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80–719 PDF 2013

REDUCING WASTE IN GOVERNMENT: ADDRESSING 

GAO’S 2013 REPORT ON DUPLICATIVE FEDERAL 

PROGRAMS 

HEARING 

BEFORE THE

COMMITTEE ON OVERSIGHT 

AND GOVERNMENT REFORM 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

FIRST SESSION 

APRIL 9, 2013 

Serial No. 113–13 

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

( 

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

http://www.house.gov/reformm 

(II) 

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM 

DARRELL E. ISSA, California, Chairman 

JOHN L. MICA, Florida 

MICHAEL R. TURNER, Ohio 

JOHN J. DUNCAN, JR., Tennessee 

PATRICK T. MCHENRY, North Carolina 

JIM JORDAN, Ohio 

JASON CHAFFETZ, Utah 

TIM WALBERG, Michigan 

JAMES LANKFORD, Oklahoma 

JUSTIN AMASH, Michigan 

PAUL A. GOSAR, Arizona 

PATRICK MEEHAN, Pennsylvania 

SCOTT DESJARLAIS, Tennessee 

TREY GOWDY, South Carolina 

BLAKE FARENTHOLD, Texas 

DOC HASTINGS, Washington 

CYNTHIA M. LUMMIS, Wyoming 

ROB WOODALL, Georgia 

THOMAS MASSIE, Kentucky 

DOUG COLLINS, Georgia 

MARK MEADOWS, North Carolina 

KERRY L. BENTIVOLIO, Michigan 

RON DESANTIS, Florida 

ELIJAH E. CUMMINGS, Maryland, Ranking 

Minority Member 

CAROLYN B. MALONEY, New York 

ELEANOR HOLMES NORTON, District of 

Columbia 

JOHN F. TIERNEY, Massachusetts 

WM. LACY CLAY, Missouri 

STEPHEN F. LYNCH, Massachusetts 

JIM COOPER, Tennessee 

GERALD E. CONNOLLY, Virginia 

JACKIE SPEIER, California 

MATTHEW A. CARTWRIGHT, Pennsylvania 

MARK POCAN, Wisconsin 

TAMMY DUCKWORTH, Illinois 

DANNY K. DAVIS, Illinois 

PETER WELCH, Vermont 

TONY CARDENAS, California 

STEVEN A. HORSFORD, Nevada 

MICHELLE LUJAN GRISHAM, New Mexico 

VACANCY 

LAWRENCE J. BRADY, Staff Director 

JOHN D. CUADERES, Deputy Staff Director 

ROBERT BORDEN, General Counsel 

LINDA A. GOOD, Chief Clerk 

DAVID RAPALLO, Minority Staff Director 

(III) 

C O N T E N T S 

Page 

Hearing held on April 9, 2013 ................................................................................ 1 

WITNESS 

The Honorable Gene L. Dodaro, Comptroller General of The U.S. Government 

Accountability Office 

Oral Statement ................................................................................................. 5 

Written Statement ............................................................................................ 7 

APPENDIX 

The Honorable Elijah E. Cummings, a Member of Congress from the State 

of Maryland, Opening Statement ....................................................................... 83 

GAO Response to Follow-up from Duplication Hearing: IRS and Return on 

Investment (ROI) ................................................................................................. 85 

(1) 

REDUCING WASTE IN GOVERNMENT: ADDRESSING GAO’S 2013 REPORT ON DUPLICATIVE FEDERAL PROGRAMS 

Tuesday, April 9, 2013 

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM, 

Washington, D.C. 

The committee met, pursuant to call, at 2:05 p.m., in Room 2153, 

Rayburn House Office Building, Hon. Darrell E. Issa [chairman of 

the committee] presiding. 

Present: Representatives Issa, Lankford, Duncan, Lummis, 

Woodall, Collins, Meadows, Bentivolio, DeSantis, Cummings, Norton, Connolly, Duckworth, and Horsford. 

Staff Present: Will L. Boyington, Press Assistant; Molly Boyl, 

Parliamentarian; Lawrence J. Brady, Staff Director; David Brewer, 

Counsel; Daniel Bucheli, Assistant Clerk; Steve Castor, General 

Counsel; Katelyn E. Christ, Professional Staff Member; John 

Cuaderes, Deputy Staff Director; Gwen D’Luzansky, Research Analyst; Adam P. Fromm, Director of Member Services and Committee 

Operations; Linda Good, Chief Clerk; Tyler Grimm, Professional 

Staff Member; Christopher Hixon, Deputy Chief Counsel, Oversight; Michael R. Kiko, Staff Assistant; Justin LoFranco, Digital 

Director; Mark D. Marin, Director of Oversight; Tegan Millspaw, 

Professional Staff Member; James Robertson, Professional Staff 

Member; Peter Warren, Legislative Policy Director; Rebecca Watkins, Deputy Director of Communications; Eric Cho, Detailee; 

Krista Boyd, Minority Deputy Director of Legislation/Counsel; Beverly Britton Fraser, Minority Counsel; Adam Koshkin, Minority Research Assistant; Elisa LaNier, Minority Deputy Clerk; and Dave 

Rapallo, Minority Staff Director. 

Chairman ISSA. The committee will come to order. 

We exist to secure two fundamental principles. First, Americans 

have a right to know that the money Washington takes from them 

is well-spent. And, second, Americans deserve an efficient, effective 

government that works for them. Our duty on the Oversight and 

Government Reform Committee is to protect these rights. 

Our solemn responsibility is to hold government accountable to 

taxpayers because taxpayers have a right to know what they get 

from their government. It is our job to work tirelessly, in partnership with citizen watchdogs, to deliver the facts to the American 

people and bring genuine reform to the Federal bureaucracy. 

Today’s hearing will focus on the GAO’s third annual report on 

areas of duplication within the Federal Government. The GAO is 

2 

our key partner in eliminating waste, fraud, and abuse and providing transparency and an honest, nonpartisan view of government and its spending. 

In the past, the GAO has made almost 300 recommendations 

among 131 issue areas to Congress and to the executive branch to 

reduce cost, duplication, fractured and overlapping programs. As of 

today, sadly, only 16 of 131 have been fully addressed. 

However, to be timely, just tomorrow we expect the President’s 

budget to have a number of these addressed. Perhaps sequestration 

was the impetus, perhaps simply a fifth year of a Presidency. But 

as budget pressure increases and the American taxpayer says, ‘‘I 

cannot afford to buy the same services twice,’’ both Congress, including the GAO, and the executive branch must find these programs—must find this waste and must do our job differently. 

One of the things that this report cannot do is it cannot talk 

about the pure inefficiency of branches thinking separately. Even 

when there is not pure duplication, ultimately every part of government, every administrative part, at least 26 different entities, buy 

separately, think separately, staff separately, and have separate 

executives to do substantially the same work. 

I am pleased that the committee has already been responsible to 

the GAO’s—or, responsive to the GAO’s nonpartisan recommendations. Several of the cost-saving recommendations addressed by the 

GAO were addressed in the Federal Information Technology Acquisition Reform Act that was unanimously voted out of this committee last month. 

IT procurement is a classic example that I believe all of us on 

the dais and all of us in America can understand. The buying of 

computers, the buying of software to meet the basic needs of communication and of contact with the public, and database management is, in fact, the same both in and out of government, for the 

most part, and certainly the same within government. 

If we implement this and other harmonizing programs, we can 

save many of the dollars that the Comptroller General will speak 

of today. But only a thorough reorganization of government will, in 

fact, prevent these from happening again. 

My first question today to our witness will be just that. Isn’t it 

inherent within our government that as long as we have individual 

budgets, individual authority, individual freedoms by Cabinet positions and bureaucrats, won’t they inherently try to build their organizations, not because they are evil, not because they choose to 

waste money, but because ultimately it is their career? 

We need to change that. We need to create a career path in government that says, where you are in government and what you do 

in government do not have to be based on protecting your own bureaucracy. Congress must focus on this. And I am delighted to say 

that, with the President’s pre-announcement of as much as $25 billion addressed by the GAO and others, we will, in fact, for the first 

time see a budget that dramatically reduces duplication. 

As I said earlier, this isn’t enough. And fundamental change 

must be in Congress’ hands, and we must rise to that occasion. 

And, with that, I would like to recognize the ranking member for 

his opening statement. 

3 

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

thank you for holding this very important hearing. 

And I want to thank you, Mr. Dodaro, for being here to testify 

about GAO’s findings. 

Today’s hearing will examine GAO’s latest annual report on duplication in Federal programs and opportunities for significant cost 

savings. 

And before I go on, let me, Mr. Dodaro, thank you and your hardworking staff for the excellent work that you all do. So often, Federal employees do not get the credit that they are due, but the integrity and the excellent work that you all put out is a real benefit 

to not only the Congress but the people of the United States of 

America. And I just want to make sure I say that. 

Hearings like this one provide an important opportunity to identify ways to cut government waste, save money, and make our taxpayer dollars go further. But holding hearings is not enough. Congress must follow up with concrete action to save the taxpayers 

money. 

GAO issued two of these reports previously in 2011 and 2012, 

and GAO made 300 specific recommendations to the executive 

branch and to Congress. This year’s report provides a status update on those recommendations, and it finds that Congress is doing 

a much poorer job than the executive branch in implementing these 

recommendations. 

Specifically, GAO finds that the executive branch has fully or 

partially addressed 80 percent of their recommendations, but Congress has fully or partially addressed only 32 percent of their recommendations. This is a poor record that Congress should strive to 

correct. 

In this year’s report, GAO highlights 11 areas of unimplemented 

recommendations from its previous reports that, if implemented, 

would save billions of dollars. Seven out of the 11 areas would require congressional action, but so far Congress has failed to act. 

For example, in previous reports GAO found that the Federal 

Government could save up to $2 billion over the next 10 years if 

Congress authorized the Department of the Interior to revise the 

royalty rates for oil and gas revenues in the Gulf of Mexico. But 

Congress has failed to act on this recommendation. As a result, it 

is listed yet again in the GAO’s report for 2013. 

GAO’s new report also identifies additional ways our government 

can save money. For example, according to GAO, if Congress limited subsidies for crop insurance, it would save up to $1.2 billion 

a year. GAO found that agencies could save billions of dollars by 

improving oversight over their information technology investments, 

and GAO also found that agencies could save millions of dollars by 

using cloud computing. 

It seems to me that this is one hearing in which Democrats and 

Republicans can join forces to eliminate waste, fraud, and abuse. 

I shall never forget, Mr. Dodaro, when I first ran for Congress 

and was 15 points behind. And I hired this guy to manage my campaign, and he said, Although you are 15 points behind—and the 

race was only a 2-month race—he said, Always remember this. He 

says, Most people know what to do, they know the plan, but they 

4 

don’t execute it. He said, If you execute the plan, you are going to 

win. And I won by 15 points. 

And so I think this is about coming up with a plan and trying 

to execute it, make it happen. So whether you believe the savings 

should go toward deficit reduction or making our current government programs more effective and efficient, we should all be able 

to agree that a dollar wasted here is a dollar that is not put to better use elsewhere. I think Republicans and Democrats will agree 

that we want to see the taxpayers’ dollars spent in an effective and 

efficient manner. 

Mr. Dodaro, I look forward to hearing your testimony, including 

specific recommendations to cut waste and save the government 

money. I would also appreciate your guidance on steps we can take 

to remove some of these longstanding recommendations from your 

list so we are not here again in 2014 asking the same questions. 

And as I said a little earlier, I compliment your staff, but we also 

want them to feel that we are doing what they have suggested that 

we do after all of their hard work. 

And, with that, Mr. Chairman, I yield back. 

Chairman ISSA. I thank the gentleman. 

Chairman ISSA. Members may have 7 days to submit opening 

statements for the record. 

Chairman ISSA. We now have the honor of welcoming our primary witness and the ladies and gentlemen he brought with him. 

The first witness is the Honorable Gene Dodaro. He is Comptroller General of the United States. 

We are also pleased to welcome several experts from the United 

States Government Accountability Office that will be with him here 

today. And we would ask that they also rise to be sworn in a 

minute. 

I would like to recognize, though, specifically—and there may be 

others, but—Ms. Janet St. Laurent. She is the Managing Director 

of Defense Capabilities and Management. Mr. Joel Willemssen is 

Managing Director of Information Technology. Mr. Mark Gaffigan 

is Managing Director of Natural Resources and Environment. And 

Ms. Cathleen Berrick is Managing Director of Homeland Security 

and Justice. 

Will those individuals and anyone else who may provide information to the Comptroller General please rise to take the oath? Would 

you please raise your right hand? 

Do you solemnly swear or affirm that the testimony you are 

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

the truth? 

Please be seated. 

Let the record reflect that all witnesses have answered in the affirmative. 

Gene, you have been here so many times, it is almost crazy to 

say look at the lights. Your statements are always sufficiently 

short, and our questions are always long. So your entire opening 

statement will be placed in the record, and you are recognized to 

give your abbreviated opening statement. 

5 

STATEMENT OF THE HON. GENE L. DODARO, COMPTROLLER 

GENERAL OF THE UNITED STATES, U.S. GOVERNMENT ACCOUNTABILITY OFFICE 

Mr. DODARO. Thank you very much, Mr. Chairman. It is a pleasure to be here this afternoon. 

Ranking Member Cummings, I appreciate your comments about 

our staff. 

Members of the committee, I am very pleased to be here today 

to discuss our most recent report on ways to make government 

more efficient and effective. We, in this report, highlighted 17 areas 

where we have focused on areas of fragmentation, overlap, or duplication in the Federal Government and made recommendations to 

address these issues. 

For example, from 2002 until most recently, the Department of 

Defense has moved from two camouflage ground-based uniforms to 

up to seven so that they are service-based purchases rather than 

joint purchases, thereby foregoing the opportunity for tens of millions of dollars of savings but also, importantly, from ensuring 

equivalent protection of servicemembers during joint operations. 

We have made recommendations to address that issue. 

Also, in the Medicaid program, which is an area where there is 

a large amount of improper payments, billions of dollars a year, the 

Department of Health and Human Services, CMS, has taken a 

number of actions. However, we have pointed out one action where 

they actually hired two contractors for every State—one to review 

the data to decide which claims to audit and another contractor to 

audit the claims. We said that is inefficient, duplicative; one contractor will do. 

And then, also, in the area of geospatial or mapping information, 

there are billions of dollars spent every year by the Federal Government to buy this information, and it has been well reported that 

there are duplicative investments. 

And so we have focused on recommendations to ensure more effective coordination of a joint committee that is focused on these activities. It needs to do a better job. OMB needs to have more visibility and to be able to prevent these duplicative investments. And 

it needs to become a priority. 

In this case, Mr. Cummings, they have a plan. It is not executed, 

Mr. Chairman, and it is not a priority. And it has to be both, thereby reaping benefits of millions of dollars in this area. 

Now, we also identify 14 other areas where there are opportunities for cost savings and revenue enhancements. 

In cost savings, we have testified before this committee on the 

Medicare demonstration pilot on Medicare Advantage and recommended the pilot be canceled. At the time we did that, there was 

the possibility of saving $8.3 billion because this pilot only rewards 

average performing plans and is not really going to demonstrate 

what it is intended to demonstrate. Right now, there is still an opportunity to save $2 billion, but Congress has to act soon in order 

to cancel this pilot. 

Also, in the Medicaid area, there are billions of dollars spent, in 

addition to reimbursements for claims, in order to make sure that 

there is money provided for uncompensated care. We think there 

is not enough oversight over these areas, and there are costs being 

6 

reimbursed that are well in excess of the costs that are spent to 

deliver those services, and this doesn’t make sense. So there needs 

to be more transparency and accountability. 

We made recommendations on the revenue side, for example. We 

have made a number of recommendations to the IRS in order to 

help close a $385 billion tax gap. There are also opportunities for 

the Congress to legislate in the tobacco tax area to make the tax 

equivalent for similar types of products. That could garner the Federal Government several hundred millions of dollars and up to a 

little over a billion dollars a year and make that more equitable. 

Now, turning to our prior reports, if I could direct your attention 

to the chart here, this shows the percent of actions that have been 

taken on the 130 recommendations we have had already. Twelve 

percent, as you mentioned, Mr. Chairman, 16, or 12 percent, have 

been acted on. Sixty-six percent have been, or 87 of them, we have 

partial addressment. And 21 percent, or 27 of those actions, have 

not been addressed at all. So there are plenty of opportunities. 

And the opportunities are throughout government. I will show 

my last chart. This is, for all 3 years, we have 162 areas, 380 specific recommendations for action, that go across virtually every 

major department and agency of the Federal Government. Many 

here are in defense, HHS, and Treasury, which are about 56 percent of total obligations for the year. 

So, many opportunities, Mr. Chairman. I look forward to answering your questions today and working with this committee to make 

government more efficient and effective on behalf of the American 

people. 

Chairman ISSA. Thank you. 

[Prepared statement of Mr. Dodaro follows:] 

7 


Insert offset folio 1 here 80719.001

GAO 

For Release on Delivery 

Expected at 2:00 p.m. EDT Tuesday, April 9, 2013 

GAO-13-496T 

United States Government Accountability Office 

Testimony 

Before the Committee on Oversight and 

Government Reform, House of 

Representatives 

GOVERNMENT 

EFFICIENCY AND 

EFFECTIVENESS 

Opportunities to Reduce 

Fragmentation, Overlap, 

and Duplication and 

Achieve Other Financial 

Benefits 

Statement of Gene L. Dodaro 

Comptroller General of the United States 

GAO 

Accountability .. Integrity * Reliability 
8 


Insert offset folio 2 here 80719.002

Chairman Issa, Ranking Member Cummings, and Members of the 

Committee: 

Thank you for the opportunity to discuss our 2013 annual report, which 

presents 31 new opportunities to reduce fragmentation, overlap, and 

duplication as well as achieve other financial benefits. It also presents the 

results of our efforts to follow up on progress made by executive branch 

agencies and Congress in addressing the areas we identified in our 2011 

and 2012 annual reports.' Through these three annual reports, we have 

completed a systematic examination to identify major instances of 

fragmentation, overlap, or duplication across the federal government. In 

light of today's challenging fiscal environment, we have also identified 

additional opportunities to achieve greater efficiency and effectiveness by 

means of cost savings or enhanced revenue collection. 

My testimony today describes the (1) new areas identified in our 2013 

annual report where fragmentation, overlap, or duplication exists among 

federal programs or activities, as well as other opportunities to achieve 

cost savings or enhanced revenue; (2) status of actions taken by 

executive branch agencies and Congress in addressing the 131 areas 

identified in our 2011 and 2012 annual reports; and (3) the summary 

results of our 3-year systematic examination across the federal 

government to identify major instances of fragmentation, overlap, or 

duplication. My comments are based upon our 2013 annual report, which 

is being released today. That report is based upon work GAO previously 

conducted in accordance with generally accepted government auditing 

standards. 

In summary, our 2013 annual report identifies 31 new areas where 

agencies may be able to achieve greater efficiency or effectiveness. 

Within these 31 areas, we identify 81 actions that the executive branch or 

Congress could take to address the issues we identified. Although it may 

be appropriate for multiple agencies or entities to be involved in the same 

programmatic or policy area due to the nature or magnitude of the federal 

effort, our report includes 17 areas of fragmentation, overlap, or 

1GAO, Opportunities to Reduce Potential Duplication in Government Programs, Save Tax 

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

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

Achieve Savings, and Enhance Revenue, GAO-12-342SP (Washington D.C.: Feb. 28. 2012), 

Page 1 GAO-13-496T 
9 


Insert offset folio 3 here 80719.003

and activities may be creating 

the definitions we use for fragmentation, 

rlllnlil,~!i"n for this work. The report also identifies 14 

nnlnOlTtHlimeS exist to achieve cost savings or 

enhance revenue C.OIlf'!"TlOns 

to 

reduce or or achieve other 

potential financial As of March date we completed 

our progress update audit work, 16 of the 131 overall areas were 

Page 2 GAO~13·496T 
10 


Insert offset folio 4 here 80719.004

addressed; 87 were partially addressed; and 27 were not addressed. 2 

Within these areas, 65 of the approximately 300 individual actions were 

addressed.' However, 149 actions were partially addressed and 85 

actions remain not addressed, highlighting the need for sustained 

attention and leadership: 

Through our three annual reports, we have identified 162 areas in which 

there are opportunities to reduce fragmentation, overlap, or duplication or 

to achieve cost savings or enhance revenue. (Appendix I presents a 

summary of the areas we identified in our three annual reports.) Within 

these 162 areas, we identify approximately 380 actions that the executive 

branch or Congress could take to address the issues we identified. These 

areas span a wide range of government missions, covering activities 

within all 15 cabinet-level executive departments and 17 other federal 

entities. Collectively, if the actions we suggest are implemented, the 

government could potentially save tens of billions of dollars annually. 

assessing progress on the 81 areas we identified in our 2011.aooual report for this 

year's report, we combined two areas related to the Department of Homeland Security's 

management of acquisitions (Areas 75 and 76) into one area. Therefore, we are 

evaluating progress for 80 areas identified in our 2011 annual report and 51 areas 

identified in our 2012 annual report. In assessing overall progress for an area, we 

determined that an area was ~addressed" if all actions in that area were addressed; 

~partiany addressed" if at least one action needed in that area showed some progress 

toward implementation but not all actions were addressed; and ~not addressed~ jf none of the actions needed in that area was addressed or partially addressed. 

3For congressional actions, we applied the following criteria: "addressed~ means relevant 

legislation has been enacted; ·partially addressed" means a relevant bill has passed a 

committee, the House of Representatives, or the Senate, or relevant legislation only 

addressed part of the action needed; and Unot addressed~ means a bill may have been 

introduced but did not pass out of a committee, or no relevant legislation has been 

introduced. For executive branch actions, "addressedn means Implementation of the action 

needed has been completed; "partially addressed" means a response to the action 

needed is in development, but not yet completed; and "not addressed" means that minimal 

or no progress has been made toward implementing the action needed. 

4we are not assessing 9 actions this year that were previously included in our 2011 and 

2012 reports. Based on subsequent audit work that we conducted, these actions have 

been consolidated, redirected from a congressional to an executive branch action, or 

revised to reflect updated information or data that we obtained. Further, 16 actions 

reported in 2011 and 2012 were revised this year due to additional audit work or other 

information vye considered. 

Page 3 GAO·13496T 
11 


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2013 Annual Report 

Identifies 31 New 

Areas Where 

Opportunities Exist to 

Achieve Greater 

Efficiency or 

Effectiveness 

In 17 of the 31 new areas where agencies may be able to achieve greater 

efficiency or effectiveness, we found evidence of fragmentation, overlap, 

or duplication among federal programs or activtties. As described in table 

1, these programs or activities cover a Wide range of federal functions 

and missions. 

Table 1: Fragmentation, Overlap, and Duplication Area. Identified in OUr 2013 Annual Report, by Mission 

Mieslon Areas Identified 

Agriculture 1. Catfish Inspection: Repealing provisions of the 2008 Fann Bill that assigned U.S. Department 01 Agriculture's 

Food Safety and Inspection Service responsibility for examining and inspecting catfish and for creating a catfish 

inspection program would avoid duplication of already existing federal programs and could save taxpayers millions 

of dollars annually without affecting the safety of catfish intended for human consumption. 

Defense 2. Combat Uniforms: The Department of Defense's fragmented approach to developing and acquiring uniforms 

Energy 

Health 

Homeland 

securityltaw 

enforcement 

could be more efficient, better protect service members, and result in up to $82 million in development and 

acquisition cost savings through increased collaboration among the military services. 

3. Defense Foreign Language Support Contracts: The Department of Defense should address fragmentation in 

the departmenfs acquisition approach for foreign language support contracts, which are estimated to cost more 

than $1 billion annually, by exploring opportunities to gain additional efficiencies. 

4. Renewable Energy Initiatives: Federal support for wind and solar energy, biotuels, and other renewable energy 

sources, which has been estimated at several billion dollars per year, is fragmented because 23 agencies 

implemented hundreds of renewable energy initiatives in fiscal year 2010-the latest year for which GAO 

developed these original data. Further, the Departments of Energy and Agriculture could take additional actionsto the extent possible within their statutory authority-to help ensure effective use of financial support from several 

wind initiatives, which GAO found provided duplicative support that may not have been needed in all cases for projects to be built. 

5. Joint Veterans and Defense Health Care Service.: The Departments 01 Veterans Affairs and Defense should 

enhance their collaboration to reduce costs, overlap, and potential duplication in the delivery of health care 

services between two of the nation's largest health care systems that together provide health care to nearly 16 

million veterans, service members, military retirees, and other beneficiaries. 

6. Medicaid Program Integrity: The Centers for Medicare & Medicaid Services needs to take steps to eliminate 

duplication and increase efficiency in two Medicaid Integrity Program activities-provider audits and the collection 

of state program integnty data. 

7. Department of Homeland Security Research and Development: Better policies and guidance for defining, 

overseeing, and coordinating research and development investments and activities would help the Department of 

Homeland Security address fragmentation, overlap, and potential unnecessary duplication. 

Page 4 GAO-13-496T 
12 


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MIssion 

Information 

technology 

International 

affajrs 

Science and 

the 

environment 

Social 

services 

Are.s Identified 

8. Field·Based Information Sharing: To help reduce inefficiencies resulting from overlap in analytical and 

investigative support activities, the Departments of Justice and Homeland Security and the Office of National Drug 

Control Policy could improve coordination among five types of field-based information sharing entities that may 

collect, process, analyze, or disseminate information in support of law-enforcement and counterterrorism-related 

efforts-Joint Terrorism Task Forces, Field Intelligence Groups, Regional Information Sharing Systems centers, 

state and major urban area fusion centers, and High Intensity Drug Trafficking Areas Investigative Support 

Centers. 

9. 

10. 

11. 

12. 

13. 

14. 

Justice and Treasury Asset Forfeiture: Conducting a study to evaluate the feasibility of consolidating the 

Departments of Justice's and Treasury's multimillion dollar asset forfeiture activities could help the departments 

identify the extent to which consolidation of potentially duplicative activities would help increase the efficiency and 

effectiveness of the programs and achieve cost savings. 

Dissemination of Technical Research Reports: Congress may wish to consider whether the fee-based mode! 

under which the National Technical Information Service currently operates for disseminating technical information 

is still viable or appropriate, given that many of the reports overlap with similar information available from the 

issuing organizations or other sources for free. 

Geospatiallnvestments: Better coordination among federal agencies that collect, maintain, and use geospatial 

information could help reduce duplication of geospatia! investments and provide the opportunity for potential 

savings of millions of dollars. 

Export Promotion: Enhanced collaboration between the Small Business Administration and two other agencies 

could help to limit overlapping export-related services for small businesses. 

International Broadcasting: The Broadcasting Board of Governors-with a budget of $752 million in fiscal year 

2012-has recognized the need to reduce overlap and reallocate limited resources to broadcasts that will have the 

greatest impact, but the agency could do more to achieve this goal, such as systematically considering overlap of 

language services in its annual language services review. 

Rural Water Infrastructure: Additiona! coordination by the Environmental Protection Agency and the Department 

of Agriculture could help three water and wastewater infrastructure programs with combined funding of about $4.3 

billion avoid potentially duplicative application requirements, as well as associated costs and time developing 

engineering reports and environmental analyses. 

15. Drug Abuse Prevention and Treatment Programs: More fully asseSSing the extent of overlap and potential 

duplication across the fragmented 76 federal drug abuse prevention and treatment programs and identifying 

opportunities for increased coordination, including those programs where no coordination has occurred. would 

better position the Office of National Drug Control Policy to better leverage resources and increase efficienCies. 

Training, 16. Higher Educ.tion Assistance: Fede'al agencies p,oviding assistance fo, highe, education should bette, 

employment, coordinate to improve program administration and help reduce fragmentation, 

:d~cation -:1:::7-. ~V;-ete'-ra-n-s'"' E=-m-p-:I;-Oym-• ...:n-:t...:.=-nd=T-ra-;"ln-:ln-g-:-=r::-he-=D-ep-a-:rtm,......:.e-:nts'-o"f L:-a7bo-"=-, :-:Ve-:t-e'-a-ns-A"ffa~i'-5,-a-nd=D-ef;-e-ns-e-n-eed-;-t:-o-:b-ett:-e-,-

coordinate the employment services each provides to veterans, and labor needs to better target the Disabled 

Veterans' Outreach Program so that it does not overlap with other programs. 

Source: GAO 

We consider programs or activities to be fragmented when more than one 

federal agency (or more than one organization within an agency) is 

involved in the same broad area of national need and opportunities may 

exist to improve how the government delivers services. We identified 

fragmentation in multiple programs we reviewed, including the following: 

Combat Uniforms: We found that the Department of Defense's (DOD) 

fragmented approach to developing and acquiring uniforms could be 

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more efficient. Since 2002, the military services have shifted from 

using two camouflage patterns to seven service-specific camouflage 

uniforms with varying patterns and colors, Although DOD established 

a board to help ensure collaboration and DOD-wide integration of 

clothing and textile activities, we continue to identify inefficiencies in 

DOD's uniform acquisition approach, For example, we found that 

none of the services had taken advantage of opportunities to reduce 

costs through partnering on inventory management or by collaborating 

to achieve greater standardization among their various camouflage 

uniforms, We have identified several actions DOD should take to 

realize potential efficiencies and up to $82 million in development and 

acquisition cost savings through increased collaboration among the 

military services, These actions include directing the Secretaries of 

the military departments to actively pursue partnerships for the joint 

development and use of uniforms, 

Defense Foreign Language Support Contracts: DOD obligated over 

$6,8 billion from fiscal years 2008 through 2012 on contracts to 

acquire a range of foreign language services and products, such as 

translation and interpretation services, Although the department has 

gained some efficiencies by centralizing contracting for certain 

services under an executive agent, it has not taken steps to 

comprehensively assess whether additional opportunities exist to gain 

efficienCies in the department's fragmented acquisition approach for 

foreign language support contracts, For example, we found that 159 

contracting organizations in 10 different DOD components obligated 

approximately $1,2 billion on contracts outside of those managed by 

the executive agent, resulting in an uncoordinated and fragmented 

approach, Our prior work has found that agencies, including DOD, 

reported savings ranging between 5 and 20 percent by implementing 

more coordinated acquisition approaches rather than fragmented 

contracting, Given the department's level of obligations for foreign 

language support services, DOD could achieve significant cost 

savings by assessing and addressing the fragmentation in its current 

approach for managing these contracts, 

Renewable Energy Initiatives: Federal support for wind and solar 

energy, biofuels, and other renewable energy sources has increased 

significantly in recent years, Specifically, third-party estimates indicate 

that federal spending over the 7-year period from 2002 through 2008 

averaged about $4 billion per year and increased to almost $15 billion 

in fiscal year 2010, in part because of additional spending through the 

American Recovery and Reinvestment Act of 2009, We found that 

federal support for renewable energy is fragmented, as 23 agencies 

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and their 130 subagencies implemented hundreds of initiatives in 

fiscal year 2010' We could not comprehensively assess the potential 

for overlap or duplication among these nearly 700 renewable energy 

initiatives, because existing agency information was not sufficiently 

complete to allow for such an assessment. However, fragmentation 

can be a harbinger of potential overlap or duplication. For example, 

we assessed federal wind energy initiatives and found that 82 windrelated initiatives that we examined had overlapping characteristics, 

and several of them have provided duplicative financial support to 

deploy wind energy projects. Such duplicative federal financial 

support may not have been needed in all cases for the projects to be 

built. To help ensure effective use of financial support, we suggested 

that the Department of Energy (Energy) and the Department of 

Agriculture (USDA), to the extent possible within their statutory 

authority, assess and document whether the financial support of their 

initiatives is needed when considering applications. 

I n some areas where fragmentation exists, we also found evidence of 

overlap, which occurs when multiple agencies or programs have similar 

goals, engage in similar activities or strategies to achieve them, or target 

similar beneficiaries. We found overlap among federal programs or 

initiatives in a variety of areas such as joint veterans and defense health 

care services, export promotion activities, and veterans' employment and 

training programs, as well as the following: 

Department of Homeland Security Research and Development: Within 

the Department of Homeland Security (DHS), we found six 

department components involved in research and development (R&D) 

activities. We examined 47 R&D contracts awarded by these 

components and found 35 instances among 29 contracts in which the 

contracts overlapped with activities conducted elsewhere in the 

department. Taken together, these 29 contracts were worth about $66 

million. In one example of the overlap, we found that two DHS 

components awarded five separate contracts that each addressed 

detection of the same chemical. While we did not identify instances of 

5We defined a renewable energy-related initiative as a program, tax expenditure, or group 

of activities serving a similar purpose or function that was related to renewable energy 

through a specific emphaSis or focus, even if renewable energy was part of a broader 

effort. There is no comprehensive database that tracks federal renewable energy 

spending across agencies for all types of activities. Fiscal year 2010 is the latest year for 

which we developed origina! data on the renewable energy initiatives. 

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unnecessary duplication among these contracts, DHS has not 

developed a policy defining who is responsible for coordinating R&D 

and what processes should be used to coordinate it, and does not 

have mechanisms to track all R&D activities at DHS that could help 

prevent overlap, fragmentation, or unnecessary duplication. We 

suggested that developing a policy defining the roles and 

responsibilities for coordinating R&D, and establishing coordination 

processes and a mechanism to track all R&D projects could help DHS 

mitigate existing fragmentation and overlap, and reduce the risk of 

unnecessary duplication. 

Drug Abuse Prevention and Treatment Programs: In fiscal year 2012, 

about $4.5 billion was allocated to 15 federal agencies that administer 

76 fragmented programs intended to prevent or treat illicit drug use or 

abuse. Of the 76 drug abuse prevention and treatment programs we 

reviewed, we also found evidence of overlap across 59 programs 

(nearly 80 percent). The Office of National Drug Control Policy 

(ONDCP) is responsible for overseeing and coordinating the 

implementation of drug abuse prevention and treatment program 

activities across the federal government. Although ONDCP has taken 

some steps to coordinate these activities, it has not systematically 

assessed drug abuse prevention and treatment programs to examine 

the extent of overlap and potential for duplication or to identify 

opportunities for greater coordination. Such an assessment would 

better position ONDCP to help ensure that federal agencies 

undertaking similar prevention and treatment efforts identify 

opportunities for increased efficiencies. 

Overlap and fragmentation among government programs or activities can 

lead to duplication, which occurs when two or more agencies or programs 

are engaged in the same activities or provide the same services to the 

same beneficiaries. Our 2013 report includes several areas where we 

identified potentially duplicative federal efforts, including the following: 

Catfish Inspection: We found that when USDA's Food Safety and 

Inspection Service (FSIS) begins the catfish inspection program as 

mandated in the Food, Conservation, and Energy Act of 2008, the 

program will duplicate work already conducted by the Food and Drug 

Administration (FDA) and by the National Marine Fisheries Service. 

For example, as many as three agencies-FDA, FSIS, and the 

National Marine Fisheries Service-could inspect facilities that 

process both catfish and other types of seafood. To avoid this 

duplication, we suggest that Congress repeal the provisions of the act 

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that assigned USDA responsibilities for examining and inspecting 

catfish and establishing a catfish inspection program. Taking this 

action could save taxpayers millions annually, according to FSIS 

estimates of the program's cost" 

Medicaid Program Integrity: We also identified duplication in the 

Medicaid Integrity Program, which provides federal support and 

oversight of state programs.7 Specifically, we identified duplication in 

two integrity program activities: (1) the National Medicaid Audit 

Program, which consists of audits of state Medicaid claims data to 

identify overpayments; and (2) state program integrity assessments, 

one of several tools through which the Centers for Medicare & 

Medicaid Services (CMS) collects data on state program integrity 

activities. For example, we found that the data collected through state 

program integrity assessments duplicate data collected through 

triennial comprehensive reviews and other reports, which provide 

more timely and useful information. We suggested that CMS merge 

certain functions of the federal review and audit contractors and 

discontinue the annual state program integrity assessment to 

eliminate or avoid duplicative activities. 

Geospatial Investments: According to the Department of the Interior, 

the federal government invests billions of dollars annually to collect, 

maintain, and use geospatial infonmation-information linked to 

specific geographic locations that supports many government 

functions, such as maintaining roads and responding to natural 

disasters. We found that federal agencies had not effectively 

"To create this potential savings, Congress would need to repeal the provision in the 

Food, Conservation, and Energy Act of 2008, or direct in the Food Safety and Inspection 

Service's appropriation that no funds may be spent on the program. If Congress enacts a 

legislative restriction, there may be some opportunity to rescind appropriated 

amounts. Because the inspection program is funded from a lump sum appropriation to 

USDA, funds that would have been used for the program could be available for new 

obligations within the appropriations account. USDA could identify the amount of funds 

currently available for obligation that would have been used for the catfish inspection 

program and Congress could rescind those amounts, 

7Medicaid is the joint federal-state health care financing program for certain low-income 

individuals and is one of the largest social programs in federal and s\ilte budgets. We 

have had long~standing concerns about Medicaid's program integrity because of problems 

with the sufficiency of federal and state oversight. For example, the Centers for Medicare 

& Medicaid Services estimated that in fiscal year 2012, $19.2 billion (7.1 percent) of 

Medicaid's federal expenditures involved improper payments. 

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implemented policies and procedures that would help them to identify 

and coordinate geospatial data acquisitions across the government. 

For example, although the Office of Management and Budget (OMB) 

has oversight responsibilities for investments in geospatial data, OMB 

staff members acknowledged that OMB does not have complete and 

reliable information to identify potentially duplicative geospatial 

investments. According to these officials, this lack of information is 

largely because agencies do not appropriately and consistently 

classify geospatial investments in their budget documents submitted 

to OMB. As a result, the agencies make duplicative investments and 

risk missing opportunities to jointly acquire data. Better coordination 

by agencies and better oversight by OMB could help to reduce 

duplication of geospatial investments, providing the opportunity for 

potential savings of millions of dollars on geospatial information 

technology. 

In addition to areas of fragmentation, overlap, and duplication, our 2013 

annual report identified 14 areas where opportunities exist either to 

reduce the cost of government operations or enhance revenue collections 

for the Treasury. These opportunities for executive branch or 

congressional action exist in a wide range of federal government missions 

(see table 2). 

Table 2: Cost Savings and Revenue Enhancement Opportunities Identified in Our 2013 Annual Report, by Mission 

Mission Areas Identified 

Agriculture 18. Agricultural Quarantine Inspection Fees: The United States Department of Agriculture's Anima! and Plant 

19. 

Defense 20. 

Energy 21. 

General 22. 

government 

Health Inspection Service could have achieved as much as $325 million in savings (based on fiscal year 2011 

data, as reported in GAO's March 2013 report) by more fully aligning fees with program costs; although the 

savings would be recurring, the amount would depend on the cost..collections gap in a given fiscal year and would result in a reduced reliance on U.S. Customs and Border Protection's annual Salaries and Expenses 

appropriations used for agricultural inspection services. 

Crop Insurance: To achieve up to $1,2 billion per year in cost savings in the federal crop insurance program, 

Congress could consider limiting the subsidy for premiums that an individual farmer can receive each year, 

reducing the subsidy for all or high~income farmers participating in the program, or some combination of limiting 

and reducing these subsidies, 

Joint Basing: The Department of Defense needs an implementation plan to guide joint bases to achieve millions 

of dollars in cost savings and efficiencies antiCipated from combining support services at 26 installations located 

close to one another. 

Department of Energy's Isotope Program: Assessing the value of isotopes to customers. and other factors such 

as prices of alternatives, may show that the Department of Energy could increase prices for isotopes that it sells to 

commercial customers to create cost savings by generating additional revenue. 

Additional Opportunities to Improve Internal Revenue Service Enforcement of Tax Laws: The Internal 

Revenue Service can realize cost savings and increase revenue collections by billions of dollars by, among other 

things, using more rigorous analyses to better allocate enforcement and other res_o_u_rc_es_. _______ _ 

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Mission 

Health 

Homeland 

security/law 

enforcement 

Information 

technology 

International 

affairs 

Are •• Identified 

23, Agencies' Use of Strategic Sourcing: Selected agencies could better leverage their buying power and achieve 

additional savings by directing more procurement spending to existing strategically sourced contracts and further 

expanding strategic sourcing practices to their highest spending procurement categories-savings of one percent 

from selected agencies' procurement spending alone would equate to over $4 billion, 

24. Opportunities to Help Reduce Government Satellite Program Costs: Government agencies could achieve 

considerable cost savings on some missions by leveraging commercial spacecraft through innovative mechanisms 

such as hosted payload arrangements and sharing launch vehicle costs. Selected agencies have reported saving 

hundreds of millions of dollars to date from using these innovative mechanisms. 

25, Medicare Prepayment Controls: More widespread use of prepayment edits could reduce improper payments and 

achieve other cost savings for the Medicare program, as well as provide more consistent coverage nationwide. 

26. Medicaid Supplemental Payments: To improve the transparency of and accountability for certain high-risk 

Medicaid payments that annually total tens of billions of dollars, Congress should consider requiring the Centers 

for Medicare & Medicaid Services to take steps that would facilitate the agency's ability to oversee these 

payments, including identifying payments that are not used for Medicaid purposes or are otherwise inconsistent 

with Medicaid payment principles, which could lead to cost savings. GAO's analysis for providers for which data 

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

27, 

28. 

29. 

30. 

31. 

Medicare Advantage Quality Bonus Payment Demonstration: Rather than implementing the Medicare 

Advantage quality bonus payment program specifically established by !aw, the Centers for Medicare & Medicaid 

Services is testing an alternative bonus payment structure under a broad demonstration authority through a 3-year 

demonstration that has design flaws, raises legal concerns, and is estimated to cost over $8 billion; about $2 billion could be saved if it were canceled for its last year, 2014. 

Checked Baggage Screening: By reviewing the appropriateness of the federal cost share the Transportation 

Security Administration applies to agreements financing airport facility modification projects related to the 

installation of checked baggage screening systems, the Transportation Security Administration could, if a reduced 

cost share was deemed appropriate, achieve cost efficiencies and be positioned to install a greater number of 

optima! baggage screening systems than it currentfy antiCipates. 

Cloud computing: Better planning of cloud-based computing solutions provides an opportunity for potential 

savings of millions of dollars, 

Information Technology Operations and Maintenance: Strengthening oversight of key federal agencies' major 

information technology investments in operations and maintenance provides opportunity for savings on billions in 

infonnation technology investments. 

Tobacco Taxes: Federal revenue losses were as much as $615 million to $1.1 billion between April 2009 and 

2011 because manufacturers and consumers substituted higher-taxed smoking tobacco products with Similar 

lower-taxed products. To address future revenue losses, Congress should consider modifying tobacco tax rates to eliminate significant tax differentials between similar products, 

Source: GAO 

Among the 14 areas of opportunity to reduce costs or enhance revenue 

identified in our 2013 annual report are the following examples of 

opportunities for executive branch agencies or Congress to take action to 

address the issues we reported: 

Medicare Advantage Quality Bonus Payment Demonstration: We 

report concerns about eMS's Medicare Advantage Quality Bonus 

Payment Demonstration, which was estimated to cost $8.35 billion 

over 10 years, most of which will be paid to plans with average 

performance. Medicare Advantage provides health care coverage 

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through private health plans offered by organizations under contract 

with CMS. The agency's stated research goal for the demonstration is 

to test whether a modified bonus structure leads to larger and faster 

annual quality improvement for Medicare Advantage plans. We found 

that the demonstration's design precludes a credible evaluation of its 

effectiveness because it lacks an appropriate comparison group 

needed to isolate the demonstration's effects, and because the 

demonstration's bonus payments are based largely on plan 

performance that predates the demonstration. Based on these 

concerns. we suggest that Department of Health and Human Services 

(HHS) cancel the Medicare Advantage Quality Bonus Payment 

Demonstration. In addition, the demonstration's design raises legal 

concerns about whether it falls within HHS's demonstration authority. 

Although the demonstration is now in its second year, HHS still has an 

opportunity to achieve significant cost savings-about $2 billion, 

based on our analysis of CMS actuaries' estimates-if it cancels the 

demonstration for 2014. 

Crop Insurance: The federal government's crop insurance costs have 

increased in recent years-rising from an average of $3.1 billion per 

year from fiscal years 2000 through 2006 to an average of $7.6 billion 

per year from fiscal years 2007 through 2012-and are expected to 

increase further. These costs include subsidies to pay for part of a 

farmer's crop insurance premiums, which farmers can purchase to 

insure against certain losses for insurable crops they produce. Unlike 

many farm programs. the federal crop insurance program does not 

have statutory income and payment limns that apply to individual 

farmers and legal entities, including corporations. Congress could 

achieve up to $1.2 billion per year in cost savings by limiting the 

subsidy for premiums that an individual farmer can receive each year, 

reducing the subsidy for all or high-income farmers participating in the 

program, or some combination of both. 

Information Technology Operations and Maintenance: Of the $79 

billion federal agencies budgeted for information technology (IT) in 

fiscal year 2011, $54 billion (about 69 percent) was reported to have 

been spent on the operations and maintenance of existing legacy IT 

sy.stems-commonly referred to as steady state investments. 

However, many federal agencies are not performing analyses to 

determine whether or not their steady state systems are continuing to 

meet bUSiness and customer needs and are contributing to meeting 

the agencies' strategic goals, as called for by OMB guidance. We 

found that agencies did not conduct such an analysis on 52 of the 75 

major existing information technology investments we reviewed. As a 

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result, there is increased potential for these IT investments in 

operations and maintenance to result in waste and duplication. We 

suggest that agencies analyze all IT investments annually and report 

the results of their analyses to OMB. These actions could help 

agencies achieve cost savings by strengthening the oversight of their 

existing IT investments in operations and maintenance, resuHing in 

the potential for billions of dollars in savings. 

Opportunities to Help Reduce Government Satellite Program Costs: In 

recent years, Congress has appropriated more than $25 billion a year 

to agencies for developing space systems.· To save money, several 

federal agencies are actively using or exploring nontraditional 

approaches to managing their space-based programs, such as 

hosting government instruments on commercial spacecraft and having 

multiple satellites share the same launch vehicle.' For example, DOD 

has two ongoing hosted payload pilot missions and has taken 

preliminary steps to develop a follow-on effort. According to DOD 

estimates, the commercial partnership has saved the department over 

$200 million. While these approaches hold promise for providing 

lower-cost access to space in the future, we identified a variety of 

technical, cuHural, logistical, and legal and policy challenges. We 

identify actions that Congress may wish to consider to address these 

challenges and better take advantage of nontraditional approaches, 

such as authorizing agencies enhanced flexibility to acquire certain 

satellite services related to hosted payload and ride sharing 

arrangements, when appropriately planned and justified. 

Medicaid Supplemental Payments: Medicaid-the joint federal-state 

program that finances health care for certain low-income individualscost the federal government and states an estimated $410 billion in 

2011.'0 States pay qualified health care providers for covered services 

delivered to Medicaid beneficiaries and obtain federal matching funds 

8 A space system can include multiple components such as satellites, ground contra! 

stations, terminals, and user equipment. 

9Severa! federal agencies, including DOD, the National Aeronautics and Space 

Administration, the Federal Aviation Administration, the Nationa! Oceanic and 

Atmospheric Administration, and the U.S. Coast Guard, are actively using or beginning to 

look at these approaches in order to save costs. 

loThe 2011 cost figure represents combined federal and state Medicaid expenditures for 

provider services in fiscal year 2011 and does not include expenditures for administration. 

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for the federal share of these payments. We found that many states 

are making Medicaid payments to many providers that are far in 

excess of those providers' costs of providing Medicaid services. 

Specifically, in 2007, the most recent year for which these data were 

available, 39 states made payments to certain providers in excess of 

Medicaid costs by a total of about $2.7 billion. To improve the 

transparency of and accountability for certain high-risk Medicaid 

payments, we suggest that Congress consider requiring CMS to take 

steps that would facilitate the agency's ability to oversee these 

payments, including identifying payments that are not used for 

Medicaid purposes or are otherwise inconsistent with Medicaid 

payment principles. Such action could lead to cost savings in the 

hundreds of millions, or even billions, of dollars. 

Agencies' Use of Strategic Sourcing: Federal agencies could achieve 

significant cost savings annually by expanding and improving their 

use of strategic sourcing-an acquisition process that moves away 

from numerous individual procurement actions to a broader 

aggregated approach. For example, a reduction of 1 percent from 

selected agencies' procurement spending would equate to over $4 

billion in savings." To help control spending, OMB established a 

government-wide strategic sourcing program to address opportunities 

to strategically source commonly purchased products and services 

and eliminate duplication of efforts across agencies. However, the 

program has not yet targeted the products and services on which the 

government spends the most. Moreover, a lack of clear guidance on 

metrics for measuring success has hindered the management of 

ongoing strategic sourcing efforts across the federal government. 

Thus, we suggested that OMB issue updated government-wide 

guidance on calculating savings and establish metrics to measure 

progress toward goals. Doing so would position OMS to help federal 

agencies better implement strategic sourcing practices and maximize 

their ability to realize billions of dollars in potential savings annually. In 

December 2012, OMS provided new direction to agencies to improve 

strategic sourcing, but it is too early to tell how effectively those 

actions will be implemented. 

"These selected agenCies include DOD, DHS. Energy. and the Department of Veterans 

Affairs, which accounted for 80 percent of the $537 billion in federal procurement 

spending in fiscal year 2011. 

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The Executive Branch 

and Congress Have 

Made Some Progress 

in Addressing the 

Areas That We 

Previously Identified 

Department of Energy's Isotope Program: Opportunities may also 

exist for Energy to generate additional revenue by increasing the price 

for isotopes that it sells to commercial customers_'2 Energy's Isotope 

Development and Production for Research and Applications program 

(Isotope Program) sells isotopes to commercial customers for a 

variety of uses, such as medical procedures and radiation detection 

equipment To achieve its mission, the Isotope Program relies on 

annual appropriations--almost $20 million in fiscal year 2012-and 

revenues from isotope sales. Although revenues from sales of 

isotopes alone totaled over $25 million in fiscal year 2012, we found 

that Energy may be forgoing revenue because it is not using thorough 

assessments to set prices for commercial isotopes. To improve the 

program's transparency in setting isotope prices and determine if 

opportunities exist to generate additional revenue, we suggest that 

Energy assess the prices it sets for commercial isotopes to determine 

if prices can be increased. 

In addition to the new actions identified in our 2013 annual report, we 

have continued to monitor the progress that the executive branch 

agencies and Congress have made in addressing issues we identified in 

our 2011 and 2012 annual reports. In these reports, we identified 

approximately 300 actions that the executive branch and Congress could 

take to reduce or eliminate fragmentation, overlap, or duplication or 

achieve other potential financial benefits.13 

We evaluated progress by determining an "overall assessmenf' rating for 

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

2 and 3). We found that executive branch agencies and Congress have 

made progress in addressing many ofthe 131 areas we identified in 2011 

and 2012. As of March 6,2013, the date we completed our audit work, 16 

of the 131 areas were addressed; 87 were partially addressed; and 27 

121sotopes are varieties of a given chemical element with the same number of protons but 

different numbers of neutrons. For example, the helium-3 isotope, which is used in 

research and to detect neutrons in radiation detection equipment, has one less neutron 

than the helium-4 isotope, which is the helium iSOtope commonly used in party balloons. 

1"Jwe are not assessing 9 actions this year that were previously included in our 2011 and 

2012 reports. Based on subsequent audit work that we conducted, these actions have 

been conSOlidated, redirected from a congressional to an executive branch action, or 

revised to reflect updated information or data that we obtained. Further, 16 actions 

reported in 2011 and 2012 were revised this year due to additional audit work or other 

information we considered. 

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the Senate, or relevant legislation has been enacted but only addressed part of the action needed; 

and "not addressedH means a bill may have been introduced but did not pass out of a committee, or 

no retevant legislation has been introduced. in assessing actions suggested for the executive branch, 

we applied the following criteria: uaddressed~ means Implementation of the action needed has been 

completed; "partially addressed~ means a response to the action needed is In development, or started 

but not yet completed; and "not addressed~ means the administration, the agencies, or both have 

made minimal or no progress toward implementing the action needed. Consolidated actions were not 

assessed in 2013 due to additional work or other infonnation we considered. 

According to our analysis, 198 of the 249 actions (almost 80 percent) 

identified in 2011 and 2012 that were directed to executive branch 

agencies are either partially addressed or addressed, An example ofthe 

progress made is DOD's efforts to implement our suggested action 

related to the area of overseas defense posture, Specifically, in our 2012 

annual report, we suggested the Secretary of Defense should direct 

appropriate organizations within DOD to complete a business case 

analysis, including an evaluation of atternative courses of action, for the 

strategic objectives that have to this point driven the decision to 

implement tour normalization in South Korea,14 Based on the resulting 

business case analYSis, DOD officials stated that United States Forces 

Korea determined that the tour normalization initiative was not affordable, 

This decision not to move forward with the tour normalization initiative 

resutted in cost avoidance of $3,1 billion from fiscal years 2012 through 

2016, 

Congress has also addressed some of our suggested actions-16 of the 

50 actions directed to Congress in our 2011 and 2012 annual reports are 

either partially addressed or addressed (32 percent), For example, in our 

2011 annual report, we stated that Congress could reduce revenue 

losses by more than $5,7 billion annually by addressing duplicative 

federal efforts directed at increaSing domestic ethanol production, To 

reduce these revenue losses, we suggested that Congress consider 

whether revisions to the ethanol tax credit were needed, and we 

suggested options to consider, including allowing the volumetric ethanol 

excise tax credit to expire at the end of 2011, Congress addressed this 

suggested action by allowing the tax credit to expire at the end of 2011, 

which ended the ethanol tax credit for fuel blenders that purchase and 

blend ethanol with gasoline, 

14Tour normalization refers to the initiative to extend the tour length of military service 

members and move thousands of dependents to South Korea. 

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Over 3 Years, GAO 

Has Identified 162 

Areas Where Federal 

Programs Could 

Achieve Greater 

Efficiency or Increase 

Effectiveness 

Although the executive branch and Congress have made some progress 

in addressing the issues that we have previously identified, additional 

steps are needed to address the remaining areas to achieve associated 

benefits. A number of the issues are difficult to address, and 

implementing many of the actions identified will take time and sustained 

leadership. Nevertheless, implementing the actions could potentially save 

the government tens of billions of dollars annually. Appendix 1/ highlights 

opportunities for potential financial benefits from our body of work. 

To help maintain attention on these issues, we are concurrently releasing 

GAO's Action Tracker, a publicly accessible website ofthe 162 areas and 

approximately 380 suggested actions presented in our 2011, 2012, and 

2013 reports. GAO's Action Tracker includes progress updates and 

assessments of legislative and executive branch actions needed. We will 

add areas and suggested actions identified in future reports to GAO's 

Action Tracker and periodically update the status of all identified areas 

and activities. 

Through our three annual reports, we have identified a total of 162 areas 

with actions that the executive branch and Congress could take to 

address fragmentation, overlap, and duplication or achieve cost savings. 

These three reports touch on areas in virtually all major federal 

departments and agencies. Specifically, the reports collectively identify 

opportunHies to reduce fragmentation, overlap, and duplication or achieve 

other financial benefits within all 15 cabinet-level executive departments 

and at least 17 other federal entities. Figure 4 illustrates actions needed 

that we directed to federal departments and agencies in our three annual 

reports. As the figure shows, we have directed numerous actions to large 

federal departments and agencies that represent the majority of federal 

obligations, including 90 actions directed to DOD, 51 to Treasury, and 44 

to HHS. These three agencies alone represented 56 percent of fiscal year 

2011 obligations. 

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bTreasury's percentage of fiscal year 2011 obligations includes interest on the national debt. 

Our 2013 annual report completes our 3-year systematic examination 

across the federal government to identify major instances of 

fragmentation, overlap, or duplication. Our systematic examination 

required a multiphased approach. First, we reviewed the budget functions 

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of the federal government representing nearly all of the overall federal 

funds obligated in fiscal year 2010.'5 Federal budget functions classify 

budget resources by national need (such as National Defense, Energy, or 

Agriculture), and instances in which multiple federal agencies obligate 

funds within a particular budget function may indicate potential duplication 

or cost savings opportunities. Although this type of analYSis cannot 

answer the question of whether overlap or duplication exists, it can help in 

the selection of areas for further investigation. Using this information, we 

identified each instance in which an executive branch or independent 

agency obligated more than $10 million within these 18 budget functions 

for further consideration. 

Second, we reviewed key agency documents, such as strategic plans, 

performance and accountability reports, and budget justifications, as we 

have found that when multiple executive branch agencies have similar 

missions, goals, or programs, the potential for fragmentation, overlap, or 

duplication exists. Third, we reviewed key external published sources of 

information. In particular, we reviewed reports published by the 

Congressional Budget Office, Inspectors General, and the Congressional 

Research Service, as well as the President's budgets, to identify potential 

overlap and duplication among agency missions, goals, and programs. 

We relied on our previous work and professional judgment to target areas 

for further review by considering a variety of factors, including the extent 

of potential cost savings; opportunities for enhanced program efficiency or 

effectiveness; the degree to which multiple programs may be fragmented, 

overlapping, or duplicative; whether issues had been identified by GAO or 

external sources; and the level of coordination among agency programs. 

Based on our multiphased approach, we have identified, to date, 162 

areas in which there are opportunities to reduce fragmentation, overlap, 

or duplication or to achieve cost savings or revenue enhancement. Our 

three annual reports provide extensive coverage of major instances of 

fragmentation, overlap, or duplication across the federal government. 

Moving forward, we plan to perform further analysis to identify any other 

potential or emerging instances that may result in fragmentation, overlap, 

and duplication. 

not include two budget functions: Allowances, because there were 

no actual obligations, and Undistributed Offsetting Receipts, because no obligations are 

charged to agencies. 

Page 20 GAO·13-496T 
28 


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In closing, as the fiscal pressures facing the nation continue, so too does 

the need for executive branch agencies and Congress to improve the 

efficiency and effectiveness of government programs and activities. 

Opportunities exist to improve the efficiency and effectiveness of 

government operations in the 162 areas we have included in our 2011-

2013 annual reports. 

Identifying, preventing, and addressing fragmentation, overlap, and 

duplication within the federal government is challenging. These are 

difficult issues to address because they may require agencies and 

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

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

of long-standing federal programs or activities with entrenched 

constituencies. Compounding these challenges is the lack of a 

comprehensive list of federal programs, reliable funding information, and 

regular performance information. Wtthout knowing the full range of 

programs involved or the cost of implementing them, gauging the 

magnttude of the federal commHment to a particular area of activity or the 

extent to which associated federal programs are duplicative is difficult. 

Effective implementation of the Government Performance and Results 

Act of 1993 (GPRA) and the GPRA Modernization Act of 2010 could help 

address these challenges, as well as improve information sharing and 

coordination among federal agencies-both of which are needed to help 

address issues of fragmentation, overlap, and duplication.'· The GPRA 

Modernization Act gave us a number of important reporting 

responsibilities, and through these responsibilities we will monitor the 

implementation of the act for Congress. 

Furthermore, we plan to conduct further analysis to look for additional or 

emerging instances of fragmentation, overlap, and duplication and 

opportunities for cost savings or revenue enhancement. Likewise, we will 

continue to monitor developments in the areas we have already identified 

in this series. We stand ready to assist this and other committees in 

further analyzing the issues we have identified and evaluating potential 

solutions. 

l. No. 103-62. 107 Stat. 285 (1993): Pub. l. No. 111-352. 124 Stat. 3866 (2011). 

Page 21 GAO·13-496T 
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GAO Contacts 

Chairman Issa, Ranking Member Cummings, and Members of the 

Committee, this concludes my prepared statement. I would be pleased to 

answer questions. 

For further information on this testimony or our April 9, 2013, report, 

please contact Orice Williams Brown, Managing Director, Financial 

Marikets and Community Investment, who may be reached at (202) 512-

8678 or williamso@gao.gov, and A. Nicole Clowers, Director, Financial 

Markets and Community Investment, who may be reached at (202) 512-

8678 or clowersa@gao.gov. Contact points for the individual areas listed 

in our 2013 annual report can be found at the end of each area at 

http://www.gao.gov/productslGAO-13-279SP. Contact pOints for our 

Congressional Relations and Public Affairs offices may be found on the 

last page of this statement. 

Page 22 GAO·13-496T 
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Appendix I: All Areas Identified in 2011-2013 

Annual Reports, by Mission 

This appendix summarizes all 162 areas we identified in our annual 

reports for 2011 through 2013. For areas included in our 2011 and 2012 

reports, we also include our assessment of the overall progress made, as 

of March 6, 2013, in addressing the issues we identified. Table 3 presents 

areas related to fragmentation, overlap, and duplication. Table 4 presents 

areas related to cost savings or revenue enhancement. 

Table 3: GAO Identified Areas of Fragmentation, Overlap, and Duplication in 2011-2013 Annual Reports 

Mission 

Agriculture 

Defense 

Annual 

report 

2011 

2012 

2013 

2011 

2011 

2011 

2011 

2011 

2011 

2011 

2012 

Overall 

Areas identified assessment 

Area 1: Fragmented food safety system has caused inconsistent oversight. ineffective () 

coordination, and ineffiCient use of resources. 

Area 1: Protection of Food and Agriculture: Centrally coordinated oversight is 

needed to ensure more than nine federal agencies effectively and efficiently 

implement the nation's fragmented policy to defend the food and agriculture systems 

against potential terrorist attacks and major disasters. 

Area 1: Catfish Inspection: Repealing provisions of the 2008 Farm Bill that assigned 

U.S. Department of Agriculture's Food Safety and Inspection Servioe responsibility for 

examining and inspecting catfish and for creating a catfish inspection program would 

avoid duplication of already existing federal programs and could save taxpayers 

millions of dollars annually without affecting the safety of catfish intended for human 

consumption. 

Area 2: Realigning the Department of Defense's (DOD) military medical command 

structures and consolidating common functions could increase efficiency and result in 

projected savings ranging from $281 million to $460 million annually. 

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

response to warfighter urgent needs. 

Area 4: Opportunities exist to avoid unnecessary redundancies and improve the 

coordination of counter~improvlsed explosive device efforts. 

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

efficient use of intelligence. surveillance, and reconnaissance capabilities. 

Area 6: A department-wide acquisition strategy could reduce DO~'s risk of costly 

duplication in purchasing Tactical Wheeled Vehicles. 

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

and supplies may reduce unnecessary duplication. 

Area 8: DOO's business systems modernization: opportunities exist for optimizing 

business operations and systems. 

Area 2: Electronic Warfare: Identifying opportunities to consolidate DOD airborne 

electronic attack programs could reduce overlap in the department's multiple efforts to 

develop new capabilities and improve the department's return on its multibiUion-<!oUar 

acquisition investments. 

Page 23 

() 

() 

() 

() 

() 

() 

() 

() 

() 

GAO·13-496T 
31 


Insert offset folio 25 here 80719.025

Annual 

Mission report 

2012 

2012 

2012 

2012 

2013 

2013 

Economic 2011 

development 

2011 

2011 

2012 

2012 

Energy 2011 

2011 

Appendix I: All Areas Identified In 2011·2013 

Annual Reports, by Mission 

Area. Identified 

Area 3: Unmanned Aircraft Systems: Ineffective acquisition practices and 

collaboration efforts in the DOD unmanned aircraft systems portfolio creates overlap 

and the potential for duplication among a number of current programs and systems. 

Area 4: Counter.Jmprovised Explosive Device Efforts: DOD continues to risk 

duplication in its multibillion-do!lar counter Improvised Explosive Device efforts 

because it does not have a comprehensive database of its projects and initiatives. 

Area 5: Defense Language and Culture Training: DOD needs a more integrated 

approach to reduce fragmentation in training approaches and overlap in the content of 

training products acquired by the military services and other organizations. 

Area 6: Stabilization, Reconstruction, and Humanitarian Assistance Efforts: 

Improving the DOD's evaluations of stabilization, reconstruction, and humanitarian 

assistance efforts, and addressing coordination challenges with the Department of 

Stale (State) and the U.S. Agency for International Development (USAID), could 

reduce overlapping efforts and result in the more efficient use of taxpayer dollars. 

Area 2: Combat Unifonns: The Department of Defense's fragmented approach to 

developing and acquiring unifonns could be more efficient, better protect service 

members, and result in up to $82 million in development and acquisition cost savings 

through increased collaboration among the military services. 

Area 3: Defense Foreign Language Support Contracts: The Department of Defense 

should address fragmentation in the department's acquisition approach for foreign 

language support contracts, which are estimated to cost more than $1 billion annually, 

by exploring opportunities to gain additional efficiencies. 

Area 9: The efficiency and effectiveness of fragmented economic development 

programs are unclear. 

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

goals, and is not accountable for results. 

Area 11: Fragmented federal efforts to meet water needs in the U.S.wMexico border region have resulted in an administrative burden, redundant activities, and an overall 

inefficient use of resources. 

Area 7: Support for Entrepreneurs: Overlap and fragmentation among the economic 

development programs that support entrepreneurial efforts require the Office of 

Management and Budget (OMB) and other agencies to better evaluate the programs 

and explore opportunities for program restructuring, which may include consolidation, 

within and across agencies. 

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

structures are not maximizing the efficient movement of freight. 

Area 12: Resolving conflicting requirements could more effectively achieve federal 

fleet energy goals. 

Area 13: Addressing duplicative federal efforts directed at increasing domestic 

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

Page 24 

OVerall 

assessment 

() 

() 

() 

() 

() 

• 

0 

() 

() 

0 

• 

GAO·13-496T 
32 


Insert offset folio 26 here 80719.026

Annual 

Mission report 

2012 

2012 

2013 

General 2011 

government 

2011 

2011 

2011 

2012 

2012 

2012 

Health 2011 

2011 

2011 

Appendix I: All Areas Identifled in 2011~2013 

Annual Reports, by Mission 

Areas Identified 

Area 9: Department of Energy Contractor Support Costs: The Department of 

Energy (DOE) should assess whether further opportunities could be taken to 

streamline support functions, estimated to cost over $5 billion, at its contractormanaged laboratory and nuclear production and testing sites, in light of contractors' 

historically fragmented approach to providing these functions. 

Area 10; Nuclear Nonproliferation: Comprehensive review needed to address 

strategic planning limitations and potential fragmentation and overlap concerns among 

programs combating nuclear smuggling overseas. 

Area 4: Renewable Energy Initiatives: Federal support for wind and solar energy, 

biofuels, and other renewable energy sources, which has been estimated at several 

billion dollars per year, is fragmented because 23 agencies implemented hundreds of 

renewable energy initiatives in fiscal year 2010-the latest year for which GAO 

developed these original data. Further, the DOE and USDA could take additional 

actions-to the extent possible within their statutory authority-to help ensure effective 

use of financial support from several wind initiatives, which GAO found provided 

duplicative support that may not have been needed in a/l cases for projects to be built 

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

and duplication. 

Area 15: Consolidating federal data centers provides opportunity to improve 

government efficiency. 

Area 16: Collecting improved data on interagency contracting to minimize 

duplication could help the government leverage its vast buying power. 

Area 17: PeriodiC reviews could help ineffective tax expenditures and redundancies 

in related tax and spending programs, potentially reducing revenue losses by billions 

of dollars. 

Area 11: Personnel Background Investigations: The Office of Management and 

Budget (OMB) should take action to prevent agencies from making potentially 

duplicative investments in electronic case management and adjudication systems. 

Area 12: Cybersecurity Human Capital: Government-wide initiatives to enhance cybersecurity workforce in the federal government need better structure, planning, 

guidance, and coordination to reduce duplication. 

Area 13: Spectrum Management: Enhanced coordination of federal agencies' efforts 

to manage radio frequency spectrum and an examination of incentive mechanisms to 

foster more efficient spectrum use may aid regulators' attempts to jointly respond to 

competing demands for spectrum while identifying valuable spectrum that could be 

auctioned for commercial use, thereby generating revenues for the U.S. Department of 

Treasury (Treasury). 

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

(VA) 10 jointly modernize their electronic health records systems. 

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

wherever it is cost~effective. 

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

strategy to better integrate nationwide public health information systems. 

Page 25 

Overall 

assessment 

• 

0 

t) 

t) 

t) 

t) 

0 

t) 

t) 

t) 

t) 

0 

GAO-13-496T 
33 


Insert offset folio 27 here 80719.027

Annual 

Mission report 

2012 

2012 

2013 

2013 

Homeland 2011 

security/law 

enforcement 

2011 

2011 

2011 

2011 

2011 

2012 

2012 

2012 

2013 

Appendix I: All Areas Identified in 2011-2013 Annual Reports, by Mission 

Overall 

Areas identified assessment 

Area 14: Health Research Funding: The Nation.llnstitutes of Health (NIH), DOD, () 

and VA can improve sharing of infonnation to help avoid the potential for unnecessary 

duplication. 

Area 15: Military and Veterans Health Care: DOD and VA need to improve () 

integration across care coordination and case management programs to reduce 

duplication and better assist servicemembers, veterans, and their families. 

Area 5: JOint Veterans and Defense Health Care Services: The Departments of 

Veterans Affairs and Defense should enhance their collaboration to reduce costs, 

overlap, and potentia! duplication in the delivery of health care services between two 

of the nation's largest health care systems that together provide health care to nearly 

16 million veterans, service members, military retirees, and other beneficiaries. 

Area 6: Medicaid Program Integrity: The Centers for Medicare & Medicaid Services 

needs to take steps to eliminate duplication and increase efficiency in two Medicaid 

Integrity Program activities-provider audits and the collection of state program 

integrity data. 

Area 21: StrategiC oversight mechanisms could help integrate fragmented interagency () 

efforts to defend against biological threats. 

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

explosives Investigations, but monitoring is needed to ensure successful e 

implementation. 

Area 24: The Transportation Security Administration'. (TSA) security () 

assessments on commercial trucking companies overlap with those of another 

agency, but efforts are under way to address the overlap. 

Area 25: OHS could streamline mechanisms for sharing security-related () 

infonnation with public transit agencies to help address overlapping information. 

~;e:V;!i;~:O~:~:: ;~de~~::.~~r.~:~~~.~~~ !~~~~!s~~:~p~~~~~~Ot~~~:~~:i;, () gaps and prioritize investments. 

Area 16: Department of Justice Grants: The Department of JUstice could improve () 

how it targets nearly $3.9 billion to reduce the risk of potentia! unnecessary duplication 

across the more than 11,000 grant awards it makes annually. 

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

coordination among four overlapping grant programs. 

Area 18: Federal Facility Risk Assessments: Agencies are making duplicate () 

payments for facility risk assessments by completing their own assessments, while 

also paying DHS for assessments that the department is not performing. 

Area 7: Department of Homeland Security Research and Development: Better 

policies and guidance for defining, overseeing, and coordinating research and 

development investments and activities would help DHS address fragmentation, 

overlap, and potential unnecessary duplication. 

Page 26 GAO.13-496T 
34 


Insert offset folio 28 here 80719.028

Mission 

Information 

technology 

International 

affairs 

Annual 

report 

2013 

2013 

2012 

2013 

2013 

2011 

2011 

2012 

2012 

2013 

2013 

Appendix I: All Areas Identified In 2011·2013 

Annual Reports, by Mission 

Overall Areas Identified assessment 

Area 8: Field·Based Information Sharing: To help reduce inefficiencies resulting 

from overlap in analytical and investigative support activities, the Departments of 

Justice and Homeland Security and the Office of National Drug Control Policy could 

improve coordination among five types of field-based information sharing entities that 

may collect, process, analyze, or disseminate information in support of law 

enforcement and counterterrorism-related efforts-Joint Terrorism Task Forces, Field 

Intelligence Groups, Regional Information Sharing Systems centers, state and major 

urban area fusion centers, and High Intensity Drug Trafficking Areas Investigative 

Support Centers. 

Area 9: JUstice and Treasury Asset Forfeiture: Conducting a study to evaluate the 

feasibility of consolidating Justice's and Treasury's multimillion dollar asset forfeiture 

activities could help the departments identify the extent to which consolidation of 

potentially duplicative activities would help increase the efficiency and effectiveness of 

the programs and achieve cost savings. 

Area 19: Infonnation Technology Investment Management: OMS, and DOD and () 

DOE need to address potentially duplicative information technology investments to 

avoid investing in unnecessary systems. 

Area 10: Dissemination of Technical Research Reports: Congress may wish to 

consider whether the fee-based model under which the National Technical Information 

Service currently operates for disseminating technical information is still viable or 

appropriate, given that many of the reports overlap with similar information available 

from the issuing organizations or other sources for free. 

Area 11: Geospatiallnvestments: Better coordination among federa! agencies that 

collect, maintain, and use geospatial information could help reduce duplication of 

geospatial investments and provide the opportunity for potential savings of millions of 

dollars. 

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

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

Area 28: Despite restructuring, overlapping roles and functions still exist at State's • 

Arms Control and Nonproliferation Bureaus. 

~:~~~~~~~~::~~~~I~~:~::~a:~:I~::~~~~ ~;r~~~e::~ga~:~~~Sa~~~I~I~7r () International Cooperative Administrative Support Services system and by reducing 

reliance on American officials overseas to provide these services. 

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

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

Area 13: International Broadcasting: The Broadcasting Board of Governors-with a 

budget of $752 million in fiscal year 2012-has recognized the need to reduce overlap 

and reallocate limited resources to broadcasts that will have the greatest impact, but 

the agency could do more to achieve this goal, such as systematically considering 

overlap of language services in its annual language services review. 

Page 27 GAO·13496T 
35 


Insert offset folio 29 here 80719.029

Annual 

Mission report 

Science and the 2012 

environment 

2012 

2012 

2012 

2012 

2013 

Socia! services 2011 

2011 

2011 

2012 

2012 

2013 

Appendix I: All Areas Identified in 2011·2013 

Annual Reports, by Mission 

OVerall 

Areas identified assessment 

Area 22: Coordination of Space System Organizations: Fragmented leadership has () 

led to program challenges and potentia! duplication in developing multibiUion-dollar 

space systems. 

Area 23: Space Launch Contract Costs: Increased collaboration between the () 

Department of Defense and the National Aeronautics and Space Administration could 

reduce launch contracting duplication. 

Area 24: Diesel Emissions: Fourteen grant and loan programs at DOE, Department 

f2~~:~~:~ f~~~~t~:.~~h;t"~~~;~~n!~!;°07~~c~~e~~b\I~~~~r~ddl~= 0 emissions; enhanced collaboration and performance measurement could improve 

these fragmented and overlapping programs. 

Area 25: Environmental Laboratories: EPA needs to revise its overall approach to () 

managing its 37 laboratories to address potential overlap and fragmentation and more 

fully leverage its limited resources. 

Area 26: Green' Building: To evaluate the potential for overlap or fragmentation () 

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

Development, DOE, and EPA should lead other federal agencies in collaborating on 

assessing their investments in more than 90 initiatives to foster green building in the 

nonfederal sector. 

Area 14: Rural Water Infrastructure: Additional coordination by the EPA and the 

USDA could help three water and wastewater infrastructure programs with combined 

funding of about $4.3 bilion avoid potentially duplicative application requirements, as 

well as associated costs and time developing engineering reports and environmental 

analyses. 

~~:~s:~~~~~~~r~::ed to reduce administrative overlap among domestic food 0 

Area 30: Better coordination of federal homelessness programs may minimize () 

fragmentation and overlap. 

Area 31: Further steps needed to improve cost~effectiveness and enhance services for () 

transportation-ciisadvantaged persons. 

Area 27: SOCial Security Benefit Coordination: Benefit offsets for related programs () 

help reduce the potential for overlapping payments but pose administrative 

challenges. 

Area 15: Drug Abuse Prevention and Treatment Programs: More fully assessing 

the extent of overlap and potential duplication across the fragmented 76 federal drug 

abuse prevention and treatment programs and identifying opportunities for increased 

coordination, including those programs where no coordination has occurred, would 

better position the Office of National Drug Control Policy to better leverage resources 

and increase efficiencies. 

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Mission 

Training, 

employmen~ 

and education 

Annual 

report 

2011 

2011 

2011 

2012 

2012 

2012 

2012 

Appendix I: All Areas Identified in 2011~2013 

Annual Reports, by Mission 

Areas identified 

Area 32: Multiple employment and training programs: providing inlol111ation on 

colocating services and consolidating administrative structures could promote 

efficiencies, 

Area 33: Teacher quality: proliferation 01 programs complicates federal efforts to 

invest dollars effectively. 

Area 34: Fragmentation of financial literacy efforts makes coordination essentiaL 

Area 29: Early Learning and Child Care: The Departments 01 Education and Health 

and Human Services (HHS) should extend their coordination efforts to other federal 

agencies with early learning and child care programs to mitigate the effects of program 

fragmentation, simplify children's access to these services, collect the data necessary 

to coordinate operation of these programs, and identify and minimize any unwarranted 

overlap and potential duplication. 

Area 30: Employment for People with Disabilities: Better coordination among 4S 

programs in nine federal agencies that support employment for people with disabilities 

could help mitigate program fragmentation and overlap, and reduce the potential for 

duplication or other inefficiencies. 

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

Strategic planning is needed to better manage overlapping programs across multiple 

agencies 

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

coordination and clarification of roles and responsibilities essential, and suggests 

potential benefits of consolidation. 

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

higher education should better coordinate to improve program administration and help 

reduce fragmentation. 

2013 Area 17: Veterans' Employment and Training: The Departments of Labor, Veterans 

Affairs, and Defense need to better coordinate the employment services each provides 

to veterans, and Labor needs to better target the Disabled Veterans' Outreach 

Program so that it does not overlap with other programs. 

$ouree: GAO analysiS 

~As of April 9, 2013, we have not assessed the 2013 areas identified . 

• = Addressed, meaning all actions needed in that area v.tere addressed, 

Overall 

assessment 

() 

• () 

() 

() 

• 

() = Partially addressed, meaning at least one action needed in that area shOwed some progress 

toward implementation, but not all actions were addressed. 

o = Not addressed, meaning none of the actions needed in that area were addressed or partially addressed, 

Consolidated or other = actions were not assessed this year 

Page 29 GAO·13496T 
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Appendix I: All Areas Identified In 2011-2013 

Annual Reports. by Mission 

Table 4: GAO Identified Areas of Cost-Savlngs and Revenue-Enhancement Opportunities In 2011-2013 Annual Reports 

Mission 

Agriculture 

Defense 

Annual 

report Areas Identified 

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

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

2013 Area 18: Agricultural Quarantine Inspection Fees: The United States Department of 

Agriculture's Animal and Plant Health Inspection Service could have achieved as much as 

$325 million in savings (based on fiscal year 2011 data, as reported in GAO's March 2013 

report) by more fully aligning fees with program costs; although the savings would be 

recurring, the amount would depend on the cost-collections gap in a given fiscal year and 

would result in a reduced reliance on U.S. Customs and Border Protection's annual 

Salaries and Expenses appropriations used for agricultural inspection services. 

2013 

2011 

2011 

2011 

2011 

2011 

2011 

2012 

2012 

2012 

2012 

Area 19: Crop Insurance: To achieve up to $1.2 billion per year in cost savings in the 

federal crop insurance program, Congress could consider limiting the subsidy for 

premiums that an individual farmer can receive each year, reducing the subsidy for all or 

high-income farmers participating in the program, or some combination of limiting and 

reducing these subsidies. 

Area 36: DOD should assess costs and benefits of overseas military presence options 

before committing to costly personnel realignments and construction plans, thereby 

possibly saving billions of doHars. 

Area 37: Total compensation approach is needed to manage Significant growth in military 

personnel costs. 

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

weapon systems acquisition programs. 

Area 39: More efficient management could limit future costs of DO~'s spare parts 

inventory. 

Area 40: More comprehensive and complete cost data can help DOD improve the costeffectiveness of sustaining weapons systems. 

Area 41: Improved corrosion prevention and contro! practices could help DOD avoid 

billions in unnecessary costs over time. 

Area 33: Air Force Food Service: The Air Force has opportunities to achieve millions of 

dollars in cost savings annually by reviewing and renegotiating food service contracts, 

where appropriate, to better align with the needs of installations. 

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

for consolidating or reducing the size of headquarters organizations. 

Area 35: Defense Real Property: Ensuring the receipt of fair market value for leasing 

underused real property and monitoring administrative costs could help the military 

services' enhanced use lease programs realize intended financial benefits. 

Area 36: Military Health Care Costs: To help achieve significant projected cost savings 

and other performance goals, DOD needs to complete, implement, and monitor detailed 

plans for each of its approved health care initiatives. 

Page 30 

Overall 

assessment 

o 

() 

() 

() 

() 

() 

() 

• 

() 

() 

() 

GAO-13-496T 
38 


Insert offset folio 32 here 80719.032

Annual 

Mission report 

2012 

2012 

2013 

Economic 2011 

development 

2011 

2011 

2012 

Energy 2011 

2012 

2013 

General 2011 

government 

2011 

2011 

2011 

2011 

2011 

Areas identified 

Appendix I: All Areas Identlfled In 2011-2013 

Annual Reports, by Mission 

Area 37: Overseas Defense Posture: DOD could reduce costs of its Pacific region 

presence by developing comprehensive cost information and re..examining altematives to 

planned initiatives. 

Area 38: Navy's Information Technology Enterprise Network: Better informed 

decisions are needed to ensure a more cost-effective acquisition approach for the U.S. 

Navy's Next Generation Enterprise Network. 

Area 20: Joint Basing: DOD needs an implementation plan to guide joint bases to 

achieve mUlions of dollars in cost savings and efficiencies anticipated from combining 

support services at 26 installations located close to one another. 

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

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

to support broadband could help avoid cost increases for consumers. 

Area 44: The U.S. Army Corps of Engineers should provide Congress with project-level 

information on unobligated balances. 

Area 39: Auto Recovery Office: Unless the Secretary of Labor can demonstrate how the 

Auto Recovery Office has uniquely assisted auto communities, Congress may wish to 

consider prohibiting the Department of Labor from spending any of its appropriations on 

the Auto Recovery Office and instead require that the department direct the funds to other 

federal programs that provide funding directly to affected communities. 

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

approximately $2 billion in revenues over 10 years. 

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

uranium could provide substantial revenue for the government 

Area 21: Department of Energy's Isotope Program: Assessing the value of isotopes to 

customers, and other factors such as prices of alternatives, may show that the 

Department of Energy could increase prices for isotopes that it sells to commercial 

customers to create cost savings by generating additional revenue. 

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

significant costs savings. 

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

potentially save billions of dollars over time. 

Area 48: Applying strategiC sourcing best practices throughout the federal procurement 

system could saves billions of dollars annually. 

Area 49: Adherence to guidance on award fee contracts could improve agencies' use of 

award fees to produce savings. 

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

federal real property. 

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

leasing decisions could save millions of dollars 

Page 31 

Overall 

assessment 

() 

0 

() 

() 

• 

0 

() 

0 

() 

() 

() 

Consolidated • 

or other 

0 

GAO-13-496T 
39 


Insert offset folio 33 here 80719.033

Annual 

Mission report 

2011 

2011 

2011 

2011 

2011 

2011 

2011 

2011 

2011 

2011 

2011 

2011 

2011 

2011 

2011 

2011 

Areas Identified 

Appendix I: All Areas Identified in 2011~2013 

Annual Reports, by Mission 

Area 52: The Office of Management and Budget's IT Dashboard reportedly has already 

resulted in savings and can further help identify opportunities to invest more efficiently in 

infonnation technology. 

Area 53: Increasing electronic filing of individual income tax returns could reduce IRS's 

processing costs and increase revenues by hundreds of millions of dollars. 

Area 54: Using return on investment information to better target IRS enforcement could 

reduce the tax gap; for example, a 1 percent reduction would increase tax revenues by 

$3.8 billion. 

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

IRS costs and increase debt collected. 

Area 56: Broadening IRS's authority to correct simple tax return errors could facilitate 

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

Area 57: Enhancing mortgage interest Information reporting could improve tax 

compliance. 

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

revenue losses of forgiven mortgage debt. 

Area 59: Better information and outreach could help increase revenues by tens or 

hundreds of millions of dollars annually by addressing overstated real estate tax 

deductions. 

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

education requirements and increase revenues. 

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

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

Area 62: IRS could find additional businesses not filing tax returns by using third~party 

data, which show such businesses have billions of dollars in sales. 

Area 63: Congress and IRS can help S corporations and their shareholders be more tax compliant, potentially increasing tax revenues by hundreds of millions of dollars each 

year. 

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

least 1 million networks of bUSinesses and related entities. 

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

and reduce forgone revenue. 

Area 66: Converting the new markets tax credit to a grant program may increase 

program efficiency and significantly reduce the $3.8 billion 5 years revenue cost of the 

program. 

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

revenue. 

Page 32 

Overall 

assessment 

• 

() 

() 

() 

0 

0 

() 

() 

() 

() 

() 

() 

() 

0 

0 

0 

GAC).13-496T 
40 


Insert offset folio 34 here 80719.034

Annual 

Mission report 

2011 

2011 

2011 

2012 

2012 

2012 

2012 

2013 

2013 

2013 

Health 2011 

2011 

2011 

Areas identified 

Appendix I: All Areas Identified in 2011~2013 

Annual Reports, by Mission 

Area 68: Adjusting civil tax penalties for inflation potentially could increase revenues by 

tens of millions of dollars per year, not counting any revenues that may result from 

maintaining the penalties' deterrent effect 

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

unallowed tax deductions or credits, 

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

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

Area 41: Genera. Services Administration Schedules Contracts Fee Rates: Raevaluating fee rates on the General Services Administration's Multiple Award Schedules 

contracts could result in significant cost savings government-wide, 

Area 42: U.S. Currency: legislation replacing the $1 note with a $1 coin would provide a 

significant financial benefit to the government over time. 

Area 43: Federal User Fees: Regularly reviewing federal user fees and charges can help 

the Congress and federal agencies identify opportunities to address inconsistent federal 

funding approaches and enhance user financing, thereby redUCing reliance on general 

fund appropriations. 

Area 44: Internal Revenue Service Enforcement Efforts: Enhancing the Internal 

Revenue Service's enforcement and service capabilities can help reduce the gap 

between taxes owed and paid by collecting billions in tax revenue and faCilitating 

voluntary compfiance. 

Area 21: Additional Opportunities to Improve Internal Revenue Service Enforcement 

of Tax Laws: The Interna! Revenue Service can realize cost savings and increase 

revenue collections by billions of dollars by, among other things, using more rigorous 

analyses to better allocate enforcement and other resources. 

Area 23: Agencies' Use of Strategic Sourcing: Selected agencies could better leverage 

their buying power and achieve additional savings by directing more procurement 

spending to existing strategically sourced contracts and further expanding strategiC 

sourcing practices to their highest spending procurement categories-savings of one 

percent from selected agencies' procurement spending alone would equate to over $4 

billion, 

Area 24: Opportunities to Help Reduce Government Salellile Program Costs: 

Government agencies could achieve considerable cost savings on some missions by 

leveraging commercial spacecraft through innovative mechanisms such as hosted 

payload arrangements and sharing launch vehicle costs. Selected agencies have 

reported saving hundreds of millions of dollars to date from using these innovative 

mechanisms. 

Area 71: Preventing billions in Medicaid improper payments requires sustained 

attention and action by eMS. 

Area 72: Federa! oversight of Medicaid supplemental payments needs improvement, 

which could lead to substantial cost savings. 

Area 73: Better targeting of Medicare's claims review could reduce improper payments. 

Page 33 

Overall 

assessment 

() 

• 

• • 

0 

0 

() 

() 

0 

() 

GAO·13-496T 
41 


Insert offset folio 35 here 80719.035

Annual 

Mission report 

2011 

2012 

2012 

2013 

2013 

2013 

Homeland 2011 

seculitynaw 

enforcement 

2011 

2011 

2011 

2012 

2012 

Areas identified 

Appendix I: All Areas Identified In 2011-2013 

Annual Reports, by Mission 

Area 74: Potential savings in Medicare's payment for health care. 

Area 45: Medicare Advantage Payment: The Centers for Medicare & Medicaid Services 

could achieve billions of dollars in additional savings by better adjusting for differences 

between Medicare Advantage plans and traditional Medicare providers in the reporting of 

beneficiary diagnoses. 

Area 46: Medicare and Medicaid Fraud Detection Systems: The Centers for Medicare 

& Medicaid Services needs to ensure widespread use of technology to help detect and 

recover billions of dollars of improper payments of claims and better position itself to 

detennine and measure financial and other benefits of its systems. 

Area 25: Medicaid Prepayment Controls: More widespread use of prepayment edits 

could reduce improper payments and achieve other cost savings for the Medicare 

program, as well as provide more consistent coverage nationwide. 

Area 26: Medicaid Supplemental Payments: To improve the transparency of and 

accountability for certain high-risk Medicaid payments that annually total tens of billions of 

dollars, Congress should consider requiring the Centers for Medicare & Medicaid Services 

to take steps that would facilitate the agency's ability to oversee these payments, 

including identifying payments that are not used for Medicaid purposes or are otherwise 

inconsistent with Medicaid payment principles, which could lead to cost savings. GAO's 

analysis of providers for which data are available suggests that savings could be in the 

hundreds of millions, or billions, of dollars. 

Area 27: Medicare Advantage Quality Bonus Payment Demonstration: Rather than 

implementing the Medicare Advantage quality bonus payment program specifically 

established by law, the Centers for Medicare & Medicaid Services is testing an alternative 

bonus payment structure under a broad demonstration authority through a 3-year 

demonstration that has design flaws, raises legal concerns, and is estimated to cost over 

$8 billion; about $2 billion could be saved if it were canceled for its last year, 2014. 

Areas 75 and 76: DHS's management of acquisitions could be strengthened to reduce 

cost overruns and schedule and performance shortfalls. 

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

funding or expansion. 

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

reduced TSA personnel costs over the next 5 years. 

Area 79: Clarifying availability of certain customs fee collections could produce a onetime savings of $640 million. 

Area 47: Border Security; Delaying proposed investments for future acquisitions of 

border surveillance technology until the Department of Homeland Security better defines 

and measures benefits and estimates life~cycle costs could help ensure the most effective 

use of future program funding, 

Area 48: Passenger Aviation Security Fees: Options for adjusting the passenger 

aviation security fee could further offset billions of dollars in civil aViation security costs. 

Page 34 

Overall assessment 

() 

() 

() 

() 

() 

() 

• () 

0 

GAO·13496T 
42 


Insert offset folio 36 here 80719.036

Mission 

Income 

security 

Information 

technology 

International 

affairs 

Annual 

report 

2012 

2013 

2011 

2013 

2013 

2011 

2012 

2013 

SOCia! Services 2012 

Appendix I: AU Areas Identified In 2011-2013 

Annual Reports. by Mission 

Overall 

Areas identified assessment 

Area 49: Immigration Inspection Fee: The air passenger immigration inspection user fee ~ 

should be reviewed and adjusted to fully recover the cost of the air passenger immigration ...., 

inspection activities conducted by the Department of Homeland Security's U.S. 

Immigration and Customs Enforcement and U.S. Customs and Border Protection rather 

than using general fund appropriations. 

Area 28: Checked Baggage Screening: By reViewing the appropriateness of the federal 

cost share the Transportation Security Administration applies to agreements financing 

airport facility modification projects related to the installation of checked baggage 

screening systems, the Transportation Security Administration could, if a reduced cost 

share was deemed appropriate, achieve cost efficiencies and be positioned to instal! a 

greater number of optimal baggage screening systems than it currently anticipates. 

Area 80: SOCial Security needs data on pensions from noncovered earnings to better 

enforce offsets and ensure benefit fairness, resulting in estimated $2.4-$2.9 billion 0 

savings over 10 years. 

Area 29: Cloud Computing: Better planning of cloud~based computing solutions provides 

an opportunity for potential savings of miltions of dollars. 

Area 30: Information Technology Operations and Maintenance: Strengthening 

oversight of key federal agendas' major information technology investments in operations 

and maintenance provides opportunity for savings on billions in information technology investments. 

~~~ac~~n~~~~~g ~~:s~rsue several options to improve collection of antidumping 0 

Area 50: Iraq Security Funding: When considering new funding requests to train and 

equip Iraqi security forces, Congress should consider the government of Iraq's financial e resources, which afford it the ability to contribute more toward the cost of Iraq's security. 

Area 31: Tobacco Taxes: Federa! revenue losses were as much as $615 million to $1.1 

billion between April 2009 and 2011 because manufacturers and consumers substituted 

higher-taxed smoking tobacco products with similar lower-taxed products. To address 

future revenue losses, Congress should consider modifying tobacco tax rates to eliminate 

significant tax differentials between similar products. 

Area 51: Domestic Disaster Assistance: The Federal Emergency Management Agency 

could reduce the costs to the federal government related to major disasters declared by 

the President by updating the principal indicator on which disaster funding decisions are 

based and better measuring a state's capacity to respond without federal aSSistance. 

Source:(3AO 

~As of AprH 9, 2013, we have not assessed the 2013 areas identified. 

Legend: 

• = Addressed, meaning aU actions needed in that area were addressed. 

o 

() = Partially addressed, meaning at least one action needed in that area showed some progress 

toward implementation, but not all actions were addressed. 

o = Not addressed, meaning none of the actions needed in that area were addressed or partially 

addressed. 

Consolidated or other = actions were not assessed this year. 

Page 35 GA().13-496T 
43 


Insert offset folio 37 here 80719.037

Appendix II: Opportunities for Potential 

Financial Benefits in 2011-2013 Annual 

Reports 

Through our 2011-2013 annual reports, we have identified 162 areas in 

which greater efficiency and effectiveness of government operations 

could be gained. As we have previously reported, estimating financial 

benefits associated with implementing our suggested actions is difficult in 

some cases due to budget and performance data limitations. 

Furthermore, the amount of savings can depend on the extent to which 

the actions are taken. However, using available information, we were able 

to identify potential financial benefits of addressing some of the areas we 

identified. This information may help facilitate congressional decision 

making about the issues we identified. 

Table 5 includes the areas for which we were able to estimate the 

potential financial benefrts associated with implementing our suggested 

actions. Table 6 includes additional areas for which information was not 

available to develop precise estimates; however, using available 

information we were able to identify the range or magnitude of potential 

financial benefits. 

Tabla 5: Estimated Financial Benefits for Certsin Areas Included in 2011-2013 Annual Reports. as of March 15. 2013 

Annual 

report 

2012 

2011 

2013 

2011 

Areas identified 

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

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

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

systems. 

Fann Program Payments (Area 35): Reducing farm program direct payments could result in savings from $800 

million over 10 years to up to $5 billion annually depending on the policy choices made. 

Crop Insurance (Area 19): To achieve up to $1.2 billion per year in cost savings in the federal crop insurance 

program, Congress could consider limiting the subsidy for premiums that an individual fanner can receive each year, 

reducing the subsidy for all or high-income farmers participating in the program, or some combination of limiting and reducing these subsidies. 

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

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

Page 36 GAO-I3-496T 
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Insert offset folio 38 here 80719.038

Annual 

report 

2012 

2013 

2011 

2011 

2012 

2013 

2011 

2013 

2013 

2012 

Areas identilled 

Appendix II: Opportunities for Potential 

Financial Banaflts In 2011~2013 Annual 

Reports 

Passenger AViation Security Fees (Area 48): Options for adjusting the passenger aviation security fee could further 

offset billions of dollars in civil aviation security costs by reducing the funds appropriated to address passenger 

aviation securtty. These options could increase fee collections from about $2 billion to $10 billion over 5 years. 

Medicare Advantage Quality Bonus Payment Demonstrallon (Area 27): Rather than implementing the Medicare 

Advantage quality bonus payment program specifically established by law, the Centers for Medicare & Medicaid 

Services is testing an alternative bonus payment structure under a broad demonstration authority through a 3~year 

demonstration that has design Raws, raises legal concerns, and is estimated to cost over $8 billion; about $2 billion 

could be saved if it were canceled for its last year, 2014. 

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

enforce offsets and ensure benefit fairness, which could result in an estimated $2.4 billion to $2.9 billion savings over 

10 years. 

Oil and Gas Resources (Area 45): Improved management of federal oil and gas resources could result in 

approximately $2 billion in additional revenue over 10 years. 

U.S. Currency (Area 42): Legislation replacing the $1 note with a $1 coin would provide a significant financial benefit 

of $4.4 billion over 30 years to the government, amounting to an average yearly discounted net benefit of about $146 

million. 

Tobacco Taxes (Area 31): Federal revenue losses were as much as $615 million to $1.1 billion between April 2009 

and 2011 because manufacturers and consumers substituted higher-taxed smoking tobacco products with similar 

lower~taxed products. To address future revenue losses, Congress should consider modifying tobacco tax rates to eliminate significant tax differentials between Similar products. 

Baggage Screening Systems (Area 78): More efficient baggage screening systems could result in about $470 million 

in reduced Transportation Security Administration personnel costs over the next 5 years< 

Checked eaggage Screening (Area 28): By reviewing the appropriateness of the federal cost share the Transportation Security Administration applies to agreements financing airport facility modification projects related to the installation of checked baggage screening systems, the Transportation Security Administration coutd, if a reduced 

cost share was deemed appropriate, achieve cost efficiencies of up to $300 million by 2030 and be positioned to 

install a greater number of optima! baggage screening systems than it currently antiCipates. 

Agricultural Quarantine inspection Fees (Area 18): The United States Department of Agriculture'S Animal and Plant 

Health Inspection Service could have achieved as much as $325 million in savings (based on fiscal year 2011 data, 

as reported in GAO's March 2013 report) by more fully aligning fees with program costs; although the savings would 

be recurring, the amount would depend on the cost.-co!lections gap in a given fiscal year and would result in a reduced reliance on U,S. Customs and Border Protection's annual Salaries and Expenses appropriations used for agricultural 

inspection services. 

Border Security (Area 47): Delaying proposed investments for future acquisitions of border surveillance technology 

until the Department of Homeland Security better defines and measures benefits and estimates life-cycle costs coutd 

help ensure the most effective use of future program funding. U.S. Customs and Border Protection requested $242 

million to fund the new Plan for fiscal year 2012. 

Page 37 GAO.13496T 
45 


Insert offset folio 39 here 80719.039

Annual 

report 

2012 

2011 

2013 

2012 

Areas identified 

Appendix II: Opportunities for Potential Financial Benefits In 2011 ·2013 Annual Reports 

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

reviewed and adjusted to fully recover the' cost of the air and sea passenger immigration inspection activities 

conducted by the Department of Homeland Security's U.S. Immigration and Customs Enforcement and U.S. Customs 

and Border Protection rather than using general fund appropriations; In 2011 this could have resulted in a reduction of 

about $178 million in appropriated funds used for inspection services. 

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

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

which can result in significant cost savings. For example, the Department of the Interior demonstrated that it had used 

enterprise architecture to modernize agency IT operations and avoid costs through enterprise software license 

agreements and hardware procurement consolidation, resulting in financial savings of at least $80 million. In 

addition, Health and Human Services will achieve savings and cost avoidance of over $150 million between fiscal 

year 2011 to 2015 by leveraging its EA to improve its telecommunications infrastructure. 

Combat Uniforms (Area 2): The Department of Defense's fragmented approach to developing and acquiring uniforms 

could be more efficient, better protect service members, and result in up to $82 million in development and 

acquisition cost savings through increased collaboration among the military services. 

Auto Recovery Office (Area 39): Unless the Secretary oi Labor can demonstrate how the Auto Recovery Office has 

uniquely assisted auto communities, Congress may wish to consider prohibiting the Department of labor from 

spending any oi its appropliations on the Auto Recovery Office, thereby saving up to $1.2 million per year. 

Table 6: Range or Magnitude of Potential Financial Benefits for Certain Areas Included In 2011-2013 Annual Reporta, as of 

March 15, 2013 

Annual 

report Areas Identified 

Category: Defense 

2011 Overseas Military Presence (Area 36): The Department of Defense should assess costs and benefits of overseas 

military presence options before committing to costly personnel realignments and construction plans, thereby possibly 

saving billions of dollars. 

2011 OOD's Spare Porta Inventory (Area 39): More effiCient and effective management could limit iuture costs of DOD's 

spare parts inventory by billions of dollars. 

2011 Tactical Wheeled Vehicles (Area 6): A departmentMwide acquiSition strategy could reduce ~OD's risk of costly 

duplication in purchasing Tactical Wheeled Vehicles. Reducing the number of joint light tactical vehicles DOD procures 

could result in billions of dollars of cost savings. 

Page 38 GA0-13-496T 
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Insert offset folio 40 here 80719.040

Annual 

report 

2011 

2011 

2012 

2012 

2013 

2011 

2011 

2011 

2013 

2013 

2011 

Are •• Identified 

Appendix 11: Opportunities for Potential 

Financial Benefits In 2011-2013 Annual 

Reports 

Corrosion Protection (Area 41): Improved corrosion prevention and control practices could help DOD avoid hundreds 

of millions of dollars in unnecessary costs. 

DOD'. Military Medical Command Structures (Area 2): Realigning the Department of Defense's military medical 

command structures and consolidating common functions could increase efficiency and result in projected savings in 

the hundreds of millions of dollars. 

Defense Headquarters (Area 34): To further reduce overhead-related costs in light of the recent changes in DOD's 

strategic priorities, DOD should continue to examine opportunities to consolidate or eliminate military commands that 

are geographically close or have Similar missions, and to seek further opportunities to centralize administrative and 

command support services, functions or programs. Since we made our recommendation, DOD has set targets to save 

several hundred million dollars by 2017 through a range of planned headquarters-efficiency measures. However, in 

some cases the specific actions to achieve these savings have not yet been identified. 

Military Health Care Costs (Area 36): To help achieve significant projected cost savings of millions of dollars and 

other performance goals, the Department of Defense needs to complete, implement, and monitor detailed plans for 

each of its approved health care initiatives. 

Joint Basing (Area 20): The Department of Defense needs an implementation plan to guide joint bases to achieve 

millions of dollars in cost savings and efficiencies anticipated from combining support services at 26 installations 

located close to one another. 

Category: Improper Payments 

Govemment-wlde Improper Payments (Area 46): Efforts to address government-wide improper payments, including 

Medicare and Medicaid, estimated at $108 billion in 2012, could result in significant cost savings. 

Category: Federal Contracting 

Competition for Federal Contracts (Area 47): Promoting competition for the over $500 billion in federal contracts 

could potentially save billions of dollars over time. 

StrategiC Sourcing (Area 48): Applying strategic sourcing best practices throughout the federal procurement system 

could save billions of donars annually. 

Agencies' Use of StrategiC Sourcing (Area 23): Selected agencies could better leverage their buying power and 

achieve additional savings by directing more procurement spending to existing strategically sourced contracts and 

further expanding strategic sourcing practices to their highest spending procurement categories-savings of one 

percent from selected agencies procurement spending alone would equate to over $4 billion. 

Opportunities to Help Reduce Government Satellite Program Costs (Area 24): Government agencies could 

achieve considerable cost savings on some missions by leveraging commercia! spacecraft through innovative 

mechanisms such as hosted payload arrangements and sharing launch vehicle costs. Selected agencies have reported 

saving hundreds of millions of dollars to date from using these innovative mechanisms. 

Category: Information Technology 

IT Dashboard (Area 52): OMS's IT Dashboard contributed to billions of dollars in reported savings and can further 

help identify opportunities to invest more efficiently in information technology. 

Page 39 GAO·13496T 
47 


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Annual 

report 

2012 

2013 

2012 

2013 

2013 

2011 

2011 

2011 

2011 

2011 

Areas identified 

Appendix II: Opportunities for Potential 

Financial Benefits in 2011·2013 Annual 

Reports 

Navy's Information Technology Enterprise Network {Area 38}: Better infonned decisions to ensure a more costeffective acquisition approach for the Navy's Next Generation Enterprise Network could result in billions of dolia'" in 

cost savings. 

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

major information technology investments in operations and maintenance provides an opportunity for billions of 

dollars in savings, 

Infonnatlon Technology Investment Management (Area 19): Identifying and consolidating potentially duplicative IT 

investments at the Departments of Defense and Energy could result in millions of dollars in cost savings. 

Cloud Computing (Area 29): Better planning of cloud-based computing solutions provides an opportunity for potential 

savings of millions of dollars. 

Geospatlallnvestments (Area 11): Better coordination among federal agencies that collect, maintain, and use 

geospatial jnfonnation could help reduce duplication of geospatial investments and provide the opportunity for potential 

savings of millions of dollars. 

Category: Tax Expenditures 

Research Tax Credits (Area 65): Opportunities exist to improve the targeting of the $6 billion research tax credit and 

reduce forgone revenue. 

New Markets Tax Credit (Area 66): Converting the new markets tax credit to a grant program could decrease the 35 

percent to 50 percent difference between the cost of the credit to the Treasury ($4.3 billion over 5 years) and the 

amount actually received by projects being subsidized. 

Ineffective Tax Expenditures and Redundancies (Area 17): Periodic reviews could help ineffective tax expenditures 

and redundancies in related tax and spending programs, potentially reducing revenue losses by billions of dollars. 

Governmental Bonds (Area 67): As Congress considers whether tax-exempt govemmental bonds should be used for 

professional sports stadiums that are generally privately used, it may also wish to consider whether other facilities, 

including hotels and golf courses, that are privately used should continue to be financed with tax-exempt governmental 

bonds. Implementing this suggestion could increase revenue because the interest earned by investors who purchase 

tax bonds is generally excluded from federal income taxes, resulting in billions of dollars annually in federal revenue 

losses. 

Real Estate Tax Deductions (Area 59): Better information and outreach could help increase revenues by tens or 

hundreds of millions of dollars annually by addressing overstated rea! estate tax deductions. 

Page 40 GA().13-496T 
48 


Insert offset folio 42 here 80719.042

Annual 

report 

2011-12 

Areas identified 

Category: Tax Gap 

Appendix II: Opportunities for Potential 

Financial Benefits In 2011~2013 Annual 

Reports 

Internal Revenue Service Enforcement (Area 54, 2011; Area 44, 2012): More complete analysis of return on 

investment-revenue collected including from improvements in voluntary compliance compared to costs-across all of 

IRS's service and enforcement programs could help better target IRS's limited resources and reduce the $385 billion 

net tax gap. If service and enforcement improvements reduce the tax gap by 1 percent, the additional revenue would 

be about $3.8 billion per year. For example, expanding third-party information reporting on rental real estate service 

payments and service payments to corporations alane, as GAO has recommended, would increase revenues by an 

estimated $5.9 billion over 10 years. 

Other areas in which IRS could enhance enforcement include: 

Broad and specific math-error authority (Area 56, 2011): Math error authority is statutory authority that allows 

IRS to correct certain errors on tax returns without a burdensome audit of the taxpayer. By granting either general 

authority or specific math error authority related to, for example, individual retirement accounts or the residential 

energy credit, IRS could improve compliance at low costs. 

Form 1098T (Area 60, 2011): Every year millions of taxpayers claim billions of dollars of credits for post-secondary 

education tuition expenses. Revising the Form 1098 T to provide more complete information on qualified expenses 

could make it easier for IRS to ensure that taxpayers claim the correct amount. 

Busine •• e. Not Filing Tax Return. (Area 62,2011): According to third-pariy information, businesses not filing 

tax returns have billions of dollars in sales. Better use of the third-party information to enforce filing requirements 

could ensure taxes are paid on income associated with such sales. 

Networks of Businesses (Area 64, 2011): Some owners of related businesses use such networks to evade tax. 

Because there are at least 1 miflion such networks, an IRS~wide strategy to address network-based tax evasion 

could bring in additional enforcement revenue. 

2011 Better Management of Tax Debt Collection (Area 55): Better management of tax debt collection may resolve cases 

faster with lower Internal Revenue Service costs and increase debt collected. The Internal Revenue Service has 

recognized that each year individuals do not pay billions of dollars of their aCknowledged tax debts. 

2011 S Corporations Compliance (Area 63): Better IRS guidance on S corporation basis and shareholder compensation 

could, potentially, increase taxes paid by hundreds of millions of dollars each year. 

2011 Electronic Filing of Individual Income Tax Returns (Area 53): Increasing electronic filing of individual income tax 

returns could save the Internal Revenue Service millions of dollars in processing costs by avoiding transcription. 

Category: Other 

2012 Spectrum Management (Area 13): Enhanced coordination of federal agencies' efforts to manage radio frequency 

spectrum and an examination of incentive mechanisms to foster more efficient spectrum use may aid regulators' 

attempts to jointly respond to competing demands for spectrum while identifying valuable spectrum that could be 

auctioned for commercial use. Past auctions of spectrum have generated tens of billions of dollars for the U.S. 

Treasury. 

Page 41 GAO·13-496T 
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Annual 

report 

2012 

2012 

2013 

2011 

2012 

2011 

2011 

2011 

Areas identified 

Appendix II: Opportunities for Potential 

Financial Benefits in 2011~2013Annual 

Reports 

Medicare Advantage Payment (Area 45): The Centers for Medicare & Medicaid Services could achieve billions of 

dollars in additional savings by better adjusting for differences between Medicare Advantage plans and traditional 

Medicare providers in the reporting of beneficiary diagnoses. We estimated that cumulatively across the three years 

from 2010 to 2012, a more accurate adjustment could have saved between $3,2 billion to $5.1 billion. 

Domestic Disaster Assistance (Area 51): Providing a more comprehensive assessment of a jurisdiction's capability to 

respond to and recover from a disaster without federal assistance to support disaster declaration decisions could save 

billions of dollars. As of January 31, 2012, FEMA anticipated that when all 539 approved disaster declarations 

deSignated during fiscal years 2004·2011 are closed, total Disaster Relief Fund obligations will be about $91.5 billion. 

GAO's analysis of FEMA's anticipated obligations for 508 dedarations with Public Assistance during fiscal years 2004~ 

2011 shows that 44 percent and 25 percent would not have met the indicator used to support declaration decisions if it 

had been adjusted for increases in personal income and inflation, respectively, since 1986. 

Medicaid Supplemental Payments (Area 26): To improve the transparency of and accountability for certain hjgh~risk 

Medicaid payments that annually total tens of billions of dollars, Congress should consider requiring the Centers for 

Medicare & Medicaid Services to take steps that would facilitate the agency's ability to oversee these payments, 

including identifying payments that are not used for Medicaid purposes or are otherwise inconsistent with Medicaid 

payment principles, which could lead to cost saYings. GAO's analysis for providers for which data are available 

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

FEMA Grants (Area 26): Congress may wish to consider limiting preparedness grant funding to maintaining existing 

capabilities (as detennined by the Federal Emergency Management Agency) until FEMA completes a national 

preparedness assessment of capabilities gaps at each level based on tiered, capability..specific performance objectives 

to enable prioritization of grant funding. In April 2011, Congress reduced funding for FEMA preparedness grants by 

$875 million from the amount requested in the President's fiscal year 2011 budget. In December 2011, Congress 

reduced funding for FEMA preparedness grants by $1.28 billion from the amount requested in the President's fiscal 

year 2012 budget. 

Overseas Administrative Services (Area 20): U.S. government agencies could lower the over $2 billion 

administrative cost of their operations overseas by increasing participation in the International Cooperative 

Administrative Support Services system and by reducing reliance on American officials overseas to provide these 

services. 

Behavior Based Screening (Area 77): Upon completion of the validation effort, Congress may also wish to consider 

the study's results- including the Screening of Passengers by Observation Techniques (SPOT) program's 

effectiveness in using behavior-based screening techniques to detect terrorists in the aviation environment-in making 

future funding decisions regarding the program, Depending on the results of DHS's validation effort and Congressional 

action, savings over the next 5 years could total tens of millions of dollars. 

Civil Tax Penalties (Area 68): Adjusting civil tax penalties for inflation potentially could increase revenues by tens of 

millions of dollars per year, not counting any revenues that may result from maintaining the penalties' deterrent effect. 

Federal Facility Ownership and Leasing (Area 51): Improved cost analYSis used for making federal facility ownership 

and leasing decisions could save millions of dollars. 

Page 42 GAO·13-496T 
50 


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Annual 

report 

2013 

2011 

(250722) 

Areas identified 

Appendix II: Opportunities for Potential 

Financial Bene1Jts In 2011~2013 Annual 

Reports 

Catfish Inspection (Area 1): Repealing provisions afthe 2008 Fann Bill that assigned U.S. Department of Agriculture's 

Food Safety and Inspection Service responsibility for examining and inspecting catfish and for creating a catfish 

inspection program would avoid duplication of already existing federal programs and could save taxpayers millions of 

dollars annually without affecting the safety of catfish intended for human consumption. 

Excess Uranium Inventories (Area 40): Marketing the Department of Energy's excess uranium could provide 

substantial revenue to the govemment 

SOUrte:GAO 

Page 43 GAO·13-496T 
51 


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Insert offset folio 46 here 80719.046

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53 

Chairman ISSA. I will recognize myself for a couple of—a quick 

statement and then a couple of questions. 

The ranking member in his opening statement mentioned raising 

the revenues from drilling of oil and natural gas. That is not a cost 

savings. He called it a cost savings. It is a tax increase, right? It 

is not one of your recommendations that you simply increase the 

percentages that you charge for royalties? 

Mr. DODARO. What we recommended is that the Department— 

there were studies showing that other agencies—that other entities 

that give those leases were gaining more revenues from the leases 

than the Federal Government. So we recommended that Interior 

conduct a study to determine whether or not it was, you know, 

maximizing the revenue capabilities. The study has been done, but 

they haven’t made any recommendations. 

Chairman ISSA. Well, but isn’t it true that they actually don’t 

know what they are entitled to? They are not able to properly audit 

how much oil or natural gas they get out? There is a huge amount 

of areas that have not been available for leasing? 

In other words, if we were to look at this as a savings—I kind 

of look at it as a tax or a revenue, but if we were to look at it as 

revenue, we would have to make these things comparable to the 

highest and best selling price you could find in the private sector— 

in other words, get at least what you would get on private lands— 

recognizing that the State of Texas, for example, has rights in shallow water. So there is a comparable between the State of Texas in 

the State versus our offshore leases and so on. But it would be 

there, it would be Federal lands for grazing. 

And, ultimately, wouldn’t there be a return if they simply got 

their audit? And I know this is where you have an expert about 

to jump up. 

Mr. DODARO. Right. 

Chairman ISSA. But if they did proper audits so they actually 

knew what they were entitled to and could ensure they get 100 

cents on the dollar of what they are entitled to. 

Mr. DODARO. Yes. And I will ask our expert, Mark, to come to 

the table. 

But there are really two issues. And we are looking at a revenue 

issue, all right? Number one, are we charging the right royalties 

in the first place? And, number two, are we really getting what we 

are owed due to the volume and extraction of the oil? So you are 

exactly right. 

Chairman ISSA. And, as you know, this committee, on a very bipartisan basis, went back and forth trying to get the revenues. 

There were contract failures that led to no revenues, when, in fact, 

that wasn’t the intent nor the letter of the law that Congress 

passed. 

Please, Mark. 

Mr. GAFFIGAN. Thank you, Chairman Issa. Yes. And we enjoyed 

working with your staff, Larry Brady and company, on that back 

in the day. 

There are sort of three parts of this. One is sort of the product 

verification, and that is what you are alluding to. We have 19 recommendations we made to what was MMS and is now—— 

54 

Chairman ISSA. Changed the names, but they are still not doing 

their job, right? 

Mr. GAFFIGAN. —still within the Department of Interior. They 

have made some progress, and that is why we addressed it as partially addressed. They have gotten together a committee that meets 

to talk about current trends in measurement. 

But they are missing in some other areas. For example, they 

really don’t have real realtime production data so they can verify, 

you know, what we are producing. 

The other part of it is the diligent development concern. We have 

leases that aren’t being—that aren’t being utilized. And there have 

been several proposals in Congress, and Interior has made some 

proposals, to charge a rent for those leases that aren’t being used 

as a motivation to seek development. And that is part of where 

that $2 billion potentially could come from. 

Chairman ISSA. Although that wouldn’t be able to come under 

current leases. 

Mr. GAFFIGAN. Right. 

Chairman ISSA. That would be part of the bid process. So 

wouldn’t there be an offset in that if I know I might have to pay 

the rent, in my bidding process I might bid a little less? 

Mr. GAFFIGAN. Yeah, that is definitely a possibility. But the idea 

is it would provide that incentive to them. 

Chairman ISSA. Sure. 

Mr. GAFFIGAN. And the other part is the revenue collection. We 

did recommend that they do some studies on what the government 

take was compared to others. They have done three of those studies, but they just haven’t acted with the recommendation to either 

affirm what we are charging now makes sense or whether we want 

to adjust it, up or down. 

Chairman ISSA. Sure. Well, I can tell you that it is a heck of a 

deal until you get into the regulatory time it takes to get an oil 

well or a natural gas well drilled sometimes. But you are absolutely right, we should try to maximize that revenue. 

Switching slightly, Mr. Dodaro, your previous report and this report continue to identify the IT investment. And I am particularly 

interested in your view on what I—if I read it correctly, from 2012, 

still today, OMB has essentially been tasked to find out how much 

is being spent on IT. We recently did a hearing on this $80 billion 

nominal amount. 

But if I read correctly, what you are telling me is that it is 

underreported, that, in fact, because they are not reporting their IT 

expenditures to the OMB and the OMB is not forcing them to, that, 

in fact, we may be spending more and spending it poorer. 

Is that a succinct way of saying it? 

Mr. DODARO. Yeah. I will ask Joel Willemssen to come up and 

explain that. But I think that that is a correct statement. 

And I also would say, Mr. Chairman, I meant in my opening 

statement to commend this committee for passage of the IT Acquisition Reform Act. That act touches on a number of areas that we 

have reported in all 3 years. 

Chairman ISSA. If you stop over at the Senate, mention that. 

Mr. DODARO. I will. I will be there next month. 

Joel? 

55 

Mr. WILLEMSSEN. Mr. Chairman, as you mentioned, when OMB 

talks about the amount of money the Federal Government spends 

on IT, it is an understated figure for a variety of reasons. 

One is that a number of smaller independent agencies don’t report this information to OMB. That is about 58 agencies. In addition, there are a number of IT projects, whether they are R&D 

projects or space projects, which include a huge percentage of IT, 

that are often not reported. 

In addition, from a total Federal Government perspective, we are 

only talking about a slice of the executive branch. We are not talking about the legislative branch, we not talking about the judicial 

branch. In addition, the intel area is not included. 

So, with all of those exclusions, what is the total amount spent? Nobody knows. Is it slightly north of $100 billion annually? Probably, but we don’t know for sure. 

Chairman ISSA. Thank you. 

I will mention, the only thing I take away from my time on the 

Select Intelligence Committee is that I learned the definition of 

‘‘petabyte’’ of data. So I share with you that that it is a lot of procurement over there. 

Mr. Cummings? 

Mr. CUMMINGS. Thank you very much. 

Mr. Dodaro, you know, the more I am in government—and I 

have been here 17 years, been in the State legislature for 14—you 

know, I am always reminded of something that my mother used to 

say. She said, So often you have motion, commotion, and emotion, 

and no results. 

You know, the older I get, the more I am concerned about that. 

Because we come here, the government spends billions of dollars 

for staff, you have people working 365 a year. And the question is, 

you know, how do we—you mentioned a few success stories in your 

opening. And you, you know—and I know you want to see things 

implemented. 

Have you seen something that gives you some hope so that when 

you go back to your staff you say, You know what, guys, you 

know—and ladies and gentlemen, we have done some great work, 

and, you know, I think this is an area that we are going to see 

some change? 

Because I can imagine that—and I alluded to this in my opening—that when people work hard and give it everything they have, 

and then if they see the recommendations put on the shelf and 

turn dusty, they begin to wonder whether or not they are truly 

feeding their souls. In other words, a lot of people come to government because they want to make a difference, the ones I talk to. 

And so when they don’t see those differences being made, they get 

frustrated and they may move on to something else. And these are 

great people. 

So I am trying to get to bottom lines. You know, I go back to that 

‘‘motion, commotion, emotion, and no results.’’ Because, as I say to 

people all the time, we only have a limited amount of time on this 

earth and a limited amount of time in these positions. 

The question is, I mean, do you see something, can you tell us 

something, based upon the things that you have seen enacted, that 

might help us to get there? Are you following my question? 

56 

Mr. DODARO. Yes. Yes. Definitely. Definitely. 

First of all, 80 percent of our recommendations at GAO are implemented. I mean, we are—— 

Mr. CUMMINGS. So you feel good about that. 

Mr. DODARO. We feel good about that. 

Mr. CUMMINGS. Is that something new? Is that new? 

Mr. DODARO. No. That is about the average—— 

Mr. CUMMINGS. Great. 

Mr. DODARO. And, actually, last year, there were financial bene- fits accrued to the Federal Government, over $55 billion, as a result of GAO work. That is $105 for every dollar invested in GAO. 

So we feel good about it. 

Now—— 

Mr. CUMMINGS. But do you all have a party or anything, like, 

when you have one of these big—I mean, seriously. 

Mr. DODARO. No. 

Mr. CUMMINGS. No? 

Mr. DODARO. No. 

Mr. CUMMINGS. Oh, all right. 

Chairman ISSA. We would investigate—— 

Mr. CUMMINGS. That is right, you would be investigated. 

Mr. DODARO. Yeah, right, right, right. We just keep feeding our 

souls. We just keep going at it. 

Chairman ISSA. You can have ‘‘Donut Friday.’’ 

Mr. DODARO. But, I mean, among that, though, I will just give 

two examples of good successes related to this area. 

We recommended that the ethanol tax credit be looked at because it was duplicating the renewable fuel standard. Congress let 

that tax credit lapse, and that was about $5.7 billion in revenue 

losses to the Federal Government. 

We also recommended that—DOD was planning on sending all 

the families of the servicemembers over to South Korea to enable 

them to have more of a normal tour of duty over there. We said, 

you know, that is going to cost a lot of money; have you done a 

business case? They did the business case, decided against it, 

avoided over $3 billion that would have been spent on that activity. 

And there are stories like that all the time. We are here talking 

about some tough issues that haven’t been addressed yet and need 

to be addressed. But be sure that the people at GAO are working 

hard to make sure that these things do get addressed. 

Mr. CUMMINGS. I want to go back to, you know, this whole oil 

and gas royalties. In that report 2 years ago, you found that the 

Federal Government could receive an additional $1.7 billion in oil 

and gas royalties over the next 10 years if the Federal Government 

started getting a fair market value for the leases. Is that right? 

Mr. GAFFIGAN. The estimate that we got from Department of the 

Interior was $2 billion over 10 years. About $800 million would 

come from the rents that I spoke of and another $1.2 billion from 

changes to the royalties. 

Mr. CUMMINGS. And GAO has also included management of Federal oil and gas resources on its annual high-risk list for the last 

3 years. Is that right? 

Mr. GAFFIGAN. Right. I think we put that on in 2009. 

Mr. CUMMINGS. And do you get frustrated? 

57 

Mr. GAFFIGAN. We stay at it. We see some progress being made. 

There is still some work to be done. For example, we were concerned about the reorganization, and we think they came through 

on that with the high-risk series. 

But we still think in two major areas they have some work to 

do: the revenue collection, which we alluded to, and as well as the 

human capital challenge of having the staff to be able to implement 

these programs. 

Mr. CUMMINGS. And you all said, Mr. Dodaro, that the administration had at least partially implemented 80 percent of the recommendations and the Congress, 32 percent. Is that right? 

Mr. DODARO. That is correct. And, actually, if you look at, 

though, to put it in perspective, if you just look at fully addressed, 

executive branch and Congress are about the same, about 20 percent. But if you look—the executive branch has a lot more partially 

addressed areas. In order to get a partially addressed in Congress, 

you have to get a bill at least reported out of committee to be able 

to do it. 

But what you said is correct. 

Mr. CUMMINGS. Now, last year, the Obama administration requested a legislative change from Congress to allow it to implement 

certain recommendations. The administration requested authority 

from Congress in its fiscal year 2012 budget request to charge a $4- 

per-acre annual fee on nonproducing Federal oil and gas leases, but 

Congress still refused to consider legislation to implement this recommendation, according to your report. Is that correct? 

Mr. GAFFIGAN. That is correct. And that is the basis of the estimate from Interior of almost $800 million over 10 years. 

Mr. CUMMINGS. I see. 

I see my time has expired. Thank you, Mr. Chairman. 

Chairman ISSA. Thank you. 

I just want to ask a clarifying question so everybody else understands what is in Congress to do and what is in the administration 

to do. 

We in the House, including you, have about $4.5 billion in budget. You are not talking about us saving money on our budget. 

When you talk about ‘‘congressional,’’ you are talking about the 

need to pass laws, presumably that the President would sign, and 

that is what is on our plate. 

When you talk ‘‘the President,’’ you talk about an Executive authority. He gets on the phone and says to the OMB Director, Do 

it. 

Am I correct that that is—— 

Mr. DODARO. Yes. Yes. That is exactly right. That is exactly 

right. 

Chairman ISSA. Okay. And I think the gentleman knows that. I 

just, hopefully, for all the new Members particularly, that one of 

them—I am not trying to make excuses for our body, but one of 

them requires that we get the Senate to agree with us, the President to agree with us, and make a law. The other is, in fact, direct. 

All you have to do is order it done, and if it is not done, you find 

somebody new that you order to have it done. 

58 

It is a little bit of a difference. And I am not making excuses because I think we should have a ‘‘partially done’’ on every one of 

your recommendations. 

And speaking of people that would get a lot of that done, we now 

recognize the gentleman from Oklahoma, Mr. Lankford. 

Mr. LANKFORD. Thank you, Mr. Chairman. 

There is a semi-unprecedented recommendation that is in the 

middle of all this, as well, and it is the Medicare Advantage demonstration program. GAO seemed to stick its neck out last year and 

to say there is a program that HHS is implementing that, I think 

the term was, is outside the bounds of the statute, what they are 

given permission to do. And it is about an $8 billion program that 

you said is not only wasteful but it is probably not even legal, 

though, obviously, you didn’t make that statement. The GAO was 

very careful to say, We are not attorneys, we are not making this 

recommendation about the legality of it. 

But of all the demonstration programs that have happened since 

1995, it is larger than all of them combined. You recommended and 

said, This program is not demonstrating anything; we recommend 

to the administration that it be canceled. Was that program canceled? 

Mr. DODARO. No. 

Mr. LANKFORD. Can you determine why the program came into 

existence? A program that is outside of the bounds of the statute, 

that they don’t have legal authority to do, that is larger than all 

of the demonstration programs combined. Were you able to get an 

answer from the administration why they are doing this program 

at all? 

Mr. DODARO. Yeah, with the chairman’s permission, I would like 

to bring up another person who wasn’t sworn in. 

Chairman ISSA. Oh, no, absolutely. 

Mr. DODARO. Okay. James Cosgrove was our witness before this 

committee and is our expert on this matter. 

Chairman ISSA. Just to be technical, please rise and raise your 

right hand. 

Do you solemnly swear the testimony you will give will be the 

truth, the whole truth, and nothing but the truth, so help you God? 

Let the record reflect an affirmative also. 

And you are in. 

Mr. LANKFORD. What is your best guess of why the administration did it in the first place? 

Mr. COSGROVE. The stated intention from the administration was 

that they wanted to test a way of giving plans a stronger incentive 

to improve their quality. 

Mr. LANKFORD. The way they had designed the program, was 

that possible to get that outcome? 

Mr. COSGROVE. What we determined was that it was impossible 

for an evaluation to be done to see whether the demonstration 

worked or not, which is why we recommended that the demonstration be canceled. 

Mr. LANKFORD. So they dumped $8.3 billion over 3 years into a 

program to demonstrate something that it is not possible to demonstrate something with. Why would they do that? They are very 

59 

smart folks. Could you ever determine, did you ever get an answer 

back from them? 

We had a hearing with this committee, as well, to try to ask 

some of the same questions. Were you able to determine why they 

are spending this 8-point-some-odd billion dollars? 

Mr. COSGROVE. What we have is simply their stated reason for 

doing the demonstration. 

This is also in the context that Congress passed and the President signed into law provisions that would have given plans an incentive to increase their quality. CMS, instead of implementing 

those provisions, set those aside and implemented the demonstration program instead. 

Mr. DODARO. We are still, in this report that we are talking 

about today, recommending that this demonstration be canceled. 

There is still $2 billion that hasn’t been spent yet that the Congress could act to stop the demonstration. 

Mr. LANKFORD. Correct. So Medicare Advantage was to be cut, 

based on the existing law that is sitting out there. The Affordable 

Care Act I assume is what you are talking about when you talk 

about the law that has been passed. There was a reduction in the 

Affordable Care Act. That reduction was replaced with this demonstration program, appropriately right before last year’s election, 

to sustain it over 3 years, and then it goes away at that point. So we are still trying to figure out where they came up with $8 

billion to be able to move into a program that everyone said this 

is not legal and that everyone has said this is wasteful, it is not 

actually demonstrating—you can’t do a demonstration project that 

doesn’t demonstrate anything, and be able to just insert money into 

the process on that. 

We are still dealing with the same dynamic here of now we have $2 billion left. Their full recommendation is, continue to cut this off 

for next year because it is not actually accomplishing anything? Is 

that correct? 

Mr. DODARO. Yes. 

Mr. COSGROVE. Yes. 

Mr. LANKFORD. There is also the Medicaid portion of this, as 

well, to deal with the uncompensated care. Can we go through a 

little bit of those recommendations also? Because you made some 

pretty strong recommendations on that. This is a high-risk area 

and has been for a while. 

Mr. DODARO. Yes. I would like to bring our expert up on this, Mr. 

Chairman, Carolyn Yocom, please, if I might indulge the committee. 

Chairman ISSA. Do you solemnly swear or affirm that the testimony you are about to give will be the truth, the whole truth, and 

nothing but the truth? 

Let the record reflect another yes. 

Mr. LANKFORD. Thank you. 

Let’s talk a little about the recommendations that are there for 

uncompensated care reimbursement from Medicaid going to the 

States. What was the recommendation? 

Ms. YOCOM. One of the main recommendations had to do with 

the way that States calculate their disproportionate share payments and the use of supplemental payments. In general, the issue 

60 

that—there are several issues. One of the main points is getting 

some transparency and some accountability to how States are managing these payments. 

We have also suggested that Congress require CMS to take three 

broad actions: first, to improve the State reporting of these supplemental payments; secondly, to clarify the methods of calculating 

how these payments will be made; and then, thirdly, to require 

independent audits of these payments. 

Mr. LANKFORD. Are there some States that are more prone to 

these supplemental payments than others? 

Ms. YOCOM. That is a difficult question to answer because we 

don’t have the full picture of all the supplemental payments that 

are out there. 

Mr. DODARO. But the nature of these payments has grown over 

the years quite extensively, correct, Carolyn? 

Ms. YOCOM. Yes. 

Mr. LANKFORD. Right. But, at this point, we don’t even know 

which States are more open to this or using it more often than others, even able to get that level of information from CMS? 

Ms. YOCOM. We really don’t. What we know is that reporting on 

these payments is improving but it is still not 100 percent. And we 

know that from 2010 there was $32 billion and in 2011 it is up to 

$43 billion, so they are on the rise. 

Mr. DODARO. And, basically, I believe in this area that Congress 

will need to act to require CMS to take these actions. And I believe 

it is appropriate. There is a lot of money at stake here, and there 

is not a proper amount of transparency and accountability. 

Mr. LANKFORD. Thank you. 

With that, I yield back. 

Chairman ISSA. I thank the gentleman. 

We now go to the very timely gentlelady from Illinois, Ms. 

Duckworth. 

Ms. DUCKWORTH. Thank you, Mr. Chairman. 

Mr. Dodaro, I was particularly interested in the portion of the report which deals with the need for better collaboration between the 

VA and the DOD in their delivery of healthcare services. I think 

a lot of folks in the civilian community think that it is the same 

population, and oftentimes it is not. 

For example, the VA has not had to deal with combat veterans 

giving birth before, but since Iraq and Afghanistan we actually now 

have female veterans of childbearing age, and yet that care is not 

available on the VA side. So, being able to go to DOD for that care 

will actually cut down costs, as opposed to sending them to civilian 

providers. 

I was especially interested in your discussion about improving 

the exchange of electronic health records between DOD and VA, 

and I was hoping that you could perhaps elaborate and summarize 

that. Because they are the two systems. We do have in Illinois and 

also in Georgia two joint DOD–VA facilities that are supposed to 

be becoming a single system and they are really not. 

Could you speak to that a little bit? 

Mr. DODARO. Yes. I find this area very perplexing. And Mr. 

Willemssen has been following it for many, many years, and I 

would like him to provide—he will give you a thorough answer. 

61 

Mr. WILLEMSSEN. Congresswoman, in 2011, the DOD and VA 

Secretaries agreed that they were going to pursue a unified, single 

system for veterans and Active Duty personnel. Unfortunately, just 

this past February, they elected to no longer pursue that route, and 

they now are going back to trying to have interoperable exchange 

of information between the major two systems. 

We testified on this in late February and expressed concern 

about the lack of a plan to do that and how they are actually going 

to carry it out. Not the least to say is the amount of time that has 

passed and the money that was spent in trying to develop that single system, which has now been set aside, and they are going back 

to their original plans of trying to go with the two systems. 

Ms. DUCKWORTH. What was the reason for going with the two 

different systems? 

Mr. WILLEMSSEN. At the February hearing, the DOD and the VA 

witnesses said that they thought they could do it in a more costeffective manner by continuing with the two systems. However, 

when pressed on that, they said the analysis of that was not yet 

complete. So we will have to wait and see whether the conclusion 

of that analysis bears that out or not. 

Mr. DODARO. I think the analysis also ought to include an analysis of using one of the two systems that they currently have and 

just going with it and having the other agency adopt that system, 

as well. 

I mean, this has gone on way too long. I think a lot of people, 

both veterans and military, Active Duty military, deserve a better 

system. And it is possible. The technical difficulties aren’t the problem here; it is a management decision, and there needs to be some 

action taken. I would encourage the Congress to have active oversight over this issue until there is a satisfactory resolution. 

Ms. DUCKWORTH. Am I correct in my understanding that between the two systems, the VA’s VistA system and the DOD’s 

AHLTA system, the VistA system is generally perceived to be the 

better system but we are not abandoning AHLTA? Is that understanding correct? 

Mr. WILLEMSSEN. AHLTA is not being abandoned at this time. 

That is correct. 

Ms. DUCKWORTH. But it is not—but the VistA system is superior. 

Is that—from the practitioner’s point of view, those who have to 

use it. 

Mr. WILLEMSSEN. I would hesitate to come to that generalization. 

It depends on the user population you are talking to. But as a generic conclusion, most would probably agree with your statement. 

Ms. DUCKWORTH. So, then, if we were to go with what you just 

said, Mr. Dodaro, as a recommendation, which is just use one of 

the two instead of trying to build a whole third one, which is even 

more expensive, how do we go about doing that? Is it a requirement from the White House? Is it Congress saying that you will 

use one of these two systems? That seems to be meddling down to 

a level in the services that we may not want to get into. 

Mr. DODARO. Yeah. Well, my recommendation would be for the 

Congress to ask for the analysis that supports their current decision and ask for that analysis to be expanded to include the pros 

and cons of going to one of the two other systems and to see, at 

62 

that point, you know, what the proper decision would be. And if the 

Congress then is not satisfied with that decision, it can legislate. 

Ms. DUCKWORTH. Do you think that—in their testimony, well, 

what they are saying is it is too expensive to develop a new system 

and they are going back to the two. Is it because they were each 

counting their money that each was spending and not the cumulative between the two together? Do you see what I am saying? 

Mr. WILLEMSSEN. I want to clarify one thing. When the 2011 decision was made to go to a unified system, it was not necessarily 

stated that they would develop a brand-new one. In fact, we assumed they would default to one of the existing ones, from a cost 

perspective. So I just wanted to make that—clarify that for you. 

Ms. DUCKWORTH. Thank you. I think this goes back to Mr. Chairman, what he has been working on with the purchase of software. 

And I yield back my time. 

Mrs. LUMMIS. [presiding.] The gentlelady’s time has expired. 

We will now yield our time to the gentleman from Georgia, Mr. 

Collins. 

Mr. COLLINS. Thank you, Madam Chair. 

Just a quick question. You used a term there, and before I get 

to it, you talked about depending on the population that was using 

it. Is that just a very nice way of saying that this is the one I am 

trained on so I like it better? 

Mr. WILLEMSSEN. Yeah, and depending on the practitioners. 

Mr. COLLINS. Right. So, basically, we are not talking costs, we 

are not talking effective. We are just saying, I was trained on this, 

I like this better. We are not looking at a big picture. 

I think we are hitting—I think that right there may have 

summed up the entire hearing that is really concerning me, is we 

are looking at what we like, we are looking at what we are trained 

on. And in many of these departments—but I appreciate the way 

you said that. It was a very nice way of saying it, just basically I 

like what I am doing and I don’t want to change. 

Mr. WILLEMSSEN. That is correct. 

Mr. COLLINS. Okay. Thank you. 

An overview question here. One, as I was looking over this report, which are always fascinating, I was—as a boy from north 

Georgia growing up, I didn’t realize catfish needed that much inspection, but—I usually just caught them. You know, I inspected 

them and said, Yep, that is a good one, put it in the bucket, you 

know, we are good. 

An overview question here. What is the greatest problem—and it 

may not be an easy answer—fragmentation, duplication, or overlap? 

Mr. DODARO. Well, of the three, we typically find most of it in 

the overlap area. 

Mr. COLLINS. Okay. 

Mr. DODARO. Among those three options, I would say. 

Mr. COLLINS. Okay. 

Going back to the reality of what you had commented on earlier, 

I was reading in the report on page 211, and it came to the checked 

baggage screening, TSA. And this one really disturbed me as we 

were going along. And, basically, your report says that TSA has not 

yet conducted a study to determine about the 90 percent cost-share. 

63 

And it went on and actually stated this. It said that it generally 

applies—the reimbursable agreements of the checked baggage—absent direction from Congress that TSA conduct a study, the agency 

currently has no plans to do so. 

Ms. BERRICK. That is correct. 

TSA was actually mandated to do that study back in 2004. They 

attempted to do the study in 2006, but they really couldn’t reach 

consensus. Some of the issues they were grappling with was, what 

was the appropriate Federal role in terms of paying for these systems? They also couldn’t reach consensus on who benefited the 

most. Was it the Federal Government? Was it the traveling public? 

Was it the airports? Because there are significant benefits to the 

airports, themselves, in terms of fewer bags being lost and stolen. 

So they couldn’t reach consensus, so they decided just to stay 

with the 90 percent cost-share. And they identified that they 

wouldn’t review that again unless Congress directed it. 

Mr. COLLINS. I mean, again, shouldn’t the appropriate role of any 

Federal agency, stewards of taxpayer dollars, be to run the most 

efficient, most productive organization that they can and not to bog 

down in what-if scenarios? 

Ms. BERRICK. We agree. We think they need to tackle this issue. 

We think they need to look at it. There are opportunities for savings here. 

Also related to checked baggage, we also identified that if TSA 

deployed more of these in-line systems, they could achieve significant savings just in reduced personnel costs. 

Mr. COLLINS. Well, I think it is very disturbing that they had a 

mandate do it, they chose—that they found problems and stopped. 

I mean, it is a story here almost like my child. When my child, once 

I tell him to do something, he says, Well, it is hard, Daddy, I don’t 

want to do it, so we give up. This is the part that most Americans 

don’t understand and they don’t get when we come to this. 

Moving along, page 41, the uniform procurement. As a member 

of the Air Force, this one is one, as just a general member, it is 

like any new—and with no offense to my higher-up generals—it is 

like the new general comes along, ‘‘We need a new uniform.’’ That 

is crazy. And especially when we are doing—is this a service 

branch issue? 

And I agree with my colleague here, not wanting to meddle, but 

why do we come along in looking at the cost of production—I am 

still trying to figure out why it took $400,000 to redo the Navy uniform when they actually look like the others. I would have done it 

for a lot less than that because it is the same pattern. 

What can we do there? Or is there anything we can do there to 

continue this process? I know the Air Force has now decided that 

they will use something with Army, but they are not really sure 

what they can use. I can use a lot of examples here of people that 

didn’t like the new ones. And, really, a force protection issue here. 

Can you elaborate on that real quickly? 

Ms. ST. LAURENT. Yes, I definitely think there is more that the 

Department of Defense can do. It has a board that is responsible 

for establishing policies and procedures with regard to uniforms 

and managing this whole process. 

64 

And there are a couple of issues. One is certainly from a cost perspective. The Defense Logistics Agency will waive a fee if two services go together and procure uniforms. And that is really probably 

just the tip of the iceberg here in terms of potential cost savings 

because there could be further efficiencies and economies of scale 

if two services are purchasing uniforms. 

I think a lot of this, again, stems to each service has their own 

culture, each service has their own acquisition process. And it is 

often easier for them to be able to go their own route, do their own 

testing, and develop a uniform exactly to their own specifications. 

But particularly in a joint environment, there are also security 

and safety risks if you have people in a combat environment with 

different types of uniforms, different camouflage patterns. 

Mr. COLLINS. I have experienced that in Iraq. 

Real quickly, and I am out of time, but are personnel costs—I 

know you look at the cost of the program savings, but is personnel, 

like elimination or others, included in your potential cost savings 

or streamlining? 

Mr. DODARO. It depends on which of the options we are talking 

about. 

Mr. COLLINS. Okay. And I will have some questions I will provide 

after, because I would like some answers on that. 

Mr. DODARO. Yeah, we’d be happy to talk to you more about it. 

But I would just say on one point, this combat uniform issue, if 

you look at many of our other options, there are much more expensive examples of what is happening here—unmanned aircraft systems, electronic warfare. There are huge opportunities there to be 

more efficient in the Department. 

Mr. COLLINS. Well, thank you for your work. 

And I yield back my time. 

Mrs. LUMMIS. Thank you. 

The chair now recognizes the gentleman from Nevada, Mr. 

Horsford. 

Mr. HORSFORD. Thank you, Madam Chair. 

Mr. Dodaro, good to see you again. Thank you for your agency’s 

work. 

I have a technical question first, just on the report itself. Once 

you do a review of an agency, I am reading through here, sometimes an agency comments, sometimes they don’t respond at all. 

What is the requirement on an agency to respond to your—the 

GAO’s recommendations? 

Mr. DODARO. Yeah, there is really no requirement. We give them 

an opportunity in accordance with our procedures and our generally accepted auditing standards, provide them an opportunity to 

comment. There is no mandatory requirement that they do so. 

Mr. HORSFORD. That seems like a fundamental flaw in the process, as well. As a former State legislator, you do an audit or a review of an agency, at a minimum that agency should respond to 

those recommendations to say whether—you know, and, again, 

sometimes they have, they agree. Sometimes they explain further 

why there may be an overlap or duplication. And sometimes they 

don’t respond at all, which, to me, if they are not responding at all, 

that is completely being unresponsive. 

65 

Mr. DODARO. Yeah, I don’t disagree with you at all on that. And 

two things I would say. One is it is relatively rare when they don’t; 

usually they do. And they will agree or disagree. Sometimes they 

will comment on our findings but not on the recommendations. If 

I think it is a significant issue, I try to meet with the heads of the 

agencies and talk them through those issues. But, by and large, we 

get good comments and good cooperation because they know it is 

in their interest. 

Mr. HORSFORD. Okay. 

So let me turn specifically to the higher education assistance portion. And another technical question is, you say here that, as of 

April 9th, GAO has not been able to assess the 2013 areas identified. What does that mean? 

Mr. DODARO. Let me ask Barbara. 

Madam Chair, we need to have her sworn in, please, if I might? 

Mrs. LUMMIS. Thank you. 

Please raise your right hand. Do you solemnly swear or affirm 

that the testimony you are about to give will be the truth, the 

whole truth, and nothing but the truth? 

Thank you, ma’am. You may take your seat. 

Let the record reflect that the witness answered in the affirmative. 

Ms. BOVBJERG. My name is Barbara Bovbjerg. I am the Managing Director for Education, Workforce, and Income Security 

Issues. 

And we wanted to discuss higher education assistance, because 

there are three different kinds of assistance out there. There are 

grants, like the Pell Grants. There are student loans, loans to students and parents. And there are tax benefits. And these are not 

necessarily well-coordinated. 

There are programs in Education, in the Veterans Affairs Department, in DOD that assist students with education. There are 

multiple tools for different situations; they don’t all get used. There 

is not a lot of coordination across agencies. 

Mr. HORSFORD. But on this report, it shows an ‘‘A’’ next to ‘‘Completion.’’ What does that mean? 

Ms. BOVBJERG. You are talking about the STEM program, I am 

thinking. 

Mr. HORSFORD. No, it says, Area 16, Higher Education Assistance. You know, if it is fully enclosed, it has been addressed; if it 

is half-enclosed, it is partially. And then there is a thing that says, 

‘‘A, as of April 9, 2013, we have not assessed the 2013 areas identified.’’ 

Mr. DODARO. Oh. Okay. It is because it is a new issue, it is really 

not addressed. That is a footnote A. That means it is a brand-new 

issue, and so we haven’t yet—they haven’t had a chance to implement it yet. 

Mr. HORSFORD. Okay. 

So let me ask my question specifically. And you pointed out the 

three agencies—actually, four different Federal agencies that administer Federal aid. On one of them, the report states that, in 

2009, 1.5 million taxpayers failed to file for an education credit for 

which they were eligible. 

66 

Have the Treasury and Education Departments taken any steps 

to improve the public’s knowledge of these education tax credits, to 

your knowledge? 

Ms. BOVBJERG. As in many areas, they are starting to think 

about this. We had suggested that they look at the demographics, 

at the characteristics of the households and individuals who were 

eligible but didn’t file. 

We also asked that they improve the information to them. People 

don’t well understand how these programs work. They also don’t 

understand how the Federal aid programs work generally. So the 

application, the FAFSA that you fill out for Federal financial assistance, even though there has been an effort on the Department 

of Education to streamline that and to prepopulate it with IRS information, it can be difficult and tedious for people to fill out, and 

people don’t. 

And so there are people who not only don’t get to take advantage 

of the tax benefits that could accrue for education expenditures, but 

there are doubtless people who don’t apply for benefits for which 

they would be qualified and perhaps do not get the education to 

which they may be entitled. 

Mr. HORSFORD. Yeah, and, obviously, that is troubling at a time 

when the costs for education are going up. 

Madam Chair, I know my time has expired. I don’t know if the 

time of her having to be sworn in counts against me or if I get any 

extra time or not. 

Mrs. LUMMIS. I will grant the gentleman additional time. 

Mr. HORSFORD. Thank you. 

On the improper payments in the VA’s comprehensive Post-9/11 

GI Bill program, apparently that quadrupled between 2009 and 

2010. And your report recommends that the Department of Ed 

share best practices with the VA and the Department of Defense. 

In what ways do you recommend that that collaboration occur? 

Ms. BOVBJERG. Well, one of the issues when this program was 

first implemented was how to get improper payments back. And if 

the funding is going to the schools, it is much easier to get things 

back because we have institutional relationships and there are a 

number of people getting funding via the school. We can withhold 

money—we can do different things to get that money back. It is 

much more difficult when it goes to the individual. 

And this was something that was really a little bumpy at the beginning of the Post-9/11 GI Bill implementation. And we felt that 

the Department of Education has for many years run grant programs and loan programs for students in higher ed and that they 

might have been able to help with certain common practices that 

are used. 

Now, in the VA’s defense, they have begun talking to the Department of Education. I don’t want to hold out the education programs 

as being perfect, by any means, but, certainly, there is a level of 

experience and lessons learned from many years of practice that 

could help. 

Mr. HORSFORD. Thank you. 

Thank you, Madam Chair. 

Mrs. LUMMIS. Thank you. 

67 

And now we will—the chair recognizes the gentleman from 

Michigan, Mr. Bentivolio. 

Mr. BENTIVOLIO. Thank you, Madam Chairwoman. 

My question deals with combat uniforms. Now, just for clarification’s sake, the two uniforms we went from was desert camo and 

forest BDU, if I am not mistaken? ‘‘BDU’’ meaning battle dress uniform. Correct? 

Ms. ST. LAURENT. Yes. There were—we went from two to seven 

different uniforms. 

Mr. BENTIVOLIO. So these are not—— 

Ms. ST. LAURENT. Different patterns. 

Mr. BENTIVOLIO. Right. These are not Class A’s, they are not 

dress whites. These are everyday-wear working uniforms, correct? 

Ms. ST. LAURENT. Yes. Correct. 

Mr. BENTIVOLIO. Great. That is what I thought. And we went 

from—if I am not mistaken, the difference between the old forest 

green camouflage for a Marine and an Army was the name of the 

branch, upper right-hand pocket, and I think the Marines wore 

their sleeves differently than the Army? Correct? 

Ms. ST. LAURENT. Again, there have been a number of changes 

made—— 

Mr. BENTIVOLIO. Yeah. 

Ms. ST. LAURENT. —over the years. 

Mr. BENTIVOLIO. A number of changes. Now we have seven. We 

have the blue digital Navy, Air Force; Marine brown digital; Army 

gray-greenish digital. And we have a—do we have a special camouflage? I am trying to find the other three or four. 

Mr. DODARO. There are pictures of them all in our report. 

Ms. ST. LAURENT. Right. 

Mr. DODARO. Let me get the page. 

What is the page? 

Mr. BENTIVOLIO. Okay. Well, I will look at that. 

Mr. DODARO. Yeah, we have them all listed, pictures of them in 

the report. 

Mr. BENTIVOLIO. All right. But I think I saw an $82 million savings if we reduced it to one? 

Ms. ST. LAURENT. Right. That would be the savings estimated, 

for example, if the Army and the Air Force go together in designing 

a new uniform. And the savings that we are reporting, these are 

the savings because the Defense Logistics Agency, which procures 

uniforms for all the services, will waive their initial inventory fee 

if two or more services join together in a procurement of a same 

uniform. 

Mr. BENTIVOLIO. And that was the $82 million that I read? 

Ms. ST. LAURENT. Uh-huh. 

Mr. DODARO. Yes. 

Mr. BENTIVOLIO. So what is your estimate of the cost savings, for 

instance, if we went to just one digital uniform? 

Ms. ST. LAURENT. We don’t have a specific cost estimate. 

Again—— 

Mr. BENTIVOLIO. Okay. But it would be considerable? 

Ms. ST. LAURENT. It would probably be significantly more because we would expect that there would be economies of—— 

Mr. BENTIVOLIO. Scale. 

68 

Ms. ST. LAURENT. —scale in the procurement of the uniforms, as 

well as some savings in the design and acquisition. 

Mr. BENTIVOLIO. And the only difference would be the name of 

the branch, and possibly the way they wear their sleeves or their 

hat would tell the difference, correct? 

Ms. ST. LAURENT. Right. Each service has to examine, look at 

their mission and determine where do you need pockets, how much 

material do you have to carry, and those kinds of things. So that 

is why the current Department of Defense guidance does not require all the services to have the same uniform. But it highly encourages them to explore opportunities to partner together and see 

if they can reach compromises and work through the requirements. 

Mr. BENTIVOLIO. Okay. So when you said cargo pockets, I mean, 

it is my understanding the cargo pocket on your leg has to be big 

enough to fit an MRE. So an MRE is eaten by all branches—— 

Ms. ST. LAURENT. Right, that is correct. But, again, looking at 

the services’ different missions, they may be carrying different 

types of equipment and want to modify things a little bit. 

Mr. BENTIVOLIO. Okay. 

Ms. ST. LAURENT. So that is where some of the individual requirements come from. 

Mr. BENTIVOLIO. Have there been any studies on exactly what 

the cost savings would be if we went to one uniform? 

Ms. ST. LAURENT. No. We checked with the Department of Defense, and we do not think that they have—we do not think that 

they have identified or done any particular studies. So, again, our 

analysis was based on the Army and Air Force going together and 

the inventory fees that could be saved. 

Mr. BENTIVOLIO. Eighty-two million dollars. Thank you very 

much. 

I yield back my time. 

Chairman ISSA. [Presiding.] Would the gentleman yield? 

One quick follow-up. In this year’s statement, you talked about 

the uniforms, obviously the branches buying additional uniforms. 

Have you ever looked into the aborted program to consolidate nonuniformed service personnel in combat, their uniforms? 

Apparently, they have repeatedly had these studies to try to 

come up with sort of what—when I visit Afghanistan or Iraq, civilians, other employees, the press, they are in haphazard different 

uniforms, sometimes sort of camouflage. I have become aware of it 

on multiple occasions, that apparently they keep getting ready to 

design one and then they can never get buy-in from the services. 

Does that fit at all into sort of this, not invented here, I won’t 

buy an Army solution even for civilians? 

Ms. ST. LAURENT. We focused on the service uniforms, military 

officials in this study, so we haven’t looked specifically at that 

issue. 

Chairman ISSA. Okay. Thank you. 

I thank the gentleman. 

We now go to the gentleman from Virginia, Mr. Connolly. 

Mr. CONNOLLY. Thank you, Mr. Chairman. 

And thank you and Mr. Cummings for holding this hearing. I 

think this is one of the most important hearings we have every 

69 

year, but I guess it is not sexy, looking at the press table. And yet, 

when we think about the potential for savings—— 

Chairman ISSA. Would the gentleman yield? 

Mr. CONNOLLY. I would. 

Chairman ISSA. You cannot insult the esteemed members of the 

press who are here. I would like to personally thank the esteemed 

members of the press who saw the importance of this. 

Mr. CONNOLLY. That is right. But thank you for being here. I just 

wish more of your colleagues understood how important, actually, 

this topic really is. 

General Dodaro, you had 381 recommendations—and thank you 

to you and your able staff for this very illuminating report. You 

had 381 recommendations since 2011, I think. What is the total estimated ballpark figure of savings to the government if all 381 

were implemented? 

Mr. DODARO. The estimate we have is tens of billions of dollars. 

We don’t have a specific estimate. 

Mr. CONNOLLY. Well, actually, it is a lot more than that. Just, 

I am going to get to one of them, tax collection. But, I mean—— 

Mr. DODARO. Well, if you closed the tax gap, you could, you 

know—— 

Mr. CONNOLLY. Yes. And improper payments. 

Mr. DODARO. Right, right. 

Mr. CONNOLLY. There is another $125 billion a year, so, I 

mean—— 

Mr. DODARO. We are being very conservative. 

Mr. CONNOLLY. You really are. 

Mr. DODARO. Yeah. 

Mr. CONNOLLY. I mean, because this committee actually has ex- plored just those two items, and they exceed $500 billion a year, 

just those two. 

Mr. DODARO. Which two. 

Mr. CONNOLLY. Well, the tax gap—— 

Mr. DODARO. Well, the tax gap is $385—— 

Mr. CONNOLLY. And improper payments are $125 billion a year, 

maybe more. 

Mr. DODARO. Right. Right. 

Mr. CONNOLLY. So uniforms is interesting, and certainly we 

should effectuate an efficiency. But when we are looking for savings, we ought to go, it seems to me, after the big stuff. 

And let me do that. In your looking at the tax gap, the figure from 2006 is $385 billion estimated. Is that correct? 

Mr. DODARO. That is correct. That is the net tax gap, right. 

Mr. CONNOLLY. Net tax gap. Now, could you define for us what 

‘‘tax gap’’ means? 

Mr. DODARO. ‘‘Tax gap’’ means the difference between taxes that 

are owed but not collected. For example, the voluntary compliance 

tax rate is about 84 percent, so about 84 percent of citizens voluntarily comply and file their taxes. And it has been that way for a 

number of years now. So if you think about it that way, 16 percent 

of the population is not properly filing their taxes. 

And that can include companies, as well. The tax gap is really 

widely distributed across both corporations and individuals and different types of taxes. 

70 

Mr. CONNOLLY. And, in fact, you went into that, General, in the 

report, saying that taxpayers’ underreporting is less likely to occur 

when the tax information is also reported to the IRS by a third 

party. Is that correct? 

Mr. DODARO. That is correct. That is correct. And we recommend 

more third-party reporting. 

Mr. CONNOLLY. What does that mean? 

Mr. DODARO. That means getting information from other agencies outside the IRS or the particular employer of the individual. 

For example, there is a number of reports that are out there that 

show business activity of different businesses, and we have suggested IRS get those reports and compare them to the businesses 

that are reporting taxes to compare the data. 

Mr. CONNOLLY. Okay. 

Mr. DODARO. The data-matching aspect of this is the most efficient and effective way to spot potential problems. 

Mr. CONNOLLY. And why would we be leaving $385 billion of revenue that is owed the government—not new taxes, not cutting critical investments—why in the world would we leave $385 billion, 

given our fiscal crisis, on the table? But for what? 

Mr. DODARO. That is one of the reasons I have included it. It has 

been on our high-risk list for years, and I have included it in every 

single one of these three reports that we have put out. I just think 

we are not focusing enough attention—— 

Mr. CONNOLLY. Well, General, could it have something to do with 

resources at the IRS? 

Mr. DODARO. In some cases, resources would be helpful, but not 

in all cases. 

Mr. CONNOLLY. What is the ROI, what is the return on investment for every dollar in collection resources we invest in IRS? Do 

you know? Would at—— 

Mr. DODARO. My experts tell me they don’t have good data on 

that. 

Mr. CONNOLLY. Would at least $1.60 be in the ballpark, do you 

think? 

You can get back to us. 

Mr. DODARO. Yeah. 

Mr. CONNOLLY. You can get back to us. 

Mr. DODARO. Okay. 

Mr. CONNOLLY. But if you could get that for the record. 

Mr. DODARO. All right. 

Mr. CONNOLLY. And then I have 37 seconds, so real quickly, the 

chairman and I have introduced a bill, as you know, called FITARA 

in trying to streamline and make more efficient and effectuate savings in our Federal IT acquisition process. And in that bill there 

is something called the working capital funds to help cloud service 

transitions for a period of up to 5 years. 

Real briefly, if the chairman will entertain it, would you comment on that provision? Because I think it is consistent with some 

of the findings in your report. 

Mr. DODARO. Yes. I will ask Mr. Willemssen—— 

Mr. CONNOLLY. If the chairman would allow the answer. 

Chairman ISSA. Of course. 

Mr. CONNOLLY. I thank the chair. 

71 

Mr. WILLEMSSEN. Yes, Congressman, that provision would be 

clearly consistent with our message in the cloud area. And we are 

in—that is in part why we are supportive of the bill. The bill overall includes at least eight areas that are included in our duplication 

report that was issued today. 

Mr. CONNOLLY. Thank you very much. And I knew the chairman 

would like to hear that. 

Chairman ISSA. Would the gentleman yield? 

Mr. CONNOLLY. Absolutely. 

Chairman ISSA. General Dodaro, the gentleman asked about additional audit. And no question at all, I think he had an accurate, 

known figure. But isn’t it that watchdog groups and others have 

come up with items that would, in fact, provide data that would 

give you a sense of people who you can’t audit because they haven’t 

filed a return that are in the cash or somewhat-cash economy? Isn’t 

that a big part of that nonreported? You know, the 84 percent is 

who you audit, but the 16 percent would be the ones you are not 

auditing, right? 

Mr. DODARO. Well, it could be. It could be the ones you are not 

auditing. I agree with you. That—— 

Chairman ISSA. Has the IRS ever audited someone who didn’t 

file taxes? 

Mr. DODARO. Well, only if they would get a tip or something—— 

Chairman ISSA. Yeah. 

Mr. DODARO. —from somebody that indicates that they are a 

nonfiler in that area. 

But there are other things that—like, we recommend that Congress give IRS math authority so they could fix some of these returns when they come in. That doesn’t cost any additional money. 

We recommend that IRS, in our most recent report, redirect 

some of their resources from auditing lower-income taxes returns 

to the higher-income taxes. They would get more ROI back on the 

money that they, you know, spent. Same amount of resources they 

would have, auditing different types of tax returns, yields more 

revenue back to the IRS. 

So we have a long list of recommendations in this area that we 

think could be implemented without additional resources that 

would yield greater revenues to the government. 

Chairman ISSA. Okay. I thank the gentleman. 

We now go to the gentleman from North Carolina, Mr. Meadows. 

Mr. MEADOWS. Thank you, Mr. Chairman. And thank you for 

holding this hearing on this important topic. 

And as I have just come back from the district, this particular 

issue continues to come up over and over again. American—the 

hardworking American taxpayers have a hard enough time paying 

for something once, but paying for it twice is really a problem. 

And so I want to focus a little bit on something that was put in 

your GAO report on renewable energy initiatives. And I have an 

energy background going back some 35 years ago. And as we 

looked at that initiative, Federal spending over a 7-year period 

from 2002 to 2008 averaged about $4 billion a year and increased 

in 2010 to some $15 billion. 

And in quoting you—this is a quote: ‘‘We found that Federal support for renewable energy is fragmented, as 23 agencies and their 

72 

130 sub-agencies implemented hundreds of initiatives in fiscal year 

2010. We assess that the Federal wind energy initiative found that 

there were 82 wind-related initiatives that we examined that had 

overlapping characteristics.’’ 

And so my question is this. In 2012, the GAO found that there 

were 700 government initiatives to promote renewable energy, and 

the report finds that there was overlapping initiatives throughout 

this entire area. Would it be safe to say that the Obama administration’s spending on renewable energy is lacking coordination? 

Mr. GAFFIGAN. I would say that this has been a problem even before the Obama administration, in terms of the number of initiatives we have out there. 

Just to go out and do the inventory and come up with those numbers was a huge effort on our part. We couldn’t go out and go to 

one source. You would think you could go to the Department of Energy and get that number, right? But the Department of Energy is 

just one of those agencies involved in dealing with renewable energy initiatives. 

And we have in the body of the work that we have worked on 

energy issues for a long time, this has been an issue going back as 

long as I have worked in the area, in the early 1990s. 

Mr. MEADOWS. Okay. Well, let me—— 

Mr. DODARO. It is also—— 

Mr. MEADOWS. Okay. Go ahead. 

Mr. DODARO. It is also fair to say that a number of those initiatives were enacted by Congress, as well, that they weren’t just administration initiatives. It is a mixture of both. 

Mr. MEADOWS. Well, but let’s look at the coordination. If this was 

a problem and we had a problem with coordination, why would we 

increase the spending by 400 percent because we take an inefficient program and make it more inefficient? 

Mr. GAFFIGAN. I don’t think we spoke to the efficiency of the particular initiatives. There are a lot of initiatives out there, and some 

of them, you know, some initiatives, some projects may benefit 

from multiple sources. 

What we are trying to point out is, does anybody have a sense 

of all these different initiatives, as the Comptroller General mentioned, established by Congress many of them, both on the tax side, 

the tax expenditure side, which tends to have the least amount of 

transparency, as well as program initiatives that every administration puts forward. 

Mr. DODARO. But I think this goes back to Chairman Issa’s point, 

too, about the visibility over these things. Nobody really had visibility over it. Nobody is responsible for focusing in on this. And if 

it wasn’t for us going in and identifying this, nobody would know 

how many programs there were. 

Mr. MEADOWS. Basically, if it is green, it is good. And that is 

what we are—and that is why I wore my tie today, to make sure 

that—but as we look at this, let’s go on a little bit further then. 

How much cost savings could we achieve if we resolved this coordination problem? I mean, what are we looking at? 

Mr. GAFFIGAN. Yeah—— 

Mr. MEADOWS. Seven hundred government initiatives. 

73 

Mr. GAFFIGAN. Yeah. That is very hard to say, because we think 

that there could be some cost savings, but there also could be 

greater efficiencies, you know, more effective programs. So it is a 

combination of those two things. 

The first step is to figure out what all these initiatives are. And 

even though we did those numbers, in 2011 they are going to 

change, in 2012 they are going to change, in 2013 they are going 

to change, because initiatives are coming in and going out. So it is 

very difficult to get a sense of the snapshot every time. It is a huge 

amount of our resources just to figure out and identify those 700 

initiatives. 

Mr. MEADOWS. And so those are changing on a regulatory basis? 

Because Congress is not changing it from year to year. 

Mr. GAFFIGAN. Well, there are programs being, you know, implemented and different emphasis on various programs within the 

government. So—— 

Mr. MEADOWS. From a regulatory standpoint? 

Mr. GAFFIGAN. I think it is a combination of changes in the Tax 

Code. You know, you have different Tax Codes that may be expiring and being renewed. Some are renewed, some aren’t. So there 

is the changing landscape. And then agencies are making decisions 

on what to emphasize. 

Mr. MEADOWS. All right. Let me—I am running out of time—let 

me ask one last question here. As we have seen, you know, there 

has been quite a bit of malfeasance uncovered within the administration in terms of spending on green energy over the last 2 years. 

And as we see this—you know, a lot of it coming from the Department of Energy. 

What energy efficiency programs do you find most concerning out 

of these 700 government initiatives? 

Mr. GAFFIGAN. Well, there is a lot of work we have done in the 

energy sector. I would say when we looked at the Loan Guarantee 

Program, we had some concerns about documentation of that program. 

But, by and large, our main concern was just bringing forth the 

notion that no one had a good sense of how many different initiatives there were, and was there good coordination. 

Mr. MEADOWS. So if you were to eliminate three—I can see my 

time has expired. Would the chair yield for one last question? 

Chairman ISSA. I ask unanimous consent the gentleman have an 

additional 30 seconds. 

Without objection, so ordered. 

Mr. MEADOWS. Okay. 

As we see this, if you were to put three programs that if you had 

a magic wand you could make disappear and save the hardworking 

American taxpayers money, what three programs would those be? 

Mr. GAFFIGAN. You know, we haven’t identified programs that 

we would eliminate. And, I mean, ultimately, that is Congress’ decision in terms of policies. 

What I would say is, if we want to make savings in green energy, 

renewable energy, we have to address the question and the issue 

of fossil fuels, which we are very heavily dependent on both for 

transportation and less so in the electricity sector, and recognize 

that we pick those because they are the most cost-competitive 

74 

sources of energy. And to force changes through government interaction is just one piece of that. And we have to really get an understanding of what government role should play. Should it be in the 

R&D sector? And those are policy decisions that are made by the 

Congress. 

Chairman ISSA. The gentleman’s time has expired. 

Mr. MEADOWS. I thank the chairman, and I yield back. 

Chairman ISSA. What are you yielding back? I thank the gentleman. 

We now go to the gentlelady from the District of Columbia, Ms. 

Eleanor Holmes Norton. 

Ms. NORTON. Thank you, Mr. Chairman. 

This is always an important hearing, but it also is more of the 

same. And I want to suggest—ask a question concerning approach. 

The gentleman before me spoke of coordination. I want to speak of 

consolidation. I think both are important. 

But it is in the nature of government, Mr. Dodaro, that we are 

going to have functions that overlap, even duplicate, because we 

have 12 appropriations subcommittees and they are pretty independent. We have many more authorization committees and subcommittees. And so it is the nature of the beast that they are going 

to put out duplicate programs. There comes a point when one has 

to look at those programs and say—make the kind of evaluation, 

the very helpful evaluation, you have made. 

May I say how much I appreciate that a part of your report 

opens with a definition of the differences between fragmentation 

and overlap and duplication, although I do note that you still lump 

them all together in the text. And yet there is a tremendous difference, considering, for example, that you could easily have programs that are fragmented because it is too early to put them together, or that overlap for reasons that would be perfectly sensible. 

But, at some point, if they are to be retained, one has to ask the 

questions that the GAO has asked. So I went out to get from staff 

the latest version of an attempt to consolidate—in other words, an 

approach that would try to take this and keep it from having a revolving-door aspect, as I think you will find the next time the Appropriations Committee comes out with yet another—with yet another provision. 

Now, the President, in 2012, early 2012, submitted a proposal to 

consolidate some agencies within the trade-related sector. Now, put 

aside the sector; that is really not my question. As I recall, we had 

a hearing on that. That did not move forward. 

It seemed to me fairly compelling, so I went looking for the letter, because it was focused on business and trade, and it indicated 

that it was difficult for firms and especially small business to get 

assistance. And so the proposal was to have one phone number, one 

mission. And it was said that this would help business succeed and 

support competitiveness, exports, job creation. Now, of course, that 

is all description. We would have to see if that would happen. 

But does there not come a point when GAO itself, perhaps, might 

suggest a more comprehensive approach than simply pointing out 

the pockmarks and hoping that somebody will pick them up? The 

President hasn’t had this authority since Ronald Reagan. 

75 

My question goes to the authority. Do you think that, given the 

nature of the problems you continue to uncover on an annual basis, 

that some of them might be eliminated through consolidation of 

some of the functions themselves? 

Mr. DODARO. Yes. In certain areas, we have recommended that. 

For example, we have looked at the loans—loan programs at HUD 

and at Agriculture in the rural housing area. In fact, HUD is giving as many loans in rural communities as the Rural Housing Authority is in urban counties. And so—— 

Ms. NORTON. So how would you consolidate that? 

Mr. DODARO. Well, you would put the two agencies together. You 

could locate them at HUD. HUD has a more extensive network. 

You could create another entity. I mean, there are different options 

for how to do it, but where we have identified that opportunity, we 

have pointed that out in those areas. 

Ms. NORTON. Uh-huh. 

Mr. DODARO. And I might say, as it relates to the scope of our 

work, I mean, we were mandated by Congress to have a routine set 

of audits and annual reports that outlined duplication across Federal Government agencies. I mean, that is why we are issuing 

these products. In some cases, you can do some consolidation, of 

course. And where we think it is appropriate, we have pointed it 

out. 

Ms. NORTON. Well, I appreciate that you have pointed it out, because there is a kind of repetitive nature to this report. And the 

problem—I am not bothered by the repetitive nature. I am bothered by the fact that the next appropriations cycle is going to dump 

equal amounts of uncoordinated and unconsolidated even, of 

course, programs. 

So this particular one didn’t move forward. I never was able, 

frankly, to get a view because we didn’t—we never got that deeply 

into it. But it does suggest that—and, by the way, only the Congress can give the President that authority, isn’t that not the case? 

Mr. DODARO. That is correct. 

Ms. NORTON. Finally, could I ask you, on—— 

Chairman ISSA. Would the gentlelady yield for a second? 

Ms. NORTON. Yes. 

Chairman ISSA. Your question is a good one, but if we perhaps 

could ask it both ways. We can give them the authority, but, of 

course, the President can either get the authority to do something 

he hasn’t asked for or he can ask for reorganization specific and 

then get that bill from the Congress. Either one is allowed. 

Ms. NORTON. Say that again. He can either ask for it or? 

Chairman ISSA. As you were alluding to, since Ronald Reagan, 

off and on, there has been reorganization authority. But Congress 

has the actual right, and we abrogate our rights when we give reorganization authority. 

On the other hand, if the administration asked for a reorganization that he had planned and said, ‘‘I would like to do this, this, 

and this,’’ then, in fact, he would be asking Congress to pass a bill, 

and he would send us a draft bill. 

The two are rather interesting differences. And the only reason 

I mention that is, every time Congress sends a proposal for effectively reorganization, the administration—we could sua sponte 

76 

pass a bill and send it to the White House, where the President 

could say, I like parts of this, I don’t like parts of this, and ask for 

it. 

But I think the gentlelady’s point is good. Without a reorg, without real change in the organization, you will probably not have full 

implementation of these at all. 

Ms. NORTON. Indeed, that is a very important point that the 

chairman makes. And I note that the President asked for fast-track 

authority. Because once you do it by saying, Here are a set of agencies, then what you do is to have the Members, who, for reasons 

of their own, perhaps that function is in a Member’s district or in 

a Member’s State, pick and choose, and they pick the bill apart. 

So the experience has been that if you don’t give the President 

the authority in some kind of fast-track order, the way we do with 

trade itself, the notion of consolidation becomes just that, a notion. 

So I am not—I just wanted to get on the record that that would 

be a way, although we haven’t used it in some time, to deal with 

the overlapping. I don’t even want to use that word because my 

next question is going to be, is there a way to unbundle how much 

of it has been fragmentation, how much of it has been overlap? 

Because you appear to understand and want us to understand 

the difference. In this graph that you have on page 2, that speaks 

of what fragmentation means, what overlap means, and what duplication means, and, hence, a final—you know, somebody needs to 

go, with the duplication. 

Chairman ISSA. The gentlelady’s time has expired, but please answer. 

Mr. DODARO. Right. 

I mean, we can segregate that out. But I would make a very important point. We are just not reporting fragmentation to say 

things are fragmented. We are only pointing out areas of fragmentation where we believe there to be inefficiency. 

Ms. NORTON. No, I understand that. 

Mr. DODARO. You know, because you are right, I mean, we could 

point out a wide range of things that are fragmented but are not 

necessarily leading to inefficiencies. 

Ms. NORTON. No, and I appreciate that, that this involves the 

analysis—— 

Mr. DODARO. Right. 

Ms. NORTON. —that shows there is an underlying problem. 

Mr. DODARO. Right. But we could identify that, recognizing in 

some areas there are both fragmentation and overlap and duplication. So there are elements of some, elements of three of them in 

several different areas. But we can attempt to isolate those and 

provide the committee with a listing. 

Chairman ISSA. If you would do that. 

Ms. NORTON. I would appreciate it. 

Chairman ISSA. The gentlelady from Wyoming is recognized. 

Mrs. LUMMIS. Thank you, Mr. Chairman. 

And I would like to continue this conversation with the opportunity, I hope, to not only ask you questions, Mr. Dodaro, but also 

our chairman and the delegate because of their longtime experience 

on this committee. 

77 

Has there ever been a joint reorganization council in the Federal 

Government between the executive and legislation branch? 

Chairman ISSA. There has. Probably—the Hoover Commission 

probably would be the huge success story where it was long-term, 

ongoing, and bought in by all the bodies. 

Most recently, I think the Homeland Security standup would be 

a major reorganization, where the administration came to us, said 

what they wanted in this new entity, and then we passed a bill. 

Those would be the two most current examples, one doing it one 

way, one doing it the other way. 

Mrs. LUMMIS. Do they work better if they are topical, or can you 

do something broader than a consolidation on one topic? Meaning—— 

Chairman ISSA. I think that is where somebody has to come up 

and talk about the success of Hoover, because it is the poster child 

for how you do it right. 

Mr. DODARO. If I could have Mr. Mihm come up and be sworn 

in. 

Chairman ISSA. Please raise your right hand. Do you solemnly 

swear the testimony you are about to give will be the truth, the 

whole truth, and nothing but the truth? 

Let the record indicate the witness answered in the affirmative. 

Mr. MIHM. Well, first, Mr. Chairman, thank you very much for 

raising the Hoover Commission. I mean, it is music to my ears, as 

a management geek here. 

The reorganizations that work best are those in which the Congress is deeply involved at the outset in making sure that they understand what the proposals are going to be, what will be done, 

and how it will be done. 

One of the concerns that I know various Members raised, you 

know, as regards to the last reorganization proposal that came in 

from the administration was that they hadn’t been brought in at 

an early enough point to understand the implications of this. 

And it doesn’t mean that at the end of the day that it couldn’t 

all have been resolved. But the experience, as the chairman just 

mentioned, of the Hoover Commission, of where you get the Congress and where you get the administration, supplemented by outside experts that can help them on that, deciding on an approach, 

whether it be a comprehensive or an agency-specific approach, such 

as the Department of Homeland Security, getting them all working 

together is really the best way to do it. 

Mrs. LUMMIS. Well, Mr. Chairman, I want to follow up with this 

line of questioning then. 

How long has it been since the Hoover Commission completed its 

work? Is it a—— 

Chairman ISSA. You weren’t born, young lady. 

Mr. MIHM. It has been a while, yes, ma’am. 

Mrs. LUMMIS. Is it time—is it time to do it again? 

Mr. MIHM. There is certainly, you know—it is, you know, given 

the current fiscal crisis, given how difficult the set of policy questions are that Congress confronts, given the track record of our 

overlap, duplication, and fragmentation efforts, it is certainly may 

be worthwhile to step back and say, do we have the right organization in shape here for a 21st-century government? 

78 

Technology has changed fundamentally in the way we can deliver services, and yet the basic institutional structure of Federal 

agencies, the way they deliver programs, has not changed in generations. In some cases, we have agencies that were put together 

to deliver services for an earlier time, an earlier client base. That 

continuously needs to be refreshed. Whether or not we do it on a 

big, broad commission or do it on a case-by-case basis is a different 

question. But, certainly, we need to be reviewing not just the increments but the base of government in the current environment. 

Mrs. LUMMIS. Now, was the Hoover Commission created by Congress? 

Mr. MIHM. I will have to—— 

Chairman ISSA. Technically, yes. 

Mr. MIHM. Thank you. I will take the chairman’s—— 

Mrs. LUMMIS. And with the assent and participation of the executive branch? 

Mr. MIHM. Right. 

Chairman ISSA. Yeah, it was actually Presidentially asked for, 

authorized, and then included all of them. 

And do you remember how many years, sort of, between the beginning and the end? It was huge. Hoover 1 and Hoover 2. 

Mr. MIHM. There was Hoover 1 and Hoover 2. I will have to refresh the history on that, but, you know, there were a number of 

years there. 

I mean, there have been other attempts. You know, there was 

the Ash Council and other councils that have—you know, President 

Nixon, of course, had a huge effort. President Carter had a reorganization effort that was attempted. 

But there really hasn’t been a zero-base one. The closest we came 

to that in recent memory has been the National Performance Review under President Clinton, of course. But that really wasn’t a 

big reorganization. That was about improving effectiveness of government with some reorganization elements. 

Mrs. LUMMIS. And did it? Did the Clinton administration performance reviews improve performance? 

Mr. MIHM. Overall, when we looked at—we have done a number 

of reviews of the 380 or so recommendations that they made. You 

know, we thought they were sensible recommendations. 

They certainly—one of their big achievements, I think, was— 

whether or not we give the NPR credit for this—was bringing a 

focus to customer service within many Federal agencies. Agencies 

hadn’t been familiar with thinking of the public in which they deal 

with as customers that have a right to polite, fast, and efficient and 

effective service. 

Certainly, one of the other pieces that was put in place during 

the National Performance Review era, but it was a congressional 

initiative, was the Government Performance and Results Act. Congress, of course, has modernized that within the last couple years 

to try and get agencies to do a better job in setting long-term goals, 

annual performance goals, measuring performance, and, most importantly—and this was the thing that we haven’t done since the 

first GPRA was passed in 1993 and a point of personal frustration 

for me—is to begin to get agencies to do a better job in using that 

performance information in order to improve performance. 

79 

Mrs. LUMMIS. Uh-huh. 

Mr. MIHM. We produce volumes of information and data on how 

programs are doing. We do a very poor job across government in 

using that information to pinpoint improvement opportunities, 

making changes, and then following up rigorously to see if those 

changes were actually effective. And if they were, let’s leverage 

them; if they are not, then let’s go to something else. 

Mrs. LUMMIS. I thank the gentleman and the chairman. 

Chairman ISSA. And just for the record, the Hoover Commission 

was officially named the commission when it was organized by the 

executive branch, and the body was appointed by Harry S. Truman. 

But it went on to, Hoover 1 and Hoover 2, throughout the Eisenhower administration. 

And I believe it is the last one that was essentially chaired by 

a former President. Is that right? 

Mr. MIHM. That is my understanding. 

Chairman ISSA. And perhaps that is the hallmark difference between it and other notables. 

With that, we go to the gentleman from Tennessee, Mr. Duncan. 

Mr. DUNCAN. Well, thank you, Mr. Chairman. And thank you for 

trying to continue to call attention to this staggering problem. 

And I want to, first of all, commend Mr. Dodaro and his colleagues. And I suppose you could say that I am hopeful but not optimistic. It seems to me that we have allowed the Federal Government to get so big and so bureaucratic that it just is out of control 

and these problems just continue. 

In fact, the Washington Examiner story today says, ‘‘Government 

overlap and duplication have dogged the Federal Government for 

years. President Reagan formed the Grace Commission to identify 

examples of the problem, and President Clinton assigned to Vice 

President Gore to the task of ending it by ’reinventing government.’ 

But the new GAO report makes clear that the examples continue 

to pile up.’’ 

And then I was given this a short time ago. It is from a report, 

and it says, quote, ‘‘The last major study of Federal surveying and 

mapping nearly 40 years ago found a disturbing proliferation of duplication of activity among many different agencies. Today these 

activities are found among an even greater number.’’ And that was 

from a 1973 report, 40 years ago. 

And, you know, it is really sad. I mean, you have done a—you 

and your colleagues have done what I think is an absolutely great 

job finding all these examples. The Justice and Treasury Departments’ forfeiture programs lost $2.2 billion in 2011 because the 

agencies cannot find a way to share storage facilities. Drug abuse 

prevention programs are strewn over 76 programs, costing taxpayers $4.5 billion. Veterans Administration, which seems to feel 

that they are immune from efforts to save money or immune from 

criticism because we all love veterans, but I think there is waste 

and inefficiency even in the VA. And your report says it could save 

$1.2 billion by consolidating employment training programs. And 

contractors for the Defense Department foreign language services 

run over 159 separate contracting organizations. I mean, it just 

goes on and on. 

80 

Let me ask you this. How hopeful are you, Mr. Dodaro, that 5 

years, 10 years from now, we won’t be coming back finding that 

this program is just as bad or worse? 

And, secondly, what do you—I was not able to get here for your 

testimony. Maybe you have covered this. But how much do you do 

in follow-up, like when you suggested to the—when you suggest 

that the training programs could be consolidated, do you write the 

VA and suggest that? And then when nothing happens, do you contact them again 30 days or 60 days or 90 days later? How does that 

work? 

Mr. DODARO. First, we regularly follow up on all our recommendations on an every-6-month kind of cycle. And if we don’t 

see enough progress made by the executive branch, then we will 

work with the Congress to try to get them involved. 

Part of the issue here is that when we identify these programs 

and activities, they cross multiple Federal departments and agencies. And, really, OMB isn’t the only position to help be a catalyst 

to look across the executive branch agencies. In my opinion, a fundamental flaw of our current organization in the executive branch 

in the government, notwithstanding the need to update them, as 

we were just talking, is there is really no accountability when multiple agencies are involved in the process. And more and more 

problems are requiring multiple agencies to be involved, I mean, 

because of the complexity of the problem. 

So if we do ever get to the point of studying the government’s organization, we have to deal with that fundamental issue. Because 

no matter how you reorganize the government, there are going to 

be multiple agencies that are going to have to be involved, and we 

need a way to be able to do it. 

On your point about am I optimistic, I am cautiously optimistic. 

My term goes to 2025. I am hopeful that I won’t be reporting all 

these same issues in that year. But I can tell you that it won’t 

change unless the Congress gets involved in this process with active oversight. 

The only times—and I was before this committee recently in February talking about our high-risk update. And the only areas that 

come off the high-risk list are where you have top-level executive 

branch attention and Congress is relentless in its oversight. Without those two elements, I mean, particularly in this overlap and 

duplication area, you know, you are not going to see very many 

major changes. 

Mr. DUNCAN. You probably don’t want to criticize any particular 

department, but I would be interested to know if there is one department that, more or less, is worse than others. Or the other 

side, is there one department that you feel does the best job in responding to your suggestions? 

Mr. DODARO. Well, first, in my opening statement, I talked about 

how pervasive this problem is across government. We have recommendations for virtually all major Federal departments and 

agencies. 

I would say that the areas where there is a need for rigorous follow-up on the part of Congress is the Defense Department and 

CMS, the Centers for Medicare and Medicaid Services. I would say 

81 

those two departments need attention in order to effectuate implementation of our recommendations. 

Mr. DUNCAN. All right. Thank you. 

Thank you very much. 

Chairman ISSA. Thank you. 

General, you have been very kind. 

I am going to do a short couple more questions. Is anyone else 

going to want a second round? 

Okay, seeing none, I will be brief. 

Mr. Duncan just brought up a point, and you named two great 

names: CMS, meaning Medicare and Medicaid; Department of Defense, meaning all of what it obviously means. Isn’t that sort of 

saying that look for where the big dollars are and you look for the 

big savings, something that Mr. Connolly said very well? And, fortunately, he said it to a national television audience that is watching it, not just the fine gentlemen in the room. 

To that extent, when we look at those large dollars, the Department of Defense, duplication within the Department of Defense, 

isn’t that a self-inflected wound? Waste and duplication and fail to 

get information and do their job right within CMS and, obviously, 

all the Medicare funding, isn’t that primarily a self-inflicted 

wound? 

And I ask that for a reason. A lot of what you did in this fine 

study is you talked about a lot of diverse groups—you know, fisheries and catfish and just everything under the sun. But the big 

dollars, the ability to reorganize DOD so that you don’t have a Pentagon just as filled as it was at the height of World War II—and 

you try to explain why there have to be as many people in this day 

and age in the white-collar, non-uniformed part of DOD, and the 

answer is because of, essentially, a wasteful way of management. 

And when you look at CMS, and we just had a hearing on $15 billion that was simply paid out in excess of what the law allowed, 

aren’t we, to a certain extent, having to find ways to make them 

do their job better? 

And the question comes from, isn’t that where something like the 

DATA Act, which was passed out of this committee unanimously in 

the last Congress and again is going to go through a process in this 

Congress, isn’t that part of the process? Create a level of transparency to where these large agencies, it becomes so transparent, 

particularly potentially even to watchdogs and the public, that you 

can get them to do their job where it is really all in their turf? 

Mr. DODARO. Definitely. Definitely. I am very supportive. I think 

that transparency is needed. I think there needs to be a statutory 

underpinning so it is enduring over time and there is consistency. 

Data standards need to be put in place. 

I am very supportive of the need to have that type of legislation 

that would require that level of transparency, and from that transparency, can lead to better questions, can lead to better oversight 

and hopefully better results. 

Chairman ISSA. Now, the DATA Act calls for recipient reporting. 

In a sense, I think I heard you say that this is one of the problems 

with the IRS, is they are not looking at both sides of the transaction in order to find people who don’t report here but they report 

to Visa and Mastercard, they report to a lot of other transactions; 

82 

that if you looked at that, you would realize that you are missing 

the very report you needed. 

Is that basically the same thing you are looking at in the DATA 

Act? Do you see those as the same sort of a problem? That government, if they are going to audit, has to, whenever possible, get information from multiple sources in order to realize what they don’t 

know? 

Mr. DODARO. Oh, that is definitely the case. That is definitely the 

case. And I think the implementation of the Recovery Act was a 

perfect example of how that could be used effectively to minimize 

fraud, waste, and abuse in programs. 

Chairman ISSA. Yeah. 

And I think, for the freshmen that are here, the Recovery Board 

is still in business for a reason: that Congress has recognized the 

need for it, kept it open, kept the mission for it. Because I think 

Congress and the GAO, certainly, we have recognized that it serves 

a purpose of showing you can do better. 

Mr. DODARO. Yes. 

Chairman ISSA. General, I am very thankful for every appearance here, but I think the discussion, because of Ms. Lummis, that 

occurred of the Hoover Commission—and she has left now, but Delegate Norton—the idea that, in fact, we have to create—and this 

committee is the committee of jurisdiction—create an environment 

in which Congress buys in, the executive branch buys in, to be honest the private sector has to be included, if we are going to have 

the kind of reorganization that in 2025 you can say, ‘‘On my watch, 

we made it better.’’ 

Mr. DODARO. I think it is imperative we do that, particularly 

given our fiscal precarious nature. I mean, we can’t afford to continue to operate the way we are operating, and it needs fundamental reexamination. We can do better, and we have to. 

Chairman ISSA. And I am going to close with one thing. The 

ranking member opened thanking your staff, which I will reiterate 

thanking your staff. 

I also will perhaps decry in a strange way the fact that sequestration hit your part of Congress, too. And I realize that you are 

now doing more oversight, more investigations, more of everything 

you are mandated to do, and you are doing it with less. So I would 

like to see that reversed as soon as possible. I don’t think you lay 

off the auditors when you have a problem with accountability. 

But I want to thank you for the good work you are doing—— 

Mr. DODARO. I appreciate—- 

Chairman ISSA. —and all the men and women that work for you. 

Mr. DODARO. Thank you. I appreciate those kind remarks and for 

your support. 

Chairman ISSA. You will continue to have it. 

We stand adjourned. 

[Whereupon, at 3:50 p.m., the committee was adjourned.] 

83 


Insert offset folio 47 here 80719.047

tAW>lENC~ J.aRMW 

STMfWRECTOR 

ONE HUNDRED THIRTEENTH CONGRESS 

<tCongreS'S' of tbe Wniteb ~tnteS' 

j!)oust of i'\epresentatiucs 

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM 

2157 RAYBURN HOUSE OFFICE BUILDING 

WASHINGTON, DC 20515-6143 

Opening Statement 

Rep. Elijah E. Cummings, Ranking Member 

Hearing on "Reducing Waste in Government: 

lill)AHECliMMINGS,MAAYlA,{O 

RANKW,M1NORITYM€MB£I! 

Addressing GAO's 2013 Report on Duplicative Federal Programs" 

April 9, 2013 

Thank you, Mr. Chairman, for holding this hearing, And thank you, Mr, Dodaro, for 

being here to testify about GAO's findings. 

Today's hearing will examine GAO's latest annual report on duplication in federal 

programs and opportunities for significant cost savings. Hearings like this one provide an 

important opportunity to identify ways to cut government waste, save money, and make our 

taxpayer dollars go further. But holding hearings is not enough. Congress must follow-up with 

concrete action to save the taxpayers money. 

GAO issued two of these reports previously-in 2011 and 2012-and GAO made 300 

specific recommendations to the executive branch and Congress. This year's report provides a 

status update on those recommendations, and it finds that Congress is doing a much poorer job 

than the Executive Branch in implementing these recommendations. 

Specifically, GAO finds that the Executive Branch has fully or partially addressed 80% 

of their recommendations, but Congress has fully or partially addressed only 32% of their 

recommendations. This is a poor record that Congress should strive to correct. 

In this year's repolt, GAO highlights 11 areas of unimplemented recommendations from 

its previous reports that, if implemented, would save billions of dollars. Seven out of the II 

areas would require Congressional action, but so far Congress has failed to act. 

For example, ill previous reports, GAO 10und that the federal goverrunent could save 

approximately $2 billion over the next ten years if Congress authorized the Department of the 

Interior to revise the royalty rates for oil and gas revenues. But Congress has failed to act on this 

recommendation. As a result, it is listed yet again in GAO's report for 2013. 
84 


Insert offset folio 48 here 80719.048

GAO's new report also identifies additional ways our government can save money, For 

example, according to GAO, if Congress limited subsidies for crop insurance, it would save up to 

$ 1,2 billion each year. 

GAO found that agencies could save billions of dollars by improving oversight over their 

information technology investments, and GAO also found that agencies could save mi11ions of 

dollars by using cloud computing. 

It seems to me that this is one hearing in which Democrats and Republicans can join 

forces to eliminate waste, fraud, and abuse. Whether you believe the savings should go towards 

deficit reduction or making our currcnt government programs more effcctive and efficient, we 

should all be able to agree that a dollar wasted here is a dollar that is not put to better use 

elsewhere. 

Mr. Dodaro, I look forward to hearing your testimony, including specific 

recommendations to cut waste and save the government money. I would also appreciate your 

guidance on steps we can take to remove some of these longstanding recommendations from 

your I ist so we are not here again in 2014 asking the same questions. 

Contact: Jennifer Hoftinan, Press Secretary, (202) 226-5181. 

2 
85 


Insert offset folio 49 here 80719.049

GAO RESPONSE TO FOLLOW-UP FROM DUPLICATION HEARING: IRS and Return on Investment (ROil 

ROI: Revenue/Cost 

There are various levels of ROI, as listed below. They are useful for different purposes. 

1. Highest Overall level 

FY 2012 Total Gross Revenue Collected before Refunds 

FY 2012 Enacted Budget (costs) 

ROI: $214 to 1 

2. Enforcement Program /Direct ROil 

$2.524 trillion 

11.B billion 

IRS considers this to be the total IRS-wide ROI, and it a frequently referred to number. It does not 

include the deterrence value of the investments and other IRS enforcement programs (indirect ROI), 

which IRS conservatively estimates to be at least three times the direct revenue impact. 

FY 2012 Enforcement Revenue 

FY 2012 Enacted Budget (costs) 

ROI: $4.2 to 1 

3. Major Enforcement Programs (Average ROil 

$50.2 billion 

11.8 billion 

These data reflect average ROI and do not include the indirect effects of IRS enforcement activities on 

voluntary compliance. 

Exam 

FY 2012 Revenue 

FY 2012 Costs 

ROI: $3.4 to 1 

Collection 

FY 2012 Revenue 

FY 2012 Cost 

ROI: $17.5 to 1 

Automated Underreporter 

FY 2012 Revenue 

FY 2012 Cost 

ROI: $17.8 to 1 

4. Projected ROI at the Initiative Level (Marginal ROil 

$14.5 billion 

4.23 billion 

$30.4 billion 

$1.7 billion 

$5.3 billion 

.27 billion 

There are several new program initiatives with ROI estimates cited in the 2014 budget request for IRS. 

As an example: 

New Initiative: Increase Collection Coverage 

FY 2016 Full Performance Projected Revenue 

FY 2016 Full Performance Projected Costs 

Projected ROI: $ 9.3 to 1 

$496.3 million 

53.3 million 
86 

Æ 


Insert offset folio 50 here 80719.050

5. Variation in Average ROls across Different Categories of Examinations (Excluding Indirect Effects) 

Examples ofthe variation GAO found in exams opened in 2007 and 2008 (GAO-13-151): 

Field Exam Category ROI 

Total positive income less than $200,000; EITC present $1.0 to 1 

Total positive income of $1,000,000 or more $6.0 to 1 

Correspondence Exam Category 

Total positive income less than $200,000; EITC present $5.4 to 1 

Total positive income of $1,000,000 or more $47.2 to 1 

Overall ROI can be increased by shifting resources from lower-return categories to ones with higher 

returns. 

Summary: 

In 2013, IRS made a significant step forward in beginning to calculate actual ROls for major enforcement 

programs. Over the longer term IRS needs to develop better information relating to the marginal 

revenue and costs of its various enforcement activities, as well as the indirect effect that these activities 

have on revenues through increased voluntary compliance. In the meantime IRS can improve its 

allocation of enforcement resources by making use of average direct ROls, such as the ones GAO 

estimated in the December 2012 report, in conjunction with its best judgment of (1) how marginal ROls 

may differ from average ROls and (2) whether the indirect effects of a resource allocation decision are 

likely to offset the direct effects. 

Related Work 

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

GAO-13-151 (Washington, D.C.: December 5, 2012). 

GAO, IRS Budget 2013: Cantinuing to Improve Informatian on Program Costs and Results Could Aid in 

Resource Decision, GAO-12-603 (Washington, D.C.: June 8, 2012). 

GAO, IRS Budget 2012: Extending Systematic Reviews of Spending Could Identify More Savings Over 

Time, GAO-11-547 (Washington, D.C.: April 11, 2011). 

GAO, Internal Revenue Service: Assessment of Budget Justificatian for Fiscal Year 2011 Identified 

Oppartunities to Enhance Transparency, GAO-I0-687R (Washington, D.C.: May 26, 2010). 

GAO, Internal Revenue Service: Review af the Fiscal Year 2010 Budget Request, GAO-09-754 

(Washington, D.C.: June 3, 2009). 

GAO, Internal Revenue Service: Fiscal Year 2009 Budget Request and Interim Performance Results a f 

IRS's 2008 Tax Filing Season, GAO-08-567 (Washington, D.C.: Mar. 13, 2008). 

GAO Contact: 

Jim White 

Director, Tax Issue 

Strategic Issues 

whitei@gao.gov 

(202)512-9110 

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