# Recent Reports

Reports News from the GAO

- Fiscal Year 2025 Budget Request: U.S. Government Accountability Office In fiscal year 2023, GAO’s work yielded $70.4 billion in financial benefits, a return of about $84 for every dollar invested in GAO. Our average return on investment for the past 6 years is $133 to $1. In 2023 we also identified 1,220 other benefits that led to improved services to the American people, strengthened public safety, and spurred improvements across the government. GAO’s High Risk Series this past year resulted in $32.9 billion in financial benefits and 468 program and operational improvements. GAO is also helping advance agencies’ efforts and related Congressional oversight to prevent, detect, and respond to fraud, waste, and abuse. For instance, in FY 2023 we estimated that the amount of unemployment insurance fraud during the COVID-19 pandemic was likely between $100 billion and $135 billion.For our fiscal year 2025 budget, GAO is requesting $916.0 million in appropriated funds and $59.8 million in offsets and supplemental appropriations. This will maintain 3,600 full-time equivalents (FTE). These resources will enable GAO to continue to meet the priority needs of the Congress including five key areas of importance to the nation and Congress:National Security Enterprise. GAO evaluates an array of national security efforts in areas such as military readiness, space programs, and the U.S. nuclear complex.	Fraud Prevention. We examine government efforts to safeguard programs from fraud by focusing agencies more on prevention.	Science and Technology. GAO’s growing portfolio of ongoing and future work includes many aspects of artificial intelligence, medical research and applications, critical minerals recovery, and quantum computing.	Cybersecurity. GAO assesses the development and execution of a comprehensive national cybersecurity strategy, the cybersecurity of 16 critical infrastructure sectors across the U.S., and the security of federal information systems.	Health Care Costs. GAO examines the sustainability and integrity of the Medicare and Medicaid programs, Veterans Affairs, DOD, and Indian Health Service health care services.Our fiscal year 2025 budget request also supports GAO’s IT modernization and space optimization efforts. We will transition processes to Cloud Services and enhance cybersecurity. This will allow GAO to grow in agility and better engage IT Modernization strategies. In addition, we will advance space optimization projects to increase leasable space in headquarters and decrease leased space in the field. We will also continue addressing a maintenance backlog at the headquarters building.BackgroundGAO’s mission is to support Congress in meeting its constitutional responsibilities and to help improve the performance and ensure the accountability of the federal government for the benefit of the American people. We provide nonpartisan, objective, professional and reliable information to Congress, federal agencies, and to the public. GAO recommends hundreds of improvements across the full breadth and scope of the federal government’s responsibilities.In fiscal year 2023 alone, GAO issued 671 products, and 1,345 new recommendations. Congress used our work extensively to inform its decisions on key fiscal year 2023 and 2024 legislation.Since fiscal year 2002, GAO’s work has resulted in over:$1.38 trillion dollars in financial benefits; and	Over 28,000 program and operational benefits that helped to change laws, improve public safety, and promote sound management throughout government.As a non-partisan, fact-based service organization, GAO is committed to providing program and technical expertise to support Congress. This includes crafting legislation; overseeing the executive branch; evaluating government programs, operations, and spending priorities; and assessing information from outside parties.For more information, contact A. Nicole Clowers at (202) 512-4400 or clowersa@gao.gov.&nbsp;
- Bureau of Indian Education: Improved Oversight of Schools' COVID-19 Spending is Needed What GAO FoundThe Bureau of Indian Education (BIE) and its schools used federal COVID-19 relief funds mainly to support distance learning and prevent the spread of COVID-19 in schools. For example, BIE spent nearly $60 million of its COVID funds on IT and broadband supports for schools, including student laptops and Wi-Fi equipment for distance learning. Similarly, nearly all of the 70 BIE schools that responded to GAO's survey reported prioritizing their COVID funds for laptops and tablets and for personal protective equipment, cleaning supplies, and COVID tests. Schools generally reported that BIE offered regular guidance and support for spending COVID funds.BIE uses several processes to monitor schools' COVID spending, including reviewing schools' single audit reports, overseeing schools at high risk of financial mismanagement, and monitoring schools' purchase card use for fraud and misuse. However, GAO found that due to insufficient controls, BIE staff did not consistently follow these processes, which limited accountability for use of COVID funds. For example, a little over a quarter of required fiscal year 2021 single audit reports for schools and Tribes that received BIE grant funds were late or not submitted as of November 2023. But BIE did not follow agency standard procedures for applying or increasing financial conditions for 19 of the 28 grantees that failed to submit a timely single audit report that year. Without timely single audit reports, BIE lacks vital information for overseeing schools' financial management. Further, BIE did not conduct sufficient oversight of high-risk schools' COVID spending and lacked the staff capacity to complete all required monitoring. Such oversight is critical for helping schools correct errors and avoid them in the future. Finally, GAO found that for BIE-operated schools, nearly half of COVID fund spending with purchase cards between March 2020 and August 2022 involved elevated risk transactions according to agency data (see figure). Examples of elevated risk transactions include the purchase of gift cards or multiple purchases at the same merchant within a certain number of days that total more than the single purchase limit. However, BIE did not provide evidence that it had investigated these transactions for fraud or misuse.Bureau of Indian Education Schools' COVID Fund Spending with Purchase Cards, March 2020 to August 2022In addition, GAO found that BIE staff did not consistently use the required tool or procedures for tracking and investigating suspicious transactions. Without addressing these gaps in its oversight of schools' COVID spending, BIE cannot ensure that schools will use remaining COVID funds appropriately to provide students the support they need.Why GAO Did This StudyMany of BIE's 183 schools are located in remote tribal lands that faced extraordinary challenges during the COVID-19 pandemic and continue to experience ongoing effects. Congress appropriated about $1.5 billion to help BIE and its schools respond to the pandemic. GAO reviewed the use of COVID-19 relief funds by schools and BIE as part of GAO's responsibilities under the CARES Act.This report examines how BIE and schools spent their COVID funds and BIE's guidance to schools on fund use, and the extent to which BIE oversees schools' fund use. GAO surveyed a generalizable sample of 85 BIE schools, with 70 schools responding, to collect information on their use of COVID funds and the extent to which BIE provided them guidance on spending. GAO also analyzed agency data on BIE schools' purchase card activity; reviewed relevant federal statutes, regulations, and agency policies and procedures for overseeing school COVID spending; and interviewed BIE and school officials.
- DHS Annual Assessment: Most Programs Are Meeting Current Goals, but Some Continue to Face Cost and Schedule Challenges [Reissued with revisions on Mar. 7, 2024] What GAO FoundDHS invests billions of dollars annually to acquire systems that help secure the border, increase marine safety, screen travelers, enhance cybersecurity, and execute a wide variety of other operations.Cost and schedule status. Of the 26 DHS acquisition programs that GAO selected to review, 16 had department-approved acquisition program baselines—a summary of measurable goals indicating how the system will perform, when it will be delivered, and what it will cost. Fifteen of the 16 programs met their current cost and schedule goals, while one program was in breach status in fiscal year 2023. The Homeland Advanced Recognition Technology program breached its schedule due to continued technical challenges and contributing financial constraints associated with increment 1 development. Further, some programs experienced ongoing challenges, while two of DHS's costliest programs reported significant cost growth and delays.The Offshore Patrol Cutter continues to face significant cost and schedule challenges despite a program restructure in 2020. The program has incurred cost growth of $6 billion since 2012 and it faces delays of almost 1.5 years for delivery of the first four cutters.	The Polar Security Cutter program increased its cost baseline by $3.5 billion and its lead ship delivery goal has been delayed by more than 2 years as the program faces continued challenges with achieving a stable design.Thirteen of the 16 programs we reviewed have rebaselined—established new cost, schedule, or performance goals—at least once since their initial baselines were established. Some have rebaselined due to scope changes like increasing quantity, while others have rebaselined due to insufficient understanding of requirements and complexity of the work to be accomplished. In addition, five programs requested schedule adjustments to address COVID-19 effects.Performance status. All seven of the 16 programs GAO reviewed that completed testing in 2023, met their current performance goals. These programs completed operational test and evaluation for at least one increment or segment in operationally realistic conditions, which determines whether a system can perform as required. The remaining nine programs have either not yet started operational test and evaluation or testing is ongoing.Why GAO Did This StudyTo help execute its many critical missions, the Department of Homeland Security (DHS) plans to spend more than $4 billion on its portfolio of major acquisition programs—those with life-cycle costs generally over $300 million—in fiscal year 2024. DHS acquisition management was removed from GAO's High-Risk Series in 2023.The Explanatory Statement accompanying the DHS Appropriations Act, 2015, included a provision for GAO to review DHS's major acquisitions on an ongoing basis. This report, GAO's ninth review, assesses the extent to which selected DHS major acquisition programs are meeting their baseline cost, schedule, and performance goals.GAO selected and reviewed 26 of DHS's largest acquisition programs, including those that GAO identified as at risk of poor outcomes, to determine program status as of September 30, 2023. To conduct this work, GAO reviewed key acquisition documents; collected cost, schedule, and performance information; and interviewed DHS officials.For more information, contact Travis J. Masters at (202) 512-4841 or masterst@gao.gov.
- The Nation's Fiscal Health: Road Map Needed to Address Projected Unsustainable Debt Levels What GAO FoundThe federal government faces an unsustainable long-term fiscal path that poses serious economic, security, and social challenges if not addressed. Congress and the administration will need to make difficult budgetary and policy decisions to address the key drivers of federal debt and change the government's fiscal path. The sooner actions are taken to change the long-term fiscal path, the less drastic they will need to be.Debt is Projected to Grow Faster than the Economy Over the Long TermAt the end of fiscal year 2023, the $26.2 trillion in debt held by the public was about 97 percent of gross domestic product (GDP). GAO projects that under current revenue and spending policies, debt held by the public willreach its historical high of 106 percent of GDP by 2028, and	grow more than twice as fast as the economy over a 30-year period, reaching 200 percent of GDP by 2050.Perpetually rising debt as a share of GDP is unsustainable and has many direct and indirect implications on the economy and American households and individuals.Debt Held by the Public Projected to Grow Faster Than GDPDebt Levels Driven by Increasingly Large Annual DeficitsWhen the government spends more than it collects in revenue, it borrows to finance the resulting deficit by issuing debt to the public. Despite strong economic growth, the fiscal year 2023 deficit was $1.7 trillion, the fourth year in a row of a deficit above $1 trillion.The deficit is composed of two parts.The primary deficit—the gap between program spending and revenue—which was about $1 trillion in fiscal year 2023.	Net interest spending—primarily the cost to service the debt—which was $659 billion in fiscal year 2023.Primary Deficit and Total Budget Deficit, Actual and ProjectedPrimary deficits are projected to grow over the long term, in large part because of projected increases in spending for Medicare, other federal health care, and Social Security programs compared to relatively lower projected increases in revenue.Persistent and widening primary budget deficits signal a structural imbalance between revenue and spending. Policymakers have more control over primary deficits because program spending and revenue reflect policy decisions, whereas net interest spending reflects the consequences of prior policy decisions.Higher Interest Rates Contribute to Increased Net Interest SpendingIn fiscal year 2023, federal net interest spending—primarily interest on debt held by the public—increased 39 percent from fiscal year 2022 (from $475 billion to $659 billion). We project the federal government will pay more than $1 trillion in net interest costs every year starting in 2029. The recent rise in net interest spending has been driven, in part, by higher interest rates.Growing debt levels combined with higher interest rates lead to projected increases in the government's net interest spending as a share of GDP. Net interest spending averaged 1.5 percent as a share of GDP over the last 20 years even as the debt grew, primarily because interest rates were historically low. GAO projects that net interest spending will reach the historical high of 3.2 percent of GDP in 2030 and grows to 7.9 percent of GDP in 2052. Increases in interest spending will add to future debt because the government will need to borrow more to pay for increased interest costs.A Plan Is Needed to Change the Unsustainable Fiscal PathGAO has previously suggested that Congress develop a plan to address the government's unsustainable fiscal path. A sustainable fiscal policy would lead to debt held by the public growing at the same—or slower—rate than the economy.&nbsp;GAO’s work has identified several components of an effective fiscal plan:Incorporate well-designed fiscal rules and targets to help manage debt, for example by controlling factors such as spending and revenue to meet a debt-to-GDP target.	Consider alternative approaches to the current debt limit	Assess the drivers of the primary deficit, such as mandatory and discretionary spending and revenue.	Address financing gaps for Medicare and Social Security, both of which are supported by trust funds that are projected to be depleted within 10 years.	Pursue opportunities to improve fiscal responsibility that do not require major changes to spending and revenue policies.Why GAO Did This StudyGAO produces this annual fiscal health report to examine the current fiscal condition of the federal government and its future fiscal path, absent policy changes in revenue and program spending. The report is based on the results of GAO's fiscal simulation using information available as of September 30, 2023 (the end of fiscal year 2023).This report describes: (1) trends in federal debt; (2) trends in primary deficits, the gap between program spending and revenue; (3) trends in net interest spending; and (4) components of a sustainable long-term fiscal plan.For more information, contact Jeff Arkin, Director at arkinj@gao.gov or (202) 512-6806.
- Veterans Affairs: Improvements Needed in Estimating Funding for Potential Future Health Emergencies What GAO FoundAs of September 30, 2023, the Department of Veterans Affairs (VA) obligated roughly $36.2 billion (98.6 percent) of its CARES Act, Families First Coronavirus Response Act, and American Rescue Plan Act of 2021 funds, with the majority obligated by its Veterans Health Administration (VHA).VA Obligations of COVID-19 Supplemental Funding Totaled $36.2 Billion as of September 30, 2023VA used COVID-19 supplemental funds to support new efforts in response to the pandemic, such as expanding VA's information technology infrastructure to provide telehealth services. It also used the funding to support already established VA programs, such as providing health care at VA medical facilities.When the COVID-19 pandemic emerged, VHA requested supplemental funding to continue operations to meet its mission. However, VA found it was not prepared to estimate the amount of supplemental funding needed during such a catastrophic event, because it did not have the modeling capacity to do so. VHA officials told GAO they have not developed the modeling capacity needed to estimate the costs of future catastrophes, such as a pandemic, because such modeling is outside of the scope of its contract with its actuarial consultant responsible for developing VA's budget projections. By developing modeling capacity for estimating the resources needed to respond to potential future health emergencies, VHA would be better prepared to quickly estimate resource needs to allow better management and planning.Why GAO Did This StudyIn response to the COVID-19 pandemic, VA received approximately $36.70 billion in supplemental funding between 2020 and 2021. CARES Act and Families First Coronavirus Response Act funds were available until September 30, 2021, and September 30, 2022, respectively. American Rescue Plan Act of 2021 funds were generally available until September 30, 2023.The VA Transparency &amp; Trust Act of 2021 includes a provision for GAO to review VA's requests for and use of COVID-19 supplemental funding, including American Rescue Plan Act of 2021 funds. Among other issues, this report describes how VA used these funds and examines how VA estimated its funding needs to inform the fiscal year 2024 budget request for key areas previously supported with COVID-19 supplemental funds.GAO reviewed VA data and spending plans for COVID-19 supplemental funding and VA processes used to develop budget request estimates for fiscal years 2022 through 2024. GAO also interviewed VA officials and VA's actuarial consultant responsible for developing estimates.
- Revolving Funds: Key Features This product is also designated as B-335844, Jan. 17, 2024.What GAO FoundOnly Congress can make public money available to federal agencies. Congress does so by making appropriations, which take a variety of forms. One such form is a revolving fund, which authorizes an agency to retain and use specified receipts for particular purposes. Revolving funds are intended to finance cyclical, business-like operations. The activity financed by a revolving fund will collect receipts from the public or other federal agencies and use those receipts to finance the fund's ongoing operations. Often, the activity supported by a revolving fund will become self-sustaining, eliminating the need for future annual appropriations.There is a key feature of revolving funds that distinguishes them from other appropriations: the receipts collected by the fund are available without the need for further congressional action and without fiscal year limitation.Even so, revolving funds remain appropriations. As such, they can only be created by Congress. Agencies must have explicit statutory authority to operate a revolving fund. The statute authorizing the creation of a revolving fund will specify the receipts which the fund may collect and retain, define the fund's authorized uses, and authorize the agency to use the collected receipts for the specified purposes without fiscal year limitation.In addition, revolving funds are subject to the legal restrictions on the use of appropriated funds. These restrictions include:The purpose statute, which requires that agencies use appropriated funds only for the purposes for which Congress appropriated them;	The Antideficiency Act, which forbids agencies from incurring obligations (that is, legal liabilities to make payments) or making expenditures that exceed the amount available in an appropriation or fund; and	The recording statute, which requires agencies to record obligations against available appropriations as they incur them.Similarly, agencies doing business with a revolving fund must also comply with appropriations law restrictions. These requirements ensure that revolving funds—like other appropriations—are spent in accordance with the law.Prior GAO work has addressed many agency activities financed by various revolving funds, as well as the financial and management issues that arise as agencies carry out revolving fund activities.Why GAO Did This StudyGAO's mission is to support Congress in meeting its constitutional responsibilities, including its oversight of the use of public funds. GAO has particular expertise in the area of appropriations law, which governs the use of appropriations made by Congress and protects Congress's power of the purse. GAO's  Principles of Federal Appropriations Law  manual provides information on many topics related to this area of the law, including revolving funds.The hearing is to examine revolving funds at the Department of Veterans Affairs. GAO's testimony provides background information on revolving funds. This testimony is based on GAO's prior legal work related to revolving funds, including the  Principles of Federal Appropriations Law  manual  . This testimony describes key features of revolving funds, including their establishment, types of revolving funds, and the applicability of key appropriations law principles.For more information, contact Julia C. Matta at (202) 512-4023 or MattaJ@gao.gov.
- COVID-19 Relief: Treasury Could Improve Its Administration and Oversight of State and Local Fiscal Recovery Funds What GAO FoundNearly all—$325.5 billion—of the $350 billion in State and Local Fiscal Recovery Funds (SLFRF) was allocated to state and local governments. As of March 31, 2023, states reported obligating 60 percent and spending 45 percent of SLFRF awards they received. Localities reported obligating 54 percent and spending 38 percent, of SLFRF awards they received. Recipients have until December 31, 2024, to obligate, and until December 31, 2026, to spend their awards.Officials in all 18 selected states and most larger selected localities GAO reviewed said they expanded their capacity to manage their awards, such as by reassigning existing or hiring new staff. Officials in most smaller localities said they administered their SLFRF awards with their existing staff and processes.Officials in most selected states and localities told GAO they benefitted from using their SLFRF awards to replace revenue lost during the pandemic—an allowable use under the SLFRF program. Specifically, they said that using funds to replace lost revenue (1) enhanced spending flexibilities by allowing funding of a broad range of government services; and (2) made it easier to meet the Department of the Treasury's reporting requirements.State and local officials identified a range of challenges in using their SLFRF awards, such as those related toPerformance indicators.  Officials in some selected states and one selected locality told GAO that the performance indicators they are required to report do not always align with their uses of SLFRF awards. Treasury established these indicators to understand and aggregate program outcomes across SLFRF recipients. However, some selected state and local officials said they needed clarity from Treasury on how to report on required performance indicators when they do not align with their uses of SLFRF awards and spending categories. Based on GAO's analysis, Treasury updated its guidance on November 30, 2023, to clarify reporting on these indicators.	Treasury assistance.  Officials in most selected states and some selected localities told GAO that the assistance Treasury provided by telephone or email through its Contact Center was not timely and did not meet their needs. Treasury established the center to field and respond to recipients' inquiries about programs administered by Treasury, but these officials said limited resources affected Treasury's assistance. Treasury has assessed some, but not all, of its staffing needs, limiting its ability to provide timely and useful assistance going forward.Treasury has established monitoring procedures for reviewing states' and localities' spending reports and annual single audit findings. Treasury modified its procedures for reviewing spending reports, adapting to lessons it learned. However, it did not document those changes in key internal program guidance, creating a risk that the new procedures will not be implemented consistently. Additionally, Treasury did not issue timely management decisions pertaining to SLFRF findings in recipients' single audit reports. As a result, Treasury does not have reasonable assurance that unallowable uses of funds are identified or remediated.Why GAO Did This StudyIn March 2021, the American Rescue Plan Act of 2021 appropriated $350 billion through the SLFRF to help tribal governments, states, localities, the District of Columbia, and U.S. territories cover costs stemming from the health and economic effects of the COVID-19 pandemic.The CARES Act includes a provision for GAO to report on its ongoing monitoring and oversight efforts related to the pandemic. GAO was also asked to review Treasury's administration of SLFRF. This report, part of a series on COVID-19 assistance to recipients, examines selected states' and localities' (1) actions to administer their awards, and (2) benefits and challenges they experienced, as well as (3) Treasury's plan to monitor the use of awards and the extent to which it has been implemented.GAO reviewed documents and interviewed officials in 18 states and 18 localities (one per state) selected based on SLFRF funding amount, population size, and geographic region. Combined, these states represent nearly 60 percent of the U.S. population and were allocated 60 percent of SLFRF funds. GAO also reviewed Treasury's policies and procedures for monitoring recipients' award uses and reviewing spending reports and single audit findings.
- Economic Downturns: Effects of Automatic Spending Programs and Taxes What GAO FoundStudies GAO reviewed showed that automatic stabilizers—mechanisms that alter tax and spending levels in response to changes in economic conditions without direct intervention by policymakers—reduced the detrimental effects of recent economic downturns. Automatic stabilizers include taxes—such as the individual income tax, where taxpayers owe less as their income declines—as well as benefit programs—such as unemployment insurance, where more people become eligible during economic downturns. These automatic stabilizers prevented the economy from getting worse by generating additional economic activity.Studies showed that during economic downturns, programs with an automatic stabilizer component had various positive effects on the wellbeing of individuals and families, such as alleviating poverty and supporting positive health outcomes such as improved nutrition and healthy birthweights. However, it is difficult to isolate the effects of automatic stabilizers, because studies frequently did not separately analyze the automatic portions of these programs and discretionary changes made by policymakers to address economic downturns.Automatic stabilizers contributed to federal deficits in the wake of recent economic downturns, according to Congressional Budget Office (CBO) analysis. However, automatic stabilizers are not the key driver of debt over the long-term. Rather, the growth in debt over the long-term results from borrowing to finance increasingly large annual budget deficits, which occur because spending is increasing more than revenue. Over the long term, this spending is driven by increases in Medicare, other federal health care, and Social Security program spending along with increases in interest costs to service the growing debt. We have previously reported that the federal government faces an unsustainable long-term fiscal future. Debt held by the public is expected to exceed its historical high of 106 percent of gross domestic product within the next 10 years.Why GAO Did This StudyDuring economic downturns, the federal government can use tax and spending policies to support economic growth and limit the detrimental effects on individuals and families through the use of automatic stabilizers. For example, in an economic downturn—when incomes and the employment level fall—tax liabilities may decrease, and more people may become eligible for certain government benefits, such as unemployment insurance and food assistance. Conversely—when incomes and the employment level rise—tax liabilities may rise, and fewer people may be eligible for government benefits.GAO was asked to review several issues related to automatic stabilizers. This report examines the effects of automatic stabilizers on the economy, the wellbeing of individuals and families, and the federal government's fiscal condition.GAO conducted an extensive review of academic and government literature; reviewed data and analysis from CBO, National Bureau of Economic Research, Bureau of Economic Analysis, and the Bureau of Labor Statistics; and spoke with CBO and Federal Reserve staff.For more information, contact Jeff Arkin at (202) 512-6806 or arkinj@gao.gov.
- COVID-19 Relief Funds: State Experiences Could Inform Future Federal Relief Funding What GAO FoundBudget office staff in eight states told GAO they worked with state legislatures, agencies, and other stakeholders to plan the use of COVID-19 relief funds. While budget staff said state legislatures typically were responsible for appropriating the funds, some legislatures allowed state officials to make or change plans when the legislatures were not in session. Budget staff in selected states said they were generally responsible for implementing newly created programs, while state agencies implemented pre-existing programs. Staff also said they used existing structures and processes to implement the funds, such as those for natural disasters or reimbursement. According to state auditors, selected states used existing processes to mitigate fraud and improper payments.State budget staff told GAO they used a variety of actions to address challenges when planning, using, and reporting on the COVID-19 relief funds.Staff capacity challenges.  Budget staff hired and reassigned staff, worked with officials in state agencies, and used contractors to address capacity challenges with using COVID-19 relief funds.	&nbsp;	Timing of funding and guidance.  Budget staff said that when additional COVID-19 relief funding was provided or guidance on allowable uses was delayed or changed, they waited to use these funds or substituted other funds with overlapping allowable uses.	&nbsp;	Communication and technical assistance challenges.  Budget staff said that federal agency officials addressed questions on program guidance and the need for technical assistance by increasing information sharing and working with national organizations representing states.	&nbsp;	Compliance with reporting requirements. Budget staff leveraged existing reporting systems or developed new systems to allow them to meet reporting deadlines, address changes to reporting requirements, or provide data they had not previously collected.GAO identified several experiences from the selected states that could inform future federal relief.Leveraging pre-existing programs.  Budget staff in some states said they were often able to use funding for existing programs more efficiently by using existing structures and processes. However, staff also noted that new, more flexible programs were key to addressing the pandemic's unique challenges.	&nbsp;	Leveraging existing expertise and processes.  States leveraged staff expertise and processes from implementing previous significant federal funding, such as from the American Recovery and Reinvestment Act of 2009, to plan and use the COVID-19 relief funds. Additionally, some states said their staff experience and capacity with the funds grew over time.	&nbsp;	Establishing new units and processes for federal relief funds.  Budget staff said they established specific units and processes for COVID-19 relief funds. They plan to leverage these units and processes for future federal relief funds.Why GAO Did This StudyThe federal government provided over $4.6 trillion to help the nation respond to the COVID-19 pandemic. A substantial portion of that amount went to state governments, which had to manage the influx of federal relief and quickly determine priorities to respond to the public health and economic emergency.The CARES Act includes a provision for GAO to conduct monitoring and oversight of the use of funds made available to prepare for, respond to, and recover from the COVID-19 pandemic. This report describes (1) how selected states planned for, used, and reported on COVID-19 relief funds; (2) challenges selected states experienced in using COVID-19 relief funds and any actions taken to address those challenges; and (3) how the experiences of the selected states could inform future federal relief funding.This report is part of a series of reports on COVID-19 relief funds to the states. GAO reviewed previously issued reports on individual COVID-19 relief programs. GAO also interviewed federal agency officials who implemented COVID-19 relief programs that received $10 billion or more for Tribes, states, localities, and U.S. territories.GAO reviewed plans for the use of the COVID-19 relief funds for eight states—California, Florida, Illinois, Minnesota, New York, Pennsylvania, Texas, and Washington—and interviewed staff from state budget offices and auditor offices. GAO selected these states based on total COVID-19 relief funding, population size, and geographic region.For more information, contact Jeff Arkin at (202) 512-6806 or arkinj@gao.gov.
- Financial Audit: Bureau of the Fiscal Service's FY 2023 and FY 2022 Schedules of Federal Debt What GAO FoundGAO found (1) the Bureau of the Fiscal Service's Schedules of Federal Debt for fiscal years 2023 and 2022 are fairly presented in all material respects, and (2) Fiscal Service maintained, in all material respects, effective internal control over financial reporting relevant to the Schedule of Federal Debt as of September 30, 2023. GAO's tests of selected provisions of applicable laws, regulations, contracts, and grant agreements related to the Schedule of Federal Debt disclosed no instances of reportable noncompliance for fiscal year 2023.From fiscal year 1997, GAO's first year auditing the schedules, through fiscal year 2023, total federal debt managed by Fiscal Service has increased from $5.4 trillion to $33.2 trillion, and the debt limit has been raised 22 times.Total Federal Debt Outstanding, September 30, 1997, through September 30, 2023Note: A small amount of total federal debt is not subject to the debt limit.During fiscal year 2023, total federal debt increased by about $2.2 trillion, with about $2.0 trillion of the increase in debt held by the public. Additionally, interest on debt held by the public increased to $678 billion in fiscal year 2023—up from $497 billion in fiscal year 2022 and $392 billion in fiscal year 2021. The primary reason for the increase in debt held by the public was the federal deficit, which was $1.7 trillion for fiscal year 2023.On January 19, 2023, the Department of the Treasury determined that the federal debt had reached the debt limit and began taking extraordinary actions—consistent with relevant laws—to avoid exceeding the debt limit. On June 3, 2023, the Fiscal Responsibility Act of 2023 was enacted, suspending the debt limit through January 1, 2025. On June 5, 2023, Treasury discontinued its use of extraordinary actions and resumed normal debt operations.The current approach to the debt limit has created uncertainty and disruptions in the Treasury securities market and increased borrowing costs. Under current policy, spending is expected to exceed revenue, causing debt held by the public to rise continuously relative to the economy, which is an unsustainable fiscal path over the long term.Why GAO Did This StudyGAO audits the consolidated financial statements of the U.S. government. Because of the significance of the federal debt to the government-wide financial statements, GAO audits Fiscal Service's Schedules of Federal Debt annually to determine whether, in all material respects, (1) the schedules are fairly presented and (2) Fiscal Service management maintained effective internal control over financial reporting relevant to the Schedule of Federal Debt. Further, GAO tests compliance with selected provisions of applicable laws, regulations, contracts, and grant agreements related to the Schedule of Federal Debt.Federal debt managed by Fiscal Service consists of debt held by the public and intragovernmental debt holdings. Debt held by the public primarily represents the amount the federal government has borrowed to finance cumulative cash deficits and is held by investors outside of the federal government. Intragovernmental debt holdings represent federal debt owed by Treasury to federal government accounts that typically have an obligation to invest their excess annual receipts (and interest earnings) over disbursements in federal securities.
- Federal Spending Transparency: Opportunities to Improve USAspending.gov Data What GAO FoundThe website USAspending.gov, the official source of federal spending information, includes information about federal awards such as contracts, grants, and loans. Quality federal spending data are key for Congress, federal managers, and the American public in tracking taxpayers' dollars.While there are requirements and guidance for agencies to submit standardized data, GAO found agencies that either did not report spending data or reported inconsistent spending data, including for COVID-19 funds. Specifically, in fiscal year 2022, 49 of the 152 agencies that reported information in the consolidated financial statements of the U.S. government, including agencies that received COVID-19 funding, did not report data to USAspending.gov.USAspending.gov Reporting Compared to CFS Reporting, Fiscal Year 2022Note: The fiscal year 2022 CFS included 164 federal entities. GAO excluded 12 of these entities for reasons such as some representing funds or entities that were not active. GAO refers to the remaining 152 entities as “agencies” for purposes of this report. GAO did not assess whether any of these are among the “executive agencies” required to report to USAspending.gov. Certain types of federal executive agencies are required by law to report their spending information to USAspending.gov, although it is up to each agency to determine for itself if it falls under the definition of an agency that must report. Twenty-five of the 49 nonreporting agencies GAO identified were in the executive branch and accounted for more than $5 billion in net outlays for fiscal year 2022. Although many nonreporting agencies may not be required to report, neither the Department of the Treasury nor the Office of Management and Budget (OMB) have clear responsibility for determining which agencies are required to report. Until Congress assigns responsibility to Treasury and OMB to periodically assess and determine which agencies must report data to USAspending.gov and oversee the completeness of their reporting, the USAspending.gov data may lack some required spending information.In addition, some agencies reported COVID-19 obligation amounts to USAspending.gov that did not agree with the information in their budget and annual financial reports. For example, in its fiscal year 2022 agency financial report, Treasury reported COVID-19 obligations that exceeded the amounts it reported to USAspending.gov by more than $195 billion. The Department of Transportation reported amounts that differed by $10 million. Without OMB and Treasury guidance to help agencies ensure that information reported to USAspending.gov is consistent and comparable with other public sources, the transparency and use of USAspending.gov information may be questioned. Information that differs from one source to another may also cause confusion and lead users to inadvertently draw incorrect conclusions.GAO also reviewed the reporting of other transaction agreements (OTA)—legally binding agreements other than standard contracts and grants that allow for flexible arrangements—and found that agencies used different approaches to report billions of dollars in OTA spending. GAO found over $40 billion in OTAs, including more than $10 billion that appeared to be related to COVID-19, that were not reported to USAspending.gov. However, the extent to which agencies completely and consistently reported this spending is unclear. Until Congress includes OTAs in the list of federal awards that agencies must report to USAspending.gov, policymakers and the public will continue to lack complete spending information and transparency of OTAs.Why GAO Did This StudyUSAspending.gov is intended to inform the American public about how much the federal government spends every year and for what purposes. The federal government has provided about $4.7 trillion to respond to the COVID-19 pandemic, which has highlighted the importance of tracking all federal spending.The CARES Act includes a provision for GAO to monitor and oversee the federal efforts to address the COVID-19 pandemic. This report provides information on the completeness of USAspending.gov data and challenges that affect users' ability to track federal spending, including for disasters and emergencies. To perform this work, GAO analyzed data from USAspending.gov and other sources and interviewed OMB and Treasury officials.
- Freely Associated States: Agencies Should Enhance Procedures to Address Millions of Dollars in Questionable Spending What GAO FoundThe Departments of Health and Human Services (HHS) and Interior did not consistently issue management decisions for audit findings related to grants to the Federated States of Micronesia (FSM), Republic of the Marshall Islands (RMI), and Republic of Palau within the time frame specified by federal regulation. Each country must annually obtain an audit—known as a single audit—of its use of grant funds and submit a report of the findings. Within 6 months, the agencies must issue a management decision for each finding—including expenditures the auditor questioned, known as questioned costs—clearly stating any expected corrective action. For single audits in fiscal years (FY) 2015 through 2019, HHS failed to issue seven of 11 decisions and Interior failed to issue seven of 12 decisions within the 6-month time frame. Both agencies attributed their failure to issue timely decisions to staffing gaps. Taking appropriate action, such as devoting needed staffing resources, to ensure they issue management decisions in the required time frame would help the agencies reduce the risk that the countries will fail to implement timely corrective actions.Table 1: Timeliness of HHS and Interior Management Decisions for Questioned Costs Identified in FSM, RMI, and Palau Single Audits, Fiscal Years 2015–2019			Agency 									Management decisions required for findings with questioned costs 									Management decisions not issued in required timeframe 									Total questioned costs associated with delayed management decisions 								HHS									11									7									$1,430,918								Interior									12									7									2,044,207					Legend: HHS = Department of Health and Human Services, FSM = Federated States of Micronesia, RMI = Republic of the Marshall Islands, Palau = Republic of Palau.Source: GAO analysis of information from HHS and Department of the Interior. | GAO-23-106160GAO's review of FY 2019 single audit reports for FSM, RMI, and Palau found that HHS had not resolved, and Interior could not show it resolved, several long-standing questioned costs as federal regulation requires.At the time of our review, HHS had not yet resolved several questioned costs, totaling almost $600,000, that were first reported in FY 2010 for RMI. GAO found HHS did not initiate required follow-up to address some of these questioned costs until many years after they were first identified. HHS's procedures for resolving questioned costs do not specify when follow-up should begin or how frequently it should occur. Revising its guidance to specify timing for audit follow-up would help HHS reduce the risk of questioned costs remaining unresolved.	Interior was unable to provide information showing the resolution of three questioned costs totaling more than $650,000 that were first reported for FSM and RMI in FYs 2008 through 2014. Though Interior told GAO it had resolved these findings, evidence it provided did not substantiate its claim. Interior has not fully documented procedures for resolving audit findings. Documenting procedures would clarify Interior staff's responsibilities related to resolving audit findings, including issuing management decisions for FSM, RMI, and Palau.Why GAO Did This StudyFSM, RMI, and Palau annually receive millions of dollars of U.S. assistance. U.S. agencies have provided some of this assistance through grant awards under the U.S. compacts of free association and other agreements with the three countries. Because of the amount of their grant spending, each country must obtain a single audit of its use of these funds each year and submit a report of the audit findings, including any questioned costs.Federal regulation requires the awarding agency to issue a management decision for each audit finding. Federal regulation also requires the agency to follow up on audit findings to ensure timely corrective action. If agencies do not issue decisions and conduct follow-up within 2 years, the country may potentially avoid repayment of any ineligible costs. More than 95 percent of questioned costs identified in the single audit reports GAO reviewed were related to grants awarded by HHS and Interior.This report examines the extent to which HHS and Interior have met federal requirements for (1) issuing management decisions and (2) following up on questioned costs. GAO reviewed the single audit reporting packages the countries submitted for FYs 2015 through 2019—the most current reports available—and HHS and Interior documentation. GAO also interviewed HHS and Interior officials.
- COVID-19 Relief: States' and Localities' Fiscal Recovery Funds Spending as of March 31, 2023 What GAO FoundState and local government recipients of the Coronavirus State and Local Fiscal Recovery Funds (SLFRF) program obligated more than half and spent less than half of their awards, per their reporting as of March 31, 2023—the most recent data available at the time of this report.All states (including the District of Columbia) reported obligating 60 percent ($118.3 billion) and spending 45 percent ($88.2 billion) of the SLFRF awards they received.	Localities reported obligating 54 percent ($67.5 billion) and spending 38 percent ($47.9 billion) of their awards.	States and localities reported spending the largest amount of their awards to replace revenue lost due to the pandemic. Specifically, 45 percent ($39.5 billion) of states' reported spending and 68 percent ($32.4 billion) of localities' reported spending was used for this purpose.	For example, Utah reported spending $333 million to replace revenue for essential government services including corrections, public safety, and social services. The city of Vineland, New Jersey reported spending over $280,000 to address a budget shortfall that resulted from increased waste removal costs from periods of quarantine during the pandemic.GAO's analysis found that approximately 14 percent of localities, with a collective $3 billion in SLFRF awards, did not submit a report to Treasury on their uses of funds through March 31, 2023, as required. Treasury officials told GAO they began sending notices of non-compliance to most of these localities in August 2023. GAO will continue to review Treasury's efforts to address non-compliance with filing required reports on uses of SLFRF awards.As a result of GAO's analysis, Treasury updated its public web postings and disclosed that SLFRF spending data do not include information from all recipients that were required to submit a report. This action will help ensure that Congress and the public have a more complete and accurate picture of how much SLFRF funding has been obligated and spent, and for what purposes.Why GAO Did This StudyThe SLFRF allocated $350 billion to tribal governments, states, the District of Columbia, local governments, and U.S. territories to help cover a broad range of costs stemming from the health and economic effects of the COVID-19 pandemic. SLFRF recipients must regularly submit reports to Treasury on their use of SLFRF awards and the projects undertaken with them.The CARES Act includes a provision for GAO to monitor the use of federal funds to respond to the COVID-19 pandemic. GAO was also asked to review Treasury's administration of the SLFRF program. This report examines the SLFRF funding states and localities are required to report to Treasury and Treasury's actions when states or localities do not submit the required reporting.To conduct this work, GAO analyzed Treasury SLFRF project and expenditure data and interviewed Treasury officials. GAO also reviewed laws and regulations governing the SLFRF program, and Treasury SLFRF program guidance, policies, and procedures.For more information, contact Jeff Arkin at (202) 512-6806 or arkinj@gao.gov.
- Tracking the Funds: Specific FY 2023 Provisions for Federal Agencies What GAO FoundThe Consolidated Appropriations Act, 2023 and the accompanying joint explanatory statement designated about $15.3 billion for 7,234 Community Project Funding/Congressionally Directed Spending provisions. The provisions designate funds for particular recipients to use for specific projects. For fiscal year 2022, about $9.1 billion was designated for 4,963 provisions.Nineteen federal agencies were appropriated funds for these provisions and are responsible for planning and executing projects using these funds. Other than one new agency—the Office of National Drug Control Policy—the same 18 agencies that were appropriated funds for fiscal year 2022 provisions also were appropriated funds for fiscal year 2023 provisions.While the amount of funding and number of provisions in fiscal year 2023 increased relative to fiscal year 2022, the pattern of total designated funding to various purposes, recipient types, and locations was generally proportionate.Funding Provided through Community Project Funding/Congressionally Directed Spending Provisions in the Consolidated Appropriations Act, 2023 by LocationWhen Congress appropriated funds for fiscal year 2023, it specified a time period applicable to each appropriation from which funds were designated for specific recipients. For example, 71 percent of the funds are available for agencies to obligate (for example, by signing a contract or awarding a grant) for a fixed period, ranging from 1 year to 5 years. The remaining 29 percent of funds are not time limited, so the funds are available for obligation at any point in the future. These are about the same percentages as in fiscal year 2022. Once funds are obligated, agencies generally have 5 years to expend (or outlay) the funds.Why GAO Did This StudyIn the 117th Congress, Members of Congress began a new process for requesting funds for specific projects, and Congress established constraints such as prohibiting members from designating funds directly to for-profit entities. Congress has continued this process in fiscal year 2023. These provisions are called “Community Project Funding” in the House of Representatives and “Congressionally Directed Spending” in the U.S. Senate.Congress included a provision in the joint explanatory statement accompanying the Consolidated Appropriations Act, 2023 for GAO to review the agencies’ implementation of these fiscal year 2023 provisions. This report provides an overview of fiscal year 2023 Community Project Funding/Congressionally Directed Spending and how it compares with fiscal year 2022. Specifically, this report provides information on (1) the agencies that were appropriated these funds; (2) the purpose of the funds, types of designated recipients, and location of projects; and (3) the period of availability of the funds.GAO analyzed data from the Consolidated Appropriations Act, 2023 and accompanying joint explanatory statement to describe the agencies designated funds and the purpose of the funds. GAO also analyzed this information to provide information on the designated recipients and projects. GAO compared this information to the corresponding information for the fiscal year 2022 provisions.For more information, contact Allison Bawden at (202) 512-3841 or bawdena@gao.gov, or Heather Krause at (202) 512-2834 or krauseh@gao.gov.
- Tracking the Funds: Agencies Have Begun Executing FY 2022 Community Project Funding/Congressionally Directed Spending What GAO FoundAs of the end of fiscal year 2022, agencies recorded obligations (actions that create a legal duty of the government for the payment of goods or services) toward almost half (2,343) of the fiscal year 2022 Community Project Funding/Congressionally Directed Spending projects and made outlays (disbursement of cash) toward 305 (about 6 percent) of these provisions. Of the $9.1 billion in total funds for these provisions, about a third of the funds were obligated, and almost 2 percent were outlayed.Agency-Recorded Obligations and Outlays for Community Project Funding/Congressionally Directed Spending, End of Fiscal Year 2022As shown in the table, agencies recorded obligations toward 99.2 percent of the provisions with one-year funding before the funds expired at the end of fiscal year 2022. Agency officials reported they were unable to record obligations toward the remaining 1 percent (13 provisions) because the recipient organizations closed, or the recipients withdrew their applications or declined funding.Obligations and Outlays for Community Project Funding/Congressionally Directed Spending Appropriations by Period of Availability, End of Fiscal Year 2022Dollar amounts in millions, and percents of row totals are in parentheses			Period of availability									Number of provisions									Number of provisions with fundsobligateda(percent)									Total fundsdesignated									Amount obligated(percent)									Amount outlayed			(percent)								One-Year									1,634									1,621			(99.2)									1,909.4									1,884.1			(98.7)									91.4			(4.8)								Multi-Year									1,864									208			(11.2)									4,267.8									475.4			(11.1)									26.4			(0.6)								No-Year									1,465									514			(35.1)									2,887.3									641.1			(22.2)									39.9			(1.4)					Source: GAO analysis of information provided by agencies. | GAO-23-106318Note: Percentages are based on total, unrounded amounts of agency-reported obligations and outlays.aThis column indicates the number and percentage of provisions for which agencies reported they had either fully or partially obligated the designated funds.Why GAO Did This StudyThe Consolidated Appropriations Act, 2022, and accompanying joint explanatory statement, designated $9.1 billion for 4,963 projects at the request of Members of Congress. These provisions designate a particular recipient—such as a nonprofit organization or local government—to receive an amount of funds to use for a specific project. These provisions are called “Community Project Funding” in the House of Representatives and “Congressionally Directed Spending” in the U.S. Senate.The joint explanatory statement accompanying the Consolidated Appropriations Act, 2022, includes a provision for GAO to review agencies’ implementation of Community Project Funding/Congressionally Directed Spending contained in the Consolidated Appropriations Act, 2022. This report describes the amount of funds for these specific provisions that have been recorded as obligated and outlayed as of the end of fiscal year 2022, as reported by the 18 agencies responsible for distributing and monitoring the funds.GAO collected budget execution data—obligations and outlays—along with data quality information from each of the relevant agencies. These data reflect agencies’ recorded obligations and outlays as of the end of fiscal year 2022.For more information, contact Allison Bawden at (202) 512-3841 or bawdena@gao.gov, or Heather Krause at (202) 512-2834 or krauseh@gao.gov.
- COVID-19: U.S. Territory Experiences Could Inform Future Federal Relief What GAO FoundFederal agencies allocated more than $32 billion in COVID-19 relief funding to the five permanently inhabited U.S. territories—American Samoa, the Commonwealth of the Northern Mariana Islands, Guam, Puerto Rico, and the U.S. Virgin Islands. This relief funding was provided through more than 100 new and existing federal programs across 16 federal agencies. Territory government officials told GAO that this funding helped them meet key priorities, including the public health response to COVID-19, improvements to health care infrastructure and access, replacement of lost revenue for continued government operations, and infrastructure development.COVID-19 Relief Funding Allocated to U.S. Territory Governments as of May 2023&nbsp;						Total allocations (in billions) 								American Samoa									$1.3								Commonwealth of the Northern Mariana Islands									$1.9								Guam									$2.7								Puerto Rico									$24.8								U.S. Virgin Islands									$1.5								Total 									$32.1 					Source: GAO analysis of appropriation and federal agency allocation data. | GAO-23-106050Notes: Total allocations include COVID-19 relief funding for which U.S. territory government agencies were the recipient. Allocation data were collected between May 2022 and May 2023, prior to the rescission of unobligated funds in a number of COVID-19 relief programs under the Fiscal Responsibility Act of 2023 in June 2023.  See  Pub. L. No. 118-5, div. B, tit. I, 137 Stat. 10, 23-30 (2023). Allocations do not sum to total due to rounding. COVID-19 relief funding awarded directly to local governments is not included.Territory government officials told us they faced challenges administering selected COVID-19 relief programs. These included having sufficient administrative capacity, determining allowable uses for funding, spending funds within allotted time frames, and managing reporting requirements.Based on the experiences of the territorial governments administering COVID-19 relief funding and federal agency actions to mitigate certain challenges, GAO identified four themes that could inform future federal relief to U.S. territories:Leveraging pre-existing programs.&nbsp;In contrast to newly created programs, territory officials reported experiencing fewer challenges administering and reporting on pre-existing federal programs that received additional funding.	Technical assistance.  Territory officials faced fewer challenges implementing programs where there was strong coordination and communication between the federal agency and the territory regarding program requirements and reporting.	Funding flexibilities.  Territory governments used COVID-19 relief funding with flexible or broad allowable uses to meet needs that might not be allowable under other federal programs, and worked with federal agencies to modify allowable uses and funding time frames to meet territory needs.	Immediately available funding.  Territory officials said funding that was immediately available, rather than provided as reimbursement, enabled them to better plan, schedule, and expend funds for allowable uses.Why GAO Did This StudyThe federal government has provided more than $4 trillion to help the nation respond to and recover from the COVID-19 pandemic. A portion of those funds went to U.S. territories through various federal programs.The CARES Act includes a provision for GAO to conduct monitoring and oversight related to the COVID-19 pandemic. This report examines (1) how much funding was allocated to the territories and how territories reported those funds were used; (2) territories' experiences administering COVID-19 relief funding; and (3) how selected federal agencies helped territories administer the funding and what themes can inform future federal relief to the territories.GAO reviewed the six COVID-19 relief laws enacted in 2020 and 2021, federal agency allocation data, and spending data from USAspending.gov. GAO reviewed program documentation, reports to federal agencies on the use of funds, and applicable Office of Inspector General reports. GAO also interviewed federal and territory agency officials about selected COVID-19 relief programs. These selected programs were those that (1) were implemented by federal agencies that administered the largest COVID-19 relief programs for Tribes, states, localities, and territories; and (2) allocated more than $100 million to the U.S. territories.For more information, contact Jeff Arkin at (202) 512-6806 or arkinj@gao.gov.
- White House Spending: FY 2022 Certificated Expenditures of the President and Vice President Were for Authorized Purposes What GAO FoundGAO found that the certificated (officially documented) expenditures by the President and Vice President of the United States for fiscal year 2022 were spent for the purposes authorized by law. These expenditures—$16,433,006 for the President and $89,727 for the Vice President—were reflected in the underlying accounting records and attested to by the Chief Financial Officer of the Executive Office of the President. GAO found no exceptions in the expenditures tested.Why GAO Did This StudyIn this report, GAO inspected and verified fiscal year 2022 certificated expenditures of the President of the United States and the Vice President of the United States. Sections 105(d) and 106(b) of Title 3 of the United States Code authorize the President and the Vice President to expend appropriated funds for certain specified purposes that may be accounted for solely on their certificates and as they determine, notwithstanding the provisions of any other law.Specifically, the President is authorized to expend appropriated funds for the care, maintenance, repair, alteration, refurnishing, improvement, air conditioning, heating, and lighting (including electric power and fixtures) of the Executive Residence at the White House. Further, the President and the Vice President are authorized to expend appropriated funds for official entertainment expenses of the President and the Vice President and for subsistence expenses of persons in the government service while traveling on official business in connection with the travel of the President and the Vice President. Sections 105(d) and 106(b) also authorize GAO to examine records related to these expenditures for the purpose of verifying that the expenditures were used for authorized purposes. In addition, GAO is to report to Congress its verification and any amounts not expended for authorized purposes.To meet this objective, GAO interviewed Executive Office of the President officials, reviewed the fiscal year 2022 independent auditor's report, performed analytical procedures, selected statistical samples of certificated expenditures of the President and Vice President, and verified these expenditures against the underlying supporting documentation in the Executive Office of the President's accounting records.For more information, contact Cheryl Clark at (202) 512-3406 or clarkce@gao.gov.
- Space Launch System: Cost Transparency Needed to Monitor Program Affordability What GAO FoundThe National Aeronautics and Space Administration (NASA) does not plan to measure production costs to monitor the affordability of its most powerful rocket, the Space Launch System (SLS). After SLS's first launch, Artemis I in November 2022, NASA plans to spend billions of dollars to continue producing multiple SLS components, such as core stages and rocket engines, needed for future Artemis missions. The program is also concurrently producing hardware for more capable versions of the SLS, the Block 1B and Block 2, for use on later missions.Space Launch System Planned Block UpgradesBecause the original SLS version's cost and schedule commitments, or baselines, were tied to the launch of Artemis I, ongoing production and other costs needed to sustain the program going forward are not monitored. Instead, NASA created a rolling 5-year estimate of production and operations costs to ensure that the costs fit within NASA's overall budget. However, neither the estimate nor the annual budget request track costs by Artemis mission or for recurring production items. As a result, the 5-year estimate and the budget requests are poor measures of cost performance over time. In 2014, GAO recommended that NASA develop a cost baseline that captures production costs for the missions beyond Artemis I that fly SLS Block I. NASA intends to fly SLS Block I for Artemis II, planned for 2024, and Artemis III, planned for 2025. NASA partially concurred, but has not yet implemented this recommendation. A cost baseline would increase the transparency of ongoing costs associated with SLS production and provide necessary insights to monitor program affordability.Senior NASA officials told GAO that at current cost levels, the SLS program is unaffordable. The SLS program developed a roadmap outlining short-term and long-term cost-saving strategies for future missions. For example, NASA plans to use contract types that shift cost risk from the government to the contractors and that achieve manufacturing efficiencies, but it is too early to determine the effects of such strategies. NASA is also considering long-term options, including purchasing future SLS launches and payload capabilities from a contractor who would own, operate, and integrate the SLS rocket.Why GAO Did This StudyThe SLS is the world's most powerful rocket and will enable NASA to return humans to the moon. NASA requested $11.2 billion in the fiscal year 2024 president's budget request to fund the program through fiscal year 2028, in addition to the $11.8 billion spent developing the initial capability. In November 2022, NASA successfully demonstrated SLS Block 1 during its Artemis I flight test. NASA intends to fly a series of increasingly difficult missions, including Artemis II—a crewed test flight—and Artemis III—a crewed lunar landing.GAO's April 2023 high-risk report noted that NASA needed to improve transparency into the long-term costs and affordability of human spaceflight programs, including by establishing cost and schedule baselines for additional SLS capabilities.A House report to an appropriations bill included a provision for GAO to review NASA's human exploration programs, including the SLS program. GAO assessed the extent to which (1) NASA has established plans to measure the SLS program costs post-Artemis I, and (2) the program has made progress with its plans to reduce projected SLS costs. GAO reviewed NASA documents and plans and interviewed agency officials.
- DOD Service Contracts: Actions Needed to Identify Efficiencies and Forecast Budget Needs What GAO FoundServices performed by contractors, such as administrative and technical support, account for about half of the Department of Defense's (DOD) contract obligations. Obligations on contracts for services increased from fiscal year 2017 through 2020 before decreasing in fiscal years 2021 and 2022, and ranged from $184 billion to $226 billion over the period.DOD has processes to validate individual service requirements but lacks some data needed to identify broader efficiencies among those requirements. DOD requires the military departments—the Air Force, Army, and Navy—to provide data that can be reviewed to identify efficiencies for service requirements valued at $10 million or more. GAO found that the Navy aggregates and reviews data on service requirements at that threshold. However, the Army does not aggregate data on service requirements, and the Air Force only does so for service requirements with a value at or above $100 million. This results in missed opportunities to identify efficiencies and potential cost savings among service requirements on contracts totaling billions of dollars, as shown in the figure.Military Departments' Obligations on Contracts for Services by Different Dollar Value Thresholds, Fiscal Years 2017–2022DOD made progress forecasting budget needs for service contracts across a 5-year period, as required by law, but communication challenges affected the military departments' ability to provide reliable data. For example, the military departments lacked timely guidance on implementing the forecasting requirement and the methodology and data sources to use. In January 2023, DOD established a working group to develop a path forward for fully implementing the forecasting requirement. But, this working group is in its early stages, having just recently developed a charter. Further, it has not established timeframes for communicating the methodology and data sources that the military departments should use. Without setting timeframes and clarifying how to forecast service contract budget needs, DOD cannot ensure that future budget submissions—starting with fiscal year 2026—will provide Congress with reliable and useful information for decision-making and oversight.Why GAO Did This StudyDOD obligates hundreds of billions of dollars each year on service contracts. Despite some progress, DOD has faced challenges with managing service contracts. As such, law required that DOD refine processes to validate service requirements and begin forecasting budget needs across a 5-year period.A Joint Explanatory statement and House Committee report included provisions for GAO to assess DOD's processes for validating service requirements. This report assesses DOD's (1) trends in service contract obligations for fiscal years 2017–2022, (2) processes for validating service requirements, and (3) progress forecasting budget needs for service contracts over a 5-year period.GAO reviewed federal procurement data for fiscal years 2017–2022, and selected a major command from each military department based on service contract obligations. GAO reviewed DOD and military department policies and analyzed a nongeneralizable sample of service requirements from each selected major command. GAO also reviewed DOD budget guidance for fiscal years 2023 and 2024, and interviewed DOD officials.
- Fiscal Year 2024 Performance Plan This report presents the Government Accountability Office's (GAO) Performance Plan for Fiscal Year 2024. In the spirit of the Government Performance and Results Act, this annual plan informs the Congress and the American people about what we expect to accomplish on their behalf in the coming fiscal year. It sets forth our plan to make progress toward achieving our strategic goals for serving the Congress and the American people. This framework not only shows the relationship between our strategic goals and strategic objectives, but also show major themes that could potentially affect our work.For more information, contact Arte Ledyard at (937) 258-7912 or ledyarda@gao.gov.
- Federal Budget: Government-Wide Inventory of Accounts with Mandatory Spending, Fiscal Years 2001–2021 What GAO FoundMandatory spending refers to budget authority that is typically provided in laws other than appropriation acts. Mandatory budget authority grew from $1.9 trillion in fiscal year 2001 to $7.2 trillion in fiscal year 2021, an increase of 282 percent, or 160 percent adjusted for inflation in fiscal year 2021 dollars. As GAO has previously reported, demographic factors, rising health care costs, and legislative decisions have contributed to this increase in spending over time.Government-Wide Gross Mandatory Budget Authority, Fiscal Years 2001–2021, in Nominal and 2021 Inflation-Adjusted DollarsNote: GAO used the fiscal year 2021 gross domestic product price index to adjust for inflation.From fiscal years 2001 through 2021, the 10 budget accounts with the largest amount of gross mandatory budget authority primarily supported Social Security, Medicare, Medicaid, and interest on the public debt. These 10 accounts represented 64 percent of government-wide mandatory budget authority during this time. In fiscal years 2020 and 2021, the federal COVID-19 response resulted in increases in mandatory spending in accounts funding other programs, such as Economic Impact Payments.A budget account's fund type indicates, among other things, the source of funding for the account. From fiscal years 2001 through 2021, the majority of mandatory budget authority came from general fund accounts and non-revolving trust fund accounts.General fund accounts  hold   all federal money not allocated by law to any other fund account. This fund type supported programs such as Medicaid.	Non-revolving trust fund accounts  are designated as “trust funds” by law and used to track receipts and spending for programs that have specific taxes or other revenues dedicated by law for their use. In some cases, they receive payments from general fund accounts. This fund type supported programs such as Social Security and unemployment benefits.Why GAO Did This StudyFrom fiscal years 2001 through 2021, more than 60 percent of federal spending in any given year came from mandatory spending. Generally, Congress and the President control spending for mandatory programs indirectly—by defining eligibility for these programs, and setting the programs' benefit or payment rules in the authorizing legislation—rather than directly through annual appropriations acts. As a result, mandatory spending may not undergo review as part of the annual appropriations process.GAO was asked to review mandatory spending. This report describes trends among federal budget accounts with mandatory budget authority in fiscal years 2001-2021, among other things.GAO analyzed Office of Management and Budget data to identify accounts with mandatory budget authority in fiscal years 2001-2021. GAO selected this time frame to provide historical context for federal spending, among other reasons.To describe trends in mandatory spending, GAO analyzed gross mandatory budget authority data on accounts that comprised the top 99 percent of all gross mandatory budget authority in any fiscal year from 2001 through 2021. Gross mandatory budget authority refers to total mandatory budget authority before reduction by applicable offsets, such as fees members of the public pay to use national parks.For more information, contact Jeff Arkin at (202) 512-6806 or ArkinJ@gao.gov.
- U.S. Territories: Public Debt Outlook - 2023 Update What GAO FoundGAO identified the most significant factors—which vary by territory—affecting each territory's future capacity for economic growth and debt repayment.Commonwealth of Puerto Rico:  Puerto Rico's gross domestic product (GDP) was $106.5 billion as of June 30, 2021. In March 2022, Puerto Rico finalized its largest debt restructuring: issuing $7.4 billion in new bonds replacing $34.3 billion in outstanding bonds (a 78 percent reduction). The restructuring also contained several initiatives to reform Puerto Rico's struggling pension system, including a new trust fund—financed by government surpluses—to support future pension payments. Finalizing the overhaul of electric and power operations and adhering to fiscal and financial management reforms are critical to sustained economic growth.Guam:  As of September 30, 2021,   Guam's total public debt outstanding was almost $2.6 billion, or about 43 percent of GDP ($6.1 billion). Guam's inflation-adjusted GDP declined by almost 2 percent annually from fiscal year 2016 to 2021. The drop reflected the decline in tourism due to COVID-19. However, Guam's economy is showing signs of recovery. The recent opening of the third U.S. military base on the island is expected to stimulate economic growth.United States Virgin Islands (USVI):  USVI's GDP was $4.2 billion in fiscal year 2020. As of September 30, 2019—the last year for which USVI reported data—public debt outstanding was more than $2.6 billion, or about 65 percent of USVI's GDP in that year. In March 2022, USVI refinanced bonds. This created a dedicated source of revenue to fund its pension system, which in turn temporarily extended pension solvency. However, the USVI government's ability to access traditional capital markets is uncertain. This leaves it without financing flexibility as it faces serious economic, financial, and demographic challenges. These include a shrinking population, dependence on the volatile tourism industry, and weak financial management practices.Commonwealth of the Northern Mariana Islands (CNMI):  As of September 30, 2020,   CNMI's total public debt outstanding was about $114.1 million, or about 12 percent of GDP ($938.8 million). This reflects CNMI's inability to borrow through capital markets in recent years. CNMI has struggled to finance its pension plan. CNMI officials told GAO they are uncertain how the government will meet its financial obligations. Moreover, its economy continues to decline with limited prospects for recovery as its tourism industry struggles and its largest casino is closed and unlikely to reopen soon. CNMI's financial management and reporting has also worsened. With CNMI's limited financial prospects and weak financial management practices persisting, CNMI is at risk of a severe fiscal crisis.American Samoa:  As of September 30, 2021  ,  American Samoa's total debt outstanding was $162.2 million, or about 23 percent of GDP ($710.8 million). This reflects recent borrowing to invest in its infrastructure. The government's pension plan is underfunded and the government is increasing contributions to extend solvency. American Samoa's economy is stable but continues to depend almost entirely on activity generated by the Starkist Samoa Co. tuna cannery and government employment. Prospects for economic growth outside of these areas face challenges.Why GAO Did This StudyThe five permanently inhabited U.S. territories—Puerto Rico, Guam, USVI, CNMI, and American Samoa—historically borrowed through financial markets. Puerto Rico, in particular, amassed large amounts of debt and defaulted on debt payments in 2015.The territories all face challenges to achieving sustained economic growth, which is critical to debt sustainability. Challenges include, for example, (1) the location of the islands that leads to the high cost of importing goods and energy; (2) vulnerability to increasing frequency and severity of extreme weather events; (3) concentrated economies relying on limited industries; and (4) outmigration and population loss.In 2016, Congress passed and the President signed the Puerto Rico Oversight, Management, and Economic Stability Act. It contains a provision for GAO to review the public debt of the five territories every 2 years. This is the fourth report in this series.In this report, for each of the five territories, GAO updates (1) trends in public debt and its composition; (2) trends in revenue and expenses; and (3) risk factors that may affect each territory's ability to repay public debt. GAO analyzed audited financial statements for fiscal years 2019, 2020, and 2021, as available; reviewed demographic and economic data for each territory; and interviewed credit rating agencies and officials from the territories' governments.For more information, contact Yvonne Jones at (202) 512-6806 or JonesY@gao.gov or Latesha Love-Grayer at (202) 512-4409 or LoveGrayerL@gao.gov.
- The Nation's Fiscal Health: Action Needed to Address Projected Unsustainable Debt Levels What GAO FoundThe federal government faces an unsustainable long-term fiscal future. At the end of fiscal year 2022, debt held by the public was about 97 percent of gross domestic product (GDP). Debt held by the public is projected to grow at a faster pace than the size of the economy and reach its historical high of 106 percent of GDP within 10 years, then continue to grow at an increasing pace.The fiscal outlook faces additional risks posed by delays in raising or suspending the debt limit—the legal limit on the total amount of money that the federal government is authorized to borrow to meet its existing legal obligations. These delays could disrupt financial markets, and investors may require higher interest rates to hedge against increased risks, which could increase borrowing costs. Failure to raise or suspend the debt limit in time to prevent a default would have devastating effects on U.S. and global economies and the public.Since 2017, GAO has stated that a plan is needed to address the government's fiscal outlook and promote a sustainable fiscal policy. GAO's work has identified several components of an effective fiscal plan:Incorporate well-designed fiscal rules and targets to help manage debt, for example by controlling factors such as spending and revenue to meet a debt-to-GDP target.	Assess the drivers of the primary deficit, such as mandatory and discretionary spending as well as revenue—including tax expenditures, such as deductions and tax credits.	Consider alternative approaches to the debt limit. For example, the debt limit could be set as part of the budget resolution or Treasury could be given the authority to propose a change in the debt limit that would take effect absent congressional disapproval.Why GAO Did This StudyGAO's long-term projections show that the balance of current revenue and program spending policies result in debt growing faster than the economy. This is unsustainable over the long term. In addition, delays in raising or suspending the debt limit pose additional risks to the long-term outlook.This testimony discusses the nation's unsustainable fiscal path, the risks posed by debt limit impasses, and actions Congress can take to address these challenges. This statement is based on prior reports on the nation's fiscal health and federal debt management.
- Priority Open Recommendations: Office of Management and Budget What GAO FoundIn July 2022, GAO identified 44 priority recommendations for the Office of Management and Budget (OMB). Since then, OMB has implemented 1 of those recommendations by issuing a Controller Alert in October 2022 that helped clarify the distinction between Fraud Reduction and Data Analytics Act of 2015 requirements and Enterprise Risk Management to ensure fraud risks are appropriately managed. GAO also removed the priority status from 6 other recommendations. These included 1 recommendation related to improving the accuracy of information on Buy America waivers that included the establishment of the BuyAmerican.gov website. We also removed the priority status on 5 recommendations related to improving federal data transparency as a result of OMB efforts to issue additional guidance, provide technical assistance, and clarify governance over the reporting of federal spending data.In May 2023, GAO identified 3 additional priority recommendations for OMB, bringing the total number to 40. These recommendations involve the following 9 areas:Developing a federal program inventory	Improving government performance	Increasing availability and transparency of government data	Improving acquisition management and reducing costs	Reducing government-wide improper payments	Strengthening cybersecurity	Establishing controls for disaster relief	Improving federal real property asset management	Improving information managementOMB's continued attention to these issues could yield significant cost savings and other improvements in government operations.Why GAO Did This StudyPriority open recommendations are the GAO recommendations that warrant priority attention from heads of key departments or agencies because their implementation could save large amounts of money; improve congressional and/or executive branch decision-making on major issues; eliminate mismanagement, fraud, and abuse; or ensure that programs comply with laws and funds are legally spent, among other benefits. Since 2015 GAO has sent letters to selected agencies to highlight the importance of implementing such recommendations.For more information, contact Michelle Sager at (202) 512-6806 or sagerm@gao.gov.
- Grants Management: Actions Needed to Improve Agency Reporting of Expired Grants What GAO FoundFederal agencies that award grants must close out the grants—ensuring that all applicable administrative actions and all required work of the grant have been completed—within an allotted time frame, generally 1 year after the grant ends. Generally, until the grants are closed out, any undisbursed balance remains in the grant award and cannot be repurposed or canceled and returned to the Department of the Treasury.The agencies in GAO's review fully met some requirements on expired grants but not others. Specifically, the Office of Management and Budget's (OMB) Circular A-136 requires federal agencies government-wide to report on expired grants with undisbursed balances annually. GAO found that all five of the selected agencies in its review—the Departments of Commerce, Health and Human Services (HHS), and Justice (DOJ); the National Aeronautics and Space Administration (NASA); and the National Science Foundation (NSF)—fully met applicable OMB Circular A-136 reporting requirements.In addition, the Commerce, Justice, Science, and Related Agencies Appropriations Act (Section 530 requirements) requires affected federal agencies—including Commerce, Justice, NASA, and NSF—to report on expired grants with undisbursed balances annually. GAO found various instances where some agencies did not fully meet the reporting requirements because some aspects of OMB's guidance on the reporting requirements were unclear.For example, Section 530 requires agencies to report on expired grants for the “preceding 3 fiscal years.” Although OMB staff told GAO that agencies' annual reports should include the most recent fiscal year that ended in the year of the reports, OMB's guidance does not define the term “preceding.” As a result, NASA's fiscal year (FY) 2021 report included data on expired grants from FYs 2018 through 2020, rather than from 2019 through 2021. Without OMB providing additional clarification about the Section 530 reporting requirements, agencies could continue reporting inaccurately.Additionally, Section 530 requires agencies to report on the amount of undisbursed balances that may be returned to the Treasury. However, OMB's guidance instructs agencies to report on their process for identifying these balances rather than the amounts themselves. GAO found that only NASA complied with this Section 530 requirement. Commerce, DOJ, and NSF reported their process to identify undisbursed balances—consistent with OMB's guidance—but did not report the amount of undisbursed balances, as directed by Section 530. By providing revised guidance or instructions, OMB would help increase transparency for Congress and others of the amount of undisbursed balances that may be returned to the Treasury.GAO also found that DOJ stopped explicitly reporting Section 530 information starting in FY 2019. DOJ interpreted OMB Circular A-136 as OMB's instructions for complying with both government-wide and Section 530 requirements. OMB staff confirmed that the two requirements are different. By not reporting this information, DOJ is providing incomplete information to Congress and the public.Why GAO Did This StudyIn FY 2021, federal agencies awarded more than $1.2 trillion in grants to state and local governments. GAO has previously reported on significant amounts of undisbursed balances from expired grants—grants that agencies have not closed out on time. To help improve financial accountability over grant programs, various laws and directives have required federal agencies to report undisbursed balances from expired grants.GAO was asked to update its prior work on grant closeout. Among other things, this report examines the extent to which selected agencies met reporting requirements for expired grants for FYs 2017 through 2021.GAO selected five agencies—Commerce, HHS, DOJ, NASA, and NSF—based on criteria such as whether they were required to report under their appropriations act and the total dollars awarded to state and local governments. The grants awarded by these five agencies comprised about 51 percent of total awards in FY 2021. GAO reviewed legislation and agency documentation, and interviewed officials from the five agencies. GAO also reviewed OMB documentation and interviewed OMB staff.
- The Nation's Fiscal Health: Road Map Needed to Address Projected Unsustainable Debt Levels What GAO FoundThe federal government faces an unsustainable long-term fiscal future. At the end of fiscal year 2022, debt held by the public was about 97 percent of gross domestic product (GDP). Projections from the Office of Management and Budget and the Department of the Treasury, the Congressional Budget Office, and GAO all show that current fiscal policy is unsustainable over the long term. Debt held by the public is projected to grow at a faster pace than the size of the economy. Debt held by the public is projected to reach its historical high of 106 percent of GDP within 10 years and to continue to grow at an increasing pace. GAO projects that this ratio could reach more than twice the size of the economy by 2051, absent any changes in revenue and spending policies.Debt Held by the Public Projected to Grow Faster Than GDPThe Federal Budget Deficit in Fiscal Year 2022 Was among the Largest in HistoryWhen the government spends more than it collects in revenue, Treasury borrows money to finance the resulting deficit. The federal budget deficit in fiscal year 2022 was $1.4 trillion, a 50 percent decline from fiscal year 2021, but still the fourth largest in U.S. history. This decline is attributable to higher tax revenue and lower pandemic-related federal spending. In fiscal year 2022, federal debt held by the public grew by about $2 trillion, reaching $24.2 trillion.Increasingly Large Deficits Drive Unsustainable Debt LevelsThe growing debt is a consequence of borrowing to finance increasingly large annual budget deficits. GAO projects thatspending for Social Security, federal health care programs, and all other federal program spending increases more than revenue, resulting in the primary deficit; and	net interest spending, which primarily represents the federal government’s cost to service its debt, steadily increases over the next 30 years, further widening the total budget deficits.Primary Deficit and Total Budget Deficit, Actual, and ProjectedNet interest spending will continue to increase because of both higher levels of overall debt, and projected increases in interest rates over the long-term. Higher than projected interest rates would further increase interest costs and debt. In addition to increased borrowing costs, rising debt could lead to slower economic growth.Other potential fiscal risks stem from delays in raising or suspending the debt limit—the legal limit on the total amount of money that the federal government is authorized to borrow to meet its existing legal obligations. These delays could create disruptions to financial markets, and investors may require higher interest rates to hedge against increased risks, which, in turn, could increase borrowing costs. Failure to raise the debt limit in time to prevent a default would have much more dire economic and reputational consequences.Action Is Needed to Change the Unsustainable Fiscal PathGAO has previously suggested that Congress develop a plan to address the government’s fiscal outlook and promote fiscal sustainability. GAO’s work has identified several components of an effective fiscal plan:Incorporate well-designed fiscal rules and targets to help manage debt, for example by controlling factors such as spending and revenue to meet a debt-to-GDP target.	Assess the drivers of the primary deficit, such as mandatory and discretionary spending as well as revenue—including tax expenditures, such as deductions and tax credits.	Consider alternative approaches to the debt limit to avoid disrupting the Treasury market and increasing borrowing costs and to improve federal debt management. For example, the debt limit could be set as part of the budget resolution or Treasury could be given the authority to propose a change in the debt limit that would take effect absent congressional disapproval.Why GAO Did This StudyGAO produces this annual fiscal health report to examine the current fiscal condition of the federal government and its future fiscal path, absent policy changes in revenue and program spending.This report describes: (1) federal government’s fiscal condition and changes from fiscal years 2019 to 2022; (2) outcomes from our 75-year simulation of the federal government’s fiscal outlook; (3) implications of rising interest costs and rates; (4) additional risks to the federal government’s fiscal outlook; and (5) components of a sustainable long-term fiscal plan and actions that Congress and federal agencies could take now to yield financial benefits.For more information, contact Jeff Arkin, (202) 512-6806 or arkinj@gao.gov, Robert F. Dacey at (202) 512-3406 or daceyr@gao.gov, or Dawn B. Simpson, (202) 512-3406 or simpsondb@gao.gov.
- Grants Management: Observations on Challenges with Access, Use, and Oversight What GAO FoundGAO has identified challenges on federal grants management in its work spanning several decades, including in the following areas:Capacity.  A lack of capacity for grant recipients can adversely affect their ability to successfully access, manage, and implement grant programs. For example, GAO's previous work on municipalities in fiscal crisis reported that the City of Flint, Michigan struggled to generate the local resources needed to make the city competitive for some federal grants. Federal agencies can help organizations mitigate capacity limitations through technical assistance and by making available federal or other revenue dedicated to covering the cost of grant administration and oversight.	Streamlining.  GAO's work has shown that when grants management requirements are duplicative or overly burdensome, agencies must direct resources toward meeting them. This can make an agency's programs and services less cost effective and increase burden for grant recipients. Addressing these challenges may achieve cost savings and result in greater efficiencies in grant programs. The federal government has continued efforts to examine and implement methods to streamline grants management and reduce recipient burden. For example, GAO recommended that OMB collect and share lessons learned from the use of grant flexibilities related to the COVID-19 pandemic.	Transparency.  Greater transparency of grant spending can help Congress and the public understand how and where federal grant funds are spent. However, GAO previously identified challenges related to the timeliness, completeness, and accuracy of grant data on USAspending.gov, the federal government's official source for spending data. Likewise, GAO and other relevant federal entities have identified challenges with the completeness and accuracy of subaward data displayed on USAspending.gov. GAO has made several recommendations to OMB and Treasury to improve the quality of data on USAspending.gov, and they have taken steps toward implementing them.	Internal controls and oversight.  GAO's work has shown that when awarding and managing federal grants, effective oversight and internal control is important to provide reasonable assurance to federal managers and taxpayers that grants are awarded properly, recipients are eligible, and federal grant funds are used as intended and in accordance with applicable laws and regulations. In 2021, GAO recommended that OMB incorporate appropriate measures to ensure that single audit guidance is issued timely and is responsive to users' input and needs. OMB stated that it issued its 2022 compliance guidance earlier than it has done in 15 years.Why GAO Did This StudyFederal grants play an important role in funding national priorities. Some examples include increasing student access to higher education and helping to care for the economically disadvantaged by funding nutrition programs and housing assistance. Recently, grants have also provided a key tool for responding to the health and economic crisis caused by the COVID-19 pandemic and rebuilding the country's infrastructure.Federal grants represent a substantial financial commitment. In fiscal year 2022, federal aid to tribal, state, local, and territorial governments—primarily through grants—was $1.2 trillion.GAO has reviewed numerous aspects of federal grants management spanning several decades. A number of common themes have arisen from GAO's work and contribute to observations on long-standing challenges.This statement is based on GAO's prior reports and testimony related to its body of work on federal grant management and focuses on long-standing challenges in the areas of capacity, streamlining, transparency, and internal control and oversight.
- Federal Spending: Information on U.S. Funding to Entities Located in China What GAO FoundU.S. agencies reported providing at least $48 million in obligations for various purposes to entities located in China from fiscal years 2017 through 2021. Of this amount, agencies obligated about $22.8 million through assistance awards and about $25.2 million through contracts. For example, the Department of Health and Human Services obligated funding through assistance awards to study infectious diseases, and the Department of State obligated funding through contracts to purchase goods and services for U.S. government operations in China. U.S. award recipients also provided funding through subawards to entities located in China. However, the full extent of these subawards is unknown because of limitations in the completeness and accuracy of subaward data reported in government systems. For example, subaward data may be incomplete because award recipients are required to provide information only for subawards valued at $30,000 or more, in accordance with federal subaward reporting requirements. Limitations in subaward data is a government-wide issue and not unique to U.S. funding to entities in China. GAO is currently examining the state of federal government-wide subaward data as part of a separate review.U.S. Agencies' Obligations to Entities Located in China, Fiscal Years 2017–2021From fiscal years 2012 through 2021, the Export-Import Bank (EXIM) supported U.S. exports to China through loan guarantees and export credit insurance. Prior to 2016, EXIM provided most of its financing through loan guarantees to support U.S. aircraft exports to China. According to EXIM data, EXIM's largest single loan guarantee totaled $830 million to support Air China's purchase of aircraft manufactured by The Boeing Company in fiscal year 2012. EXIM's annual financial exposure to China (i.e., EXIM's outstanding credit risk attributable to entities in China) has declined every year since fiscal year 2015. EXIM defines Chinese state-owned entities as entities owned by the government of China in addition to those entities that, since EXIM's 2019 reauthorization, EXIM identified as partially owned by the government of China. Chinese state-owned entities accounted for less than 5 percent of total exposure to China at the end of fiscal year 2021, according to EXIM data.Why GAO Did This StudyU.S. agencies provide funding through assistance awards and contracts to foreign recipients to support U.S. goals. Some of these foreign recipients are entities located in China—a major U.S. trading partner and strategic rival. EXIM also provides financing, such as loans, guarantees, and insurance, to Chinese or other entities, to facilitate U.S. exports to China.GAO was asked to review U.S. funding and financing of entities located in China. This report examines (1) funding obligated by U.S. agencies through assistance awards and contracts to entities located in China from fiscal years 2017 through 2021; and (2) financing provided by EXIM for U.S. exports to China, or to Chinese state-owned entities, from fiscal years 2012 through 2021.GAO analyzed assistance award and contract data in USAspending.gov from fiscal years 2017 through 2021 and validated these data with five U.S. agencies that accounted for about 99 percent of the funding obligated to entities in China. GAO also analyzed subaward data in USAspending.gov for two U.S. agencies whose award recipients reported providing the largest amount of funding through subawards to entities in China and discussed subaward data limitations with these agencies. GAO analyzed EXIM financing data on U.S. exports to China from fiscal years 2012 through 2021—a 10-year scope that includes a 4-year period when EXIM lacked full funding authority, according to EXIM. GAO interviewed agency officials about these funding and financing activities.For more information, contact Kimberly Gianopoulos at (202) 512-8612 or gianopoulosk@gao.gov.
- Oversight of Agency Spending: Implementing GAO Recommendations Could Help Address Previously Identified Challenges at Commerce, DOE, and EPA What GAO FoundCongress and the administration have provided billions in funding to the Department of Commerce, the Department of Energy (DOE), and the Environmental Protection Agency (EPA) through three recently enacted laws: the Infrastructure Investment and Jobs Act, the Inflation Reduction Act of 2022, and the Creating Helpful Incentives to Produce Semiconductors for America Act of 2022.With regard to this new funding, GAO's prior work examining federal grants management and the implementation of the American Recovery and Reinvestment Act of 2009 (Recovery Act) offers valuable lessons for overseeing agency spending and addressing long-standing challenges. For example, lessons learned include:Streamlined grants management  is critical to effective use of federal funds. When grants management requirements are duplicative, unnecessarily burdensome, or conflicting, agencies must direct additional resources toward meeting them.	Strong internal controls  provide reasonable assurance to federal managers that grants are awarded properly, recipients are eligible, and grant funds are used as intended.	Adjustments and innovations in oversight  helped foster accountability for Recovery Act funding. For example, federal, state, and local officials used networks and agreements to work toward common goals.In previous reviews of Commerce, DOE, and EPA programs, GAO has identified challenges in various aspects of some of the programs, for which Congress and the administration have provided significant funding through recent legislation. Programs examined by GAO include:Commerce's broadband programs,	EPA's clean water and drinking water state revolving fund programs and EPA grants, and	DOE's nuclear energy demonstration projects and DOE loan programs.The challenges that GAO identified included management of fraud risk, adherence to cost controls, and ensuring that programs have the right policies and expertise in place. The agencies have implemented some GAO recommendations to help address these challenges.GAO has ongoing or planned work more broadly examining aspects of how Commerce, DOE, and EPA spend the funds they received in the three acts. For example, GAO is currently reviewing a Commerce tribal broadband program, as well as DOE's carbon capture and storage projects and Office of Clean Energy Demonstrations activities.Why GAO Did This StudyGAO has overseen federal agency spending over decades, including oversight of major federal investments such as the Recovery Act. In addition, GAO oversight has previously identified challenges related to programs managed by Commerce, DOE, and EPA.This testimony discusses: (1) considerations for oversight of federal spending provided in the three acts; (2) examples of challenges associated with Commerce, DOE, and EPA programs as identified in prior GAO work; and (3) GAO's ongoing or planned work relevant to oversight of federal funding provided to Commerce, DOE, and EPA in the three acts.This testimony is based on prior GAO work related to federal grants management challenges; lessons learned from the Recovery Act; and reviews of Commerce, DOE, and EPA programs between 2007 and 2023. Details on GAO's methodology can be found in each of the reports cited throughout this hearing statement.
- Fiscal Year 2024 Budget Request: U.S. Government Accountability Office GAO continued to demonstrate its value in fiscal year (FY) 2022. GAO’s work yielded $55.6 billion in financial benefits, a return of about $74 for every dollar invested in GAO. Over the past five years, on average, GAO has returned $145 for every dollar appropriated to us. In FY 2022, GAO also delivered 1,260 program and operational benefits that led to improved services to the American people, strengthened public safety, and spurred program and operational improvements across the government. Congress also continues to use GAO’s work to inform its legislative decisions. For example, the National Defense Authorization Act for 2023 contained more than 20 actions based on GAO work and the Consolidated Appropriations Act for FY 2023 included 40 directives that would spur agency action on GAO’s recommendations.GAO’s FY 2024 budget request reflects the continued demand for GAO services. In addition to the hundreds of requests from committee leadership for GAO studies we receive each year, Congress directs us to conduct hundreds of studies in legislation and related committee reports. For example, Congress directed us to provide oversight of the federal assistance provided to Ukraine and Inflation Reduction Act spending, which will require dozens and dozens of audits. Congressionally mandated studies reflect the broadest representation of congressional demand for and interest in GAO work. Completing these mandated studies are our highest priority. They can also account for significant staff resources.GAO Mandated Studies from Selected Recent Public LawsPublic Law			Number of Mandates			Estimated FTE		P.L 117-263&nbsp; &nbsp;James M. Inhofe National Defense Authorization Act for Fiscal Year 2023			158			312		P.L 117-328&nbsp; &nbsp;Consolidated Appropriations Act, 2023			97			191		P.L. 117-103&nbsp; Consolidated Appropriations Act, 2022			58			114		P.L. 117-167&nbsp; CHIPS Act of 2022			10			20		P.L. 117-58&nbsp; &nbsp; Infrastructure Investment and Jobs Act			35			69		Total			358			706		Source: GAO | GAO-23-900493Note: These numbers reflect mandates in statute and in related committee reports. Estimated FTE is for staff to complete work and does not include overhead or other costs.GAO’s FY 2024 budget requests $859.7 million in appropriated funds and uses $93.8 million in offsets and supplemental appropriations. &nbsp;This request would enable GAO to modestly increase its staffing levels to 3,675 full-time equivalents to meet the demand for GAO services and ensure GAO employees have access to modern information technology tools and to a safe and secure work place. &nbsp;As outlined in the budget request, GAO plans to maximize its science and technology reporting capabilities to report on transformative technologies like artificial intelligence and blockchain, given the policy implications of these advances on government decision-making. GAO will also prioritize our reporting on government-wide cybersecurity capabilities; and continued evaluations of healthcare spending, military readiness, and defense weapons systems development.BackgroundGAO’s mission is to support Congress in meeting its constitutional responsibilities and to help improve government performance. &nbsp;Since 2002, GAO’s work has resulted in about $1.31 trillion in financial benefits and over 27,000 program and operational benefits. Congress relies on GAO’s nonpartisan, objective, and high-quality work to help inform congressional deliberations as well as oversight of the executive branch. GAO’s work spans the full breadth and scope of the federal government’s responsibilities.In fiscal year 2022, GAO issued over 500 reports with 1,255 new recommendations and over 450 legal opinions, and handled about 1,600 bid protests. GAO was asked to conduct work for the Chairs or Ranking Members for over 90 percent of all standing committees. GAO testified 72 times before 43 separate committees or subcommittees on topics such as DOD and VA suicide prevention efforts, NASA’s moon landing plans, and the Biodefense National Strategy.For more information, contact A. Nicole Clowers at (202) 512-4400 or clowersa@gao.gov.