GAO-12-882CG

19th Biennial Forum of Government Auditors

June 27, 2012

Alexandria, Va.

Gene L. Dodaro

Comptroller General of the United States

U.S. Government Accountability Office

Partnership and Collaboration: 

Meeting the Challenges Across 

All Levels of Government

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Fiscal Backdrop

2 
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Debt Held by the Public: 

Spring 2012 Simulations

Source: GAO.

Note: Data are from GAO’s Spring 2012 simulations based on the Trustees’ assumptions for Social Security and the Trustees’ and CMS 

Actuary’s alternative assumptions for Medicare. 

Alternative

Baseline Extended

3 
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Daily Average Number of People 

Turning 65

Thousands

Year

Baby boomers turning 65

Source: GAO analysis of U.S. Census Bureau data.

Note: Data are from the U.S. Census Bureau's National Population Projections. For this analysis, we used data from the low net

international migration series. 4 
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Number of Workers per Social Security 

Beneficiary Forecasted to Continue to Fall

Source: 2012 OASDI Trustees Report.

Covered workers per OASDI beneficiary

6 

5 

4 

3 

2 

1 

0 

 5 
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State and Local Governments Face 

Increasing Fiscal Challenges

Source: GAO simulations, updated April 2012.

 

Note: Historical data are from the Bureau of Economic Analysis’s National Income and Product Accounts from 1980 to 2010. Data in 2011 are GAO estimates 

aligned with published data where available. GAO simulations are from 2012 to 2060, using many Congressional Budget Office projections and assumptions, 

particularly for the next 10 years. Simulations are based on current policy. Negative Balance Positive Balance

6 
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0.0

2.0

4.0

6.0

8.0

10.0

12.0

2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 2055 2060

Percentage of GDP

Year

Health and Nonhealth Expenditures of State 

and Local Governments

Source: GAO simulations, updated April 2012. 

Note: Historical data are from the Bureau of Economic Analysis’s National Income and Product Accounts from 2005 to 2010. Data in 2011 are GAO 

estimates aligned with published data where available. GAO simulations are from 2012 to 2060, using many Congressional Budget Office projections 

and assumptions, particularly for the next 10 years. Simulations are based on current policy. 

Non-health care 

expenditures 

Health care 

expenditures 

7 
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Pension Funded Ratios Have Declined 

Since 2001

Aggregate Funding Ratio for Large State and Local Government Plans, FY2001-2010

8 
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Opportunities for Partnership and 

Collaboration

• Budget constraints and fiscal challenges mean 

challenges for all levels of government

• Accountability community expected to help 

identify savings, find efficiencies, increase 

effectiveness

• With resources constraints facing many 

governments, collaboration will be necessary

• The Forum is a key opportunity to continue to 

build partnerships and work on solutions

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Transportation Infrastructure

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Transportation: Intergovernmental 

Collaboration and Challenges

Surface Transportation

• Over the next 10 years, the Congressional Budget Office 

estimates a $125 billion gap between Highway Trust 

Fund spending and projected revenues

• Upgrading the surface transportation system to meet 

projected demand is estimated in the hundreds of 

billions of dollars

• Funding surface transportation remains on GAO’s highrisk list

• GAO recommended adopting a performance-oriented 

approach for surface transportation

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Transportation: Intergovernmental 

Collaboration and Challenges

Highways

• The federal government provides $40 billion annually to 

states for highway and bridge programs 

• The federal role in the highway program has expanded 

without a well-defined vision of evident national interests

• The Federal Highway Administration uses its partnership 

with state Departments of Transportation to meet its 

multiple responsibilities and assist states in executing 

highway projects

• Yet the federal-state partnership also poses risks: We 

observed FHWA actions that demonstrated lax oversight 

and lack of independence in decision making 12
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Rail 

• Amtrak has struggled financially and requires about 

$1.5 billion in annual federal subsidies. Capital needs for 

Northeast Corridor improvements are estimated at 

$52 billion through 2030

• Legislation requires states to pay full cost of intercity 

passenger rail service beyond Amtrak’s basic service

• Amtrak, commuter rail, and freight often operate on the 

same track but sometimes have conflicting priorities 

regarding services and investments

• Without dedicated long-term federal, state, or other 

funding sources, initiating large projects like High Speed 

Rail is difficult 

Transportation: Intergovernmental 

Collaboration and Challenges

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Transportation: Intergovernmental 

Collaboration and Challenges

Transit

• The federal government provided about $12 billion in FY 

2011 to states and localities to support transit programs.

• State and local governments execute most federal transit 

programs by matching and distributing federal funds and 

by planning, selecting, and supervising infrastructure 

projects and safety programs

• Coordination between governments and among various 

federal agencies is key in the delivery of transit programs 

but faces some challenges: 

• Potential duplication of efforts; oversight gaps; limited 

financial resources

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Ongoing Work

• Review of tolls and use of funds by transportation 

authorities established by interstate compacts. 

• Evaluating the California high speed rail project’s 

estimates of costs, ridership, revenues, and economic 

impacts. 

Future Work

• Identify transit asset management best practices to 

effectively use transit agencies’, states’, and federal 

government’s funds. 

Transportation: Intergovernmental 

Collaboration and Challenges

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National Preparedness

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Emergency and Disaster Preparedness

• GAO has consistently called for the development of a 

national preparedness strategy that involves partners from 

all levels, including federal, state, and local organizations 

• The terrorist attacks of 9/11 and Hurricane Katrina 

highlighted the need to better define roles and 

responsibilities across government organizations at all 

levels 

• The Post-Katrina Emergency Management Reform Act of 

2006 required FEMA to establish a national preparedness 

system to build tribal, local, state, regional, and national 

capabilities needed to respond to any type of disaster. 

• Act also required that FEMA develop a comprehensive 

assessment system to assess preparedness at the local, 

state and federal level. 17
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Conceptual Illustration for Assessing 

Capability Requirements and Identifying 

Capability Gaps for National Preparedness

18
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National Preparedness: 

Challenges and Opportunities

• Autonomy issues, different operational structures and 

civic traditions of states and municipalities 

• Competing priorities within and among intergovernmental 

jurisdictions and agencies 

• Incompatible procedures, processes, data, and computer 

systems 

• FEMA has faced challenges in implementing a system for 

assessing local, state and federal capabilities

• The intergovernmental nature of national preparedness 

provides numerous and wide-ranging opportunities for 

better integrating development and delivery of disaster 

response resources and services across multiple levels of 

government 19
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Recent & Ongoing Work on 

National Preparedness Issues

• Managing Preparedness Grants and Assessing 

National Capabilities 

• National Preparedness System

• Urban Area Security Initiative and the National 

Capital Region

• FEMA’s Disaster Declarations and the Disaster 

Relief Fund

• Capabilities to Manage Early Response To Nuclear 

Or Radiological Attack

• Biosecurity 

20
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Housing

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Foreclosure Mitigation Review:

Loan Modifications 

Loan Modification Is Focus of 

Foreclosure Response but 

Activity Level Has Declined 

22
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Treasury Provided $7.6 Billion to States 

Under its Hardest Hit Fund Program 

23
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Fannie Mae and Freddie Mac:

Multifamily Housing Financing

• Congressional request to provide information on the 

history and performance of Fannie Mae and Freddie 

Mac’s (the enterprises) multifamily activities

• Our objectives are to determine:

• How the enterprises’ multifamily loan activities and 

loan performance have changed over time

• How the enterprises’ multifamily credit standards 

compare with those of other mortgage capital 

sources and how they have managed their credit risk

• The enterprises’ role in the multifamily housing 

financing marketplace and the extent to which they 

have met affordable housing goals.

• Includes analysis of loan-level data going back to 1994

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Recent & Ongoing Work on Housing 

Issues

• Foreclosure mitigation & loan modification

• Fannie Mae and Freddie Mac’s multifamily financing 

activities 

• Housing Choice Voucher program

• Moving to Work (MTW) demonstration program

• HUD’s block grant programs

• Recovery Act’s Low Income Housing Tax Credit 

Programs

• Fragmentation and overlap in housing programs 25
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Improper Payments, Medicare, 

Medicaid

26
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Governmentwide Improper Payments:

Estimates and Reduction Strategies

• OMB and the federal agencies reported improper 

payment estimates for fiscal year 2011 totaling $115.3 

billion. 

• Attributable to 79 programs spread among 17 agencies.

• The FY 2011 estimate of $115.3 billion was a decrease 

of $5.3 billion from the revised prior year reported 

estimate. 

• Primarily caused by

• Decreases in the Unemployment Insurance program 

outlays

• Earned Income Tax Credit and Medicare Advantage 

program error rates

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Governmentwide Improper Payments:

Estimates and Reduction Strategies

• Actions are currently underway across government to 

properly estimate and reduce improper payments. 

• Future initiatives are also needed to move forward with 

improper payment reduction strategies that include:

• Identifying the root causes of improper payments;

• Developing effective preventive controls to avoid 

improper payments; and

• Developing effective detective controls to identify and 

recover losses to the government, including payment 

recapture audits.

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Governmentwide Improper Payments:

Medicare and Medicaid

• Medicare and Medicaid ─ two programs on GAO’s high 

risk list ─ have among the highest reported improper 

payments.

• GAO’s ongoing Medicare work includes examining the 

effectiveness of federal efforts to: 

• enroll only legitimate providers; 

• implement prepayment controls, including those that 

address vulnerabilities identified through payment 

recapture audits; and 

• use data analytics to identify fraudulent billing.

 29
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Governmentwide Improper Payments:

Medicare and Medicaid

• GAO’s ongoing Medicaid work includes assessing the:

• effectiveness of federal oversight of and support for 

state efforts to reduce improper payments; 

• methodology for estimating Medicaid improper 

payments and the extent to which state corrective 

action plans have been developed to address the 

types of errors identified; and

• implementation of the National Medicaid Audit 

Program and related federal initiatives aimed at 

reducing improper payments in Medicaid. 

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Duplication, Overlap, and 

Fragmentation

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2012 Annual Report on 

Duplication, Overlap, and Fragmentation

• 32 areas where agencies, offices, or initiatives 

have similar or overlapping objectives or provide 

similar services to the same populations; or 

where government missions are fragmented 

across multiple agencies or programs.

• 19 additional areas describing other opportunities 

for agencies or Congress to either reduce the 

cost of government operations or enhance 

revenue collections for the Treasury.

• Collectively, we identified about 130 actions that 

the executive branch or Congress could take. 

Depending on the extent of actions taken, these 

savings and revenues could collectively result in 

billions of dollars in savings.

32
Duplication, Overlap, and Fragme

St t f 81 A i 2011 St

a

tus o

f 81

Areas 

in 2011

The Congress and the executive branch have made some addressing the majority of the 81 areas that we identified; additi

o

n

al s

teps

a

r

e needed t

o f

ull

y im

ple

m

ent th

e r

e

m

ain

4 (5%)

17 (21%)

add o a s eps a e eeded o u y p e e e e a achieve associated benefits. 

17 (21%)

60 (74%)

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Addressed Partially addressed Not addressed

Source: GAO analysis, as of February 10, 2012 
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Duplication, Overlap, and Fragmentation:

Status of 176 Actions in 2011

23 (13%)

99 (56%)

54 (31%)

Addressed Partially addressed Not addressed

Source: GAO analysis, as of February 10, 2012

The majority of 176 actions needed within the 81 areas identified by 

GAO have been partially addressed. 

34
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Program Evaluations: Measuring the 

Effectiveness of Programs

Examples of program areas that have limited or no evaluations 

of effectiveness

• Economic development

• Employment and training

• Science, Technology, Engineering, Mathematics (STEM) 

education

• Teacher quality

• Some nutrition assistance programs 

• Transportation for disadvantaged persons

• Federal Emergency Management Agency (FEMA) grants

• Green building 35
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Workforce of the Future

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Nation’s “Workforce System” 

Transcends All Levels of Government 

and Includes Public and Private Entities

• The workforce system was designed to foster 

integration of employment and training services

• Federal law encourages and, in some cases, requires 

that service providers co-locate and provide services 

through “one-stop centers”

• Funding for these services comes primarily from the 

federal government and is overseen by 4 main federal 

agencies

• State and local entities make decisions about how the 

one-stops operate

• Job seekers are the primary customer, but employer 

demand is intended to drive services

• Community colleges play an important role 37
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Federal Agencies Have Taken Steps 

to Align Programs

• Under the GPRA Modernization Act of 2010, crosscutting 

goals were recently established to promote collaboration 

across federal agencies in this area:

• Preparing 2 million workers with skills training by 2015 

and improving the coordination and delivery of jobtraining services;

• Increasing the number of graduates with science, 

technology, engineering, and math degrees by onethird over the next 10 years (an additional 1 million 

graduates);

• Improving the employability of veterans by increasing 

the percent of service members served by career 

readiness and preparedness programs from 50 

percent to 90 percent.

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GAO’s Work Suggests that More Can Be 

Done to Achieve Efficiencies in the 

Workforce System

• Our 2011 report found 47 federal programs spent

$18 billion to enhance jobs skills, identify job 

opportunities, and help job seekers obtain employment.

• Almost all of the programs overlapped with at least one 

other program—provided similar services to similar 

populations—but differences may exist in eligibility, 

objectives, and service delivery.

• Little is known about the effectiveness of these 

programs.

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Intergovernmental Collaboration 

Creates Specific Challenges for the 

Workforce System

• Leveraging funds from different funding streams 

• Requires states and localities to navigate complex 

rules and regulations

• Fostering linkages between the workforce and economic 

development systems, given that these systems have 

traditionally been considered separately

• Workforce and economic development are overseen 

by different federal agencies

• Balancing state and local flexibility with accountability 

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Recent & Ongoing Work on 

Workforce Issues

• Challenges that unemployed older workers are facing 

since the recession

• Innovative collaborations among local workforce boards, 

employers, and education entities

• Department of Labor’s actions to assess effectiveness 

of employment and training programs

• Coordination of employment and training programs for 

veterans

• Trade Adjustment Assistance for farmers, firms, 

workers, and communities

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Tax Reform

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Tax Reform: Concerns Have Led to a 

Debate About the Design of the Federal 

Tax System

• Issues to consider when assessing alternative tax proposals:

• Revenue

• Criteria for a good tax system

• Equity (fairness) 

• Economic efficiency

• Simplicity, transparency, and administrability

• Implications for state and local government tax revenues

• Tax reform includes the following choices:

• Type of base: income, consumption (e.g., value added 

tax), or a hybrid of the two

• Rate structure: flatter or more progressive 

• Breadth of the base: the extent of tax expenditures

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Tax Gap: Noncompliance is Spread 

Across Various Types of Taxes and 

Taxpayers

Source: GAO Analysis of IRS data. 44
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Tax Gap: Closing the Gap Will Require 

Multiple Approaches

• No single approach is likely to fully and cost-effectively 

address tax gap, but the following strategies could help:

• Enhancing information reporting by third parties

• Ensuring high-quality services to taxpayers 

• Devoting additional resources to IRS enforcement 

• Expanding compliance checks before IRS issues 

refunds

• Leveraging external resources, such as paid tax 

return preparers and whistleblowers

• Modernizing information systems

• Simplifying the tax code

• Federal approaches may be informed by state efforts

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Recent and Ongoing Work on Tax Issues

• Community development tax expenditures

• Tax expenditures, grants, and loans available for postsecondary education 

• Evaluating expiring tax provisions 

• Filing season

• Potential revenue enhancement through improved IRS 

compliance efforts

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Intergovernmental Delivery 

System

47
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Intergovernmental System is a 

Complex Network of Governmental 

and Non-governmental Partners

Many Local

3033 counties

19,492 municipalities

16,519 Towns

14,561 School Districts

37,381 Special Districts

 

Nonprofit

Sector

Including ~33,000

Human service NPs

with federal contracts

50 States

state agencies,

quasi-governmental

entities

 

 

 

 

 

 

 

 

For-profit 

Sector

federal contractors

state/local contractors

In 2007, there were 89,527 “governmental entities” in 

the United States.

Sources: GAO graphic based on U.S. Government Manual: 2009-10; U.S. Census Bureau, Statistical Abstract of the United States: 2011 (2007 Data); and Urban Institute’s 

National Study of Nonprofit-Government Contracting Survey Results (2009 Data).

Many Local

3033 counties

19,492 municipalities

16,519 Towns

14,561 School Districts

37,381 Special Districts

50 States

state agencies,

quasi-governmental

entities

 

 

 

 

 

 

 

 

Nonprofit

Sector

Including ~33,000

Human service NPs

with federal contracts Many Local

3033 counties

19,492 municipalities

16,519 Towns

14,561 School Districts

37,381 Special Districts

50 States

state agencies,

quasi-governmental

entities

 

 

 

 

 

 

 

 

For-profit 

Sector

federal contractors

state/local contractors

 

Nonprofit

Sector

Including ~33,000

Human service NPs

with federal contracts Many Local

3033 counties

19,492 municipalities

16,519 Towns

14,561 School Districts

37,381 Special Districts

50 States

state agencies,

quasi-governmental

entities

 

 

 

 

 

 

 

50 States

state agencies,

quasi-governmental

entities

 

 

 

 

 

 

 

 

For-profit 

Sector

Federal contractors

State/local contractors

 

Nonprofit

Sector

Including ~33,000

Human service NPs

with federal contracts Many Local

3033 counties

19,492 municipalities

16,519 Towns

13,051 School Districts

37,381 Special Districts

Federal Govt. 

15 executive departments,

66 Independent Agencies & 

Government Corporations

 (Civilian workforce of 

approximately 2.8 mil)

50 States

Many state agencies

 

 

 

 

 

 

 

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1State expenditures also include $6,651,698,000 for current operations. 

Note: Federal government totals represent all federal support to local education and state education agencies in FY2008. State and local totals represent total spending for elementary and 

secondary education in FY 2008.

Source: U.S. Census Bureau 2008 Annual Surveys of State and Local Government Finances and U.S. Department of Education, National Center for Education Statistics. 

Funding of Elementary and Secondary Education

$1.6B

Federal Government

State Government

Local Government

Local Education Agency

State governments spent a 

total of $308.2B on elementary 

and secondary education in 

FY20081 

$488.7B 

Local governments (including 

school districts) spent a total of 

$558.9B on elementary and 

secondary education in FY 2008

Intergovernmental Funding: 

Multiple Partners and Funding Streams

49
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State Revenues:

Key and Increasing Role of Federal Grants

Source: GAO Analysis of U.S. Census Bureau Government Finance Statistics. 

Note: The components of general revenue are own-source revenues (taxes, charges, miscellaneous revenues, etc.) and intergovernmental revenues (revenues received from 

federal and local government). These data represent aggregates for the sector. State revenue sources vary considerably by state. For example, seven states have no state income 

tax: Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming. Two others, New Hampshire and Tennessee, tax only dividend and interest income.

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Aggregate Shifts in State and Local 

Intergovernmental Grants

Source: GAO analysis of historical data from the Bureau of Economic Analysis’s National Income and Product Accounts.

Note: Medicaid grants comprised 91 percent of health grants in 2010. ‘Other’ includes national defense, public order and safety, and recreation and culture. 

Federal Grant Revenues, 1980 Federal Grant Revenues, 2010

51
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Projected & Actual Federal Outlays to 

States & Localities under the Recovery Act

Source: GAO analysis of data from CBO, Recovery.gov and Federal Funds Information for States.

0

20

40

60

80

100

120

2009 2010 2011 2012 2013 2014 2015 2016

Fiscal year

Estimated

$252.5 billion in Actual Total Federal

Outlays as of June 1, 2012

Outlays in billions of dollars

52
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Future Intergovernmental Challenges

• Post-Recovery Act

• Streamlining and improved efficiency

• Greater collaboration between levels of government

• Strong strategic intergovernmental partnerships in 

managing programs and providing oversight will be 

needed to achieve desired outcomes and meet 

national goals

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Opportunities for the Forum

• Continue to evolve partnerships

• Develop solutions to cross-cutting challenges

• Find opportunities for increased collaboration 

• Expand networks to leverage limited 

resources

54
GAO-12-882CG

19th Biennial Forum of Government Auditors

June 27, 2012

Alexandria, Va.

Gene L. Dodaro

Comptroller General of the United States

U.S. Government Accountability Office

Partnership and Collaboration: 

Meeting the Challenges Across 

All Levels of Government

55
GAO-12-882CG

GAO on the Web 

Web site: http://www.gao.gov/ 

Contact

Chuck Young, Managing Director, Public Affairs, youngc1@gao.gov

(202) 512-4800, U.S. Government Accountability Office

441 G Street NW, Room 7149, Washington, D.C. 20548

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56