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

Letter

Twenty-six New Areas Identified to Improve Efficiency and Effectiveness across the Federal Government

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.

Executive Branch and Congress Continue to Make Progress in Addressing Previously Identified Issues

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.

Better Data and a Focus on Outcomes Are Essential to Improving Efficiency and Effectiveness

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.

GAO Contacts

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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