management problems continue as one of three 

major impediments preventing us from expressing an opinion on the 

consolidated financial statements of the federal government. 

Sustained leadership commitment will be critical to DOD's success in 

achieving financial accountability, and in providing reliable information 

for day-to-day management decision making as well as financial audit 

readiness. DOD needs to assure the sustained involvement of 

leadership at all levels of the department in addressing financial 

management reform and business transformation. In addition, further 

action is needed in the areas of capacity and action planning. 

Specifically, DOD needs to 

continue building a workforce with the level of training and 

experience needed to support and sustain sound financial 

management; 

continue to develop and deploy enterprise resource planning 

systems as a critical component of DOD's financial improvement 

and audit readiness strategy, as well as strengthen automated 

controls or design manual workarounds for the remaining legacy 

systems to satisfy audit requirements and improve data used for 

day-to-day decision making; and 

effectively implement its Financial Improvement and Audit 

Readiness Plan and related guidance to focus on strengthening 

processes, controls, and systems to improve the accuracy, 

reliability, and reporting for its priority areas, including budgetary 

information and mission-critical assets. 

Further, DOD needs to monitor and assess the progress the 

department is making to remediate its internal control deficiencies. 

DOD should (1) require the military services to improve their policies 

and procedures for monitoring their corrective action plans for 

financial management-related findings and recommendations, and (2) 

improve its process for monitoring the military services' audit 

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remediation efforts by preparing a consolidated management 

summary that provides a comprehensive picture of the status of 

corrective actions throughout the department. DOD is continuing to 

work toward undergoing a full financial statement audit by fiscal year 

2018; however, it expects to receive disclaimers of opinion on its 

financial statements for a number of years. 

A lack of comprehensive information on the corrective action plans 

limits the ability of DOD and Congress to evaluate DOD's progress 

toward achieving audit readiness, especially given the short amount of 

time remaining before DOD is required to undergo an audit of the 

department-wide financial statements for fiscal year 2018. Being able 

to demonstrate progress in remediating its financial management 

deficiencies will be useful as the department works toward 

implementing lasting financial management reform to ensure that it 

can generate reliable, useful, and timely information for financial 

reporting as well as for decision making and effective operations. 

Moreover, stronger financial management would show DOD's 

accountability for funds and would help it operate more efficiently. 

Additional information on DOD Financial Management is provided on 

page 280 of the high-risk report. 

Modernizing the U.S. Financial Regulatory System and the 

Federal Role in Housing Finance. Resolving the role of the federal 

government in housing finance will require leadership commitment 

and action by Congress and the administration. The federal 

government has directly or indirectly supported more than two-thirds 

of the value of new mortgage originations in the single-family housing 

market since the beginning of the 2007-2009 financial crisis. 27 

Mortgages with federal support include those backed by Fannie Mae 

and Freddie Mac, two large government-sponsored enterprises (the 

enterprises). Out of concern that their deteriorating financial condition 

threatened the stability of financial markets, the Federal Housing 

Finance Agency (FHFA) placed the enterprises into federal 

conservatorship in 2008, creating an explicit fiscal exposure for the 

federal government. As of September 2016, the Department of the 

Treasury (Treasury) had provided about $187.5 billion in funds as 

capital support to the enterprises, with an additional $258.1 billion 

available to the enterprises should they need further assistance. In 

accordance with the terms of agreements with Treasury, the 

ftgure is based on data from Inside Mortgage Finance. 

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enterprises had paid dividends to Treasury totaling about $250.5 

billion through September 2016. 

More than 8 years after entering conservatorship, the enterprises' 

futures remain uncertain and billions of federal dollars remain at risk. 

The enterprises have a reduced capacity to absorb future losses due 

to a capital reserve amount that falls to $0 by 2018. Without a capital 

reserve, any quarterly losses-including those due to market 

fluctuations and not necessarily to economic conditions-would 

require the enterprises to draw additional funds from Treasury. 

Additionally, prolonged conservatorships and a change in leadership 

at FHFA could shift priorities for the conservatorships, which in turn 

could send mixed messages and create uncertainties for market 

participants and hinder the development of the broader secondary 

mortgage market For this reason, we said in November 2016that 

Congress should consider legislation establishing objectives for the 

future federal role in housing finance, including the structure of the 

enterprises, and a transition plan to a reformed housing finance 

system that enables the enterprises to exit conservatorship. 28 

The federal government also supports mortgages through insurance 

or guarantee programs, the largest of which is administered by the 

Department of Housing and Urban Development's Federal Housing 

Administration (FHA). During the financial crisis, FHA served its 

traditional role of helping to stabilize the housing market, but also 

experienced financial difficulties from which it only recently recovered. 

Maintaining FHA's long-term financial health and defining its future 

role also will be critical to any effort to overhaul the housing finance 

system. 

We previously recommended that Congress or FHA specify the 

economic conditions that FHA's Mutual Mortgage Insurance Fund 

would be expected to withstand without requiring supplemental funds. 

As evidenced by the $1.68 billion FHA received in 2013, the current 2 

percent capital requirement for FHA's fund may not always be 

adequate to avoid the need for supplemental funds under severe 

stress scenarios. Implementing our recommendation would be an 

important step not only in addressing FHA's long-term financial 

viability, but also in clarifying FHA's role. 

28GAO, Federal Housing Finance Agency: Objectives Needed for the Future of Fannie 

Mae and Freddie Mac After Conservatorships, GA0~17-92 (Washington, D.C .. Nov. 17, 

2016). 

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Additional information on Modernizing the U.S. Financial Regulatory 

System and the Federal Role in Housing Finance is provided on page 

107 of the report. 

Pension Benefit Guaranty Corporation Insurance Programs. The 

Pension Benefit Guaranty Corporation (PBGC) is responsible for 

insuring the defined benefit pension plans of nearly 40 million 

American workers and retirees who participate in nearly 24,000 

private sector plans. PBGC faces an uncertain financial future due, in 

part, to a long-term decline in the number of traditional defined benefit 

plans and the collective financial risk of the many underfunded 

pension plans that PBGC insures. PBGC's financial portfolio is one of 

the largest of all federal government corporations and, at the end of 

fiscal year 2016, PBGC's net accumulated financial deficit was over 

$79 billion-having more than doubled since fiscal year 2013. PBGC 

has estimated that, without additional funding, its multiemployer 

insurance program will likely be exhausted by 2025 as a resu~ of 

current and projected pension plan insolvencies. The agency's singleemployer insurance program is also at risk due to the continuing 

decline of traditional defined benefit pension plans, increased financial 

risk and reduced premium payments. 

While Congress and PBGC have taken significant and positive steps 

to strengthen the agency over recent years, challenges related to 

PBGC's funding and governance structure remain. Addressing the 

significant financial risk and governance challenges that PBGC faces 

requires additional congressional action. To improve the long-term 

financial stability of PBGC's insurance programs, Congress should 

consider: (1) authorizing a redesign of PBGC's single employer 

program premium structure to better align rates with sponsor risk; (2) 

adopting additional changes to PBGC's governance structure-in 

particular, expanding the composition of its board of directors; (3) 

strengthening funding requirements for plan sponsors as appropriate 

given national economic conditions; (4) working with PBGC to develop 

a strategy for funding PBGC claims over the long term, as the defined 

benefit pension system continues to decline; and (5) enacting 

additional structural reforms to reinforce and stabilize the 

multiemployer system that balance the needs and potential sacrifices 

of contributing employers, participants and the federal government. 

Absent additional steps to improve PBGC's finances, the long-term 

financial stability of the agency remains uncertain and the retirement 

benefits of millions of American workers and retirees could be at risk 

of dramatic reductions. 

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Additional information on Pension Benefit Guaranty Corporation 

Insurance Programs is provided on page 609 of the report. 

Ensuring the Security of Federal Information Systems and Cyber 

Critical Infrastructure and Protecting the Privacy of Personally 

Identifiable Information. Federal agencies and our nation's critical 

infrastructures-such as energy, transportation systems, 

communications, and financial services-are dependent on 

computerized (cyber) information systems and electronic data to carry 

out operations and to process, maintain, and report essential 

information. 29 The security of these systems and data is vital to public 

confidence and the nation's safety, prosperity, and well-being. 

However, safeguarding computer systems and data supporting the 

federal government and the nation's critical infrastructure is a 

concern. We first designated information security as a governmentwide high-risk area in 1997. 

This high-risk area was expanded to include the protection of critical 

cyber infrastructure in 2003 and protecting the privacy of personally 

identifiable information (PII) in 2015. Ineffectively protecting cyber 

assets can facilitate security incidents and cyberattacks that disrupt 

critical operations; lead to inappropriate access to and disclosure, 

modification, or destruction of sensitive information: and threaten 

national security, economic well-being, and public health and safety. 

In addition, the increasing sophistication of hackers and others with 

malicious intent, and the extent to which both federal agencies and 

private companies collect sensitive information about individuals, have 

increased the risk of Pll being exposed and compromised. 

Over the past several years, we have made about 2,500 

recommendations to agencies aimed at improving the securny of 

federal systems and information. These recommendations would help 

agencies strengthen technical security controls over their computer 

networks and systems, fully implement aspects of their information 

security programs, and protect the privacy of Pll held on their 

systems. As of October 2016, about 1,000 of our information security29Critical infrastructure includes systems and assets so vital to the United States that 

incapacitating or destroying them would have a debilitating effect on national security. 

These critical infrastructures are grouped by the following industries or ~sectors~: 

chemical; commercial facilities; communications; critical manufacturing; dams; defense 

industrial base; emergency services; energy; financial services; food and agriculture; 

government facilities; health care and public health; infonnation technology; nuclear 

reactors, materials, and waste; transportation systems; and water and wastewater 

systems. 

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New High-Risk Areas 

Management of Programs 

That Serve Tribes and 

Their Members 

related recommendations had not been implemented. In addition, the 

federal government needs, among other things, to improve its abilities 

to detect, respond to, and mitigate cyber incidents; expand efforts to 

protect cyber critical infrastructure; and oversee the protection of Pll, 

among other things. 

Additional information on Ensuring the Security of Federal Information 

Systems and Cyber Critical Infrastructure and Protecting the Privacy 

of Personally Identifiable Information is provided on page 338 of the 

report. 

For 2017, we are adding three new areas to the High-Risk List. 30 

We, along with inspectors general, special commissions, and others, 

have reported that federal agencies have ineffectively administered Indian 

education and health care programs, and inefficiently fulfilled their 

responsibilities for managing the development of Indian energy 

resources. In particular, we have found numerous challenges facing 

Interior's Bureau of Indian Education (BIE) and Bureau of Indian Affairs 

(BIA) 31 and the Department of Health and Human Services' (HHS) Indian 

Health Service (IHS) in administering education and health care services, 

which put the health and safety of American Indians served by these 

programs at risk. These challenges included poor conditions at BIE 

school facilities that endangered students, and inadequate oversight of 

health care that hindered IHS's ability to ensure quality care to Indian 

communities. In addition, we have reported that BIA mismanages Indian 

energy resources held in trust and thereby limits opportunities for tribes 

and their members to use those resources to create economic benefits 

and improve the well-being of their communities. 

Congress recently noted, "through treaties, statutes, and historical 

relations with Indian tribes, the United States has undertaken a unique 

trust responsibility to protect and support Indian tribes and Indians."" In 

light of this unique trust responsibility and concerns about the federal 

3

D-ro determine which federal government programs and functions should be designated 

high risk, we use our guidance document, Determining Performance and Accountability 

Challenges and High Risks, GA0-01-159SP. 

31Both of these bureaus are under the Office of the Assistant Secretary for Indian Affairs 

(Indian Affairs). 

321ndian Trust Asset Reform Act, Pub. L. No. 114-178, § 101(3)(2016). 

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What Needs to Be Done 

government ineffectively administering Indian education and health care 

programs and mismanaging Indian energy resources, we are adding 

these programs as a high-risk issue because they uniquely affect tribal 

nations and their members. 

Federal agencies have performed poorly in the following broad areas: (1) 

oversight of federal activities; (2) collaboration and communication; (3) 

federal workforce planning; (4) equipment, technology, and infrastructure; 

and (5) federal agencies' data. While federal agencies have taken some 

actions to address the 41 recommendations we made related to Indian 

programs, there are currently 39 that have yet to be fully resolved. 

We plan to continue monitoring federal efforts in these areas. To this end, 

we have ongoing work focusing on accountability for safe schools and 

school construction, and tribal control of energy delivery, management, 

and resource development. 

Education: We have identified weaknesses in how Indian Affairs 

oversees school safety and construction and in how it monitors the way 

schools use Interior funds. We have also found limited workforce planning 

in several key areas related to BIE schools. Moreover, aging BIE school 

facilities and equipment contribute to degraded and unsafe conditions for 

students and staff. Finally, a lack of internal controls and other 

weaknesses hinder Indian Affairs' ability to collect complete and accurate 

information on the physical conditions of BIE schools. 

In the past 3 years, we issued three reports on challenges with Indian 

Affairs' management of BIE schools in which we made 13 

recommendations. Eleven recommendations below remain open. 

To help ensure that BIE schools provide safe and healthy facilities for 

students and staff, we made four recommendations which remain 

open, including that Indian Affairs ensure the inspection information it 

collects on BIE schools is complete and accurate; develop a plan to 

build schools' capacity to promptly address safety and health 

deficiencies; and consistently monitor whether BIE schools have 

established required safety committees. 

To help ensure that BIE conducts more effective oversight of school 

spending, we made four recommendations which remain open, 

including that Indian Affairs develop a workforce plan to ensure that 

BIE has the staff to effectively oversee school spending; put in place 

written procedures and a risk-based approach to guide BIE in 

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overseeing school spending; and improve information sharing to 

support the oversight of BIE school spending. 

To help ensure that Indian Affairs improves how it manages Indian 

education, we made five recommendations. Three recommendations 

remain open, including that Indian Affairs develop a strategic plan for 

BIE that includes goals and performance measures for how its offices 

are fulfilling their responsibilities to provide BIE with support; revise 

Indian Affairs' strategic workforce plan to ensure that BIA regional 

offices have an appropriate number of staff with the right skills to 

support Bl E schools in their regions; and develop and implement 

decision-making procedures for BIE to improve accountability for BIE 

schools. 

Health Care: IHS provides inadequate oversight of health care, both of its 

federally operated facilities and through the Purchase Referred Care 

program (PRC). Other issues include ineffective collaborationspecifically, IHS does not require its area offices to inform IHS 

headquarters if they distribute funds to local PRC programs using 

different criteria than the PRC allocation formula suggested by 

headquarters. As a result, IHS may be unaware of additional funding 

variation across areas. We have also reported that IHS officials told us 

that an insufficient workforce was the biggest impediment to ensuring 

patients could access timely primary care. 

In the past 6 years, we have made 12 recommendations related to Indian 

health care that remain open. Although IHS has taken several actions in 

response to our recommendations, such as improving the data collected 

for the PRC program and adopting Medicare-like rates for non hospital 

services, much more needs to be done. 

To help ensure that Indian people receive quality health care, the 

Secretary of HHS should direct the Director of IHS to take the 

following two actions: (1) as part of implementing IHS's quality 

framework, ensure that agency-wide standards for the quality of care 

provided in its federally operated facilities are developed, and 

systematically monitor facility performance in meeting these standards 

over time; and (2) develop contingency and succession plans for 

replacing key personnel, including area directors. 

To help ensure that timely primary care is available and accessible to 

Indians, IHS should: (1) develop and communicate specific agencywide standards for wait times in federally-operated facilities, and (2) 

monitor patient wait times in federally-operated facilities and ensure 

that corrective actions are taken when standards are not met. 

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To help ensure that IHS has meaningful information on the timeliness 

with which it issues purchase orders authorizing payment under the 

PRC program, and to improve the timeliness of payments to 

providers, we recommended that IHS: (1) modify IHS's claims 

payment system to separately track IHS referrals and self-referrals, 

revise Government Performance and Results Act measures for the 

PRC program so that it distinguishes between these two types of 

referrals, and establish separate time frame targets for these referral 

types; and (2) better align PRC staffing levels and workloads by 

revising its current practices, where available, used to pay for PRC 

program staff. In addition, as HHS and IHS monitor the effect that new 

coverage options available to IHS beneficiaries through PPACA have 

on PRC funds, we recommend that IHS concurrently develop potential 

options to streamline requirements for program eligibility. 

To help ensure successful outreach efforts regarding PPACA 

coverage expansions, we recommended that IHS realign current 

resources and personnel to increase capacity to deal with enrollment 

in Medicaid and the exchanges, and prepare for increased billing to 

these payers. 

If payments for physician and other nonhospital services are capped, 

we recommended that IHS monitor patient access to these services. 

To help ensure a more equitable allocation of funds per capita across 

areas, we recommended that Congress consider requiring IHS to 

develop and use a new method for allocating PRC funds. 

To develop more accurate data for estimating the funds needed for 

the PRC program and improve IHS oversight, we recommended that 

IHS develop a written policy documenting how it evaluates the need 

for the PRC program, and disseminate it to area offices so they 

understand how unfunded services data are used to estimate overall 

program needs. We also recommended that IHS develop written 

guidance for PRC programs outlining a process to use when funds 

are depleted but recipients continue to need services. 

Energy: We have reported on issues with BIA oversight of federal 

activities, such as the length of time it takes the agency to review energyrelated documents. We also reported on challenges with collaboration-in 

particular, while working to form an Indian Energy Service Center, BIA did 

not coordinate with key regulatory agencies, including the Department of 

the Interior's Fish and Wildlife Service, the U.S. Army Corps of Engineers, 

and the Environmental Protection Agency. In addition, we found 

workforce planning issues at BIA contribute to management shortcomings 

that have hindered Indian energy development. Lastly, we found issues 

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with outdated and deteriorating equipment, technology, and infrastructure, 

as well as incomplete and inaccurate data. 

In the past 2 years, we issued three reports on developing Indian energy 

resources in which we made 14 recommendations to BIA. All 

recommendations remain open. 

To help ensure BIA can verify ownership in a timely manner and 

identify resources available for development, we made two 

recommendations, including that Interior take steps to improve its 

geographic information system mapping capabilities. 

To help ensure BIA's review process is efficient and transparent, we 

made two recommendations, including that Interior take steps to 

develop a documented process to track review and response times for 

energy-related documents that must be approved before tribes can 

develop energy resources. 

To help improve clarity of tribal energy resource agreement 

regulations, we recommended BIA provide additional guidance to 

tribes on provisions that tribes have identified to Interior as unclear. 

To help ensure that BIA streamlines the review and approval process 

for revenue-sharing agreements, we made three recommendations, 

including that Interior establish time frames for the review and 

approval of Indian revenue-sharing agreements for oil and gas, and 

establish a system for tracking and monitoring the review and 

approval process to determine whether time frames are met. 

To help improve efficiencies in the federal regulatory process, we 

made four recommendations, including that BIA take steps to 

coordinate with other regulatory agencies so the Service Center can 

serve as a single point of contact or lead agency to navigate the 

regulatory process. 

To help ensure that BIA has a workforce with the right skills, 

appropriately aligned to meet the agency's goals and tribal priorities, 

we made two recommendations, including that BIA establish a 

documented process for assessing BIA's workforce composition at 

agency offices. 

Congressional Actions Needed: It is critical that Congress maintain its 

focus on improving the effectiveness with which federal agencies meet 

their responsibilities to serve tribes and their members. Since 2013, we 

testified at six hearings to address significant weaknesses we found in the 

federal management of programs that serve tribes and their members. 

Sustained congressional attention to these issues will highlight the 

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U.S. Government's 

Environmental Liabilities 

challenges discussed here and could facilitate federal actions to improve 

Indian education and health care programs, and the development of 

Indian energy resources. 

See pages 200-219 of the high-risk report for additional details on what 

we found. 

The federal government's environmental liability has been growing for the 

past 20 years and is likely to continue to increase. For fiscal year 2016, 

the federal government's estimated environmental liability was $44 7 

billion-up from $212 billion for fiscal year 1997. 33 However, this estimate 

does not reflect all of the future cleanup responsibilities facing federal 

agencies. Because of the lack of complete information and the often 

inconsistent approach to making cleanup decisions, federal agencies 

cannot always address their environmental liabilities in ways that 

maximize the reduction of health and safety risks to the public and the 

environment in a cost-effective manner. 

The federal government is financially liable for cleaning up areas where 

federal activities have contaminated the environment. Various federal 

laws, agreements with states, and court decisions require the federal 

government to clean up environmental hazards at federal sites and 

facilities-such as nuclear weapons production facilities and military 

installations. Such sites are contaminated by many types of waste, much 

of which is highly hazardous. 

Federal accounting standards require agencies responsible for cleaning 

up contamination to estimate future cleanup and waste disposal costs, 

and to report such costs in their annual financial statements as 

environmental liabilities. Per federal accounting standards, federal 

agencies' environmental liability estimates are to include probable and 

reasonably estimable costs of cleanup work. Federal agencies' 

environmental liability estimates do not include cost estimates for work for 

which reasonable estimates cannot currently be generated. 

Consequently, the ultimate cost of addressing the U.S. government's 

environmental cleanup is likely greater than $447 billion. Federal 

3

'3we did not adjust environmental liability estimates for inflation because information 

about the amount of the liability applicable to each fiscal year was not available. 

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What Needs to Be Done 

agencies' approaches to addressing their environmental liabilities and 

cleaning up the contamination from past activities are often influenced by 

numerous site-specific factors, stakeholder agreements, and legal 

provisions. 

We have also found that some agencies do not take a holistic, riskinformed approach to environmental cleanup that aligns limited funds with 

the greatest risks to human health and the environment. Since 1994, we 

have made at least 28 recommendations related to addressing the federal 

government's environmental liability. These include 22 recommendations 

to the Departments of Energy (DOE) or Defense (DOD), 1 

recommendation to OMB to consult with Congress on agencies' 

environmental cleanup costs, and 4 recommendations to Congress to 

change the laws governing cleanup activities. Of these, 13 

recommendations remain unimplemented. If implemented, these steps 

would improve the completeness and reliability of the estimated costs of 

future cleanup responsibilities, and lead to more risk-based management 

of the cleanup work. 

Of the federal government's estimated $447 billion environmental liability, 

DOE is responsible for by far the largest share of the liability, and DOD is 

responsible for the second largest share. The rest of the federal 

government makes up the remaining 3 percent of the liability with 

agencies such as the National Aeronautics and Space Administration 

(NASA) and the Departments of Transportation, Veteran's Affairs, 

Agriculture (USDA), and Interior holding large liabilities (see figure 2). 

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Figure 2: Total Reported U.S. Environmental Uability, Fiscal Year 2016 

Dollars in billions 

3% Other federal agencies 12 

Total: 447 

Soun::e: GAO ana!y$18 of !he Flnandal Report oft11e U.S. Government, fiscal year2016. j GA0-17-317 

Note: We did not adjust environmental liability estimates for lnflation because infonnatlon about the 

amount of the liability applicable to each fiscal year was not available. 

Agencies spend billions each year on environmental cleanup efforts but 

the estimated environmental liability continues to rise. For example, 

despite billions spent on environmental cleanup, DOE's environmental 

liability has roughly doubled from a low of $176 billion in fiscal year 1997 

to the fiscal year 2016 estimate of $372 billion. In the last 6 years alone, 

DOE's Office of Environmental Management (EM) has spent $35 billion, 

primarily to treat and dispose of nuclear and hazardous waste, and 

construct capital asset projects to treat the waste; however, EM's portion 

of the environmental liability has grown over this same time period by 

over $90 billion, from $163 billion to $257 billion (see figure 3). 

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Figure 3: DOE's Office of Environmental Management's Annual Spending and 

Growing Environmental Liability 

Dolla,..(inblllions) 

2011 

Flscalyear 

2012 2013 

Annual EM spending 

Cumulative EM spending 

2014 

Reported EM envtronmentalliability 

2015 

Source: GAO analyais of Department of Energy budge! data. 1 GA0-17-317 

2016 

}rotalspentbyOfflceof 

Environmental Management (EM) 

since fiscal year2011: $35 billion 

Note: EM is the organization within DOE responsible for managing environmental cleanup and is 

responsible for cleaning up 107 sites across the country. To date, EM has completed cleanup at 91 of 

these sites. EM spending includes money to treat and dispose of nuclear and hazardous waste, and 

to construct capital asset projects to treat the waste. We did not adjust environmental liability 

estimates for inflation because information about the amount of the liability applicable to each fiscal 

year was not available. 

Progress in addressing the U.S. government's environmental liabilities 

depends on how effectively federal departments and agencies set 

priorities, under increasingly restrictive budgets, that maximize the risk 

reduction and cost-effectiveness of cleanup approaches. As a first step, 

some departments and agencies may need to improve the completeness 

of information about long-term cleanup responsibilities and their 

associated costs so that decision makers, including Congress, can 

consider the full scope of the federal government's cleanup obligations. 

As a next step, certain departments, such as DOE, may need to change 

how they establish cleanup priorities. For example, DOE's current 

practice of negotiating agreements with individual sites without 

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Completeness of 

Environmental Liability 

Estimates 

Reliability of Environmental 

Liability Estimates 

Risk-Based Decision Making 

considering other sites' agreements or available resources may not 

ensure that limited resources will be allocated to reducing the greatest 

environmental risks, and costs will be minimized. 

We have recommended actions to federal agencies that, if implemented, 

would improve the completeness and reliability of the estimated costs of 

future cleanup responsibilities, and lead to more risk-based management 

of the cleanup work. These recommendations include the following. 

In 1994, we recommended that Congress amend certain legislation to 

require agencies to report annually on progress in implementing plans 

for completing site inventories, estimates of the total costs to clean up 

their potential hazardous waste sites, and agencies' progress toward 

completing their site inventories and on their latest estimates of total 

cleanup costs. We believe these recommendations are as relevant, if 

not more so, today. 

In 2015, we recommended that USDA develop plans and procedures 

for completing its inventories of potentially contaminated sites. USDA 

disagreed with this recommendation. However, we continue to believe 

that USDA's inventory of contaminated and potentially contaminated 

sites-in particular, abandoned mines, primarily on Forest Service 

land-is insufficient for effectively managing USDA's overall cleanup 

program. Interior is also faced with an incomplete inventory of 

abandoned mines that it is working to improve. 

In 2006, we recommended that DOD develop, document, and 

implement a program for financial management review, assessment, 

and monitoring of the processes for estimating and reporting 

environmental liabilities. This recommendation has not been 

implemented. 

We have found in the past that DOE's cleanup strategy is not risk 

based and should be re-evaluated. DOE's decisions are often driven 

by local stakeholders and certain requirements in federal facilities 

agreements and consent decrees. In 1995, we recommended that 

DOE set national priorities for cleaning up its contaminated sites using 

data gathered during ongoing risk evaluations. This recommendation 

has not been implemented. 

In 2003, we recommended that DOE ask Congress to clarify its 

authority for designating certain waste with relatively low levels of 

radioactivity as waste incidental to reprocessing, and therefore not 

managed as high-level waste. In 2004. DOE received this specific 

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2020 Decennial Census 

authority from Congress for the Savannah River and Idaho Sites, 34 

thereby allowing DOE to save billions of dollars in waste treatment 

costs. The law, however, excluded the Hanford Site. 

More recently, in 2015, we found that DOE is not comprehensively 

integrating risks posed by National Nuclear Security Administration's 

(NNSA) nonoperational contaminated facilities with EM's portfolio of 

cleanup work. 35 By not integrating nonoperational facilities from 

NNSA, EM is not providing Congress with complete information about 

EM's current and future cleanup obligations as Congress deliberates 

annually about appropriating funds for cleanup activities. We 

recommended that DOE integrate its lists of facilities prioritized for 

disposition with all NNSA facilities that meet EM's transfer 

requirements, and that EM should include this integrated list as part of 

the Congressional Budget Justification for DOE. DOE neither agreed 

nor disagreed with this recommendation. 

See pages 232-24 7 of the high-risk report for additional details on what 

we found. 

One of the most important functions of the U.S. Census Bureau (Bureau) 

is conducting the decennial census of the U.S. population, which is 

mandated by the Constitution and provides vital data for the nation. This 

information is used to apportion the seats of the U.S. House of 

Representatives; realign the boundaries of the legislative districts of each 

state; allocate billions of dollars in federal financial assistance; and 

provide social, demographic, and economic profiles of the nation's people 

to guide policy decisions at each level of government. A complete count 

of the nation's population is an enormous challenge as the Bureau seeks 

to control the cost of the census while it implements several new 

innovations and manages the processes of acquiring and developing new 

and modified IT systems supporting them. Over the past 3 years, we have 

made 30 recommendations to help the Bureau design and implement a 

more cost-effective census for 2020; however, only 6 of them had been 

fully implemented as of January 2017. 

L No. 108-375, § 3116 (2004). 

35NNSA has identified 83 contaminated facilities for potential transfer to EM for disposition 

over a 25-year period, 56 of which are currently nonoperationaL NNSA is maintaining 

these facilities for future transfer to EM, but the condition of non operational facilities 

continues to degrade, resulting in increasing costs to NNSA to maintain them to prevent 

the spread of contamination. 

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The cost of the census, in terms of cost for counting each housing unit, 

has been escalating over the last several decennials. The 2010 Census 

was the costliest U.S. Census in history at about $12.3 billion, and was 

about 31 percent more costly than the $9.4 billion cost of the 2000 

Census (in 2020 dollars). 36 The average cost for counting a housing unit 

increased from about $16 in 1970 to around $92 in 2010 (in 2020 

constant dollars). Meanwhile, the return of census questionnaires by mail 

(the primary mode of data collection) declined over this period from 78 

percent in 1970 to 63 percent in 2010. Declining mail response rates-a 

key indicator of a cost-effective census-are significant and lead to higher 

costs. This is because the Bureau sends enumerators to each 

nonresponding household to obtain census data. As a result, 

nonresponse follow-up is the Bureau's largest and most costly field 

operation. In many ways, the Bureau has had to invest substantially more 

resources each decade to match the results of prior enumerations. 

The Bureau plans to implement several new innovations in its design of 

the 2020 Census. In response to our recommendations regarding past 

decennial efforts and other assessments, the Bureau has fundamentally 

reexamined its approach for conducting the 2020 Census. Its plan for 

2020 includes four broad innovation areas that it believes will save it over 

$5 billion (2020 constant dollars) when compared to what it estimates 

conducting the census with traditional methods would cost. The Bureau's 

innovations include (1) using the Internet as a self-response option, which 

the Bureau has never done on a large scale before; (2) verifying most 

addresses using "in-office" procedures and on-screen imagery rather than 

street-by-street field canvassing; (3) re-engineering data collection 

methods such as by relying on an automated case management system; 

and (4) in certain instances, replacing enumerator collection of data with 

administrative records (information already provided to federal and state 

governments as they administer other programs). These innovations 

show promise for a more cost-effective head count. However, they also 

introduce new risks, in part, because they include new procedures and 

technology that have not been used extensively in earlier decennials, if at 

all. 

36-rhe fiscal year 2020 constant dollar factors the Bureau used are derived from the 

Chained Price Index from "Gross Domestic Product and Deflators Used in the Historical 

Tables: 1940-2020" table from the Fiscal Year 2016 Budget of the United States 

Government. 

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What Needs to Be Done 

The Bureau is also managing the acquisition and development of new 

and modified IT systems, which add complexity to the design of the 

census. To help control census costs, the Bureau plans to significantly 

change the methods and technology it uses to count the population, such 

as offering an option for households to respond to the survey via the 

Internet or phone, providing mobile devices for field enumerators to 

collect survey data from households, and automating the management of 

field operations. This redesign relies on acquiring and developing many 

new and modified IT systems, which could add complexity to the design. 

These cost risks, new innovations, and acquisition and development of IT 

systems for the 2020 Census, along with other challenges we have 

identified in recent years, raise serious concerns about the Bureau's 

ability to conduct a cost-effective enumeration. Based on these concerns, 

we have concluded that the 2020 Census is a high-risk area and have 

added it to the High-Risk List in 2017. 

To help the Bureau mitigate the risks associated with its fundamentally 

new and complex innovations for the 2020 Census, the commitment of 

top leadership is needed to ensure the Bureau's management, culture, 

and business practices align with a cost-effective enumeration. For 

example, the Bureau needs to continue strategic workforce planning 

efforts to ensure it has the skills and competencies needed to support 

planning and executing the census. It must also rigorously test individual 

census-taking activities to provide information on their feasibility and 

performance, their potential for achieving desired results, and the extent 

to which they are able to function together under full operational 

conditions. 37 

We have recommended that the Bureau also ensure that its scheduling 

adheres to leading practices and be able to support a quantitative 

schedule risk assessment, such as by having all activities associated with 

the levels of resources and effort needed to complete them. The Bureau 

has stated that it has begun maturing project schedules to ensure that the 

logical relationships are in place and plans to conduct a quantitative risk 

assessment. We will continue to monitor the Bureau's efforts. 

37GAO, 2020 Census: Additional Actions Could Strengthen Data Collection Efforts, 

GA0-17-191 (Washington, D.C.: Jan. 26, 2017). 

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The Bureau must also improve its ability to manage, develop, and secure 

its IT systems. For example, the Bureau needs to prioritize its IT 

decisions and determine what information it needs in order to make those 

decisions. In addition, the Bureau needs to make key IT decisions for the 

2020 Census in order to ensure they have enough time to have the 

production systems in place to support the end-to-end system test To 

this end, we recommended the Bureau ensure that the methodologies for 

answering the Internet response rate and IT infrastructure research 

questions are determined and documented in time to inform key design 

decisions. 38 Further, given the numerous and critical dependencies 

between the Census Enterprise Data Collection and Processing and 2020 

Census programs, their parallel implementation tracks, and the 2020 

Census's immovable deadline, we recommended that the Bureau 

establish a comprehensive and integrated list of all interdependent risks 

facing the two programs, and clearly identify roles and responsibilities for 

managing this list 39 The Bureau stated that it plans to take actions to 

address our recommendations. 

It is also critical for the Bureau to have better oversight and control over 

its cost estimation process and we have recommended that the Bureau 

ensure its cost estimate is consistent with our leading practices. 40 For 

example, the Bureau will need to, among other practices, document all 

cost-influencing assumptions; describe estimating methodologies used for 

each cost element; ensure that variances between planned and actual 

cost are documented, explained, and reviewed; and include a 

comprehensive sensitivity analysis, so that it can better estimate costs. 

We also recommended that the Bureau implement and institutionalize 

processes or methods for ensuring control over how risk and uncertainty 

are accounted for and communicated within its cost estimation process. 

The Bureau agreed with our recommendations, and we are currently 

conducting a follow-up audit of the Bureau's most recent cost estimate 

and will determine whether the Bureau has implemented them. 

Sustained congressional oversight will be essential as well. In 2015 and 

2016, congressional committees held five hearings focusing on the 

progress of the Bureau's preparations for the decenniaL Going forward, 

39GA0-16-623. 

40GA0-16-628. 

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Monitoring Previous 

High-Risk Areas 

Personnel Security 

Clearances 

active oversight will be needed to ensure these efforts stay on track, the 

Bureau has needed resources, and Bureau officials are held accountable 

for implementing the enumeration as planned. 

We will continue monitoring the Bureau's efforts to conduct a costeffective enumeration. To this end, we have ongoing work focusing on 

such topics as the Bureau's updated lifecycle cost estimate and the 

readiness of IT systems for the 2018 End-to-End Test. 

See pages 219-231 of the high-risk report for additional details on what 

we found. 

After we remove areas from the High-Risk List we continue to monitor 

them, as appropriate, to determine if the improvements we have noted 

are sustained and whether new issues emerge. If significant problems 

again arise, we will consider reapplying the high-risk designation. DOD's 

Personnel Security Clearance Program is one former high-risk area that 

we continue to closely monitor in light of government-wide reform efforts. 

The Office of the Director of National Intelligence (ODNI) estimates that 

approximately 4.2 million federal government and contractor employees 

held or were eligible to hold a security clearance as of October 1, 2015. 41 

Personnel security clearances provide personnel with access to classified 

information, the unauthorized disclosure of which could, in certain 

circumstances, cause exceptionally grave damage to national security. 

High profile security incidents, such as the disclosure of classified 

programs and documents by a National Security Agency contractor and 

the OPM data breach of 21.5 million records, demonstrate the continued 

need for high quality background investigations and adjudications, strong 

oversight, and a secure IT process, which have been areas of longstanding challenges for the federal government. 

Director of National Intelligence (ON I), in accordance with Executive Order 13467, 

is responsible, as the Security Executive Agent, for the development of policies and 

procedures governing the conduct of investigations and adjudications for eHgibility for 

access to classified infonnation and eligibility to hold a sensitive position, See Exec. Order 

No. 13,467, § 2.3(c), 73 Fed. Reg. 38,103 (June 30, 2008). (renumbered as section 2.5(e) 

in January 2017) 

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In 2005, we designated the DOD personnel security clearance program 

as a high-risk area because of delays in completing background 

investigations and adjudications. We continued the high-risk designation 

in the 2007 and 2009 updates to our High-Risk List because of issues 

with the quality of investigation and adjudication documentation and 

because delays in the timely processing of security clearances 

continued. 42 

In our 2011 high-risk report, we removed DOD's personnel security 

clearance program from the High-Risk list because DOD took actions to 

develop guidance to improve its adjudication process, develop and 

implement tools and metrics to assess quality of investigations and 

adjudications, and improve timeliness for processing clearances43 We 

also noted that DOD continues to be a prominent player in the overall 

security clearance reform effort, which includes entities within the OMB, 

OPM, and ODNI that comprise the Performance Accountability Council 

(PAC) which oversees security clearance reform. The executive branch 

has also taken steps to monitor its security clearance reform efforts. The 

GPRA Modernization Act of 2010 requires OMB to report through a 

website-performance.gov-on long-term cross-agency priority goals, 

which are outcome-oriented goals covering a limited number of 

crosscutting policy areas, as well as goals to improve management 

across the federal government44 Among the cross-agency priority goals, 

the executive branch identified security clearance reform as one of the 

key areas it is monitoring. 

Since removing DOD's personnel security clearance program from the 

High-Risk List, the government's overall reform efforts that began after 

passage of the Intelligence Reform and Terrorism Prevention Act of 2004 

have had mixed progress, and key reform efforts have not yet been 

implemented. In the aftermath of the June 2013 disclosure of classified 

documents by a former National Security Agency contractor and the 

September 2013 shooting at the Washington Navy Yard, OMB issued, in 

February 2014, the Suitability and Security Processes Review Report to 

42GAO, High-Risk Series: An Update, GA0-07-310 (Washington, D.C.: January 2007); 

and High-Risk Senes: An Update, GA0-09-271 (Washington, D.C.: January 2009). 

43GAO, High-Risk Series: An Update, GA0-11-278 (Washington, D.C.: January 2011). 

44See also GAO, Performance.gov: Long-Term Strategy Needed to Improve Website 

Usability, GA0-16-693 (Washington, D.C .. Aug 30, 2016) 

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the President, a 120-day review of the government's processes for 

granting security clearances, among other things. 

The 120-day review resulted in 37 recommendations, 65 percent of which 

have been implemented, as of October 2016, including the issuance of 

executive branch-wide quality assessment standards for investigations in 

January 2015. Additionally, the recommendations led to expanding 

DOD's ability to continuously evaluate the continued eligibility of cleared 

personnel. However, other recommendations from the 120-day review 

have not yet been implemented. For example, the reform effort is still 

trying to fully implement the revised background investigation standards 

issued in 2012 and improve data sharing between local, state, and federal 

entities. 

In addition, the 120-day review further found that performance measures 

for investigative quality are neither standardized nor implemented 

consistently across the government, and that measuring and ensuring 

quality continues to be a challenge. The review contained three 

recommendations to address the development of quality metrics, but the 

PAC has only partially implemented those recommendations. We 

previously reported that the executive branch had developed some 

metrics to assess quality at different phases of the personnel security 

clearance process; however, those metrics had not been fully developed 

and implemented. 45 

The development of metrics to assess quality throughout the security 

clearance process has been a long-standing concern. 46 Since the late 

1990s we have emphasized the need to build and monitor quality 

throughout the personnel security clearance process. 47 In 2009, we again 

45GAO, Personnel Security Clearances: Full Development and Implementation of Metrics 

Needed to Measure Quality of Process, GA0-14-157T (Washington, D.C.: Oct 31, 2013). 

46GAO, Personnel Security Clearances Funding Estimates and Government-wide Metrics 

Are Needed to Implement Long-Standing Reform Efforts, GA0-15-179SU (Washington, 

D.C.: Apr. 23, 2015); Personnel Security Clearances: Additional Guidance and Oversight 

Needed at DHS and DOD to Ensure Consistent Application of Revocation Process, 

GA0-14-640 (Washington, D.C.: Sept. 8, 2014); DOD Personnel Clearances: 

Comprehensive Timeliness Reporting, Complete Clearance Documentation, and Quality 

Measures Are Needed to Further Improve the Clearance Process, GA0-09-400 

(Washington, D.C May 19, 2009). 

47GAO, DOD Personnet Inadequate Personnel Security Investigations Pose NaUonaf 

Security Risks, GAO/NSIAD-00-12 (Washington, D.C.: Oct. 27, 1999). 

Page 47 GA0-17-375T 
57 


KING-6430 with DISTILLERInsert offset folio 51 here 26361.051

noted that clearly defined quality metrics can improve the security 

clearance process by enhancing oversight of the time required to process 

security clearances and the quality of the investigation and adjudicative 

decisions. We recommended that OMB provide Congress with results of 

metrics on comprehensive timeliness and the quality of investigations and 

adjudications•• According to ODNI, in October 2016, ODNI began 

implementation of a Quality Assessment and Reporting Tool to document 

customer issues with background investigations. The tool will be used to 

report on the quality of 5 percent of each executive branch agency's 

background investigations. 

ODNI officials stated that they plan to develop metrics in the future as 

data are gathered from the tool, but did not identify a completion date for 

these metrics. Separately, the NOAA for Fiscal Year 2017, among other 

things, requires DOD to institute a program to collect and maintain data 

and metrics on the background investigation process, in the context of 

developing a system for performance of background investigations. 49 The 

PAC's effort to fully address the 120-day review and our 

recommendations on establishing metrics on the quality of investigations 

as well as DOD's efforts to address the broader requirements in the 

NOAA for Fiscal Year 2017 remain open and will need to be a continued 

focus of the department moving forward in its effort to improve its 

management of the security clearance process. 

Further, in response to the 2015 OPM data breach, the PAC completed a 

90-day review which led to an executive order establishing the National 

Background Investigations Bureau, within OPM, to replace the Federal 

Investigative Services and transferred responsibility to develop, maintain 

and secure new IT systems for clearances to DOD. 50 Additionally, the 

Executive Order made DOD a full principal member of the PAC. 51 The 

Executive Order also directed the PAC to review authorities, roles, and 

responsibilities, including submitting recommendations related to revising, 

48GA0-09-400. 

49See Pub. L. No.114-328, § 951(b)(1)(G) (2016). 

50See Exec. Order No. 13,741,81 Fed. Reg. 68,289 (Sept. 29, 2016) (amending Exec. 

Order No. 13,467). 

51See Exec. Order No. 13.741, § 1(e), 81 Fed. Reg. at68,289--90 

Page 48 GA0-17-375T 
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KING-6430 with DISTILLERInsert offset folio 52 here 26361.052

as appropriate, executive orders pertaining to security clearances. 52 This 

effort is ongoing. 

In addition to addressing the quality of security clearances and other 

goals and recommendations outlined in the 120-day and 90-day reviews 

and the government's cross-agency priority goals, the PAC has the added 

challenge of addressing recent changes that may result from the NOAA 

for Fiscal Year 2017. Specifically, section 951 of the act requires the 

Secretary of Defense to develop an implementation plan for the Defense 

Security Service to conduct background investigations for certain DOD 

personnel-presently conducted by OPM-after October 1, 2017. 53 The 

Secretary of Defense must submit the plan to the congressional defense 

committees by August 1, 2017. It also requires the Secretary of Defense 

and Director of OPM to develop a plan by October 1, 2017, to transfer 

investigative personnel and contracted resources to DOD in proportion to 

the workload if the plan for DOD to conduct the background investigations 

were implemented. 54 It is unknown if these potential changes will impact 

recent clearance reform efforts. 

Given the history and inherent challenges of reforming the governmentwide security clearance process, coupled with recent amendments to a 

governing Executive Order and potential changes arising from the NOAA 

for Fiscal Year 2017, we will continue reviewing critical functions for 

personnel security clearance reform and monitor the government's 

implementation of key reform efforts. We have ongoing work assessing 

progress being made on the overall security clearance reform effort and 

in implementing a continuous evaluation process, 55 a key reform effort 

considered important to improving the timeliness and quality of 

Exec. Order No. 13.741, § 2. 81 Fed. Reg. at 68.291. 

53Specifically, the implementation plan would cover background investigations for DOD 

personnel whose investigations are adjudicated by the DOD Consolidated Adjudication 

Facility. See Pub. L. No. 114-328, § 951(a). According to the Consolidated Adjudication 

Facility, its mission is to determine security clearance eligibility of non-intemgence agency 

DOD personnel, with a customer base including all mmtary service members, military 

applicants, civilian employees, and consultants affiliated with DOD 

54See id. 

55Continuous evaluation refers to a vetting process to review the background of an individual who has been determined to be eligible for access to classified information or to hold a sensitive position at any time during the period of eligibility. It leverages a set of 

automated record checks and business rules to assist in the on..going assessment of 

continued eligibility. Exec. Order No. 13,764, § 3(e) (Jan. 17, 2017). 

Page 49 
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KING-6430 with DISTILLERInsert offset folio 53 here 26361.053

(101425) 

investigations. We anticipate issuing a report on the status of the 

government's continuous evaluation process in the fall of 2017. 

Additionally, we have previously reported on the importance of securing 

federal IT systems and anticipate issuing a report in early 2017 that 

examines IT security at OPM and efforts to secure these types of critical 

systems. 56 Continued progress in reforming personnel security 

clearances is essential in helping to ensure a federal workforce entrusted 

to protect U.S. government information and property, promote a safe and 

secure work environment, and enhance the U.S. government's risk 

management approach. 

The high-risk assessment continues to be a top priority and we will 

maintain our emphasis on identifying high-risk issues across government 

and on providing insights and sustained attention to help address them, 

by working collaboratively with Congress, agency leaders, and OMB. As 

part of this effort, with the new administration and Congress in 2017 we 

hope to continue to participate in regular meetings with the incoming 

OMB Deputy Director for Management and with top agency officials to 

discuss progress in addressing high-risk areas. Such efforts have been 

critical for the progress that has been made. 

This high-risk update is intended to help inform the oversight agenda for 

the 115th Congress and to guide efforts of the administration and 

agencies to improve government performance and reduce waste and 

risks. 

Thank you, Chairman Chaffetz, Ranking Member Cummings, and 

Members of the Committee. This concludes my testimony. I would be 

pleased to answer any questions. 

For further information on this testimony, please contact J. Christopher 

Mihm at mihmj@gao.gov or (202) 512-6806. Contact points for the 

individual high-risk areas are listed in the report and on our high-risk 

website. Contact points for our Congressional Relations and Public Affairs 

offices may be found on the last page of this statement. 

56GAO, Information Security: Agencies Need to Improve Controls over Selected HighImpact Systems, GAQ-16-501 (Washington, D.C.: May 18. 2016). 

Page 50 
60 

Chairman CHAFFETZ. Thank you. Thank you for being here. 

We’ll now start by recognizing the gentleman from Tennessee, 

Mr. Duncan. 

Mr. DUNCAN. Thank you, Mr. Chairman. 

And, Mr. Dodaro, thank you for your work. I do appreciate the 

work that you do and your agency. It’s very helpful to this committee. 

There are several areas I’d like to get into very quickly, but the 

ranking member mentioned Dodd-Frank. And we had a hearing in 

here 2 or 3 months ago with the head of the FDIC, and it’s been 

brought out that something like one in five banks and credit unions 

have gone under since Dodd-Frank, or have disappeared. And you 

mentioned in your report, quote, ‘‘mounting regulations stemming 

from Dodd-Frank.’’ 

Do you and your experts—we had one witness who said you have to have probably at least $1 billion in assets to survive in the banking business today. Do you and your experts foresee a continuation 

of this, of so many banks going under or being forced to merge or 

at high risk? 

Mr. DODARO. There have been a number of areas we’ve looked at, 

particularly small community banks and what the burden would be 

for them. The number of banks—you know, we do the audit of the 

Federal Deposit Insurance Fund. The number of banks that have 

failed have been going down over this past several years, and the 

number on the troubled list or the watch list that they have has 

been going down as well. So it may be in some other sectors of the 

economy. 

I have Orice Williams Brown here. But there are definitely some 

things that need streamlined, and we’ve made recommendations. 

The stress test that the banks are put under. I think we have to 

look for ways, and the way we’ve advised the Congress is looking 

for ways to make refinements that reduce the regulatory burden 

but still do not undermine the need for banks to have adequate 

capital reserves to withstand downturns in the economy. We’re 

looking very carefully now at the bank examination process because of concentrations in commercial real estate lending and auto 

lending as well. 

Ms. Brown is with me today. She’s our expert in this area. I’ll 

just ask her to address this issue. 

Ms. BROWN. We currently have work underway looking at the effect of various pieces of legislation on small banks, community 

banks. So we’re looking at the issue of regulatory burden. We are 

trying to identify if there are certain characteristics of legislation 

or laws that particularly impact small banks. We’re also looking at 

exemptions and a variety of issues. So that work will be coming out 

later this year that specifically addresses this issue. 

Mr. DUNCAN. Well, you do agree, I think everyone agrees, that 

this regulatory burden is much more difficult for the small banks 

to work with than these large, giant banks. And the total deposits 

of the five largest banks have gone up from 22 percent total deposits to 44 percent since the passing of Dodd-Frank. 

Let me ask you, Mr. Dodaro, about another area. Several years 

ago, I received a letter from the BLM and a recommendation from 

OMB. BLM identified over 3 million acres of land that they would 


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like to sell or dispose of. And we did pass a bill last year, the Federal Assets Sale and Transfer Act. The GAO has identified 273,000 

buildings that the Federal Government either leases or owns. 

Are we making any progress toward raising some money from 

some of the sale of some of these lands? We seem to have continued 

taking over more land instead of getting rid of some of this land 

that even the government, even the different agencies don’t want. 

Mr. DODARO. There’s some progress being made. There’s a national strategy that was issued. You mentioned the legislation. 

Congress passed two pieces of legislation late last year that will 

help in that area. 

One property we reported in our testimony is Cotton Annex, 

they’ve been trying to sell. We understand they just got a bid on 

that. I think this board that the Congress has set up to independently identify some high-value properties is an important area as 

well. And the agencies need to make sure that the property, some 

of the properties are properly maintained and upgraded so that 

they’re actually able to be sold or disposed of in adequate means. 

So we’re making some progress in that area, but there’s a lot more 

that still needs to be done. 

Mr. DUNCAN. I think it’s pretty clear that the Federal Government owns or leases far too many buildings. 

Let me quickly get into one other area. The President has advo- cated a $1 trillion increase in spending on transportation, yet you 

say in your report that spending has not improved system performance in the transportation area. Why do you think that is? 

Mr. DODARO. Yeah. That’s because the programs that were set 

up by the Department of Treasury—or, excuse me, Transportation 

really did not adequately measure the results of the investment 

that the Federal Government had made. We knew a lot of money 

was being spent, but was it actually improving the safety of the 

system, the condition of the roads, the condition of the bridges? So 

Congress mandated a more performance-based system, which 

Transportation’s in the progress of issuing regulations and will 

soon be implemented. So by the next update, we’ll know whether 

that’s working well or not. 

But our putting this on the high-risk list emanated from the financing issue, that there’s really—the Highway Trust Fund has 

not been adequate enough for a number of years now. Congress has 

been supplementing that with general appropriation funds. They 

really need to find a permanent financing vehicle. Congress did 

find a temporary one that will get us through 2020, but between 

2021 and 2026, CBO is estimating there’ll be over $1 billion shortfall in what’s needed to maintain the roads. 

So there are two issues: Finding the money and then making 

sure the money is producing the right results. And that’s what 

we’ve been focused on. 

Mr. DUNCAN. All right. Thank you very much. 

Chairman CHAFFETZ. I thank the gentleman. 

We’ll now recognize the gentleman from Virginia, Mr. Connolly, 

for 5 minutes. 

Mr. CONNOLLY. Thank you, Mr. Chairman. 

And welcome, General Dodaro and your team. I don’t know if 

anyone is left at GAO today, but we’re glad you’re all here. 


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And, Mr. Chairman, I want to thank you for this hearing. And 

I think this is one of the most important hearings we have every 

year, and I think this is one of the most signal pieces of work done 

by the Federal Government about the Federal Government. And I 

thank GAO for the contribution, because it could virtually be the 

work plan of this committee. And it brings us together, it’s not partisan, and there’s a lot of good work we can do in collaboration with 

our colleagues at GAO. So thank you. 

I was listening to Mr. Duncan, who got in a little dig at DoddFrank. So since we passed Dodd-Frank, did I understand you, Mr. 

Dodaro, to say the fact of the matter is bank failures have gone 

down, not up? Is that correct? 

Mr. DODARO. That is correct. 

Mr. CONNOLLY. And is it also true that there have been no bailouts since that legislation was passed? Any additional bailouts? 

Mr. DODARO. I can’t think of any. I don’t think so. 

Mr. CONNOLLY. Not any, yes. And in 2008 and 2009, what was 

the total amount of banking bailouts to the taxpayer in this country? 

Mr. DODARO. Well, it was a lot. It was hundreds of billions of dollars. 

Mr. CONNOLLY. Hundreds of billions of dollars, right. That’s a lot, 

I agree. 

Mr. DODARO. Right. 

Mr. CONNOLLY. It’s a technical term, ‘‘a lot.’’ 

I want to talk about the census, if I can, because to me, that’s 

the intersection of IT and the function of government. The census 

is a critical piece of work that must be done. A lot flows from it, 

including representation in this body. The people, you know, have 

their representation allocated based on the findings of that census. 

Allocation of resources from the Federal Government to the States 

flows from data from the census. 

And in looking at your report, I want to make sure I understand 

this, you state that with the technology they’re using in field tests, 

25 percent of households could not be contacted by Bureau enumerators even after six attempts. Is that correct? 

Mr. DODARO. Let me call up our expert in that area, Mr. Mihm. 

Mr. CONNOLLY. Mr. Mihm, welcome. 

Mr. MIHM. Thank you, sir. Yes, sir, that is correct. 

Mr. CONNOLLY. That’s astounding. Twenty-five percent. That 

calls into question the accuracy of the census itself. What’s the nature of the problem? 

Mr. MIHM. Well, it’s a number of things, and a lot of it is just 

the changing nature of American society. We have increasing gated 

communities, and so it can be very difficult to work with property 

managers and others to get access then to the individual housing 

units. You have increased, obviously, diversity in languages. We 

have to make sure that we send enumerators that can speak the 

language in the community in which they’re enumerating. A lot 

of—it’s a lot of the complexity there. 

There are also some changes that we were urging in census rules 

on how they do that followup, to make sure that they’re not just 

following up at the same time on repetitive days, that they’re actuVerDate Nov 24 2008 11:05 Aug 25, 2017 Jkt 000000 PO 00000 Frm 00066 Fmt 6633 Sfmt 6633 H:\26361.TXT APRIL

KING-6430 with DISTILLER
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ally going at different times. They need to adjust their rules to 

allow them to do that. 

Mr. CONNOLLY. One of the problems, though, I think you highlighted was—I get that and, obviously, that’s not a technology problem. But the technology piece there is the software makes it hard 

to leave notes when an enumerator, in fact, knocks on your door 

and you’re not home. Is that correct? 

Mr. MIHM. Yes, sir. And that’s also part of what I was mentioning. The third element there is allowing then subsequent enumerators to know not to go back. You know, if they go at noon for 

three straight days in a row and there hasn’t been someone there 

at noon, if people are all working, they need to be able to say, okay, 

we’ll come back at 5 o’clock or we’ll come back before, you know, 

people leave for work. 

Mr. CONNOLLY. This committee had hearings with the Census officials on the technology piece. And what happened in 2010 was 

kind of a disaster in terms of technology, custom-made, you know, 

handheld devices and so forth. And so this time, they were going 

to use off-the-shelf, you know, with modifications, and it was hopefully going to lower cost. The 2010 census was the most expensive 

in history, $12.3 billion. 

Mr. MIHM. Yes, sir. 

Mr. CONNOLLY. So how is that working out for us, in terms of 

these modified off-the-shelf devices and the hopeful goal of lowering 

the cost? 

Mr. MIHM. It’s still an open issue, sir. I mean, there are three 

big technology issues that they’re confronting is, one, to make sure 

that we can have the internet response option. Second is that they 

have a major processing technology—— 

Mr. CONNOLLY. Let me interrupt you when you say that just so 

we all understand what that means. In other words, a subject, a 

citizen, can go on the internet and respond if an enumerator hasn’t 

reached me. 

Mr. MIHM. Yes, sir. 

Mr. CONNOLLY. Yeah. 

Mr. MIHM. And the second is a major processing effort, which is 

called CEDCaP. And then the third then is the mobile devices, and 

which you alluded to was a big problem last time. 

There are unresolved issues with all three of these major technology issues. It was a major driver as to why we put the 2020 census on the high-risk list. 

Mr. CONNOLLY. My time has run out, but just bottom line, how 

worried should we be that, here we go again, the Census Bureau, 

with best intentions, is facing 3 years out a serious problem both 

with the technology and with the budget, the cost of this enterprise, or are these just glitches that we’re confident can be worked 

out? 

Mr. DODARO. If we weren’t worried, we wouldn’t put it on the 

list. 

Mr. CONNOLLY. Thank you, Mr. Dodaro. 

Thank you, Mr. Chairman. 

Mr. MIHM. I agree. 


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Chairman CHAFFETZ. Mr. Mihm, if you can just stay right there. 

I’m going to go ahead and recognize myself. I want to follow up on 

what Mr. Connolly was saying about the census. 

What’s your biggest worry right now? 

Mr. MIHM. The biggest worry right now, I think, is that they 

have a series of innovations that are very important potential innovations that can have huge cost-savings implications if they work 

out. So they have a series of these innovations at the same time 

that they are canceling tests in the field for later this year and into 

2018. 

They need to make sure that they are able to have these innovations, the internet response, increasing use of administrative 

records, and others, be able to work together in concert in censustaking operations. That’s a—— 

Chairman CHAFFETZ. How far behind schedule are they? 

Mr. MIHM. It’s not so much that they’re behind schedule. It’s that 

they’re, in a sense, racing to—they need to make sure that they 

maintain the schedule that they’re on. They’ve canceled a test 

that’s coming up, you know, for a variety of reasons, which they 

say is primarily driven by budget concerns, you know, budget concerns related to the continuing CR and other issues. 

We’re quite concerned that they need to make sure that all these 

innovations are tested in census-like operations. That’s key to making sure that they maintain the quality of the census, but then also 

delivering on a more efficient census as well. 

Chairman CHAFFETZ. Now, one of the things that is important to 

executing on a census are going out and finding what ends up 

being a couple hundred thousand people to go out and do the enumeration. 

You know, I’ve been an advocate since I’ve been here to tap into 

the Postal Service. We actually have a workforce of people that 

have uniforms. They have clearances. We trust them. We’ve identified them. And they’re familiar with the neighborhoods. They don’t 

need to go remap the world. 

Have you done anything or looked at anything? We’re working 

towards introducing a piece of legislation that would allow postal 

workers to do this. They may need to make more money to do it. 

It’s going to take money to still train them. But they’re already 

walking the routes. They already know the neighborhoods. Have 

you looked at that at all? 

Mr. MIHM. We’ve looked at it indirectly. I mean, I know, as you 

mentioned, Mr. Chairman, this is an issue that has been or a question that’s been asked of the Census Bureau for at least the last 

two or three census about the increasing use of the Postal Service 

in taking the census. There are cost implications. 

Chairman CHAFFETZ. Sure. 

Mr. MIHM. Typically, a letter carrier will make more than a census enumerator that would take place. It is, you know, pretty 

labor-intensive, and so we’d have to figure out where they could 

find the time within their schedule. 

On the other hand, as you point out, they do know the neighborhoods and, in fact, in many cases would know where the hidden 

households are, which is a major challenge that the Bureau faces. 

It’s not just a postal address but are there, you know, basement 


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units or something like that. That’s the tradeoff that would have 

to be made. 

Chairman CHAFFETZ. And we also trust them I think is a big 

part of that issue. 

Mr. Dodaro, I want to go back to the post office. This committee 

is looking at legislation dealing with the post office. What happens 

if we do nothing? The current financial trajectory of the post office, 

what’s your view of that? 

Mr. DODARO. Well, right now, they’re not making the prepayments for the retirement benefits area, and that’s a big problem. 

That’s a growing issue. That means at some point, those benefits 

are going to have to be paid. And if the Postal Service hasn’t 

prefunded it over a period of time, that’s going to be a problem. 

They’re already maxed out on their borrowing from the Treasury 

Department at $15 billion. They can’t borrow any more money from 

the Treasury at this time. Their other liabilities for workmen’s 

compensation are going up. Their total liabilities, I think it’s about 

130 percent of their revenues at this point. 

So—but the underlying problem is the business model’s really 

broken. You’re not—first-class mail has been going down. It’s likely 

to go down for the foreseeable future. It’s the most profitable margin that they have. And they’ve taken major cost-cutting moves, 

but they don’t have any major other cost-cutting activities planned. 

So they really need help. 

So we’ve put on a list. Congress has to act. There needs to be 

a reform in this area. 

Chairman CHAFFETZ. And we’re looking at a bailout if we don’t 

fix it, correct? 

Mr. DODARO. Yes. 

Chairman CHAFFETZ. This is something that I think is of urgent 

need for this committee, and I’m glad that we’re on top of it, but 

we do need to pass a piece of legislation to fix the systemic problems. 

Fannie and Freddie, they—as a quasi-government agency, there 

isn’t much exposure that the public gets to see and look under the 

hood. I’m working on a piece of legislation to give Freedom of Information Act requests that the public could actually issue a FOIA request to Fannie and Freddie. Do you have any opinion or thoughts 

on that? 

Mr. DODARO. I could give that some thought. I mean, generally, 

I’m a supporter of the Freedom of Information Act. 

Chairman CHAFFETZ. Is there any reason you can think of off the 

top of your head, though, why they shouldn’t be subject to FOIA 

requests? 

Mr. DODARO. Not off the top of my head, unless—there’s a lot of 

litigation right now, and I think that may be a complicating factor, 

but that is true for every Federal agency. 

Chairman CHAFFETZ. That is true for every agency. It just seems 

that the American public—we have all the liability for Fannie and 

Freddie, correct? 

Mr. DODARO. That’s correct. 

Chairman CHAFFETZ. Do you have any—again, you’re amazing 

with numbers off the top of your head, but what is the ongoing liability at Fannie and Freddie? 


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Mr. DODARO. Well, there’s in law, I think it’s over $200 billion 

that potentially—Orice has the specific numbers. But it’s over $200 

billion that they could still potentially draw from the Treasury Department. They’ve paid more back than what the government lent 

them during the crisis, but if there’s another downturn in the housing economy, their capital reserve is going toward zero by 2018. At 

least at this time, we have a regulatory entity. You know, for years 

we warned that they weren’t regulated enough, but it came too 

late. 

Chairman CHAFFETZ. Did you have anything you wanted to add 

to that? 

Sorry, your microphone. 

Ms. BROWN. So Freddie and Fannie received $187.5 billion from 

the Treasury. They have $258.1 billion available that they can receive in additional assistance. And they have repaid more than 

$250 billion in dividends to the Treasury. So right now, they’ve 

paid more to Treasury than they received initially in assistance. 

Chairman CHAFFETZ. It just seems to me, with so much exposure 

to the Federal taxpayers, the taxpayers should be able to issue a 

Freedom of Information Act request. 

Mr. DODARO. I might say also, Mr. Chairman, on this, we’ve 

issued a number of reports about a framework that could be used 

to make decisions on Fannie and Freddie and some of the options 

available. So we’d be happy to share that information for the 

record. 

Chairman CHAFFETZ. Thank you. 

I now recognize the ranking member, Mr. Cummings. 

Mr. CUMMINGS. Mr. Dodaro, the high-risk report states that the 

Office of Personnel Management and the Chief Human Capital Officers Council, along with agencies, identified six governmentwide 

occupations with mission-critical skill gaps. One of these occupations is auditor. 

As you know, agencies across the government have auditors 

within the Offices of Inspector General who are tasked with helping detect and prevent fraud, waste, and abuse, a mission that 

helps our committee in oversight. Do the auditor positions described in the report include those within the Inspector General’s 

office? 

Mr. DODARO. Yes. 

Mr. CUMMINGS. And so is it correct to say that the IG offices do 

not have enough highly skilled and qualified auditors? 

Mr. DODARO. Well, I think that’s always a concern for that community. I know, you know, we have issues we’re focused on as well. 

So let me ask Mr. Mihm if he has any more insight. 

Mr. MIHM. Yes, sir, it’s two things. It’s in one case, or in some 

cases, it’s obviously just a number of people. It’s also a skill set 

that’s an issue. As, I mean, this committee and others was instrumental in passing the DATA Act, which will provide just a wealth 

of additional information. And so data analytics is a skill set that 

both agencies need but also auditors need to better target their audits. And so it’s both skills in terms of competencies as well as 

numbers of people. 

Mr. CUMMINGS. Well, President Trump ordered a hiring freeze 

during his first week in office. What will be the likely impact of a 


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hiring freeze on the government’s ability to address the missioncritical skills gap of auditors? 

Mr. DODARO. It will make it more difficult. I mean, we’ve looked 

at hiring freezes in the past by prior administrations, and they 

haven’t proven to be effective in either reducing cost, and they 

cause some problems if they’re in effect for a long period of time. 

Now, in this case, they’ve made a number of exceptions to that 

area. 

Mr. CUMMINGS. Is this one of them? Is this one of them? 

Mr. DODARO. I don’t believe so. But they’re supposed to come up 

with a plan. I think a lot of it will depend on what kind of plan 

they come up with at the end of this temporary hiring freeze. But 

a sustained hiring freeze is not the best way. It’s better to do it 

through a budget or workforce plan. 

Mr. CUMMINGS. What kind of problems does it cause? 

Mr. DODARO. Well, it causes—you already—we know there are 

already skill gaps. You mentioned in your opening statement 

that—— 

Mr. CUMMINGS. Social security. 

Mr. DODARO. Well, social security. I mean, cybersecurity, acquisition workforce, oil and gas management, petroleum engineers. A 

number of areas on our high-risk list have human capital. Nurses 

at the VA. You know, there’s a lot of areas. And there will be, likely, emerging skill gaps. And you’re going to have a lot of people retiring. There’s a lot of people retiring in the Federal Government. 

So you have to be able to realign the workforce. The retirements 

give you an opportunity to realign your workforce, but you have to 

have that committed. 

I mean, if you want to reduce the number of Federal employees, 

in my opinion, you have to reduce the functions that those employees are doing. If you don’t reduce Federal programs or eliminate 

programs or reduce things or find some other way to do it, if you 

just eliminate the people but keep all the functions there, you’re 

going to have a problem. 

Mr. CUMMINGS. Yeah. If the ability to hire skilled personnel to 

address the skills gap is taken off the table, you know, one of my 

fears is IGs will be hampered in their capacity to detect and prevent waste, fraud, and abuse. So you, I take it, based upon what 

you just said, would agree with that? 

Mr. DODARO. Well, we’re going to monitor that issue. If it stays 

in effect for a long period of time, it’s going to have effects. What 

we found before was that it reduced revenue coming to the government because IRS wasn’t able to hire revenue agents. It caused 

agencies to hire contractors or temporary employees. It really didn’t 

end up saving much, reducing the size of the workforce as much 

as anticipated, and it caused agencies problems in implementing 

their missions. 

Mr. CUMMINGS. So when we go out and we hire these contractors, what kind of problems does that—I mean, have you looked at 

that overall? 

Mr. DODARO. Yeah. 

Mr. CUMMINGS. I mean generally. 

Mr. DODARO. Yeah, yeah. I mean, there’s a number of contract 

management issues already on the high-risk list. We’ve got DOD 


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contract management. We’ve got DOE, Energy Department contract management, NASA, acquisitions. 

And so managing—having the right people to oversee the contractors is very, very important. And if you don’t have that in 

place, then you don’t have necessarily a good prospect of getting 

the requirements right in the first place and proper direction and 

oversight over the contractors. 

Mr. CUMMINGS. Now, your report also states, and I quote: ‘‘According to OPM, data governmentwide, over 34 percent of Federal 

employees on board by the end of fiscal year 2015 will be eligible 

to retire.’’ 

It also says, and I quote: ‘‘A potential wave of employee retirements could produce gaps in leadership and institutional knowledge and threaten to aggravate the problems created by existing 

skill gaps.’’ 

Can you explain how a retirement wave exacerbates the skill 

gaps? And then I’m finished. 

Mr. DODARO. Yeah. Chris. 

Mr. MIHM. Well, it’s in two senses or at least in two senses. One 

is that if you have staff with critical skills that are retirement eligible and they leave without effective succession planning programs 

within agencies and knowledge transfer programs, you can have 

basically some of your very most skilled people walking out the 

door. Likewise, at a leadership level, that you can lose a core of 

your senior executive and other leadership can go out if you don’t 

have a good succession planning program. 

As the comptroller general has mentioned, is that it provides an 

opportunity for agencies to rethink what their skill gaps or what 

their competencies are that they need. So retirements are not necessarily a bad thing. It’s just retirements that aren’t factored in as 

part of a succession planning program are a bad thing. 

Mr. CUMMINGS. All right. Thank you very much. 

Mr. PALMER. [Presiding.] The chair now recognizes the gentleman from North Carolina, Mr. Walker, for 5 minutes. 

Mr. WALKER. Thank you, Mr. Chairman. 

Mr. Dodaro, would you take a few minutes and, as we discussed 

the Medicaid program, I have a couple questions there. And I don’t 

know how you are able to do this so much from memory, but we’ll 

give it a shot here as we move forward. 

Can you tell me what the improper payment rate of the Medicare 

program is right now? 

Mr. DODARO. I think it’s over 10 percent, and it’s gone up recently. 

Is that correct, Nikki? 

Yes, that’s correct. It’s over 10 percent. It was about $36 billion 

last year in improper payments in Medicaid. And I don’t believe, 

Mr. Walker, Congressman Walker, that that’s even the true magnitude of the problem, because the managed care portion of Medicaid shows very small improper payment rates, because they’re 

only measuring what they pay the contractor, not what the contractor pays the beneficiaries. 

Mr. WALKER. Okay. 


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Mr. DODARO. So we got them to put a new rule in place that I 

think will shed more light on this. They’re going to audit the Medicare contractors. Medicaid, excuse me. 

Mr. WALKER. Thank you. Is that 10 percent higher or lower than 

last year? 

Mr. DODARO. It’s higher. 

Mr. WALKER. So we’re trimming, obviously, the wrong direction. 

Mr. DODARO. Well, I’m very concerned about both Medicaid and 

Medicare. They’re the fastest growing programs in the Federal 

Government’s portfolio. They’re estimated to continue to grow at, 

you know, over 6 percent for the foreseeable future. And most of 

the improper payments—governmentwide was $144 billion. $60 billion of that was Medicare, $36 billion was Medicaid. 

Mr. WALKER. Okay. Let’s drill down a little bit further if we can 

then. How did the improper payment rate change from before the 

Patient Protection and Affordable Care Act was enacted to after 

States began to expend Medicaid? 

Mr. DODARO. Nikki. 

Ms. CLOWERS. The rate has continued to go up over the past 2 

years. 

Mr. DODARO. Yeah. One of the reasons that they cite, Congressman, for the rate going up is that States didn’t have the proper 

systems in to determine eligibility under the new Affordable Care 

Act regulations. So it’s had some effect on that. Not to say that 

some people may not be; they just haven’t been able to demonstrate 

that they’re eligible. 

Mr. WALKER. Okay. Is there anything that you guys are doing or 

have done or could do, past, present, or future, in examining the 

reasons why these rates continue to change? 

Mr. DODARO. Yeah. We’ve had a lot of recommendations in those 

areas. First is to get better data. The Medicaid data is really not 

good at all that the Center for Medicaid and Medicare studies has. 

It’s old data. It’s a year or two out of date. It’s very inaccurate, very 

unreliable. 

We’ve recommended that they audit these managed care providers. I’ve worked with State auditors. In fact, the State auditor 

from North Carolina was involved in our discussions to try to get 

the State auditors to do more oversight and continuous auditing of 

the Medicaid program since it’s such a large percent of the State 

budget activities. We’ve suggested and Congress has given the goahead to take the Social Security numbers off Medicare cards. We 

thought that that was leading to a problem. We tried for about almost a decade to do that. 

Mr. WALKER. Okay. 

Mr. DODARO. So we’ve got a number of other recommendations, 

but they need to—— 

Mr. WALKER. Sure. 

Mr. DODARO. We’re working on it. I’ve given this a high priority. 

You know, since Congress has required improper payments to be 

reported, measured and reported, since 2003, it’s over $1.2 trillion 

that have been reported. And last year, it was 112 programs at 22 

different agencies. So it’s not just confined. Medicare and Medicaid 

are the largest, but it’s more of a pervasive problem than I would 

like to see. 


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Mr. WALKER. Speaking of the different States, I’m going to pick 

one. I’m going to pick Arkansas. A recent review of the Medicaid 

enrollees in Arkansas found 43,000 people who had moved out of 

the State, yet remained on Medicaid. Seven thousand of these had 

appeared to have never lived in the State. So it is very likely that 

two States may be paying two different insurance companies for 

that same individual. 

Any proposal of what we can do with such a problem? 

Mr. DODARO. Yeah. Yeah. Well, we’ve recommended that they 

make sure that they have adequate eligibility determination. There 

are two issues: One is providers, to make sure that only proper providers are in the programs; and second is eligibility determination. 

Let me ask Nikki if there’s anything else she wants to add. 

Ms. CLOWERS. I was going to mention the eligibility determinations as well as checks for duplicate coverage, that they need to do 

that on a regular basis. 

Mr. WALKER. Thank you, Mr. Dodaro. 

Thank you, Mr. Chairman. I yield back. 

Mr. PALMER. I thank the gentleman from North Carolina. 

The chair now recognizes the gentlelady from Illinois, Ms. Kelly, 

for 5 minutes. 

Ms. KELLY. Thank you, Mr. Chairman. 

Welcome to the witnesses. 

Mr. Dodaro, your report states, and I quote: ‘‘Over the past several years, GAO has made about 2,500 recommendations to agencies aimed at improving the security of Federal systems and information. These recommendations would help agencies strengthen 

technical security controls over their computer networks and systems, fully implement aspects of their information security programs, and protect the privacy of personally identifiable information held on their systems. The implementation of these systems 

are critical to addressing the privacy concerns of citizens in an age 

where hacking seems rampant.’’ 

Can you explain why, as of October 2016, close to half of those 

information security-related recommendations have not been implemented? 

Mr. DODARO. I’ve been very concerned about the pace of agencies 

implementing our recommendations in this area. As I mentioned in 

my opening statement, we had first identified this as a governmentwide problem—it was the first time we ever designated anything across the entire Federal Government high risk—in 1997. It 

was hard to get agencies’ attention to put in place comprehensive 

systems. 

Secondly, there’s a lot of legacy systems, old systems, where they 

just can’t keep up with patching things appropriately, and they 

need to replace the legacy systems, as I know you’re aware of that 

as well. They don’t have comprehensive systems in place. And despite the breaches that have occurred most recently, there’s more 

attention being given to this area but not enough, from my opinion, 

sense of urgency and actually fixing these problems. 

So I’m hoping, as I meet with the new officials from the new administration, the Cabinet officials, I put this on their radar screen 

for prompt attention. 


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Ms. KELLY. Thank you. In your report, you also discuss the need 

for the Federal Government to improve its ability to detect, respond, and to mitigate cyber incidents. To that end, we’ve heard 

encouraging news about the implementation of continuous 

diagnostics and monitoring, or CDM. In your opinion, how are 

DHS, GSA, and other agencies doing in its implementation and 

what challenges are they facing? 

Mr. DODARO. Greg Wilshusen is our expert in this area. He has 

good insights in that. Greg. Hit the mic. 

Mr. WILSHUSEN. Yes. Certainly, we believe that CDM is a tool 

that can help agencies better secure their systems by looking at the 

configurations of those systems, making sure that they’re in compliance with agency standards, identify vulnerabilities, and even 

just to identify the devices on the networks. 

What we have found and what we will be looking at, because we 

are going to be starting an engagement to look at the CDM program specifically, is that agencies generally do not do a very good 

job of configuring their systems in accordance with sound security 

principles. It’s something we identify at just about every agency we 

go to, including just the installation of patches, for example, in a 

timely manner and using software that’s no longer supported by 

the vendors. 

CDM and having a continuous monitoring program in place 

that’s effectively in place across the entire enterprise will help to 

identify those instances and, hopefully, agencies will act on that information. 

Ms. KELLY. Okay. Now, CDM is just one of the many steps that 

we need to take if the Federal Government is to be a leader in 

cybersecurity. And we also passed the bipartisan Modernizing Government Technology Act, or MGT. But we also need to improve 

cybersecurity in the procurement process. 

In 2013, GSA and DOD published a report recommending the incorporation of cybersecurity standards into the Federal IT acquisition process. How helpful would these standards be in improving 

the Federal Government’s overall cybersecurity? 

Mr. WILSHUSEN. Well, I would just like to say that it’s critical 

for information security controls to be designed into systems at the 

very beginning. Trying to come back and add on security features 

after the system is up and running is usually not as effective and 

more costly. So, clearly, designing and including security controls 

in those acquisition is key. 

What’s also key is making sure that the acquisition officers and 

the team that’s acquiring this have the cybersecurity expertise in 

order to assure that those security controls are being specified in 

the contracts and indeed are being adhered to by the contractors. 

Ms. KELLY. And one last question. What chief recommendations 

does GAO have to directly deter cyber attacks from other nations? 

Mr. WILSHUSEN. Well, one would be, of course, in terms—one is 

just for the agencies to be adequately secure to help prevent those 

attacks, but recognize that attacks are going to continue, and even 

in good security, they’re likely to succeed, because of their sophistication. 

In terms of working against—with other countries, one of the key 

things is to have an international strategy that addresses 


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cybersecurity and come to an agreement with agencies of like mind 

to identify what those cyber norms are and to try to come up with 

procedures to protect against it. And when those countries or 

whomever attack us is make sure that there’s some sort of consequence as a result. 

Ms. KELLY. Thank you. I know I’m out of time. 

Thank you, Mr. Chair. 

Mr. PALMER. The chair now recognizes the gentleman from Georgia, Mr. Hice, for 5 minutes. 

Mr. HICE. Thank you, Mr. Chairman. 

I’d like to probably go down a similar path here while we’re on 

it. Of course, we spend billions of dollars developing and acquiring 

the best technologies that we can have for our military. Obviously, 

we want to maintain the advantage as much as possible. 

As I understand it, protecting these technologies, there are a lot 

of different agencies involved in administering the protection, from 

DOD to DHS and State, Treasury, a host of different administration. Are any of these agencies more effective than others at protecting our technologies? 

Mr. DODARO. Yeah. Mr. Francis is our expert in this area. It’s a 

good question. 

Mr. FRANCIS. I think the agency—there are at least six agencies 

involved. I don’t know that any one is doing better than another, 

but in the export control area, where we actually have a formal 

process for end items, State and Commerce are doing, I think, a 

pretty good job in coordinating their licensing list and their licensing processes. 

It’s the individual efforts by other agencies on antitamper and 

things like that, where the individual programs are not well coordinated. And we’ve made a simple recommendation, why don’t you all 

just get together once a year and talk about what you’re doing. 

That’s not happening yet. 

Mr. HICE. Why is that not happening, do you think? 

Mr. FRANCIS. I don’t think there’s an incentive to do it. The agencies are all working—— 

Mr. HICE. This is a major deal. Obviously, our technologies are 

massively critical to the national security of our country and so 

forth. What would need to happen to get the proper incentive for 

those communications to occur? 

Mr. DODARO. Yeah. I think legislation by the Congress. Where 

we’ve seen very effective interagency coordination mechanisms, 

there needs to be a statutory underpinning for those mechanisms 

so they transcend administrations, and having regular reporting requirements to the Congress. 

I’ve been having meetings with OMB and the agencies on the 

high-risk list for a number of years now. And I think when we had 

one on the export control area, it might have been the first time 

everybody got together to talk about these issues. And so I think 

it’s very important to do this, because, as Paul mentioned, all these 

agencies have interrelated pieces, and they need to work together 

very effectively in order to make sure and keep things up to date, 

share information. Technology is rapidly advancing, as you point 

out, Congressman, and they need to be on top of this. But it’d be 


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very effective, I think, to have some legislation. We’d be happy to 

work with you on that. 

Mr. HICE. Okay. Yes. Well, let’s please do. 

So you’re saying the coordination is not there. Is that correct? 

Mr. DODARO. Particularly in the nonexport area. This would be, 

as Paul mentioned, the antitamper area, foreign military sales, and 

some other things. So on export control, they’re doing a little bit 

better job in that area. They have a plan to reform it to go further, 

but they’ll need legislation. So legislation is going to be needed in 

both areas, in my opinion. 

Mr. HICE. Okay. If you would please, work with our office. Let’s 

see how we can get that. This is a critical issue that needs to be 

addressed. 

Mr. DODARO. Sure. 

Mr. HICE. Speaking real quickly, and I know I don’t have much 

time, but you mentioned NASA a little while ago. And, of course, 

they are, from what I understand, planning another big major 

launch sometime next year, latter part of 2018, I believe. Do you 

have concerns that NASA may not be ready for that type of bigscale launch? 

Mr. DODARO. Go ahead, Paul. 

Mr. FRANCIS. Yes, we do have concerns. It has three elements: 

It’s the launch system, the ground system, and the Orion space 

capsule. Right now, they’re all on fairly high-risk schedules, not 

much margin left. They’re not all that well-coordinated. We think 

it’s a very high risk of them not making that November 2018 date. 

Mr. HICE. All right. But they believe that they are right on 

schedule, meeting all the requirements. You would disagree with 

that, with their assessment? 

Mr. FRANCIS. I think they know they’re on the edge. 

Mr. HICE. On the edge of what? 

Mr. FRANCIS. Not making it. 

Mr. HICE. So why are they saying that they’re making it, that 

they’re on schedule? 

Mr. FRANCIS. Well, I think they’ve done internal analysis. They 

have not come out and said they can’t make it yet. But every indication we have, it looks very unlikely that they are. So I think 

maybe it’s a matter of time. 

Mr. HICE. So in that case, you would disagree with their internal 

analysis? 

Mr. FRANCIS. Yes. 

Mr. HICE. Okay. All right. Thank you very much. Appreciate you 

all being here. 

I yield back. 

Mr. DODARO. Congressman, I would also like to thank you publicly for help in our bill to get the mandates reduced to GAO. It’s 

helped us focus on our more important areas. Thank you. 

Mr. HICE. Well, thank you. And I appreciate your letter saying 

so. It meant a great deal to me. Thank you. 

Mr. PALMER. The gentleman yields. 

The chair now recognizes the gentlewoman from Florida, Mrs. 

Demings. 

Mrs. DEMINGS. Thank you so much, Mr. Chairman. 


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And good morning Mr. Dodaro, and to all of our witnesses, welcome. 

The GAO has found that sufficient progress has been made since 

2005 to remove the high-risk designation from one area this year 

establishing effective mechanisms for sharing and managing terrorism-related information to protect the homeland. 

In its 2017 high risk report, GAO states, and I quote, ‘‘While the 

progress is commendable, it does not mean the government eliminated all risk associated with sharing information or terrorism-related information.’’ I understand that GAO has switched the designation of this area from risk—to risk rather than high risk. Is 

that correct? 

Mr. DODARO. That’s correct. 

Mrs. DEMINGS. This is a concrete step, no doubt, in the right direction, and I hope we can continue to build on this progress, but 

I have to admit that I am worried that we may be losing some of 

the progress we have made in this area. 

Recently, the President issued an executive order pertaining to 

homeland security without seeking advice or conferring with Congress or any of the agencies whose mission it is to protect our Nation. Orders meant to truly protect our country should be implemented and conducted in a thorough fashion and one that shares 

information in a productive manner. The American people deserve 

a government that directs its resources at well-planned and wellcommunicated efforts. 

Mr. Dodaro, how important is information sharing to the security 

and well-being of our Nation? 

Mr. DODARO. It’s absolutely essential. I mean, that was one of 

the issues after the September 11, 2001, attacks that was cited as 

a weakness. Congress passed an Intelligence Reform Act that there 

be established an information-sharing environment, so there was 

sharing among all the agencies and that’s what’s been implemented 

effectively. 

It’s taken a number of years, a number of steps, and we’ve made 

a lot of specific recommendations, but they’ve made a lot of 

progress over the period of time and have demonstrated some result. Particularly in geospatial information, sharing law enforcement databases, and also in maritime domain awareness where 

there—in monitoring the sea. 

So we’ve seen some good progress. We’ll be keeping a watchful 

eye to make sure that that progress continues. 

Mrs. DEMINGS. What are some of the things you would suggest 

that we can do to sustain the progress or maximize it? 

Mr. DODARO. George. 

Mr. SCOTT. Good morning. A couple areas where we think that 

continued focus is needed. It’s important to ensure that, as we’ve 

said in the report, while we’ve taken it off the high-risk list, that 

does not mean that the risk does not remain. And so just ensuring 

that there is continued leadership, attention, and focus on this 

issue. 

Oftentimes, a number of the issues that we face, whether it is 

information sharing or other issues, it’s less about sort of technology challenges; it’s more about sort of leadership commitment 

and staying focused on these issues. So I think that is one area 


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where we can continue to pay attention in this area. And the other 

issue is making sure that they continue to develop and measure 

their progress in meeting goals for the program. 

Mrs. DEMINGS. Thank you very much. I yield back. 

Mr. PALMER. The gentlewoman yields. 

The chair now recognizes the gentleman from Florida, Mr. 

DeSantis, for 5 minutes. 

Mr. DESANTIS. Thank you, Mr. Chairman. 

Mr. Dodaro, in terms of the DOD acquisition, I know there has 

been problems with the F–35, with the LCS. What steps is DOD 

taking to ensure that that doesn’t happen in the future? 

Mr. DODARO. Yeah, I’ll ask Mr. Francis, our expert in this area 

to address that. But you’re—I’m concerned. 

Mr. FRANCIS. Good morning. Yes, DOD is taking a number of 

steps. They have an initiative called Better Buying Power that involves doing better cost estimates, better monitoring. They’re doing 

a report every year to check on how they’re doing, so we think 

those are good things. They’ve improved the acquisition workforce, 

also good things. 

But we still see programs that are going forward without really 

measuring up to all the best practices they should, at start, like 

technology maturity, design, and having good cost and schedule estimates. And if those programs aren’t right at the beginning, we’re 

playing catchup the rest of the way. So DOD is not doing quite as 

well there, and I think there’s a real important role for the Congress there to hold programs accountable and say no to programs 

that aren’t measuring up. 

Mr. DESANTIS. Yeah. And the problem that we have is we don’t 

do it at the beginning, like you said. Once you get to the F–35, 

there’s so much money invested. It’d be stupid to say, now we’re 

not going to do it and just abandon it. So we’ve got to get this right 

early on. 

So did you read—there was an article in the Washington Post at 

the end of the year about a report that had been commissioned 

within the DOD. It identified a number of effectively dead weight 

costs that could be mitigated over a 5-year period. I think it was 

125 billion. As I read the article in the report, none of that really 

affected the actual warfighter. DOD kind of deep-sixed it. Have you 

been able to review that report, or are you familiar with the issues? 

Mr. FRANCIS. Go ahead. 

Mr. DODARO. Yeah, we’re familiar with the issues. That was a 

defense business board report, and their estimate over the 125 billion was over a number of years. They cited a lot of the same areas 

that we’ve cited where there are opportunities for savings. Some of 

the areas we were comfortable with their numbers; others we 

weren’t. 

So, no, they were headed in the right direction. I’m not sure 

there’s that magnitude of savings available over that reasonable 

period of time, but there are savings to be had and it’s—— 

Mr. DESANTIS. Do you know why the DOD leadership was so 

hostile to it after it had been put out? 

Mr. DODARO. Where’s Kathy? Excuse me. She knows. This is 

Kathy Berrick. 

Mr. DESANTIS. Revolving door, whatever works—— 


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Mr. DODARO. Yeah right. 

Ms. BERRICK. They agreed with aspects of the study and, in fact, 

have internal reviews within DOD where they’re looking for efficiencies. They had some disagreements on the amount of money 

that could be saved. But I would say, overall, they had some agreements with the specifics of the study, but weren’t in full concurrence with the overall conclusions about how much money could be 

saved. Some of these efforts are still ongoing within DOD, some of 

these reviews. So ultimately, it could result in some savings moving forward. 

Mr. DESANTIS. So we on the committee here, we are going to be 

reviewing kind of that report. I think that’s going to happen in a 

couple weeks. We’re going to do the full committee hearing. And I 

think the thought is is that obviously we have budget pressures, 

defense is our number one priority. Whatever deadweight is in 

there, I mean, to be able to get and root some of that out, that ultimately is going to free up more money for the warfighter so it really benefits the people who are on the front lines. 

But my fear is, if you don’t start early in a new administration, 

a lot of this stuff just goes by the wayside. So we would definitely 

want to take your recommendations. We’re going to do some fact 

finding but then try to facilitate even more reforms, because if we 

get this right, it could eventually, I think, really be helpful to folks 

who are frontline warriors. 

Mr. DODARO. No, I agree with you completely. Actually, if you 

look at the high-risk list, probably a third of the areas on high-risk 

lists are DOD business management practices. I mean, we have the 

best military in the world, but when it comes to the business practices, there’s a lot of room for improvement. We can help. But the 

fundamental—— 

Mr. DESANTIS. What can we do though for the business systems? 

Are there recommendations? 

Mr. DODARO. Oh, we have lots of recommendations. We’ll share 

with you all those recommendations. But the fundamental problem 

that everybody has is the lack of reliable information over there. 

DOD is the only major Federal agency that’s never been able to 

pass a test of an independent audit. 

And so therefore, the room for people to quibble over the data 

is—there’s a large playing field there that there shouldn’t be, even 

in, you know, how to gain the $10 billion Congress has mandated 

in headquarters reductions. You know, what’s the baseline? How do 

you measure that? So we have a lot of insight into those areas. We 

can help you a great deal. 

Mr. DESANTIS. No, absolutely. And it was supposed to be audited, I think, in the early 1990s, just never happened. And so it 

does make it more difficult; there’s no doubt about it. So, I appreciate you guys, and I yield back the balance of my time. 

Mr. DODARO. Thank you. 

Mr. PALMER. The gentleman yields. The chair now recognizes the 

gentleman from Pennsylvania, Mr. Cartwright, for 5 minutes. 

Mr. CARTWRIGHT. Thank you, Mr. Chairman. 

And General Dodaro, welcome back. 

Mr. DODARO. Thank you. 


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Mr. CARTWRIGHT. It is a pleasure to have you back here. I first 

met you 4 years ago when you came in with the high-risk report 

at that time. And at that time, that was the first year you had climate change on one of the action items for the high-risk report. 

I just want to cite a statistic I saw today: ‘‘Between 2005 and 2015, FEMA issued more than $67 billion in grants to assist communities and individuals devastated by extreme weather events.’’ 

And Mr. Dodaro, you guys picked up on this. GAO has reported on 

climate change for a number of years now. The high-risk report 

cites climate change findings of the National Research Council and 

the U.S. global change research program. 

The report states, quote, ‘‘According to the National Research 

Council, although the exact details cannot be predicted with certainty, there is clear, scientific understanding that climate change 

poses serious risks to human society and many of the physical and 

ecological systems upon which society depends.’’ 

GAO has done substantial work on the issue of climate change. 

The question is, what does the body of scientific literature suggest 

as to whether climate change is, in fact, occurring? 

Mr. DODARO. Yeah. Well, we’ve deferred largely to the scientists 

at national academies and the global research group that you mentioned which are made up of the agencies. 

Our angle on this, and the reason we’re concerned, is the fiscal 

exposure of the Federal Government. 

Mr. CARTWRIGHT. Me too. Fiscal exposure, that’s what we’re all 

here to talk about, the fiscal exposure of the Federal Government. 

And you wrote in your report, ‘‘The Federal Government is not well 

organized to address the fiscal exposure caused by extreme weather 

events.’’ Right? 

Mr. DODARO. That’s correct. 

Mr. CARTWRIGHT. So how large are these exposures, and how 

high might the associated cost of inaction be? 

Mr. DODARO. Yeah. The exposures are in several different forms. 

We don’t have an overall number, I’ll say that upfront. 

Number one is the Federal Government as a property owner. I’m 

very concerned. DOD has raised this issue on the impact on its own 

operations, but this—particularly on coastal areas, of protecting all 

those DOD assets that we built both domestically and internationally. 

Second is on the Federal Government as an insurer. The flood insurance program already owes over $20 billion to the Treasury Department. It is not actuarially sound, and it’s subject to a lot of additional exposure. 

Crop insurance, the payments for the Federal Government for 

crop insurance have doubled over the last several years from what 

they were before so there’s likelihood there. 

The other issue is the Federal Governments never reform the criteria it uses for declaring a natural disaster that it’s going to step 

into. We’re still using a per capita amount, you know, in individual 

States. We suggested that needed to be reformed. 

And then the budgeting area is another area. We don’t budget as 

a national government for major disasters. We budget for anything 

that’s under $500 million. But when something big hits, we just 

go—you know, we take care of it—— 


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Mr. CARTWRIGHT. You take care of it. 

Mr. DODARO. —but we’ve got to borrow. 

Mr. CARTWRIGHT. So we’re talking about the American taxpayers 

are property owners, they are insurers—— 

Mr. DODARO. Right. 

Mr. CARTWRIGHT. And they bail out when there’s a FEMA emergency. 

Mr. DODARO. Right. 

Mr. CARTWRIGHT. And this is why this is on the high-risk report 

because we need to prepare for these crises. And your finding was 

that the Federal Government is not well organized to plan ahead 

for resilience and planning and things like that. 

So I have introduced legislation working with your office to create an oversight and governance structure and a process that requires agencies to implement governmentwide resilience, preparedness, and risk management priorities, and elevating the role of 

OMB to ensure proper funding and implementation for these initiatives. 

The support for this has been bipartisan. My brother, Mr. 

Farenthold, is a cosponsor of this. He’s not here right now, but we 

also have a lot of taxpayers groups that love this legislation: Taxpayers for Commonsense, National Taxpayers Union, Coalition to 

Reduce Spending, Taxpayers Protection Alliance, even the Reinsurance Association of America. 

People who are concerned about fiscal soundness and saving taxpayers money love this bill. It is the PREPARE Act. I will be reintroducing it again this Congress. 

And I want to thank you for all your work and your foresight in 

working on this problem. 

Mr. DODARO. Thank you very much. 

Mr. CARTWRIGHT. I yield back. 

Mr. DODARO. Congressman Cartwright, thank you. 

Mr. PALMER. The gentleman yields. 

The chair now recognizes the gentleman from Michigan, Mr. 

Mitchell, for 5 minutes. 

Mr. MITCHELL. Thank you, Mr. Chairman. 

General Dodaro, you may have to change, rotate experts there, 

sir. 

Mr. DODARO. I need a chair on wheels. 

Mr. MITCHELL. What’s that? 

Mr. DODARO. I say, I need a chair on wheels. 

Mr. MITCHELL. Yes, you do in here. If you’re a Member of Congress, you need wheels as well. Trust me on that. 

I’d like to talk a little bit about transportation, surface transportation. The GAO report found—yep, somebody knew. The GAO report found that several agencies failed to document key award decisions when making decisions regarding discretionary, I would say, 

allegedly competitive grants that resulted in poor decisionmaking. 

Specifically, GAO found that DOT failed to document key decisions and deviated from established procedures in awarding the 

TIGER grants, the Transportation Investment Generating Economic Recovery grants. What were your offices findings—recommendations regarding that matter? 


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Mr. DODARO. Yeah. We were very concerned about the lack of 

documentation and the clear—and the transparency on which these 

grants were awarded. Ms. Siggerud can explain the details there. 

We’ve made some recommendations. They’ve taken some actions, 

but not enough, so I think congressional follow-up would be helpful. 

Kate. 

Ms. SIGGERUD. GAO has looked at several different types of discretionary grants given by the Department of Transportation, including the TIGER grants that you mentioned, as well as more recently some transit grants related to emergency situations. 

Mr. MITCHELL. Sure. 

Ms. SIGGERUD. In all of those cases, we found both a lack of 

transparency at the beginning about the criteria and then explanation of how those criteria were applied throughout the entire 

process, including documentation of any decisions that were made 

outside or not in agreement with those criteria. 

So we made sort of a wrap-up recommendation in December of 

this year regarding all of the discretionary grant programs at the 

Department, and we will be monitoring how the Department looks 

at both that upfront criteria setting as well as the decisionmaking 

and the documentation throughout. 

Mr. MITCHELL. Did you look at how much money was spent outside the anticipated intent or guidelines? Did you look at the 

amount of money that was, let’s say, misallocated, for lack of a better term? Did you get an estimate of that? 

Ms. SIGGERUD. I’d like to get that number to you for the record. 

We did look at grants and identified some that were elevated above 

others in apparent disagreement with the criteria that were originally established. 

Mr. MITCHELL. When you provide that, if you could provide not 

only the amount but which grants and which locations they were 

for. 

Ms. SIGGERUD. I’d like to get back with our team on that so we 

could determine the level of detail that we have. 

Mr. MITCHELL. Sure, if we could. 

And if we could put that in the record, Mr. Chair, when we do 

receive that, I would appreciate it. 

Mr. PALMER. Without objection. 

Mr. MITCHELL. One more quick question for you while I have 

time. One of the findings you note is that funding for transportation, highway transportation has eroded in part because of inflationary impacts and failure to raise the gas tax. 

Has the Department made any recommendations regarding efficiency, regarding administrative cost cuts that can be made at DOT 

to, in fact, put more money in the highways? 

Mr. DODARO. We’ve not—we’ve not—you mean, by the department, you mean the GAO? 

Mr. MITCHELL. Oh GAO, yes, sir. 

Mr. DODARO. Yeah. I’ll get back. I’ll look at that and we’ll get 

back to you for the record. Nothing springs to mind offhand in that 

area. I think our main recommendations have been mostly geared 

toward making sure that the States’ use of the highway money is 

producing good results. 

Mr. MITCHELL. Sure. 


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Mr. DODARO. And that has been our primary area of concern. I 

don’t think we’ve identified other areas that could be cut to shift 

money into that area. 

Mr. MITCHELL. Well, the question I would ask is, how efficient 

are we being with the money and how much money is being transmitted onto the States rather than spent on, I would say, bureaucratic overhead that, in fact, doesn’t put highway miles, doesn’t fix 

roads, which in Michigan and across this country, is significant 

concerns. 

Mr. DODARO. Right, right. No, while go back—I’ll go back and 

take a look and submit something for the record for that area. Offhand, nothing comings to mind. 

Mr. MITCHELL. I appreciate the review. Thank you very much. 

And I yield back, Mr. Chair. 

Mr. PALMER. The gentleman yields. 

The chair now recognizes the gentlewoman from New York, Mrs. 

Maloney, for 5 minutes. 

Mrs. MALONEY. Thank you Chairman Palmer for yielding. 

And it’s always good to see you, Mr. Dodaro, and we all rely on 

the GAO in our daily decisions for your independent and professional judgment, so thank you. 

I’d like to direct my questions on the Consumer Financial Protec- tion Bureau. And as you know, the CFPB has returned over $12 

billion to over 27 million Americans who have been victims of fraud 

and deception. And you rightfully applauded them for this achievement. 

Now, the high-risk report indicates that the Consumer Financial 

Protection Bureau has addressed all of GAO’s previous recommendations. In fact, the report states that Congress should consider, and I quote, ‘‘transferring other regulators’ consumer protection authorities to the bureau.’’ I can assume that these statements 

are due to the bureau’s effectiveness and efficiency. 

Specifically, why are you recommending that other regulators 

and consumer protection transfer it over to the CFPB? 

Mr. DODARO. Yeah, let me ask Ms. Williams to respond to that. 

Ms. WILLIAMS. So we issued a report last year that looked at the 

regulatory structure. And one of the things we observed in the consumer protection space is that there’s fragmentation; that while the 

CFPB was created there were certain responsibilities that went to 

CFPB, and there were others that were retained by the existing 

regulators. So this creates a potential for unevenness in terms of 

protecting consumers. 

Mr. DODARO. It’s part of—if I might, Orice, it’s part of an overall 

look that we had of the banking regulators. And we still think that 

there’s a lot of overlap and duplication in the bank regulation area 

at large, and then within that framework consumer protection 

issue was raised. 

Ms. WILLIAMS. Yes. We also looked at the regulatory structure 

for depository institutions and also insurance. 

Mrs. MALONEY. Okay. I’d like to ask today about the recommendations in your report for the overall financial regulatory 

system. And the report indicates, and I quote, ‘‘Congress and financial regulators have made progress in improving the financial regulatory systems,’’ so that’s really good news. 


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And the report indicates that the Financial Stability Oversight 

Council, or FSOC, quote, ‘‘represents advancement in addressing 

systemic risks and threats to the U.S. financial system,’’ end quote. 

And even that—and I quote, ‘‘its legal authorities may not be broad 

enough to ensure that it addresses all of the threats effectively.’’ 

Now, can you comment on why you felt that it’s not addressing 

everything effectively, it could be broader. Could you address that 

more? 

Mr. DODARO. Yeah. I’ll ask Orice to give particulars. But I’m very 

concerned about this. You know, one of the issues when we put it 

on the high-risk list, one of the reasons in 2009 was there was not 

a systemic risk focus by any of the regulatory areas. And this was 

one of the major failures that led to the global financial crisis, and 

the crisis we had in our country. 

And so instead of designating a regulator, they gave the responsibility to FSOC to do. And we’ve looked at their work, tried to encourage them to be more transparent and thorough and also have 

a better research group, not duplicate what the individual regulators were doing. 

And in some of the recommendations we had, if I recall correctly, 

they believed they didn’t have the legal authority to do it. So we 

recommended that Congress clarify it. 

Orice can provide the specifics. 

Mrs. MALONEY. Okay. Could you elaborate on that? 

Ms. WILLIAMS. Yes. So the council consists of independent regulators. So if a problem is identified by the council, they aren’t able 

to bind any of the regulators to take action to address any particular risk that may emerge in the system. 

And that’s what—the matter that we had spoke to was perhaps, 

if FSOC is going to be the systemic risk entity, then it should have 

responsibilities and authorities commensurate with the helping to 

identify and address systemic risk issues. 

Mrs. MALONEY. That’s interesting, because some of my colleagues 

are working to abolish the CFPB, which seems to be incredibly successful in helping consumers and I would say the financial system, 

because the overall financial system thrives when consumers are 

also successful. And that the FSOC does not have implementation 

powers as strong as they should. 

I want to thank you for your very helpful insight into this and 

basically your statement that abolishing these new safeguards for 

the financial system would be a mistake and hurt the overall economy. 

So my time has expired, so I want to thank you for your hard 

work. I love GAO. I probably ask for too many reports from all of 

you, but they’re always insightful and very helpful, and I’m very 

appreciative. It’s helped advance our work in a bipartisan way. 

Thank you. 

Mr. DODARO. Thank you very much. 

Mr. PALMER. The chair recognizes the gentleman from North 

Carolina, Mr. Meadows, for 5 minutes. 

Mr. MEADOWS. Thank you, Mr. Chairman. 

Mr. Dodaro, thank you so much for your work. And as I look out 

into the audience with a lot of your fellow colleagues, a real thank 


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you to all of you as well. I know this is not your first rodeo, and 

we do appreciate your work. 

And it makes a difference. I think I need to stress that, that the 

recommendations that many times—you know, a lot of times we 

can do these recommendations and think that no one is listening 

and no one is hearing, but I can tell you that not only do we listen 

normally, whether it’s census or even—Mr. Dodaro, I think strategic oil reserves is one of the things that you mentioned that we 

needed to address. 

So it got used as a pay-for at least three or four times after your 

hearing. I think we only had, you know, 25 billion. I think we used 

it four times, $100 billion worth. 

So as we become more accustom to some of the recommendations 

that you make, what I’d like to do is for us to look just for our accountability, and it may be for GAO’s benefit, is the number of recommendations that actually get implemented and not just by agency but overall those cost-saving recommendations. I know that 

you’re doing that as they come off the high-risk list, but the more 

specific where you can actually get the feedback to the individual 

sector that is working, so whether it’s DOD or the IRS or anything 

else, if we could do that. 

So let me go very specifically to two—if your DOD person would 

come back up real quick on foreign military sales. 

Mr. DODARO. Yes. 

Mr. MEADOWS. And something that I need to get more clarification on, primarily because I’ve got somebody coming in to ask me 

about something today, as it would happen. They’re not in my district and so I feel like maybe I can speak out a little bit more clearly. 

But with regards to foreign military sales and what I would say 

sole-source procurement, where there is one person that ultimately 

gets the contract and where they get disqualified because of not 

having dealt with the bureaucracy of the United States before, is 

that a common practice, and if that is a common practice, does that 

not present a barrier to entry for anyone else wanting to compete 

for the same type of business? 

Because the reason supposedly was that they don’t normally deal 

with the bureaucracy of the Federal Government even though they 

are qualified to sell to the government. But because they haven’t 

done it, they got thrown out. Is that common? 

Mr. FRANCIS. I don’t know how common it is, but it happens. 

Mr. MEADOWS. Have you seen it before? 

Mr. FRANCIS. Yes. Yes. 

Mr. MEADOWS. Okay. So if you’ve seen it before, and we have a 

barriered entry, and because you haven’t done business with the 

Federal Government you can’t do business with the Federal Government in the future. Does that not have a chilling effect on competition? 

Mr. FRANCIS. Yes. And it keeps nontraditional firms from entering into the DOD market, and we’re not able to take advantage of 

some of the commercial innovation. And we’re taking a look at that 

right now. 

Mr. MEADOWS. All right. Well, will you take the message back 

that there’s one member from North Carolina that is not going to 


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give up on this particular issue and that he has the support of two 

very senior Senators in the upper chamber that would—not necessarily from my State, that are looking at this very exact thing. 

And so if you would take to them that if they’re going to have 

a chilling effect on competition, we’re going to look a lot closer at 

the procurement aspects as it relates. Would you do that for me? 

Mr. FRANCIS. We will do that. 

Mr. MEADOWS. All right. Great. 

Mr. Dodaro, in the 49 seconds I have remaining, let’s look at tax 

gap and truly at where we are in terms of not collecting taxes. I 

understand the newest one is—$406 billion is the tax gap. 

Mr. DODARO. Right. 

Mr. MEADOWS. Eventually that becomes real money. Doesn’t it? 

Mr. DODARO. In a hurry. 

Mr. MEADOWS. Yeah, in a hurry. 

So when we look at EITC, and the earned income tax credit, it 

shows that improper payments average around 25 to 26 percent. Is 

that correct? 

Mr. DODARO. I believe that’s right. 

Mr. MEADOWS. And so is that a historical trend which typically 

doesn’t change much year to year? 

Mr. DODARO. As I recall, it has been pretty much in that neighborhood over the time. I’ll go back and I’ll give the exact numbers 

for the record. There was a slight drop this past year, but there’s 

no big changes that I’ve seen. There’s some structural issues with 

that area. 

Mr. MEADOWS. Okay. So if there are structural issues, at what 

point do we get serious? Because even just on the improper payments there, according to my notes, it’s between $13 billion and 

$15 billion. 

Mr. DODARO. Right. It’s the third largest improper payment behind Medicare and Medicaid. 

Mr. MEADOWS. So how do we fix it? 

Mr. DODARO. There are a couple of things that have to be looked 

at: One is the statutory basis for the earned income tax credit. 

That’s a very complicated situation. And I think—— 

Mr. MEADOWS. So are you suggesting that Members of Congress 

passed something that was very complicated? I’m shocked. 

Mr. DODARO. In this particular case, I might say that that it 

could be simplified. And it—— 

Mr. MEADOWS. Okay. You need to run for office. That was very 

political, yeah. 

Mr. DODARO. I’m happy with my current job. 

Mr. MEADOWS. As you should be. I’ve run out of time, so I will 

give you some for the record. I want to be sensitive to the chair. 

And if we would—I’ll yield back, but I’ll follow up and give your 

tax experts some—we need some as we look at the Affordable Care 

Act, the repeal replacement. We’re about to make some more complicated decisions that I don’t want to make sure—I want to make 

sure we don’t make the same mistake. 

And I’ll yield back. 

Mr. DODARO. Okay. 

Mr. PALMER. The chair now recognizes the gentlelady from the 

District of Columbia, Ms. Holmes Norton, for 5 minutes. 


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Ms. NORTON. I thank the chairman. 

I have a question about the effect of the elimination of regulations that is going full board here now. 

So let’s start with one. Mr. Dodaro, the management of Federal 

oil and gas resources by our country has been put on the high-risk 

list since 2011. 

According to your report, some progress has been made on implementing the GAO’s recommendations in this area. And I note that 

resources from oil and gas amount to $49 billion, at least I’m 

quoting now from fiscal years 2011 through 2015, and therefore, 

one of the governments’ largest sources of nontax revenue. 

Now, past GAO work had has found that the American people or 

that the country may not be getting a fair return from oil and gas 

produced from Federal leases. The Bureau of Land Management 

revises its—recommended—I’m sorry GAO recommended that the 

Bureau of Land Management revise its regulations to charge higher royalty rates to companies producing oil and gas on public lands. 

Now, I understand that this recommendation was implemented 

as part of BLM’s final rule on methane and waste reduction. Now, 

I like your view on the effect you envision given what you know 

about your recommendations to put it into effect in the first place. 

What would be the likely effect if this rule were finally overturned? 

Mr. DODARO. I would like to ask Mr. Gaffigan to address that. 

He’s our expert in that area. 

Mr. GAFFIGAN. Thank you for your question. 

Yeah, our recommendation was in the revenue collection area, 

basically that BLM should provide itself some flexibility to change 

the rates. They hadn’t been looked at in a long time, and BLM 

went through a long process to do that and was, as you indicated, 

able to do a proposed rule, which allows for this flexibility. 

What happens in the future is very dependent on where the resource is, what’s at stake. They obviously want to provide a competitive rate. They don’t want to price themselves out of the market 

by having a rate that’s too high, but at least they’ve set the stage 

for providing the flexibility to collect revenues. And as you mentioned—— 

Ms. NORTON. They had done that in the rule. 

Mr. GAFFIGAN. They’ve done that in the rule in November of 

2016. 

Ms. NORTON. Uh-huh. So the notion that one of these rules may 

actually deprive us of revenues is almost laughable if it weren’t so 

sad. 

GAO has looked intensively at this area, and it’s also recommended that BLM update other regulations, including—I understand this is called onshore order number three to help BLM accurately determine how much is due in royalties, and that this was 

implemented. 

With onshore order number three, if we see its elimination, how 

would you characterize the potential effect? 

Mr. DODARO. Go ahead. 

Mr. GAFFIGAN. I think that there’s a lot of things happening in 

that area of revenue collection. We still have it in sort of a partially 

met status in terms of where BLM is in this, because I think we 

need to see how it plays out. One of the issues—— 


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Ms. NORTON. What do you mean by partially? 

Mr. GAFFIGAN. The criteria for coming off the high risk. We think 

they have made some progress, but they haven’t fully met it. And 

we have it at the partially-met category because we think it 

needs—we need to see it implemented. And I think there’s still 

some remains-to-be-seen work that needs to be done in this—— 

Ms. NORTON. How much of it has been implemented? 

Mr. GAFFIGAN. I’m sorry? 

Ms. NORTON. You say it has been partially implemented. 

Mr. GAFFIGAN. Right. 

Ms. NORTON. So are we almost there? Are we halfway there? 

Mr. GAFFIGAN. I think they set the stage for them to be able to 

do some of these things. To increase—— 

Ms. NORTON. So you must have some view then on what would 

happen if that halfway or that were eliminated? 

Mr. GAFFIGAN. Well we’re going to continue to monitor it and 

continue to monitor this area, as we have for a number of years, 

to see. We think there has been some progress made, but there’s 

more work that needs to be done. 

Mr. DODARO. If in some of these areas, when we’re—we’re monitoring them all the time. If we see progress has regressed, we will 

state that. We will let the Congress know. 

In fact, in this oil and gas area, we’re saying for the reorganization area on high risk, they’ve regressed. They haven’t fixed—in 

their safety and environmental management, they haven’t—they’re 

still using pre-Deep Water Horizon Investigation rules. They 

haven’t fixed that. They’re having problems in planning and documenting and have quality assurance over their investigations. 

In the environment area, they’re still operating on a 30-year-old 

agreement with EPA. They haven’t changed that yet. And their enforcement mechanisms, they haven’t been very clear on that area 

as well. And they’ve changed, in some of the environment area, reversed their reorganizational structure plans that they had in 

place. 

So that’s an area where we’re saying this year, for that aspect 

of it, they’ve moved backwards not forward. And we’ll keep an eye 

on these other areas as well. 

Ms. NORTON. Thank you very much. 

Mr. PALMER. The chair now recognizes the gentleman from Kentucky, Mr. Massie, for 5 minutes. 

Mr. MASSIE. Thank you, Mr. Chairman. 

Mr. Dodaro, I see on here, on the list of 34 at-risk programs, is 

improving Federal oversight of food safety. I missed your opening 

comments, but if you’d like to say something about that, I’d love 

to hear. 

Mr. DODARO. Yeah. We’ve had that on the list for a number of 

years. It’s a very fragmented system that we have. You know, 

there’s, you know, 30 different laws about 16 different Federal 

agencies that are involved in food safety, and we’ve recommended 

that there be, you know, comprehensive reform; that they have a 

food safety governmentwide plan that spells out what needs to be 

done. There’s metrics on how to do it. 

They used to have a—the executive branch used to have a food 

safety working group. That’s fallen by the wayside. We’re saying 


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Congress, we believe, should at a minimum reestablish that group, 

ask for a governmentwide plan with measures and milestones, particularly as we’re importing more food as well. I mean, the number 

of imported food now has almost doubled that in the past several 

years. And so I think it’s very important that they address this 

issue. 

Mr. MASSIE. What are the potential contributors to the increase 

in reported multi-State outbreaks of foodborne illness? 

Mr. DODARO. Mr. Gaffigan is our expert in that area too. 

Mr. MASSIE. Okay. Great. 

Mr. GAFFIGAN. I don’t quite have the range he has, but there’s 

a couple things going on. You know, we have more and more of our 

food that’s imported across the world. We have more and more of 

our folks eating raw, unprocessed foods. And we also have more 

vulnerable populations; as people age, they’re more vulnerable to 

these things. So those are three factors that can contribute to more 

of the multi-State outbreaks. 

Mr. MASSIE. How about the centralization of foods, food processing and preparation and production? 

Mr. GAFFIGAN. You know, we haven’t—that hasn’t been cited as 

a contributor one way or the other. I think our main concern is 

having 30 different agencies involved in this. And we’re just talking 

about the Federal agencies. There’s a lot of efforts at the State and 

local level that are involved in our food safety system, and there’s 

really a need, I think, for a national strategy to get these stakeholders together. And like any crosscutting issue, it starts with 

leadership, who’s in charge, defining roles and responsibilities. 

And we have a report that has just come out that reiterates some 

of this. We gathered some experts from the—with the assistance of 

the national academies, brought folks in, former FIS folks, former 

FDA folks, folks from the grocery industry and throughout. And it’s 

really a phenomenal group of experts, and that was a theme of 

theirs. You know, a lot of folks doing a lot of good work, but we 

need somebody to kind of take charge and assign these roles and 

responsibilities. 

Mr. MASSIE. Well, from the folks that I talk to, they say that, you 

know, our food supply system is actually—the more centralized it 

is, the more brittle it becomes and at risk, because if you have an 

issue in one slaughterhouse or in one field, it could show up in 

twelve different States very quickly. And so, you know, we’ve seen 

a lot of recalls that are nationwide instead of the local grocery store 

or something. 

So here’s—based on what both of you have said, here are a couple things that I have noticed that I want to comment on. I know 

a lot of small farmers. I’ve noticed that they’re decreasing in number. The number of dairies is decreasing. The number of abattoirs, 

slaughterhouses is decreasing, and it’s becoming more centralized. 

And this actually puts us—it’s more efficient, but it’s also a riskier 

system in terms of the magnitude of an outbreak if it happens. 

Here’s the ironic thing: What’s pushing this trend is the fact we 

have 16 different, you know, administrative facilities for enforcing 

the laws, and the small guys, the small producers are being forced 

out by the regulations that are intended to keep us safer. So the 

regulations are leading to a greater centralization, just the overVerDate Nov 24 2008 11:05 Aug 25, 2017 Jkt 000000 PO 00000 Frm 00090 Fmt 6633 Sfmt 6633 H:\26361.TXT APRIL

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head of compliance, for instance, for a local slaughterhouse puts— 

you know, they go out of business and then it consolidates. 

So I would just say, I’d like to keep that in mind as we promulgate more and more regulations, that the little guys aren’t going 

to be able to keep up with so you can’t buy food from your local 

processer or local farmer. You’ve got to buy it from another State. 

So keep that in mind. 

Another thing that disappointed me a couple years ago, and I 

think this somewhat puts the consumer more at risk is, here in 

Congress, we got rid of country-of-origin labeling for beef and pork, 

a couple years ago, in the omnibus bill. And we were told we had 

to do this for trade reasons. 

But as you pointed out, we doubled our consumption of food overseas, and I think everybody can agree there’s not a uniform food 

safety law across the globe. And I think the best thing you can do 

is say, okay, buyer beware, this is the country that it’s coming 

from. 

So I think for food safety, let’s just keep in mind that more regulations doesn’t mean always safer food because it gets more centralized—leads to more centralized production. And I think labels are 

always a good thing. 

So with that, I’ll yield back to the chairman. 

Mr. DODARO. Just for the record, we are not calling for more regulation. 

Mr. MASSIE. Okay. Great. Thank you. 

Mr. DODARO. We’re calling for a streamlined, simplified, more cohesive system, which could lead to a streamlining of the regulations. 

Mr. MASSIE. And I think that would be great for smaller producers and actually make our food supply system less brittle if they 

could deal with one agency instead of 16. 

Mr. DODARO. Yeah, and we’ll submit our most recent report, 

which I think was just issued this past week, for the record. 

Mr. MASSIE. Great. Thank you both. I yield back. 

Mr. PALMER. The gentleman yields. 

The chair now recognizes the gentleman from California, Mr. 

DeSaulnier for 5 minutes. 

Mr. DESAULNIER. Thank you, Mr. Chairman. I appreciate your 

leadership skills today. 

So I wanted to talk a little bit about tax law enforcement and 

identity theft, whoever is going to move up to the chair for that. 

While you’re doing your well choreographed, I just want to—— 

Mr. DODARO. I can handle some of these. 

Mr. DESAULNIER. I’m aware. I’m aware. Just the fact that you 

admitted that you didn’t want to run for office is a good indication 

of your intellectual capacity. 

And to all of you, seriously, thank you for the work you do. This 

is really incredibly important work. It may seem out of the limelight in our political environment, but I wish we did more of it. And 

as others have said on both sides of the aisle, this is really the 

meat and potatoes of what we should do in Congress in a bipartisan way. 

So in your 2015 high-risk report, you included tax law enforce- ment and identity theft for the IRS. As much as $14.5 billion you 


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identified in tax fraud was attempted in 2015; 85 percent of that 

we were able to recover. 

So the question is, just the pressures between us not investing 

in the Internal Revenue Service and then whatever impact the hiring freeze would have on attracting the best quality people, because 

I just—I assume that the bad guys are constantly out there trying 

to push the envelope, and obviously it’s in everyone is best interest 

to make sure that people are protected but also that people who 

pay their taxes on time, both their Federal and State and local 

taxes, realize the integrity of the process. 

So if you could comment on the challenges to making sure that 

the personnel and the infrastructure are—we’re investing properly 

in it, in regards to both the decrease in our support of the IRS 

overall and the potential impact from the hiring freeze. 

Mr. DODARO. Right. In the identity theft area—and then I’ll turn 

it over to Chris for specifics—they’ve actually allocated more resources to that area, which is one of the reasons they made some 

progress. 

I was also pleased to see the Congress implement our recommendation that you accelerate the W–2 information reporting 

from employers from March or April to January. This will enable 

IRS to better match the information, but they’ll need to have the 

systems in place to be able to do that to effectively take advantage 

of that congressional flexibility that that’s being given to them. 

The skill issues, Mr. Mihm, is focused on that, and I’ll turn it 

over to him. 

Mr. MIHM. Yes, sir. Thank you for the question. In addition to 

the additional resources IRS has put on it under its own initiative, 

Congress also provided additional resources in this particular area 

as well as the service side last year to make sure that they could 

augment their capacity to detect and respond to identity theft 

issues. 

The challenge that they face is precisely the one that you mentioned, is that we have an adversary that’s adaptive. And so it’s the 

moment you put in one set of controls or one set of ways, detection 

technologies, they are able to figure that out and, you know, are 

working very aggressively to get, you know, around that. 

So the big ongoing challenge that the IRS faces is making sure 

that they have authentication procedures in place; that they can 

really know that when you or I are saying we are you or I, we are 

indeed ourselves and not somebody in a foreign country. 

Mr. DESAULNIER. So on the issue of attracting and retaining 

young people who can make a good deal of money in the private 

sector doing this kind of work, are we able to keep up with that 

challenge to attract and retain the best people? 

Mr. DODARO. This is an issue of cross-government—— 

Mr. DESAULNIER. Right. 

Mr. DODARO. —not just the IRS. And we put the strategic human 

capital management on a high-risk list in 2001, because we were 

concerned that the government is behind in that area. It’s something that I am concerned about governmentwide. I’m very concerned about the Federal workforce in terms of skill gaps, impending retirements. And the complexity has increased in terms of some 


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of the issues the Federal Government has to deal with; cyber is a 

classic example of this. 

But acquisitions is another area where acquiring much more sophisticated weapons technology, satellite systems, space-based systems, et cetera. So this is an area that I would, you know, really 

underscore that needs careful attention. I know I’m more worried 

about it. You know, I’m fortunate that I’m able to attract and retain talented people in GAO. We’re not in the executive branch system. You know, we have our own personnel authorities, which I attributed largely to the reason we’re able to operate effectively. But 

you’re right to be worried about this, not only at the IRS but across 

the government. 

Mr. DESAULNIER. In regards to the hiring freeze, how does that 

concern you? I was reading one of your reports from the 1980s talk 

about the implications of a hard hiring freeze, but particularly 

when it comes to revenue collection. 

Mr. DODARO. Yes. A hiring freeze is not an effective way to manage the workforce. So our past work has shown that not to be true. 

In this case, they are doing it temporarily. They are going to come 

up with a plan. I’m anxious to see what the plan would be that 

they come up with in order to do this. They’ve made some exceptions in some areas, which is important to do as well. 

But you really need a good workforce plan, and you also need to 

make decisions about what you want the government to do. If you 

still have all the requirements for government to do things but you 

have less people to do it, you’re going to have problems. There will 

be breakdowns. There will be unsatisfied objectives. 

So if you reduced some of the functions of government, then the 

people that go along with those functions you can reduce it that 

way. So either through budgetary controls or through strategic 

workforce planning would be the most optimal way to deal with 

making sure you have the—not only the size workforce you want 

but the one with the right skills. 

Mr. DESAULNIER. Thank you. Thank you, all. 

Thank you, Mr. Chairman. 

Mr. PALMER. The gentleman yields. 

The chair now recognizes the gentleman from California, Mr. 

Issa, for 5 minutes. 

Mr. ISSA. Thank you, Mr. Chairman. 

Good to see you again. 

Mr. DODARO. Good to see you. 

Mr. ISSA. Just to put it in perspective, because I think the gentleman from California did tee it up pretty well, but today, the Federal Government in its—all of its programs, including Medicare, 

Social Security, and so on, consumes a greater portion of our gross 

domestic product than ever before. Isn’t that correct? 

Mr. DODARO. That’s correct. 

Mr. ISSA. So government has grown in the size and amount of 

money that it takes in. So in a nutshell, is it fair to say that if 

we’re getting more money as a percentage of the total wealth of the 

country, we have no one to blame if we don’t have enough money 

for vital programs than ourselves? 

Mr. DODARO. That’s true. 


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Mr. ISSA. But I’m going to go back to something you said. I’m not 

trying to hold you accountable, but I know a little bit about what 

you try to do. How many slots do you have today, and how many 

of them have you been able to fill because of limited resources? 

Mr. DODARO. We have—we don’t have a set number of slots—— 

Mr. ISSA. But you used to have a lot more full-time equivalents? 

Mr. DODARO. Oh, yes, yes, we did. Most recently we had about 

3,250 before the sequester. We’ve been under 3,000 people most recently. So—— 

Mr. ISSA. So the IRS isn’t the only group that’s being told to do 

more with less and leverage technology. Are they? 

Mr. DODARO. That’s correct. And we think, just for the record, in 

the IRS that they could do more with the resources they have. We 

don’t think they’ve measured good return on investment about different enforcement strategies and allocated the resources. 

Mr. ISSA. And isn’t it true, if you know, that the IRS has done 

very little to deal with the kind of fraud that has become rampant 

where people, through identity theft, basically file your tax return 

quickly and get a return from the government. That’s a growing industry. Isn’t it? 

Mr. DODARO. It’s a growing industry, but they have taken some 

measures. We give them credit for it in this report and also the 

Congress for giving them additional legislation to get the W–2 information from employers earlier, which will help them match. Previously, people could file their returns and they didn’t have the W– 

2s. 

Mr. ISSA. Right. In The old days a quick filer comes in early January and just defrauds and gets away with it. It’s a little harder 

now. 

Mr. DODARO. Yeah. 

Mr. ISSA. I want to go to one of the areas that you note. It’s a 

new area. You have a fairly broad group of problems for Native 

Americans. 

Mr. DODARO. Yes. 

Mr. ISSA. And this is new. Education is failing. We, the Federal 

Government, are failing in our responsibility to bring education to 

the tribal areas. Correct? 

Mr. DODARO. That’s correct, and particularly the condition of the 

schools. 

Mr. ISSA. Indian Healthcare Service is not meeting its responsibilities. Is that true? 

Mr. DODARO. That’s correct. 

Mr. ISSA. And when Native American tribes try to do energy programs, energy development programs, you noted that they’re finding extreme burdens in trying to do their own programs on Native 

American land? 

Mr. DODARO. Yes. 

Mr. ISSA. So first time, but it looks like there’s an attack on Native Americans on three fronts: Their education, their opportunity 

to have energy and employment, and, of course, their health. How 

are we going to fix this? 

Mr. DODARO. I think you need better leadership over at the Bureau of Indian Affairs and Indian Health Services. It has to be a 

higher priority. When I meet with the new Secretary of Interior, 


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once there is one, I’m going to raise this issue to them. This is a 

serious problem. 

Staffing isn’t up to where it needs to be at a lot of these locations. There are no healthcare standards and metrics that they’re 

supposed to have. They’re still allocating the money for contract 

care for health care using a formula they used in the 1930s. I 

mean, it just—I mean, lack of attention would be the underlying 

theme, Congressman Issa, that I would—— 

Mr. ISSA. So this is—— 

Mr. DODARO. We put it on the list to elevate attention it to it. 

It needs a leadership commitment. 

Mr. ISSA. And that leadership failure is, in fact, at the Department of the Interior. They’ve gotten to where you now see three 

separate parts of our dealing with our obligation for these tribal 

lands in a way in which it has got to be almost job one of the Secretary of Interior to find himself some key lieutenants and put 

them to work. 

Mr. DODARO. Exactly. And there’s—Department of Health and 

Human Services has a role here too. 

Mr. ISSA. Well, they do have a Secretary now. So that’s—— 

Mr. DODARO. I plan to meet with Secretary Price. 

Mr. ISSA. Well, I plan to meet with him on this issue too because 

California, as you know, has a fairly extensive amount of Native 

American assets. 

You’ve been doing this for a long time, and I did note that you’re 

doing more with less. But in the remaining seconds, just tell me, 

if you could have one thing from this committee, one thing to make 

your job easier and more successful, what would it be? We’ll leave 

money aside. 

Mr. DODARO. Attention and more hearings on the high-risk 

areas. 

Mr. ISSA. Well, I look forward to that. I might add one that I 

hoped you would say, but I didn’t prep you, and that is the type 

of interference that you have had from previous executive branch 

where they found you a nuisance, they argued over what your statutory authority was, and denied you access. Would that also be 

something you’d put high on the list? 

Mr. DODARO. Oh, definitely. I’ll be on your doorstep right away 

if there’s a problem. 

Mr. ISSA. Well, Mr. Chairman, it is—I ask that question for a 

reason. I know Will is going to be next, but the last administration, 

I think, failed, and it is our obligation to hold this administration 

to a much higher standard to cooperate with the GAO because 

without them our oversight is not meaningful. Thank you. 

I yield back. 

Mr. PALMER. The gentleman yields. 

The chair recognizes the gentleman from Texas, Mr. Hurd, for 5 

minutes. 

Mr. HURD. Thank you, Chairman Palmer for saving the best for 

last. 

Mr. PALMER. Well, I’m actually last. 

Mr. HURD. Oh, there you go. 

Mr. PALMER. But I accept the compliment. 


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Mr. HURD. Mr. Dodaro, great to see you. When I was elected to 

Congress, what, three Novembers ago, I never would have expected 

that GAO would be my new favorite department. And what you 

and your team do is integral to our role as oversight and to helping 

make sure that our Federal Government is lean, mean, and responsive to the citizens that they serve. And so thank you to you and 

your team for all that work. And I don’t start any project off without saying, hey, what does GAO say about that and not try to 

recreate the wheel. 

What I’d like to talk to you about is the VA. Your recent report 

indicates there are significant gaps between the VA’s stated plans 

and its actual progress. You flag improving access to timely medical appointments as requiring immediate action. This is after the 

VA has already spent $127 million over 9 years to modernize outpatient scheduling. 

What’s the current status of the VA’s scheduling system? What 

actual progress has there been in improving the scheduling of veterans’ medical appointments, and why is this such a problem? 

Mr. DODARO. Yeah. The current scheduling system they have is 

30 years old. It has been a problem because it hasn’t been properly 

managed. Their IT structures, we just issued a report—Dave 

Powner, who I’m sure you’re very familiar with. 

Mr. HURD. Yeah, he’s fantastic. I see him over there. 

Mr. DODARO. He’s here, and he can explain their IT problems in 

more detail. I’m very concerned about this area. I raised the highrisk list last update because I knew it wouldn’t be fixed right away, 

but I’m disappointed in a lack of progress. 

Mr. HURD. And to both of you, General and Mr. Powner, it’s always good to see you, and thanks for your work that you and your 

team are doing on the scorecards that we offer—provide to—on the 

agencies. 

I had a veteran come up to me recently, had heart problems, had 

high blood pressure, and he lived in Texas. He was in Florida visiting his kids. He goes into the Florida VA because he was having 

real problems, didn’t have his medicine. Took 9 hours to get him— 

to get entered into the system. It’s 2017, for God’s sake. This is— 

you know, you should be able to pull him up. 

Is the enterprise so big that it requires years to implement a 

scheduling system, in your expert opinion? 

Mr. DODARO. No, no, absolutely not. I mean, they should go to 

a commercial solution. There are commercial solutions, so obviously 

scheduling medical appointments is not unique to the Veterans Affairs Department. They will tell you that as well. 

I’m also concerned that they’re not measuring wait times for patients. You know, they don’t start measuring wait times until 

some—a veteran can call for an appointment, then they have to 

check eligibility, then eventually a scheduler will get back to the 

person, and then they’ll ask them when they’re first available to 

have an appointment, and then they’ll say, well, I’d like to come 

in on the 17th, let’s say, for example. And they say, we don’t have 

anything on the 17th. 

So they’ll start only from that time, counting wait time, when it 

could’ve been many days before this even transpires. But Dave can 


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talk about the IT. They spend over $4 billion a year, and we’re getting very limited return on that investment. 

Mr. HURD. I’m glad this table is attached to the floor because I’d 

flip it over on the next topic, and that’s DOD and VA electronic 

healthcare interoperability. 

Mr. DODARO. I’ll come and help you. 

Mr. HURD. How long is it going to take us to achieve true interoperability? 

Mr. DODARO. You know, we flagged this issue probably 15, 20 

years ago. 

Mr. HURD. Yeah. 

Mr. DODARO. You have the two most bureaucratic government 

entities trying to work together in this area. They haven’t done it. 

They still haven’t provided us a good rationale for why they decided not to have an integrated system and they’re going off on 

their own way. DOD has a system that they bought now, a commercial system. Maybe VA ought to consider, you know, that as an 

option as well. 

You know, I don’t want to limit competition and procurement; 

I’m not saying that. But studies that were done show that 90-plus 

percent of the requirements are the same for the two systems. 

Mr. HURD. Mr. Powner, you can have the remaining time I have 

or do not have. 

Mr. POWNER. Well, I think the key here with both scheduling 

and electronic health record, they can hand in hand. So you could 

modify the current systems or you can go commercial. With commercial electronic health records, there’s typically scheduling modules. 

VA is piloting those initiatives right now. They’re leaning towards the commercial decision. Now that the Secretary is in place, 

they’re waiting for a decision to be made. The decision should be 

go commercial. That will go a long ways towards interoperability 

with DOD. 

Mr. HURD. Buy, not build. 

Mr. POWNER. Correct. 

Mr. HURD. Excellent. 

I yield back, Mr. Chairman. 

Mr. PALMER. The gentleman yields. 

I now recognize myself for 5 minutes. And these will be rapid 

fire, if I may. I mean, if you need to go into an extended explanation, then do so. 

On the enforcement of tax laws, the information that I have, you 

show a $385 billion tax gap in 2006. Do you know what it was in 

2016? 

Mr. DODARO. It’s the equivalent number. The net tax gap’s about 

$406 billion. 

Mr. PALMER. Okay. And how about 2015? 

Mr. DODARO. Well, they only measure it every once in a while. 

Mr. PALMER. Every once in a while? 

Mr. DODARO. Yes. So they don’t measure it every year. The latest 

estimate is a net tax gap of over $400 billion. 

Mr. PALMER. I saw a number yesterday. Well, the net. Now, I’m 

glad you clarified, because the total tax gap was like 456. 


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Mr. DODARO. That is correct. Then they expect to collect so much. 

I gave you the number that compared to the 385. 

Mr. PALMER. Thank you. And I appreciate the clarification. 

On the improper payments, that’s a big deal with me. I think 

we’ve had this conversation before. The improper payments doesn’t 

account for all the improper payments on Medicaid. You said it’s 

$36 billion. 

Mr. DODARO. Right. 

Mr. PALMER. And then approximately another $60 billion on 

Medicare. 

Mr. DODARO. Right. 

Mr. PALMER. On the Medicaid, you said it didn’t account for all 

of it. Do you have a ballpark on—— 

Mr. DODARO. No, I don’t. Unfortunately, I don’t. 

Mr. PALMER. How about on Medicare, do you think that represents all the improper payments there? 

Mr. DODARO. That estimate is pretty good on Medicare, now that 

they’re measuring all parts of Medicare. 

Mr. PALMER. So we’re right at $100 million a year. And this has 

been going up. 

Mr. DODARO. Yes, that is correct. It’s been going up. 

Mr. PALMER. So it hasn’t improved. I was informed a few days 

ago that there may be some indication that not all Federal agencies 

are reporting improper payments. 

Mr. DODARO. That is correct. I am very concerned about that. I 

pointed that out. There were at least a dozen programs that did not 

report this past year. One was the Supplemental Nutrition Assistance Program, SNAP, or the old food stamp program. 

The Temporary Assistance for Needy Families has never reported. They don’t believe that they can do it. I’ve encouraged Congress to pass legislation to require them to make that effort. And 

a number of agencies just haven’t done it. So the estimates, governmentwide estimate of $144 billion for 

2016 is not a complete estimate. And we’ve flagged this for a number of years on our governmentwide audit is that the Federal Government doesn’t have reasonable assurance that it knows the full 

extent of improper payments and can address those issues. 

Ninety percent of the improper payments over the last few years 

are overpayments. Some are underpayments. That’s a problem, too, 

because somebody that should be getting a benefit isn’t. But most 

of it are overpayments. 

Mr. PALMER. Well, here’s the thing that concerns me. I’m also on 

the Budget Committee, and I made this point that there are days 

I feel like my head will explode. We’re expending money improperly 

and not properly funding other programs where we’re now obviously deficit spending. 

So we’re literally borrowing money and paying interest on it as 

a result of improper payments and the failure to fully collect all the 

taxes. 

Mr. DODARO. That’s exactly right. 

Mr. PALMER. When you add these two together—and, again, to 

your point that we don’t know that this is all that’s being expended 

improperly—we’re talking almost $600 billion. And in our 10-year 

window, that’s $6 trillion, and it’s going up. 


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Mr. DODARO. Right. 

Mr. PALMER. And we’re laying that on future generations plus interest. 

Mr. DODARO. Right, right. 

Mr. PALMER. That’s maddening. 

Mr. DODARO. Yes. Yes, it is. I testified before the Senate Finance 

Committee on this very issue. I’d like to submit my statement for 

the record, both on the tax gap and improper payments. 

I think—I mean, it won’t solve our long-term sustainable fiscal 

path, but it will make a huge contribution if we could get these two 

areas under control. 

Mr. PALMER. I thank you for that and, without objection. 

Mr. PALMER. I want to go back to something Ms. Holmes Norton 

brought up about the revenues from the Bureau of Land Management. And how much is reported that we collected in royalties and 

revenues? 

Mr. DODARO. Yes. I’ll have to—here, I have an answer quick for 

you. We’re rapid fire. 

Mr. PALMER. Well, I have the gavel, so we’ll be a little flexible. 

Mr. GAFFIGAN. About $10 billion a year for oil and gas. 

Mr. PALMER. Okay. There’s a number of reports that indicate 

that the revenues over a 15-year period as a result of repealing the 

ban on exporting crude oil should increase. 

But one of the things that I found out—and I want to clarify this, 

make sure I heard it right—the last that I heard, we hadn’t increased the royalty rate since the 1920s. Is that correct or did that 

change? 

Mr. GAFFIGAN. There have been changes since the 1920s. There’s 

the major law. One of the major laws is from the 1920s. But there 

hasn’t been a huge change in recent years on the royalty rates, 

both onshore and offshore, but there has been some tweaking. 

Mr. PALMER. What is the royalty rate? 

Mr. GAFFIGAN. It ranges from about 12 to 18 percent, depending 

if it’s onshore or offshore. 

Mr. PALMER. What’s the royalty rate that the private sector, private landowners get? 

Mr. GAFFIGAN. That can range, and we could give you some estimates of that. Obviously, we are only familiar with the Federal 

rules. 

Mr. PALMER. On the high end, though, I think it’s less—it’s more 

than what the Federal Government gets. 

Mr. DODARO. Yes. There’s a study that compared the Federal 

Government to the State governments and what they receive as 

well as the private sector. We can get you a summary of that study. 

Mr. PALMER. I’d appreciate that. 

Continuing on our rapid-fire deal on the improper payments, and 

I think you may have addressed this, but on the Social Security 

Disability programs, I know we’re expending money improperly 

there as a result of the failure to do the 3-year reviews. If we could, 

I’d like to—if you’ve got a number on that, you can submit that to 

us later. 

Mr. PALMER. I want to ask you something about Federal real 

property. Has there been any estimate for how much could be sold 

and how much revenue would be generated from that? 


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Mr. DODARO. There’s not an estimate I’m aware of. I’ll doublecheck and, if so, I’ll submit it. 

Mr. PALMER. If you do that, could you also include estimated savings on maintenance and upkeep? 

Mr. DODARO. Okay. 

Mr. PALMER. Because that is an annual expenditure that we 

want to address. 

I want to ask you another one, and this has to do with—you’ve 

made progress in getting these agencies to meet the criteria and 

you showed that the benefits, approximately $240 billion over that 

10-year period, about $24 billion a year. Do you have any idea 

what that financial benefit would be to the Federal Government if 

all of the agencies met the criteria? 

Mr. DODARO. No, I don’t have an estimate on that. But most of 

that money comes from DOD weapon systems that we’ve been able 

to curtail. A lot of it’s Medicare or Medicaid and the tax revenue 

side. So it’s all big areas. If we could continue to—I think those 

areas have huge potential. I know it’s tens of billions. I just don’t 

have a complete estimate. 

Mr. PALMER. All right. And Mr. DesJarlais—no, it was Mr. Cartwright—I apologize, another mistaken identity here—brought up 

the issue of climate change. 

Has the GAO looked into the Federal Government and the national, the Nation’s exposure to an EMP event, electromagnetic 

pulse event? 

Mr. DODARO. Actually, we have. And I’ll submit those reports for 

the record. 

Mr. PALMER. Without objection. 

Mr. PALMER. And then the last thing, and this is a clarification. 

When someone was asking about the Fannie Mae and Freddie Mac 

and indicated that they have guarantees backing them up that are 

$ 200 billion, maybe a little bit more, there was an article in the 

Washington Post last October that indicated that that guarantee 

was only about $83 billion. Could someone just check into that and 

clarify that? 

Mr. DODARO. Yes. We’ll clarify for the record, but I’m pretty confident on our number. 

Mr. PALMER. Yes. Well, I just saw that. And I’m not questioning 

your number. I just want to make sure that we’re all on the same 

page on that. 

Mr. DODARO. Okay. Well, we’ll check what the Post was talking 

about and we’ll check our number and then I’ll give it for the 

record. 

Mr. PALMER. The chair now recognizes the gentleman from Wisconsin, Mr. Grothman, for 5 minutes. 

Mr. GROTHMAN. Thank you. 

GAO removed the personnel security clearance as a high-risk 

area a few years back, 5 years ago now. Since then, the security 

clearance system has seen a lot of changes, reform initiatives. You 

guys are not listing it as high-risk now, but your report discusses 

ongoing reviews of the overall reform effort. 

What do you think is going right in the reform effort, and what 

concerns does GAO have as you move forward? 


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Mr. DODARO. Yes. Well, I think—they’re implementing a number 

of the recommendation that they had from the reviews that were 

done after the Washington Navy Yard incidents and the incidents 

with the OPM breach. But I’m still concerned about several areas. 

One, you have this new entity, the National Background Investigations service that’s just been stood up in October. There’s also 

a move to transfer the IT systems to DOD to manage those systems. The National Defense Authorization Act is requiring DOD to 

consider taking over the background investigations again for DOD. 

So there’s a lot of moving parts right now. 

And I’m also concerned about whether or not adequate changes 

have been made to properly protect the security of these very important systems. 

So we’re looking at all those areas right now. And the work we 

are going to do should be finished by this fall, and if, you know, 

I’m concerned about it at that point, I’ll add it to the high-risk list 

out of cycle. I’ve done that before if circumstances warrant it. 

Mr. GROTHMAN. Okay. The National Background Investigations 

Bureau was supposed to be responsible for conducting security 

clearance investigations. There’s a feeling that things are moving 

a little bit slowly there. Do you have any recommendations for Congress? 

Mr. DODARO. Yes. Cathy Berrick is our expert in that area. 

Mr. GROTHMAN. Oh, good. Well, we get somebody different. Ask 

the right question. 

Ms. BERRICK. There is currently a significant backlog at NBIB. 

They came into existence, became operational in October of 2016. 

There’s already a 569,000 backlog of personnel security clearance 

investigations that need to be conducted. 

So I think one of the first things they need to do is develop a 

plan for how they’re going to work through that backlog. They are 

hiring an additional couple hundred people. They also doubled 

their number of contractors from two to four. But I think actually 

having a concrete plan on how they’re going to work through that 

is going to be important. 

I also think it’s important for them to work with the DNI, the 

Security Executive Agent for security clearances, to develop governmentwide quality metrics for personnel security clearances. So 

they’re not just focused on the backlog, but they’re also focused on 

the quality of investigations. I think those are probably the two 

most important things they should do. 

And now I’ll throw a third in as well, which is oversight over 

their contractors, since contractors conduct the bulk of background 

investigations for both initial and reevaluations. So oversight is important, and that’s something we’re also currently looking at. 

Mr. GROTHMAN. At the current path, are they going to work their 

way through the backlog? 

Ms. BERRICK. They have no specific plan or timeframe on when 

they’ll work through it. They’ve just said it’s going to take time. 

Mr. GROTHMAN. Do you know is the backlog getting greater or 

lesser? 

Ms. BERRICK. It’s gotten greater over recent years, in part due 

to the OPM data breach, in part due to new investigative standards. 


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Mr. GROTHMAN. Okay. According to the most recent reporting by 

the Performance Accountability Council, the time it takes to conduct an investigation has been the highest it’s been in years. Do 

you think that’s a problem? 

Mr. DODARO. Well, timeliness was the reason we put it on the 

high-risk list in the first place, so—and that was after 9/11 occurred. So more things became classified and secret sensitive and 

things, so more people needed background investigations. 

So timeliness is something we’ll look at, but quality and quality 

standards is also important. So we’ll be looking at both of those 

issues. 

Mr. GROTHMAN. Both of them. Can you give me a timeframe 

right now? 

Mr. DODARO. Yes. We’ll issue our reports in the fall. Right. 

Ms. BERRICK. Right. 

Mr. GROTHMAN. I mean not your timeframe, but their timeframe. 

What is the standard wait? 

Mr. DODARO. Oh, oh, oh. 

Ms. BERRICK. It varies within the intelligence community. Outside of, you know, sometimes it could be over 200 days. It just varies, depending on the agency. 

Mr. GROTHMAN. Okay. Like what agency would be 200 days? 

Ms. BERRICK. I’ll have to get that information for you, and we 

could submit it for the record. 

Mr. GROTHMAN. Okay. Thanks. 

I’ll yield the remainder of my time. 

Mr. PALMER. The gentleman yields. 

I would like to thank our witness, Mr. Dodaro, I always enjoy our 

time together, and all the folks from GAO who accompanied him 

for taking time to appear before us today. 

Several members asked for additional information for the record, 

so we would appreciate your provision of the information requested. 

I ask unanimous consent that members have 5 legislative days 

to submit questions for the record. Without objection, so ordered. 

If there is no further business, without objection, the committee 

stands adjourned. 

[whereupon, at 12:16 p.m., the committee was adjourned.] 


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APPENDIX 

MATERIAL SUBMITTED FOR THE HEARING RECORD


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Questions for The Honorable Gene L. Dodaro 

Comptroller General of the United States 

U.S. Government Accountability Office 

Questions from Chairman Jason Chaffetz 

February 15.2017, Hearing: "GAO's 2017 High Risk Report: 34 Programs in Peril" 

Mitigating Gaps in Weather Satellite Data 

1. Why has NOAA been successful in launching a geostationary satellite replacement 

and why launching a polar satellite replacement is proving to be more difficult? 

A key factor in the National Oceanographic and Atmospheric Administration's (NOAA) 

successful launch of its geostationary satellite replacement in November 2016 was that it had 

a strong integrated program management team that was able to effectively navigate cost, 

schedule, and technical challenges. For example, when faced with timeframes that would not 

allow comprehensive system integration testing, the program made the decision to move to 

round-the-clock testing and later delayed the launch date by 6 months. 

However, it is important to note that both geostationary and polar-orbiting satellite programs 

experienced difficulties leading up to their satellite launches. Over the last decade, we issued a 

series of reports identifYing cost, schedule, and technical challenges facing both programs.' 

We also made multiple recommendations over the years to address these challenges and 

NOAA has worked to implement these recommendations. 

One differentiating factor between the two programs is that NOAA's polar satellite program 

had a more troubled history than the geostationary satellite program. NOAA, the National 

Aeronautics and Space Administration, and the Department of Defense (DOD) were 

originally part of a tri-agency polar-orbiting satellite program (called the National Polarorbiting Environmental Satellite System program), which was expected to provide more 

complex satellites in multiple orbits. In 20 I 0, after spending 16 years and $6 billion, and 

experiencing significant inter-agency management challenges, the executive office of the 

president directed the disbanding of the NPOESS program and instructed NOAA and DOD to 

establish separate programs to address their own requirements in different orbits. NOAA 

subsequently established its Joint Polar Satellite System program to fulfill its requirements for 

polar-orbiting environmental satellite data. 

2. What is DOD currently doing to ensure it will be able to provide its two highestpriority capabilities in the near future (cloud characterization and area-specific 

weather imagery)? 

'See GAO. Polar Weather Satellites: NOAA Is Working to Ensure Continuity but Needs to Quickly Address Information 

Security Weaknesses and Future Program Uncertainties. GA0-16-359 (Washington, D.C.: May 17, 2016); Environmental 

Satellites: Launch Delayed; NOAA Faces Key Decisions on Timing of Future Satellites. GA0-16-143T (Washington. D.C.: 

Dec. 10, 2015); Geostationary Weather Satellites: Launch Date Nears. but Remaining Schedule Risks Need to be Addressed. 

GA0-15-60 (Washington, D.C.: Dec. 16. 2014); and Polar Weather Satellites: NOAA Needs To Prepare for Near-term Data 

Gaps. GA0-15-47 (Washington. D.C.: Dec. 16. 2014). 

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In August 2016, DOD reported to Congress its near-term plans to address potential satellite 

data gaps.2 Plans for addressing the two highest-priority capabilities--cloud characterization 

and area-specific weather imagery--include exploring options to move a geostationary 

satellite over an affected region, and exploring options for acquiring and fielding new 

equipment, such as satellites and satellite components to provide the capabilities. However, 

because it takes time to establish new satellite data sources and assimilate them into data 

products, these proposed solutions may not be available in time or be comprehensive enough 

to avoid any near-term coverage gaps. 

More recently, plans were approved to initiate an effort by the Operationally Responsive 

Space (ORS) Office ····a joint initiative of several DOD agencies with a mission to rapidly 

deploy space capabilities-that would focus on addressing these high-priority gaps. We have 

ongoing work assessing this and other ORS efforts. 

DOD Business System Modernization 

3. What can Congress do to ensure DoD commits resources to business system 

modernization? 

Congress can consider directing DOD to submit to GAO, the House Committee on Oversight 

and Government Reform, and other cognizant committees (e.g., the congressional defense 

committees and the Senate Committee on Homeland Security and Governmental Affairs), a 

plan to address deficiencies in its management controls for business systems modernization 

described in GAO's 2017 High-Risk Report. Our February 2017 High-Risk Report identified 

DOD's lack of plans for addressing the various actions and associated recommendations 

described in the report as an important factor limiting the department's ability to make 

progress. Specifically, we noted that the department lacked final and approved plans to 

address needed improvements in business system acquisition management, business system 

investment management, and its federated business enterprise architecture. Such plans, 

properly developed and implemented, would provide DOD and Congress a means to monitor 

progress in these areas and hold responsible entities accountable for committing available 

resources and making needed progress. 

DOD Financial Management 

4. What structural reforms or organization restructuring does DoD need for improved 

contract and financial management? 

We have reported that DOD's efforts to improve its financial management have been 

impaired by its decentralized organization; cultural resistance to change; lack of skilled 

2

Earlier, in March 2016. we found that DOD had ineffectively engaged with the National Oceanic and Atmospheric 

Administration (NOAA) during its analysis of alternatives for space-based environmental monitoring (SBEM) capabilities, 

which contributed to an incorrect assumption about the availability of cloud characterization and area~specific weather 

imagery data from European satellites. As a result, these two capabilities were not a' thoroughly analyzed for potential 

solutions in the department's analysis of alternatives. We recommended DOD establish formal mechanisms for coordination 

and collaboration with NOAA to ensure DOD is sufficiently informed about the availability of data from partner satellites as 

it plans for future SBEM capabilities. DOD stated that existing working-level engagemenl' with NOAA were consistent with 

the recommendation and that senior NOAA representatives would be invited to participate in future SBEM planning. We 

reiterated that DOD should formalize il' efforts. to include clearly defined roles and responsibilities for the two agencies. 

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financial management staff; lack of effective processes, systems, and controls; incomplete 

corrective action plans (CAP); and ineffective monitoring and reporting. 

Under its current financial management structure, DOD leadership will need to continue 

building a workforce with the level of training and experience needed to support and sustain 

sound financial management DOD needs to address the lack of availability of financial 

management staff due to the impact of the mandatory workforce reductions at headquarters as 

required by the National Defense Authorization Act (NOAA) for fiscal year 2016 and 

possible impact of the Administration's 90 day hiring freeze. In addition, to continue building 

a skilled and knowledgeable workforce, DOD needs to assure that the financial manager 

certification program continues developing and refreshing required competencies, periodically 

assessing the workforce's capabilities, identifying competency gaps, and closing those gaps. 

Further, DOD needs to continue to develop and deploy enterprise resource planning (ERP) 

systems as a critical component of DOD's financial improvement and audit readiness 

strategy.3 DOD also will need to strengthen automated controls or design manual 

workarounds for the remaining legacy systems to satisfY audit requirements and improve data 

used for day-to-day decision making. 

In terms of contract management, DOD needs to take further actions to ensure its acquisition 

workforce is appropriately sized and trained to meet its needs so as to increase the 

department's capacity to negotiate, manage, and oversee contracts. For example, while DOD 

met its overall acquisition growth goal for its workforce-increasing in its military and 

civilian workforce from about 126,000 to more than 158,000 between September 2008 and 

March 2016, or by about 12,000 more than the target identified in DOD's April2010 

acquisition workforce plan-DOD did not accomplish the goals it set for some of its 13 

acquisition career fields. 4 DOD's acquisition workforce strategic plan indicated that targeted 

growth in 5 priority career fields-auditing, business, contracting, engineering, and program 

management-would help DOD strategically reshape its acquisition workforce. As of March 

2016, our analysis shows that DOD met or exceeded its planned growth for 8 career fields by 

about 12,500 personnel, including the priority career fields of program management and 

engineering, but fell short by about 2,800 personnel in 5 other career fields, including the 

priority career fields of contracting, business, and auditing. In December 2015, we 

recommended that DOD issue an updated workforce plan that included revised career field 

goals and issue guidance to the components to focus hiring on priority career fields. 5 DOD 

agreed that additional guidance was essential to ensure that DOD had the right people with the 

right skills to meet future needs, but noted that determining which career fields were a priority 

was most appropriately determined by the components. DOD stated that it would work with 

the components to issue guidance that would best meet both enterprise and specific 

component workforce needs. DOD issued an updated strategic plan in October 2016 that 

reiterated the need to shape the acquisition workforce to achieve current and future acquisition 

requirements but did not establish specific targets for the acquisition workforce as a whole or 

3 An ERP system is an automated system using commercial off-the¥shelf software consisting of multiple, integrated 

functional modules that perform a variety of business-related tasks, such as general 1edger accounting, payroll, and supply 

chain management 

'Pursuant to the Defense Acquisition Workforce Improvement Act, DOD identified 13 career fields and designated 

acquisition-related positions held by military or civilian personnel. Pub. L. No. 101-510 §§ 1201-1211 (1990) (relevant 

sections codified as amended at 10 U.S.C. §§ 1701-1764). The business career field was divided into two career fields in 

2010. cost estimating and financial management. We combined the two career fields under the "business" career field for 

consistency. 

'GAO, Defense Acquisition Workforce: Actions Needed to Guide Planning Ef}orts and Improve Workforce Capability, GA0-

16-80 (Washington. D.C.: Dec. 14, 2015). 

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targets for specific career fields. DOD officials noted that DOD's objective is to sustain the 

current level of the acquisition workforce and understand the workload demand. 

Additionally, DOD needs to take more actions to improve how it manages services 

acquisitions, which account for more than half of its annual procurement spending. One 

critical element in improving services acquisition is to know what the department is buying 

today and what it intends to buy in the future. We found that while data on future service 

acquisitions are generally maintained by DOD program offices, DOD and military department 

guidance does not require that data to be specifically identified in DOD's budget forecasts. 

We recommended in February 2016 that the military departments revise their programming 

guidance to collect information that is already available on how contracted services will be 

used to meet requirements beyond the budget year. We also recommended that DOD 

establish a mechanism, such as a working group of key stakeholders, to coordinate these 

efforts. DOD partially concurred with these two priority recommendations, citing challenges 

in estimating future spending.6 

ln that regard, DOD's January 2016 service acquisition instruction includes requirements to 

generate data on anticipated future service acquisition spending, but this requirement does not 

clearly identify what level of detail should be collected, leaving DOD at risk of developing 

inconsistent data between each military department. Ensuring DOD has the people, skills, 

capacity, tools, and data needed to make informed acquisition decisions is essential if DOD is 

to effectively and efficiently carry out its mission in an era of more constrained resources. 

Ensuring the Effective Protections of Technologies Critical to U.S. National Security 

Interests 

5. What are the criteria for determining if certain technology is placed on the U.S. 

Munitions List? Who is responsible for making those decisions and do these 

individuals have the expertise necessary to make an informed decision? 

The overarching criterion for determining if a certain technology is placed on the United 

States Munitions List (USML)--under the International Traffic in Arms Regulations-is 

whether defense articles and defense services are determined to provide a critical military 

or intelligence advantage. 

The Department of State (State), with assistance from DOD's Defense Technology 

Security Administration, determines what is included on the USML. Further, over the last 

several years, as part of the former President's Export Control Reform initiative, a task 

force (consisting of various departments and agencies, including the Department of 

Commerce (Commerce), DOD, and State) created new, more specific export control 

criteria to determine which items and technologies needed to remain on the USML and 

which could be transferred to Commerce control. In doing so, State, Commerce, and 

Defense Technology Security Administration officials involved in the reform initiative 

have been working to reach agreement on the appropriate controls over items in the 21 

categories of State's USML. As of our 2017 High Risk update on this topic, we found 17 

of the 21 categories of the USML have been reviewed to clearly identify the jurisdiction 

of these categories. 

6

GAO, DOD Service Acquisition: Improved Use of Available Data Needed to Better Manage and Forecast Service Contract 

Requirements, GA0-16-119 (Washington, D.C. Feb 18, 2016). 

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GAO has not assessed expertise of the officials involved in making decisions for what is 

placed on the USML. 

U.S. Government's Environmental Liabilitv 

6. This year, GAO has included the U.S. Government's environmental liability as a new 

addition to its high-risk list. How did GAO come to the decision to include this new 

area? 

GAO's criteria for adding an area to the high risk list include government operations that are 

vulnerable to fraud, waste, abuse, and mismanagement, as well as operations where there is 

exposure to loss in monetary tenns in which there is at least $1 billion at risk. Over the past 20 

years, the U.S. Government's estimated environmental liability has more than doubled-from 

$212 billion in 1997 to $447 billion in 2016-even while federal agencies have spent about 

$200 billion to address the liability. In addition, this $447 billion estimate does not reflect all 

of the future cleanup responsibilities federal agencies may face. Because of the lack of 

complete information and the often inconsistent approach to making cleanup decisions. 

federal agencies cannot always address their environmental liabilities in ways that maximize 

the reduction of health and safety risks to the public and the environment in a cost effective 

manner. An increase in future liabilities that outpaces federal efforts to reduce them creates an 

unsustainable financial path and suggests that better methods are needed to manage the risks 

and reduce the growth in future costs. All of these factors led to our decision to include this 

new area on the 2017 high-risk list. 

7. In the 2017 High Risk Report, GAO estimates the U.S. Government's environmental 

liability to be $447 billion. However, it also states that the actual cost may be even 

higher. What factors or costs would cause this amount to increase? 

As we testified in February 2016, DOE's estimated liability does not include billions in 

expected costs, and this is true for other federal departments as wel1.7 For example, DOE has 

not yet developed a cleanup plan or cost estimate for the Nevada National Security Site and, 

as a result, the cost offuture cleanup of this site was not included in DOE's fiscal year 2015 

reported environmental liability. The nearly 1,400-square-mile site has been used for 

hundreds of nuclear weapons tests since 1951. These activities have resulted in more than 45 

million cubic feet of radioactive waste at the site. 

According to DOE's financial statement, DOE is not yet required by applicable cleanup 

regulations to establish a plan to clean up the site since there is no current feasible remediation 

approach. As a result, the costs for this work are excluded from DOE's annually reported 

environmental liability. In addition, DOE's reported environmental liability includes an 

estimate for the cost of a permanent nuclear waste repository, but these estimates are highly 

uncertain and likely to increase. In response to the termination of the Yucca Mountain 

repository program, DOE proposed separate repositories for defense high-level and 

commercial waste in March 2015. In January 2017, we reported that the cost estimate for 

DOE's new approach excluded billions in costs and the time trames for key activities. As a 

7 According to government accounting standards, environmental liability estimates include costs that are probable and 

reasonably estimable, meaning that costs that cannot yet be reasonably estimated are not included in total environmental 

liability. 

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result, the full cost of these activities is likely more than what is reflected in DOE's 

environmental liability estimate. Notably, DOE may have insufficient controls in place to 

accurately account for its environmental liabilities. In January 20!7, the DOE Inspector 

General reported a significant deficiency in internal control related to the reconciliation of 

environmental liabilities. 

As for other federal departments, our recent work found that DOD's $63 billion environmental 

liability is likely to exceed its current estimate because a number of activities are not fully 

included in the estimate; the activities are not included because their scopes are not yet 

known. Notably, we reported in February 2014 that our audit of the government's 

consolidated financial statements found that DOD's inability to estimate with assurance key 

components of its environmental liabilities was a material weakness, and we reported in 

January 20!7 that this weakness still exists. For example, DOD's current environmental 

liability estimate does not include additional costs that will likely be needed for DOD to 

complete the cleanup for Base Realignment and Closure (BRAC) activities. We reported in 

January 2017 that DOD estimates it will need about $3.4 billion in addition to the $11.5 

billion it has already spent to manage and complete environmental cleanup of BRAC 

installations. We also found that DOD's annual report on its environmental cleanup program 

does not include significant costs associated with cleanup of contaminants at its installations, 

including those closed under BRAC. 

8. In the past, GAO has recommended setting national priorities for cleaning up its 

contaminated sites. Has DOE taken any steps to adopt a methodology for prioritizing 

among sites? How would such a system help DOE more effectively address its 

environmental liability? 

DOE has taken some steps over the last several decades to integrate the requirements 

contained in its numerous site-specific environmental agreements, whose priorities and 

requirements have not always been consistent with technical or fiscal realities or well suited to 

setting priorities among sites. However, the consistency of these efforts has been limited. In 

2015, a review organized by the Consortium for Risk Evaluation with Stakeholder 

Participation, an independent multidisciplinary consortium of universities led by Vanderbilt 

University, reported that DOE is not optimally using available resources to reduce risk.8 

According to the report, factors such as inconsistent regulatory approaches and certain 

requirements in federal facility agreements cause disproportionate resources to be directed at 

lower priority risks. 

The report called for a more systematic effort to assess and rank risks within and among sites, 

including through headquarters guidance to sites, and to allocate federal taxpayer monies to 

remedy the highest priority risks through the most efficient means. In some instances, DOE 

has successfully implemented a risk-based approach to address priority risks through efficient 

means. For example, pursuant to section 3!16 of the National Defense Authorization Act for 

Fiscal Year 2005, DOE was able to manage a majority of its tank waste at its Savannah River 

site more flexibly, which allowed it to begin waste treatment sooner-a key priority of both 

DOE and the state--and reduce lifecycle treatment costs. Setting national priorities could help 

DOE direct limited cleanup funds to the highest risk activities, which could shorten the 

duration of the highest risk and highest cost cleanup obligations, thereby reducing the 

department's environmental liability. 

11To carry out the reviews, the consortium constituted a committee of eight nationally distinguished individuals with diverse 

experience in risk analysis; public health and safety; nuclear safety; risk management; and environmental law, regulation, 

and public policy. 

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Questions for The Honorable Gene L. Dodaro 

Comptroller General of the United States 

U.S. Government Accountability Office 

Questions from Ranking Member Elijah E. Cummings 

February 15,2017, Hearing: "GAO's 2017 High Risk Report: 34 Programs in Peril" 

l. Please list the GAO recommendations that have been closed as implemented as a 

result ofthe Bureau of Land Management's rule on Waste Prevention, Production 

Subject to Royalties, and Resource Conservation. This should include 

recommendations closed in response to the proposed and the final rule. 

a. Please note which of these, if any, 'IWre"high priority" recommendations. 

Based on BLM's rule, we closed the following high priority recommendation: 

To better ensure that the government receives a fair return on its oil and gas 

resources, the Secretary of the Interior should take steps, within existing 

authority, to revise Bureau of Land Management's regulations to provide for 

flexibility to the bureau to make changes to onshore royalty rates, similar to that 

which is already available for offshore leases, to enhance Interior's ability to 

make timely adjustments to the terms for federal onshore leases.9 

We closed this high priority recommendation for fiscal year 2016 as 

implemented by the aforementioned rule. In addition to this recommendation, we 

made two other recommendations that we closed as implemented: 

To help improve reporting of emissions data on the Oil and Gas Operations 

Report (OGOR), the Secretary of the Interior should direct the Office of Natural 

Resources Revenue (ONRR) to provide additional guidance on how to report 

royalty-free and royalty-bearing flaring and consider creating a separate category 

for royalty-bearing flaring. 

To help improve reporting of emissions data on the OGOR, the Secretary of the 

Interior should direct ONRR to provide additional guidance on how to report 

certain unreported or underreported emissions, such as emissions from storage 

tanks and gas vented during well completions. 10 

b. Please describe any federal financial savings that would result from the 

implementation of these recommendations. 

All three of the recommendations could have implications for federal revenues but none 

do so automatically. In the case of the first recommendation, the rule simply allows BLM 

9

GAO, Oil and Gas Resources.· Actions Needed for Interior to Better Ensure a Fair Return, GA0-14-50 

(Washington, D.C.: Dec. 6, 2013). 10GAO, Oil and Gas: Interior Could Do More to Account for and Manage Natural Gas Emissions GA0-16-607 

(Washington, D.C.: July 7, 2016). 

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to adjust royalty rates on new leases if it deems that this is warranted. The other two 

would help BLM identifY flared or vented natural gas and would, ifBLM deemed these 

leakages to be avoidable, lead to royalties being charged and therefore higher federal 

revenues. In none of these cases does GAO have an estimate of the amount of revenue 

collections that could result from implementation of the recommendations because such 

implications would depend on specific agency actions. 

2. Please list the recommendations that have been closed as implemented as a result of 

the Bureau of Land Management rule updating Onshore Oil and Gas Order 3: Site 

Security on Federal and Indian Oil and Gas Leases. This should include 

recommendations closed in response to the proposed and the final rule. 

a. Please note which ofthese, if any, were "high priority" recommendations. 

With regard to the rule updating Onshore Oil and Gas Order 3: Site Security on Federal 

and Indian Oil and Gas Leases, GAO Report: GA0-15-39 

http://www.gao.gov/products/GA0-15-39 made the following recommendation that we 

have closed as implemented: 

To further improve its production verification efforts and to help ensure that BLM no 

longer relies on outdated regulations, the Secretary of the Interior should direct BLM to 

meet its established time frame for issuing final regulations for site security. 

GAO Report: GAO-l 0-313 http://www.gao.gov/products/GAO-l 0-313 also made the 

following recommendation that we have closed as implemented. 

To increase Interior's assurance that it is accurately measuring oil and gas produced on 

federal lands and waters, and to help ensure that Interior is consistently tracking where 

and how oil and gas are measured, the Secretary of the Interior should require that BLM 

track all onshore meters, including information about meter location, identification 

number, and owner. 

Neither of these two recommendations was a priority recommendation. 

b. Please describe any federal financial savings that would result from the 

implementation of these recommendations. 

In neither case does GAO have an estimate of potential effects on revenue collection. 

However, the implementation of these recommendations provides greater assurance that 

the federal government is collecting the correct amount of revenues from oil and gas 

production on federal lands. 

3. If either of these rules were overturned through the Congressional Review Act 

process, how would GAO address the above closed recommendations? 

GAO would need to assess the current status of these programs in order to determine whether 

or how it has changed since GAO made these recommendations. 

8