Government Efficiency and Effectiveness: Opportunities to Reduce Fragmentation, Overlap, and Duplication and Achieve Other Financial Benefits
Published: 2014-04-08T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: As the fiscal pressures facing the government continue, so too does the need for executive branch agencies and Congress to improve the efficiency and effectiveness of government programs and activities. Opportunities to take action exist in areas where federal programs or activities are fragmented, overlapping, or duplicative.
To highlight these challenges and to inform government decision makers on actions that could be taken to address them, GAO is statutorily required to identify and report annually to Congress on federal programs, agencies, offices, and initiatives, both within departments and government-wide, which have duplicative goals or activities. GAO has also identified additional opportunities to achieve greater efficiency and effectiveness by means of cost savings or enhanced revenue collection.
This statement discusses the (1) new areas identified in GAO's 2014 annual report; (2) status of actions taken by the administration and Congress to address the 162 areas previously identified in GAO's 2011, 2012 and 2013 annual reports; and (3) opportunities to address the issues GAO identified. To identify what actions exist to address these issues and take advantage of opportunities for cost savings and enhanced revenues, GAO reviewed and updated prior work and recommendations for consideration.
section_title: What GAO Found
paragraphs: GAO's 2014 annual report identifies 64 new actions that executive branch agencies and Congress could take to improve the efficiency and effectiveness of 26 areas of government. GAO identifies 11 new areas in which there is evidence of fragmentation, overlap, or duplication. For example, under current law, individuals are allowed to receive concurrent payments from the Disability Insurance and Unemployment programs. Eliminating the overlap in these payments could save the government about $1.2 billion over the next 10 years. GAO also identifies 15 new areas where opportunities exist either to reduce the cost of government operations or enhance revenue collections. For example, Congress could rescind all or part of the remaining $4.2 billion in credit subsidies for the Advanced Technology Vehicles Manufacturing Loan program unless the Department of Energy demonstrates sufficient demand for this funding.
The executive branch and Congress have made progress in addressing the approximately 380 actions across 162 areas that GAO identified in its past annual reports. As of March 6, 2014, the date GAO completed its progress update audit work, nearly 20 percent of these areas were addressed, over 60 percent were partially addressed, and about 15 percent were not addressed, as shown in the figure below. Executive branch and congressional efforts to address these and other actions over the past 3 years have resulted in over $10 billion in cost savings with billions of dollars more in cost savings anticipated in future years.
Better data and a greater focus on outcomes are essential to improving the efficiency and effectiveness of federal efforts. Currently, there is not a comprehensive list of all federal programs and agencies often lack reliable budgetary and performance information about their own programs. Without knowing the scope, cost, or performance of programs, it is difficult for executive branch agencies or Congress to gauge the magnitude of the federal commitment to a particular area of activity or the extent to which associated federal programs are effectively and efficiently achieving shared goals.

section_title: Letter
paragraphs: I appreciate the opportunity to discuss our 2014 annual report, which  presents 26 new opportunities to reduce fragmentation, overlap, and  duplication, and achieve other financial benefits. My testimony today  describes the (1) new issues identified in our 2014 annual report; (2) the  status of actions taken by the administration and Congress to address the  issues identified in our past annual reports and (3) opportunities to  address the issues we identified. My comments are based upon our 2014  annual report, which is being released today, as well as our update on the  progress made in implementing actions that we have made in our  previous annual reports. These efforts are based upon work GAO  conducted in accordance with generally accepted government auditing  standards.
subsections: section_title: Twenty-six New Areas Identified to Improve Efficiency and Effectiveness across the Federal Government
paragraphs: We identified 11 new areas in which we found evidence of fragmentation,  overlap, or duplication and present 19 actions to executive branch  agencies and Congress to address these issues. As described in table 1,  these areas span a wide range of federal functions or missions.
We consider programs or activities to be fragmented when more than one  federal agency (or more than one organization within an agency) is  involved in the same broad area of national need, which may result in  inefficiencies in how the government delivers services. We identified  fragmentation in multiple programs we reviewed. For example, the  Department of Defense (DOD) does not have a consolidated agency-wide  strategy to contract for health care professionals, resulting in a  contracting approach that is largely fragmented. Although some of the  military departments have attempted to consolidate their health care  staffing requirements through joint-use contracts, such contracts only  accounted for approximately 8 percent of the $1.14 billion in obligations  for health care professionals in fiscal year 2011.
Moreover, in May 2013, we identified several instances in which  numerous task orders were awarded by a single military department for  the same type of health care professional in the same area or facility. For  example, we identified 24 separate task orders for contracted medical  assistants at the same military treatment facility. By not consolidating its  requirements, this facility missed the opportunity to achieve potential cost  savings and other efficiencies. To reduce fragmentation and achieve  greater efficiencies, DOD should develop a consolidated agency-wide  strategy to contract for health care professionals.
Fragmentation can also be a harbinger for overlap or duplication. Overlap  occurs when multiple agencies or programs have similar goals, engage in  similar activities or strategies to achieve them, or target similar  beneficiaries. We found overlap among federal programs or initiatives in a  variety of areas, such as overlapping benefits between the Disability  Insurance and Unemployment Insurance programs. In July 2012, we  reported that 117,000 individuals received concurrent cash benefit  payments in fiscal year 2010 from the Disability Insurance and  Unemployment Insurance programs totaling more than $850 million  because current law does not preclude the receipt of overlapping  benefits. Individuals may be eligible for benefit payments from both  Disability Insurance and Unemployment Insurance due to differences in  the eligibility requirements; however, in such cases, the federal  government is replacing a portion of lost earnings not once, but twice.
The President’s fiscal year 2015 budget submission proposes to eliminate  these overlapping benefits, and during the 113th Congress, bills have  been introduced in both the House of Representatives and the Senate  containing language to reduce Disability Insurance payments to  individuals for the months they collect Unemployment Insurance benefits.  According to the Congressional Budget Office (CBO), this action could  save $1.2 billion over 10 years in the Social Security Disability Insurance  program. Congress should consider passing legislation to offset Disability  Insurance benefit payments for any Unemployment Insurance benefit  payments received in the same period.
In other areas of our work, we found evidence of duplication, which  occurs when two or more agencies or programs are engaged in the same  activities or provide the same services to the same beneficiaries.  Examples of duplicative, or potentially duplicative, federal efforts include  DOD’s use of dedicated satellite control operations. We reported in April  2013 that DOD has increasingly deployed dedicated satellite control  operations networks as opposed to shared networks that support multiple  kinds of satellites. For example, at one Air Force base in 2013, eight  separate control centers operated 10 satellite programs. Dedicated  networks can offer some benefits to programs, but they can also be more  costly to maintain and have led to a fragmented, and potentially  duplicative, approach that requires more infrastructure and personnel to  manage when compared with shared networks.
While opportunities exist to improve DOD satellite control operations, we  identified certain barriers that hinder DOD’s ability to increase the use of  shared networks, such as the inability to quantify all spending on satellite  ground control operations and the absence of DOD-wide guidance or a  plan that supports the implementation of alternative methods for  performing satellite control operations. These barriers also have hindered  DOD’s ability to achieve optimal satellite control systems that would result  in cost savings in this area. To address the duplication and inefficiencies  that arise from dedicated satellite control operations networks, DOD  should take actions to improve its ability to identify and then assess the  appropriateness of a shared versus dedicated satellite control system.
In addition to areas of fragmentation, overlap, and duplication, our 2014  report identified 15 new areas where opportunities exist either to reduce  the cost of government operations or to enhance revenue collections for  the Treasury and suggest 45 actions that the executive branch and  Congress can take to address these issues. These opportunities for  executive branch or congressional action exist in a wide range of federal  government missions (see table 2).
For example, to achieve cost savings, Congress may wish to consider  rescinding all or part of the remaining credit subsidy appropriations to the  Advanced Technology Vehicles Manufacturing (ATVM) loan program,  unless the Department of Energy (DOE) can demonstrate sufficient  demand for new ATVM loans and viable applications. We reported in  March 2013 that DOE last issued a loan under this program in March  2011 and was not actively considering any applications for the remaining  $4.2 billion in credit subsidy appropriations under the ATVM loan  program. Also, most applicants and manufacturers we had spoken to  indicated that the costs of participating outweigh the benefits to their  companies and that problems with other DOE programs have tarnished  the ATVM loan program, which may have led to a deficit of applicants.  Since our March 2013 report, DOE has received one application seeking  approximately $200 million.
DOE recently stated that it has begun new outreach efforts to potential  applicants that will increase awareness and interest in the program and  lead to additional applications in 2014. However, DOE has not further  demonstrated a demand for ATVM loans, such as new applications that  meet all the program eligibility requirements and involve amounts  sufficient to justify retaining the remaining credit subsidy appropriations,  nor has it explained how it plans to address challenges cited by previous  applicants including a burdensome review process. Determining whether  program funds will be used is important, particularly in a constrained fiscal  environment, as unused appropriations could be rescinded or directed  toward other government priorities.
We also identified multiple opportunities for the government to increase  revenue collections. In particular, the federal government could increase  tax revenue collections by hundreds of millions of dollars over a 5-year  period by denying certain privileges or payments to individuals with  delinquent federal tax debt. For example, Congress could enable or  require the Secretary of State to screen and prevent individuals who owe  federal taxes from receiving passports. We found that in fiscal year 2008,  passports were issued to about 16 million individuals; of these, over 1  percent collectively owed over $5.8 billion in unpaid federal taxes as of  September 30, 2008. According to a 2012 CBO estimate, the federal  government can save about $500 million over a 5-year period on the  revocation or denial of passports in case of certain federal tax  delinquencies.
section_title: Executive Branch and Congress Continue to Make Progress in Addressing Previously Identified Issues
paragraphs: In addition to the new actions identified for this year’s annual report, we  have continued to monitor the progress that executive branch agencies  and Congress have made in addressing the issues we identified in our  last three annual reports. We evaluated progress by determining an  overall assessment rating for each area and an individual assessment  rating for each action within an area. We found that the executive branch  agencies and Congress have generally made progress in addressing the  162 areas we previously identified. As of March 6, 2014, the date we  completed our audit work, 19 percent of these areas were addressed, 62  percent were partially addressed, and 15 percent were not addressed  (see fig.1). Within these areas, we presented about 380 actions that the  executive branch agencies and Congress could take to address the  issues identified. As of March 6, 2014, 32 percent of these actions were  addressed, 44 percent were partially addressed and 19 percent were not  addressed.
Congress and executive branch agencies have made progress toward  addressing our identified actions, as shown in figure 2. In particular, an  additional 58 actions have been assessed as addressed over the past  year. These addressed actions include 19 actions identified in 2011, 21  actions identified in 2012, and 18 actions identified in 2013.
The following examples illustrate the progress that has been made over  the past year:
Farm program payments: In our 2011 annual report, we stated that  Congress could save up to $5 billion annually by reducing or  eliminating direct payments. Direct payments are fixed annual  payments to farmers based on a farm’s history of crop production.  Farmers received them regardless of whether they grew crops and  even in years of record income. The Agricultural Act of 2014  eliminated direct payments and should save approximately $4.9 billion  annually from fiscal year 2015 through fiscal year 2023, according to  CBO.
Passenger aviation security fees: In our 2012 annual report, we  presented options for adjusting the Transportation Security  Administration’s (TSA) passenger security fee—a uniform fee on  passengers of U.S. and foreign air carriers originating at airports in  the United States—to offset billions of dollars in civil aviation security  costs. The Bipartisan Budget Act of 2013, enacted on December 26,  2013, modifies the passenger security fee from its current per  enplanement structure ($2.50 per enplanement with a maximum one- way-trip fee of $5.00) to a structure that increases the passenger  security fee to a flat $5.60 per one-way trip, effective July 1, 2014.  Pursuant to the act, collections under this modified fee structure will  contribute to deficit reduction as well as to offsetting TSA’s aviation  security costs. Specifically, the act identifies $12.6 billion in fee  collections that, over a 10-year period beginning in fiscal year 2014  and continuing through fiscal year 2023, will contribute to deficit  reduction. Fees collected beyond those identified for deficit  reduction are available, consistent with existing law, to offset TSA’s  aviation security costs. According to the House of Representatives  and Senate Committees on the Budget, and notwithstanding amounts  dedicated for deficit reduction, collections under the modified fee  structure will offset about 43 percent of aviation security costs,  compared with the approximately 30 percent currently offset under the  existing fee structure.
Combat uniforms: In our 2013 annual report, we noted that DOD  employed a fragmented approach for acquiring combat uniforms and  could improve efficiency, better protect servicemembers, and realize  cost savings through increased collaboration among the military  services. Over the past year, DOD and Congress addressed all three  actions that we identified. In September 2013, DOD developed and  issued guidance on joint criteria that will help to ensure that future  service-specific uniforms will provide equivalent levels of performance  and protection. In December 2013, a provision in the National  Defense Authorization Act for Fiscal Year 2014 established as policy  that the Secretary of Defense shall eliminate the development and  fielding of service-specific combat and camouflage utility uniforms in  order to adopt and field common uniforms for specific environments to  be used by all members of the armed forces. Subject to certain  exceptions, the provision also prohibits the military departments from  adopting new pattern designs or uniform fabrics unless they will be  adopted by all services or the uniform is already in use by another  service.
We estimate that executive branch and congressional efforts to address  these and other actions from fiscal year 2011 through fiscal year 2013  have resulted in over $10 billion in realized cost savings to date, and  projections of these efforts have estimated that billions of dollars more in  savings will accrue over the next 10 years.
Although Congress and executive branch agencies have made notable  progress toward addressing the actions we have identified, further steps  are needed to fully address the remaining actions, as shown in table 3.  More specifically, over 60 percent of actions directed to Congress and  executive branch agencies identified in 2011, 2012, and 2013 remain  partially addressed or not addressed.
Sustaining momentum and making significant progress on our suggested  actions for reducing, eliminating, or better managing fragmentation,  overlap, or duplication or achieving other potential financial benefits  cannot occur without demonstrated commitment by executive branch  leaders and continued oversight by Congress. A number of the issues  that we have identified are complex, and implementing many of the  actions will take time and sustained leadership. As our work has shown,  committed leadership is needed to overcome the many barriers to  working across agency boundaries, such as agencies’ concerns about  protecting jurisdiction over missions and control over resources or  incompatible procedures, processes, data, and computer systems.  Without increased or renewed leadership focus, agencies may miss  opportunities to improve the efficiency and effectiveness of their programs  and save taxpayers’ dollars.
As we have previously reported, addressing the issues identified in our  annual reports could lead to tens of billions of dollars of savings. Table 4  highlights selected opportunities that could result in cost savings or  enhanced revenues.
section_title: Better Data and a Focus on Outcomes Are Essential to Improving Efficiency and Effectiveness
paragraphs: Even with sustained leadership, addressing fragmentation, overlap, and  duplication within the federal government is challenging because it may  require agencies and Congress to re-examine within and across various  mission areas the fundamental structure, operation, funding, and  performance of a number of long-standing federal programs or activities  with entrenched constituencies. As we have previously reported, these  challenges are compounded by a lack of good data.
In particular, we have found that the lack of a comprehensive list of  federal programs and reliable budget information makes it difficult to  identify, assess, and address potential fragmentation, overlap, and  duplication. Currently, no comprehensive list of federal programs exists,  nor is there a common definition for what constitutes a federal program.  We have also reported instances where agencies could not isolate  budgetary information for some programs because the data were  aggregated at higher levels. For example, in 2012 we reported that  agencies were not able to provide complete and reliable federal funding  information on many of the 94 nonfederal sector green building initiatives.  According to agency officials, many of the initiatives are part of broader  programs, and the agencies do not track green building funds separately  from the funds for other activities.
Without knowing the scope of programs or the full cost of implementing  them, it is difficult for executive branch agencies or Congress to gauge  the magnitude of the federal commitment to a particular area of activity or  the extent to which associated federal programs are effectively and  efficiently achieving shared goals. Moreover, the lack of reliable, detailed  budget information makes it difficult to estimate the cost savings that  could be achieved should Congress or agencies take certain actions to  address identified fragmentation, overlap, and duplication. Absent this  information, Congress and agencies cannot make fully informed decisions  on how federal resources should be allocated and the potential budget  trade-offs.
In addition, we have called attention to the need for improved and regular  performance information. The regular collection and review of  performance information, both within and among federal agencies, could  help executive branch agencies and Congress determine whether the  return on federal investment is adequate and make informed decisions  about future resource allocations. However, as we previously noted, our  annual reports on fragmentation, overlap, and duplication highlight  several instances in which executive branch agencies do not collect  necessary performance data.
Effective implementation of the framework originally put into place by the  Government Performance and Results Act of 1993 (GPRA) and  significantly enhanced by the GPRA Modernization Act of 2010  (GPRAMA) could help clarify desired outcomes, address program  performance spanning multiple organizations, and facilitate future actions  to reduce, eliminate, or better manage fragmentation, overlap, and  duplication. In particular, GPRAMA establishes a framework aimed at  taking a more crosscutting and integrated approach to focusing on results  and improving government performance. The crosscutting approach  required by the act will provide a much needed basis for more fully  integrating a wide array of federal activities as well as a cohesive  perspective on the long-term goals of the federal government that is  focused on priority policy areas. It could also be a valuable tool for re- examining existing programs government-wide and for considering  proposals for new programs.
However, the usefulness of these requirements hinges on the effective  implementation of the act’s provisions. In our June 2013 review of initial  implementation, we reported that the executive branch needed to more  fully implement GPRAMA to address pressing governance challenges,  such as addressing fragmentation, overlap, and duplication. Moreover,  our ongoing work continues to find opportunities to improve  implementation of the act. For example, GPRAMA requires the Office of  Management and Budget (OMB) to develop an inventory of federal  programs. OMB directed 24 large federal agencies to develop and  publish inventories of their programs in May 2013. However, our  preliminary review of these initial inventories identified concerns about the  usefulness of the information being developed and the extent to which it  might be able to assist executive branch and congressional efforts to  identify and address fragmentation, overlap, and duplication. For  example, OMB’s guidance for developing the inventories provided  agencies with flexibility to define their programs by such factors as  outcomes, customers, products/services, organizational structure, and  budget structure. As a result, agencies took various approaches to define  their programs. Many used their budget structure while others used  different approaches, such as identifying programs by related outcomes  or customer focus. The variation in definitions across agencies limits  comparability among similar programs.
Proposed legislation could help address some of the data limitations we  have identified. For example, the proposed Digital Accountability and  Transparency Act is intended to improve the accountability and  transparency of federal spending data (1) by establishing government- wide financial data standards so that data are comparable across  agencies and (2) by holding agencies more accountable for the quality of  the information disclosed. Such increased transparency provides  opportunities for improving the efficiency and effectiveness of federal  spending and improving oversight to prevent and detect fraud, waste, and  abuse of federal funds.
In conclusion, identifying and addressing instances of fragmentation,  overlap, and duplication is challenging. While some progress has been  made, more work remains. We plan to conduct further analysis to look for  additional or emerging instances of fragmentation, overlap, and  duplication and opportunities for cost savings or revenue enhancement.  Likewise, we will continue to monitor developments in the areas we have  already identified in this series. We stand ready to assist this and other  committees in further analyzing the issues we have identified and  evaluating potential solutions.
Chairman Issa, Ranking Member Cummings, and Members of the  Committee, this concludes my prepared statement. I would be pleased to  answer questions.
section_title: GAO Contacts
paragraphs: For further information on this testimony or our April 8, 2014, report,  please contact Orice Williams Brown, Managing Director, Financial  Markets and Community Investment, who may be reached at (202) 512- 8678 or williamso@gao.gov, and A. Nicole Clowers, Director, Financial  Markets and Community Investment, who may be reached at (202) 512- 8678 or clowersa@gao.gov. Contact points for the individual areas listed  in our 2014 annual report can be found at the end of each area at  http://www.gao.gov/products/GAO-14-343SP. Contact points for our  Congressional Relations and Public Affairs offices may be found on the  last page of this statement.
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