Government Efficiency and Effectiveness: Opportunities to Reduce Fragmentation, Overlap, and Duplication and Achieve Other Financial Benefits
Released: 2018-05-23T00:00:00

Letter

Congress and Executive Branch Agencies Continue to Address Actions That Span the Federal Government

We monitor the progress that Congress and executive branch agencies have made in addressing the issues we identified in each of our last seven annual reports. As shown in table 4, Congress and executive branch agencies have made consistent progress in addressing many of the actions we identified from 2011 to 2017. As of March 2018, 376 (52 percent) of the actions we identified from 2011 to 2017 have been fully addressed. See our online Action Tracker for the status of all actions.

Billions in Financial Benefits Due to Actions Taken by Congress and Executive Branch Agencies

The progress Congress and executive branch agencies have made in addressing our open actions has resulted in $178 billion in financial benefits, including roughly $125 billion in financial benefits from 2010 through 2017, with at least an additional $53 billion in estimated benefits projected to accrue in 2018 or later. Table 5 highlights examples of these results.

These financial benefits continue to grow as we identify and document additional agency actions that respond to our recommendations. For example, in recent months CMS has formalized changes to its oversight of spending allowed for large Medicaid demonstrations, which allow states to test new ways to deliver or pay for care. These demonstrations, by HHS policy, should not raise federal costs over what the program would have cost without the demonstration—that is, they should be budget neutral. But our past work has shown that the spending HHS had authorized for these demonstrations was much higher than what was justified, as HHS had allowed states to use questionable methods when proposing spending for their demonstrations.

CMS’s new policy partially responds to a longstanding recommendation we have made to better ensure that valid methods are used to demonstrate budget neutrality. We anticipate that CMS’s recent actions could potentially reduce the federal government’s liability for Medicaid by billions, or tens of billions, annually.

While not all actions result in financial benefits to taxpayers, all of our suggested actions, when implemented, can result in other benefits—for instance, they make government more efficient or eliminate, reduce, or improve management of fragmented, overlapping, or duplicative programs. For example, such benefits can be seen in the results of our work on the government’s acquisition of space programs. For over two decades, we and others have reported on problems caused by fragmented leadership and a lack of a single authority in oversight of these multibillion dollar programs.

In 2012, we made a recommendation aimed at strengthening leadership and authority of space systems acquisitions. In response, in 2017 the President revived the National Space Council to provide a coordinated process for developing and monitoring the implementation of national space policy and strategy. Separately, in the National Defense Authorization Act for Fiscal Year 2018, Congress made changes to certain DOD space leadership positions and required the department to conduct a review and identify a recommended organizational and management structure for its national security space components, and submit related reports. The act also required DOD to contract with a federally funded research and development center not closely affiliated with the Air Force to develop a plan to establish a separate military department responsible for DOD national security space activities. These actions could reduce fragmentation and speed decision making in the development of a substantial investment in space systems.

Action on Remaining and New Areas Could Yield Significant Additional Benefits

While Congress and executive branch agencies have made progress toward addressing the 798 total actions we have identified since 2011, further steps are needed to fully address the 365 actions that are partially addressed or not addressed. We estimate that tens of billions of dollars in additional financial benefits could be realized should Congress and executive branch agencies fully address open actions. In addition to producing financial benefits, these actions make government more efficient; improve major government programs or agencies; reduce the risk of mismanagement, fraud, waste, and abuse; and increase assurance that programs comply with laws and funds are legally spent.

Significant Open Actions Directed to Congress

Congress has used our work to identify legislative solutions to achieve cost savings, address emerging problems, and find efficiencies in federal agencies and programs. Our work has contributed to a number of key authorizations and appropriations. In addition, congressional oversight of agencies’ efforts has been critical in realizing the full benefits of our suggested actions addressed to the executive branch, and it will continue to be critical in the future.

In our 2011 to 2018 annual reports, we directed 100 actions to Congress, including the 3 new congressional actions we identified in 2018. Of the 100 actions, 58 remain open (11 of which were partially addressed and 47 were not addressed or new) as of March 2018. Table 6 highlights areas with significant open actions directed to Congress. Appendix I has a full list of all open congressional actions.

Significant Open Actions Directed to Executive Branch Agencies

In our 2011 to 2018 annual reports, we directed 698 actions to executive branch agencies, including 65 new actions identified in 2018. Of the 698 actions, 307 remained open as of March 2018. Of these open actions, 164 were partially addressed and 143 were not addressed or new. While these open actions span the government, a substantial number of them are directed to seven agencies that made up 83 percent—$3.7 trillion—of federal outlays in fiscal year 2017 and have the largest number of open actions (see figures 2 and 3).

As shown in figure 3, seven agencies have at least 25 open actions.

The following sections highlight examples of open actions across those seven major agencies.

More Efficiently Targeting Defense Resources

In our 2011 to 2018 reports, we directed 176 actions to DOD in areas that center on DOD’s effectiveness in providing the military forces needed to deter war and to protect the security of the United States. As of March 2018, 74 of these 176 actions remained open. DOD represented about 14 percent of federal spending in fiscal year 2017, with outlays totaling about $635.5 billion. Our work suggests that effectively implementing these open actions, including those related to areas listed in table 7, could yield substantial financial benefits and improve DOD’s effectiveness.

Improving the Efficiency of Health Care Programs

In our 2011 to 2018 reports, we directed 111 actions to HHS in areas that contribute to HHS’s mission to enhance the health and well-being of Americans. HHS provides health coverage for over 145 million Americans through three principal programs—Medicare, Medicaid, and the Children’s Health Insurance Program—as well as the health-insurance marketplaces. HHS also operates other public health-related agencies such as the Food and Drug Administration, the Centers for Disease Control and Prevention, and the National Institutes of Health.

HHS represented about 27 percent of the fiscal year 2017 federal budget, with outlays totaling about $1.2 trillion. As of March 2018, 56 of HHS’s 111 actions remained open. Our work suggests that effectively implementing these actions, including those related to areas listed in table 8, could reduce costs, provide services more efficiently, and yield substantial financial benefits.

Enhancing Federal Revenues

In our 2011 to 2018 reports, we directed 91 actions to the Internal Revenue Service (IRS) in areas that contribute to effectively and efficiently providing high-quality service to taxpayers and enforcing the law with integrity and fairness to all. As of March 2018, 38 of these 91 actions remained open. The funding of the federal government depends largely upon IRS’s ability to collect taxes legally owed. Our work suggests that effective implementation of our open actions, including those related to areas listed in table 9, could increase revenues through better compliance or reduce costs.

Improving the Efficiency and Effectiveness of Homeland Security Operations

In our 2011 to 2018 reports, we directed 79 actions to the Department of Homeland Security (DHS) in areas that contribute to the effective implementation of its mission. In fiscal year 2017, DHS spent about $63.6 billion, about 1.4 percent of federal outlays. As of March 2018, 31 of the 79 actions to DHS remained open. Fully implementing these actions, including those related to areas listed in table 10, could result in financial benefits and substantial improvements in agency operations.

Advancing the Implementation of Government-Wide Policies and Performance

Many of the results the federal government seeks to achieve require the coordinated effort of more than one federal agency, level of government, or sector. OMB manages and coordinates many government-wide efforts. In our 2011 to 2018 reports, we directed 66 actions to OMB in areas to improve the efficiency and effectiveness of government-wide programs and activities. As of March 2018, 30 of the 66 actions to OMB remained open. Fully implementing these actions, including those related to areas listed in table 11, could yield significant financial benefits and substantial program improvements across government.

More Efficiently Administering Services to Retirees and Citizens with Disabilities

In our 2011 to 2018 reports, we directed 32 actions to the Social Security Administration (SSA) in areas that contribute to SSA providing financial assistance to eligible individuals through Social Security retirement and disability benefits and Supplemental Security Income (SSI) payments. As of March 2018, 27 of these 32 actions remained open.

In fiscal year 2017, SSA spent about $1 trillion, roughly 22 percent of federal outlays. While most of SSA’s funding is used to pay Social Security retirement, survivors, and disability benefits from the Old-Age and Survivors Insurance Trust Fund and the Disability Insurance Trust Fund, our work suggests that effective implementation of these actions, including the examples listed in table 12, could result in significant benefits.

Improving Support and Services for Veterans

In our 2011 to 2018 reports, we directed 54 actions to the Department of Veterans Affairs (VA) in areas that contribute to VA effectively and efficiently achieving its mission to promote the health, welfare, and dignity of all veterans by ensuring that they receive medical care, benefits, and social support. As of March 2018, 25 of these 54 actions remained open. In fiscal year 2017, VA spent about $183.0 billion—about 4 percent of federal outlays—for veterans’ benefits and services. Our work suggests that effective implementation of these actions, including those related to areas listed in table 13, could yield cost savings and efficiencies that would improve the delivery of services to the nation’s veterans and their families.

We will continue 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. We stand ready to assist this and other committees in further analyzing the issues we have identified and evaluating potential solutions.

Thank you, Chairman Enzi, Ranking Member Sanders, 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 26, 2018 report, please contact J. Christopher Mihm, Managing Director, Strategic Issues, at (202) 512-6806 or mihmj@gao.gov, and Jessica Lucas-Judy, Director, Strategic Issues, at (202) 512-9110 or lucasjudyj@gao.gov. Contact points for the individual areas listed in our 2018 annual report can be found at the end of each area in GAO-18-371SP. Contact points for our Congressional Relations and Public Affairs offices may be found on the last page of this statement.

Appendix I: Open Congressional Actions, by Mission

In our 2011 to 2018 annual reports, we directed 100 actions to Congress, of which 58 remain open. Of the 58 open congressional actions, 11 are partially addressed and 47 are not addressed or new, as of March 2018. See table 14.