The List Nobody Wants to Make: The 2015 GAO High Risk List

By Leslie Paige
WasteWatcher, February 2015

Anyone who has spent time on social media in recent years has inevitably noticed the proliferation of lists.  There are lists associated with everything from 24 Things Only People Who Love Valentine’s Day Will Understand to Double Vision: Top Ten Most Famous Twins and the 50 Funniest Grumpy Cat Memes to 13 Off-Beat, Kinda Weird, But Totally Cool Things to Do in L.A.  There are even lists about other lists.  In fact, there are hundreds, perhaps thousands, of websites hopelessly devoted to posting almost nothing but…lists.

However, in Washington, there is definitely one list that everyone seems to want to avoid, the Government Accountability Office’s (GAO) biennial High Risk List.  This year’s list is a compendium of 32 federal programs that merit concern “due to their vulnerabilities to fraud, waste, abuse, and mismanagement or are most in need of broad reform.  The High Risk List has documented more than $40 billion in financial benefits and 866 other improvements related to high-risk areas.”

According to GAO, 18 of the 30 high-risk areas that were on the 2013 list “at least partially met all of the criteria for removal from the list” and 11 “met at least one criteria and partially met all others.”  However, in 2015, the GAO also added two new areas of concern, Managing Risks and Improving Health Care and Improving the Management of IT Acquisition and Operations.  Longevity of programs on the lists is clearly a problem.  Twelve of the troubled areas have been on the GAO’s watch list for at least 18 years and six, including Medicare and Medicaid, have been on the list since its inception in 1990.

One of the nagging problems cited by GAO in regards to Medicare is improper payments, which increased from 10.1 percent in fiscal year (FY) 2013 to 12.7 percent in FY 2014.  One of the reasons for the uptick in improper payments is Congress’ complicity in allowing the Centers for Medicare and Medicaid Services to suspend and weaken the Recovery Audit Contractor Program, which has recovered $9.7 billion for the Medicare Trust Fund and taxpayers.    

The United States Postal Service (USPS) also made the list again.  GAO observed that even though the USPS has cut costs by $8 billion since 2013, it lost $5 billion and $5.5 billion in FYs 2013 and 2014, respectively.   First-class mail volume has dropped by 35 percent since 2006 and that trend will continue and accelerate.  The USPS has been searching frantically for new revenue streams that unfairly compete with the private sector and show little promise of profitability, such as grocery delivery and financial services, instead of radically reforming its labor infrastructure and business practices.  Congress has been unhelpful on this issue, as members have routinely prevented the USPS from undertaking the needed reforms such as closing low volume post offices.    

It is not surprising that IT acquisition is a new addition to the 2015 list.  GAO has repeatedly emphasized that IT investments are chronically mismanaged, frequently not completed, and end up costing a lot more than projected.  GAO has made 730 recommendations to help federal manager’s improve IT oversight and implementation over the last five years but only 23 percent have been acted upon. 

Dozens of agency inspector general reports have also cited IT mismanagement and failures government-wide, including the Department of Veterans Affairs’ Core Financial and Logistics System, which cost taxpayers $249 million after six years of missed deadlines; the IRS’ Cyberfile program wasted $17 million before being discontinued.  The Office of Management and Budget has also tried to rein in duplicative IT projects and help identify high risk projects; however, GAO found that these efforts have also encountered strong headwinds.

The House Oversight and Government Reform Committee (OGR) held a hearing on the 2015 GAO High Risk List on February 11, 2015 featuring GAO’s Comptroller General Gene Dodaro;  Senior Advisor to the Secretary of the Energy Department John MacWilliams; Associate Administrator, National Aeronautics and Space Administration Robert Lightfoot, Jr.; Deputy Administrator and Director of the Center for Program Integrity at the CMS Shantanu Agrawal, M.D.; Principal Deputy Under Secretary of Defense for Acquisition, Technology and Logistics at the Defense Department Alan Estevez, and Internal Revenue Service Commissioner John Koskinen.

When delving into the details of the agencies’ woes, several overarching themes emerged during the hearing.  It was clear that in almost all the cases, the problems highlighted by GAO had lingered, and even worsened over a period of years or decades.  Furthermore, bureaucrats inside the agencies were simply not adequately motivated to lean into problems of government waste, fraud, mismanagement, and abuse and even less incented to take corrective action without hard triggers (annual mandatory reporting requirements, for example).  Dodaro stated unequivocally that no key management reforms have ever taken place in the federal government absent clearly defined statutory requirements.  He forcefully nudged Congress to grapple with areas of concern sooner rather than later; the nation’s privacy laws date back to 1994 and must be modernized, the USPS is virtually hamstrung when it comes to making needed changes to its business model until Congress acts.  

All of the members of the OGR agreed that a timely and thorough implementation of the Federal Information Technology Acquisition Reform Act, which passed in 2014, would be essential to realize substantial savings that GAO has identified. 

Dodaro started emphatically that a lack of funding is not what plagues programs on the High Risk List.  When D.C. Delegate Eleanor Holmes Norton (D) asked Dodaro whether “it would be fair to say that a significant challenge to getting of the [High Risk] list would be scarcity of resources these days?,” Dodaro would not concur.  Instead he confirmed what so many have long understood, saying “It could be that they’re not using the funding they have very well, it doesn’t necessarily mean that they need more money.”  She didn’t press him further.

Ironically, at the same time that GAO was releasing its High Risk List, the American Federation of Government Employees was holding its annual legislative conference for new lawmakers, and its head, David Cox, was laying down the gauntlet.  With lawmakers from both parties sitting before him, Cox threatened to “whoop [the] ass” of anybody in Congress who stood in the unions’ way or made any attempts to shrink the bloated federal workforce. 

While the 2015 GAO High Risk Report could be an extremely effective roadmap to help Congress winnow back ineffective and duplicative programs, shrink or eliminate wasteful government programs, and eliminate inefficient practices, it also presents lawmakers and taxpayers with an interesting conundrum.  In the current legislative environment, where the next budget battle will be over whether to lift the sequester, blow through the budget caps enacted in the Budget Control Act of 2011, and provoke the ire of the federal employees’ unions, it is questionable whether Congress will be willing to exert rigorous oversight and make tough determinations on which programs are working.  Without better management practices, and absent a federal workforce willing to take the initiative to cut the waste, fraud, and abuse, and be held accountable to higher performance standards, preserving the across-the-board spending caps may be the only way to impose true fiscal discipline. 

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