Comptroller General Testifies to U.S. House on Government Duplication, Overlap and Fragmentation

[ Silence ]>>The General is recognized.>>Thank you very much, Mr. Chairman. I’m very pleased to be here today before the committee, Ranking Member Cummings, members of the committee, to talk about GAO’s body of work on overlap, duplication, and fragmentation in the federal government and opportunities to achieve greater efficiencies and effectiveness in government. Our report this year for 2012, like the report last year, touches on many parts of the federal government, most civilian major departments and agencies as well as the Defense Department. In Defense, for example, one of the areas we point out is unmanned aircraft systems, of which the department plans to spend over $37 billion over the next 4 years to purchase not only aircraft but payloads, which are operating system, censors, et cetera, as well as ground control stations. Now, we found that these service-centered requirements, rather than an effective overall department strategy, is causing a great degree of overlap in this effort. For example, the Navy was unable to provide us justification why it was going to develop an aircraft similar to the Air Force Global Hawk aircraft as opposed to buying additional Global Hawk aircrafts. And also the Army and Navy are separately pursuing software for cargo and surveillance technologies that are likely to produce similar requirements going forward. So we’ve made a number recommendation to strengthen management of this program. There are huge opportunities for significant savings if the department can better manage these programs and focus on commonality of requirements and making sure that there’s effective management of this program. This is especially important since in the new defense strategy, there’s going to be greater reliance on unmanned aircraft systems. We point out in our report the same things are true in the department’s efforts for electronic warfare and also countermeasures for improvised explosive devices. Now on the civilian front, one good example is in the housing area, which is a new area for this year. We point out there are over 20 different entities managing over 160 different programs, tax expenditures, and other activities to promote home ownership and to provide rental support to Americans. One area that we’ve singled out this year for consolidation potential is in the areas involving the Agriculture Department and the Housing Department. Now you have eight times-in 2009-eight times as many single-family home loans given to distressed … economically distressed rural communities by HUD than you do by Agriculture. Conversely, Agriculture’s given many of its loans near urban areas. In fact, 56 percent of them in 2009 were given in metropolitan counties. So there’s opportunities here; the administration has a task force they’re putting together to look at the housing areas, we’re looking more closely at it, but I think that’s one area that’s very ripe for potential consolidation and streamlining activities. Also, there are many support operations of the federal government where there’s a need for streamlining and efficiency. For example, we looked at the Department of Defense and Energy and at the Department of Homeland Security, looked to see if they had duplicative IT investments. And indeed we found 37 different areas within Defense and Energy alone that were potentially duplicative IT investments. And those investments represented over a billion dollars in funding for those areas. We didn’t find any on our own in the Department of Homeland Security, but they found some on … on their own and saved $41 million and identified other opportunities. There’s also opportunities we found in facility security assessments. Agencies were doing their own facility security investments, while also paying the Department of Homeland Security Federal Protective Service for doing security assessments that they weren’t doing, so there was duplication there. Same thing is true with background investigations for security clearances. We found a number of areas where agencies were standing up on their own case management and adjudication systems, rather than the shared common system across the federal government, so that there was redundancies there and money spent that did not have to be spent. Now, like last year’s report, in addition to overlap, duplication, and fragmentation, we highlight additional cost savings opportunities and opportunities for revenue enhancements. For example, in cost savings there are billions of dollars that could be saved through wider use of information technology to deal with improper payments in the Medicare and Medicaid areas. There’s also refinements that could be made in the process by which there are adjustments made to the Medicare Advantage payments based upon the diagnosis given beneficiaries and the differences between their coding systems and the fee-for-service system. We’ve estimated that could be between, you know, $1.2 and $2.7 billion right there. On a revenue enhancement side, we point out many opportunities, such as the potential for selling excess uranium inventories that the Department of Defense have. There are user fees that could be adjusted to be more contemporary for people-international travelers coming into the country-that could take away from the need to use general appropriations to pay for those activities. And there are many opportunities for the Internal Revenue Service to deal with tax enforcement of what’s now estimated to be a $385 billion gap between taxes owed under the current system and taxes paid. That’s up from 290 billion the last time I appeared before this committee. So we recommend a number of activities in those areas. In addition, we published a separate report, Mr. Chairman, as you alluded to in your statement about progress-and Representative Cummings-about progress from last year. And we found, of the 81 areas, 4 had been fully addressed, 60 had been partially addressed, and 17 had not been addressed. So there are many opportunities. We think, collectively, the opportunities pointed out in our report last year and the new ones this year, there are tens of billions of dollars that could be saved, and more importantly, more effective in streamline government serving American people. So, I look forward to answering your questions and I appreciate the opportunity to be here today, so thank you very much.

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