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Duplication, Overlap, and Fragmentation, Save Tax Dollars, and Enhance 
Revenue' which was released on February 28, 2012. 

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United States Government Accountability Office: 
GAO: 

Report to Congressional Addressees: 

February 2012: 

Follow-up on 2011 Report: Status of Actions Taken to Reduce 
Duplication, Overlap, and Fragmentation, Save Tax Dollars, and Enhance 
Revenue: 

GAO-12-453SP: 

Contents: 

Letter: 

Enclosure I: Overall Progress Made in Each of the 81 Areas: 

Enclosure II: Progress Update for Each of the 176 Actions Needed 
within the 81 Areas: 

Enclosure III: Scope and Methodology: 

Tables: 

Table 1: Overall Progress Made in Each of the GAO Identified Areas of 
Potential Duplication, Overlap, and Fragmentation, as of February 10, 
2012: 

Table 2: Overall Progress Made to Address GAO-Identified Cost-Saving 
and Revenue-Enhancing Areas, as of February 10, 2012: 

Abbreviations: 

ASC: alternative simplified credit: 

ATF: Bureau of Alcohol, Tobacco, Firearms, and Explosives: 

BEST: Border Enforcement Security Task Force: 

BLM: Bureau of Land Management: 

CBP: Customs and Border Protection: 

CDE: Community Development Entity: 

CIO: Chief Information Officer: 

CMS: Centers for Medicare & Medicaid Services: 

Commerce: Department of Commerce: 

CDBG: Community Development Block Grant: 

Coordinating Council: Interagency Transportation Coordinating Council 
on Access and Mobility: 

Corps: U.S. Army Corps of Engineers: 

CPRA: Civilian Real Property Realignment Act: 

DHS: Department of Homeland Security: 

DOD: Department of Defense: 

DOT: Department of Transportation: 

EAS: Essential Air Service: 

EDA: Economic Development Administration: 

ESEA: Elementary and Secondary Education Act of 1965: 

FAM: Foreign Affairs Manual: 

FBI: Federal Bureau of Investigation: 

FCC: Federal Communications Commission: 

FEMA: Federal Emergency Management Agency: 

FMCSA: Federal Motor Carrier Safety Administration: 

GPRAMA: Government Performance and Results Modernization Act of 2010: 

GSA: General Services Administration: 

HHS: Department of Health and Human Services: 

HUD: Department of Housing and Urban Development: 

IBET: Integrated Border Enforcement Team: 

IED: improvised explosive device: 

iEHR: integrated electronic health record: 

IILCM: integrated investment life cycle model: 

Interior: Department of the Interior: 

IPERA: Improper Payments Elimination and Recovery Act of 2010: 

IRS: Internal Revenue Service: 

IT: information technology: 

JIEDDO: Joint Improvised Explosive Device Defeat Organization: 

Justice: Department of Justice: 

Labor: Department of Labor: 

MOU: memorandum of understanding: 

MPPR: multiple procedure payment reduction: 

NSS: National Security Staff: 

OFPP: Office of Federal Procurement Policy: 

OMB: Office of Management and Budget: 

O&S: operating and support: 

PAR: Performance and Accountability Report: 

RAC: recovery audit contractor: 

R&D: research and development: 

ROI: return on investment: 

SBA: Small Business Administration: 

SIOC: Strategic Information Operation Centers: 

SPOT: Screening of Passengers by Observation Techniques: 

S&T: Science and Technology Directorate: 

State: Department of State: 

TANF: Temporary Assistance for Needy Families: 

T&E: testing and evaluation: 

Treasury: Department of the Treasury: 

TRIAD: Transit and Rail Intelligence Awareness Daily: 

TSA: Transportation Security Administration: 

USAID: U.S. Agency for International Development: 

USDA: U.S. Department of Agriculture: 

USICH: U.S. Interagency Council on Homelessness: 

VA: Department of Veterans Affairs: 

VEETC: Volumetric Ethanol Excise Tax Credit: 

VR: vocational rehabilitation: 

[End of section] 

United States Government Accountability Office: 
Washington, DC 20548: 

February 28, 2012: 

Congressional Addressees: 

In March 2011, GAO issued its first annual report to the Congress on 
potential duplication, overlap, and fragmentation in the federal 
government.[Footnote 1] The report also identified opportunities to 
achieve cost savings and enhance revenues. We identified 81 areas--
which span a wide range of government missions[Footnote 2]--with a 
total of 176 actions[Footnote 3] that the Congress and the executive 
branch could take to reduce or eliminate unnecessary duplication, 
overlap, and fragmentation or achieve other potential financial 
benefits. We also presented areas where programs may be able to 
achieve greater efficiencies or become more effective in providing 
government services. In many areas, we suggested actions--identifying 
some new options, as well as underscoring numerous existing GAO 
recommendations--that policymakers could consider. This status report 
provides an overall assessment of progress in implementing actions for 
the 81 areas, as well as an assessment of each of the 176 suggested 
actions. 

As of February 10, 2012, the Congress and the executive branch had 
made some progress in addressing the majority of the 81 areas that we 
identified, including the implementation of all actions in 4 areas; 
however, additional steps are needed to fully implement the remaining 
actions to achieve associated benefits. GAO suggested a wide range of 
actions for the Congress and the executive branch to consider, such as 
developing strategies to better coordinate fragmented efforts, 
implementing executive initiatives to improve oversight and evaluation 
of overlapping programs, considering enactment of legislation to 
facilitate revenue collection, and examining opportunities to 
eliminate potential duplication through streamlining, collocating, or 
consolidating program efforts or administrative services. 

GAO's specific assessment of progress as of February 10, 2012, showed 
that 4 (or 5 percent) of the 81 areas GAO identified were addressed; 
60 (or 74 percent) were partially addressed; and 17 (or 21 percent) 
were not addressed. Enclosure I presents GAO's assessment of the 
overall progress made in each area. GAO applied the following criteria 
in making these overall assessments for the 81 areas. We determined 
that an area was: 

* "addressed" if all actions needed in that area were addressed; 

* "partially addressed" if at least one action needed in that area 
showed some progress toward implementation, but not all actions were 
addressed; and: 

* "not addressed" if none of the actions needed in that area were 
addressed. 

As of February 10, 2012, the majority of 176 actions needed within the 
81 areas identified by GAO have been partially addressed. 
Specifically, 23 (or 13 percent) were addressed[Footnote 4]; 99 (or 56 
percent) were partially addressed; 54 (or 31 percent) were not 
addressed[Footnote 5]. Enclosure II presents a progress update for 
each of the 176 legislative and executive actions needed that GAO 
identified within the 81 areas, as well as GAO's assessment of that 
progress. GAO applied the following criteria in making these 
assessments. 

For legislative branch actions: 

* "addressed," means relevant legislation is enacted and addresses all 
aspects of the action needed;[Footnote 6] 

* "partially addressed," means a relevant bill has passed a committee, 
the House or Senate, or relevant legislation has been enacted, but 
only addressed part of the action needed; and: 

* "not addressed," means a bill may have been introduced, but did not 
pass out of a committee, or no relevant legislation has been 
introduced. 

For executive branch actions: 

* "addressed," means implementation of the action needed has been 
completed; 

* "partially addressed," means the action needed is in development, 
started but not yet completed; 

* "not addressed," means the administration and/or agencies have made 
minimal or no progress toward implementing the action needed. 

In addition to the actions taken reported above, Congress has held a 
number of hearings and the Office of Management and Budget (OMB) has 
provided guidance to executive branch agencies on areas that GAO 
identified that could benefit from increased attention and ongoing 
oversight. Since the issuance of our March 2011 report, GAO has 
testified numerous times on its first annual report and on specific 
issues highlighted in the report. On August 17, 2011, OMB issued its 
Fiscal Year 2013 Budget Guidance, which stated that agencies' 2013 
budget submissions and management plans should take into consideration 
areas of duplication or overlap identified by GAO, as well as by 
others. The guidance also advised agencies to take a number of other 
steps to achieve efficiency increases, such as identifying and 
including in their budget submissions cost-saving efforts that will 
improve operational efficiency and taxpayers' rate of return, 
including program integration, reorganizations within and between 
agency components, and resource realignment to improve public services. 

Streamlining federal efforts, reducing government costs, and enhancing 
revenue collections can offer financial and other benefits. Today, and 
concurrently with this report, GAO issued its second annual report to 
Congress in response to the statutory requirement that GAO identify 
federal programs, agencies, offices, and initiatives with duplicative 
goals or activities.[Footnote 7] That report identifies 51 additional 
issue areas and numerous actions within those issue areas that, if 
implemented, may further improve programs' effectiveness and 
efficiency, achieve cost savings, and enhance revenues. 

Opportunities exist for the Congress and federal agencies to continue 
to address the identified actions needed in our March 2011 and 
February 2012 reports. Collectively, these reports show that, if the 
actions are implemented, the government could save tens of billions of 
dollars annually. A number of the issues are difficult to address and 
implementing many of the actions identified will take time and 
sustained leadership. 

To prepare this report, we conducted our work from July 2011 through 
February 2012 in accordance with all sections of GAO's Quality 
Assurance Framework that are relevant to our objectives. The framework 
requires that we plan and perform the engagement to meet our stated 
objectives and to discuss any limitations in our work. We believe that 
the information and data obtained, and the analysis conducted, provide 
a reasonable basis for any findings and conclusions in this product. 
GAO provided the draft to the agencies involved and OMB for their 
comments and incorporated comments as appropriate. The information in 
this report is current as of February 10, 2012 and does not reflect 
any actions that might have been taken after that date. Enclosure III 
contains additional details of our scope and methodology. 

This report was prepared under the coordination of Janet St. Laurent, 
Managing Director, Defense Capabilities and Management, who may be 
reached at (202) 512-4300, or stlaurentj@gao.gov and Zina Merritt, 
Director, Defense Capabilities and Management, who may be reached at 
(202) 512-4300 or merrittz@gao.gov. 

Signed by: 

Gene L. Dodaro: 
Comptroller General of the United States: 

List of Congressional Addressees: 

The Honorable Daniel K. Inouye:
Chairman:
The Honorable Thad Cochran:
Vice Chairman:
Committee on Appropriations:
United States Senate: 

The Honorable Kent Conrad:
Chairman:
The Honorable Jeff Sessions:
Ranking Member:
Committee on the Budget:
United States Senate: 

The Honorable Joseph I. Lieberman:
Chairman:
The Honorable Susan M. Collins:
Ranking Member:
Committee on Homeland Security and Governmental Affairs:
United States Senate: 

The Honorable Harold Rogers:
Chairman:
The Honorable Norman D. Dicks:
Ranking Member:
Committee on Appropriations:
House of Representatives: 

The Honorable Paul Ryan:
Chairman:
The Honorable Chris Van Hollen:
Ranking Member:
Committee on the Budget:
House of Representatives: 

The Honorable Darrell Issa:
Chairman:
The Honorable Elijah E. Cummings:
Ranking Member:
Committee on Oversight and Government Reform:
House of Representatives: 

The Honorable Scott Brown:
United States Senate: 

The Honorable Tom Coburn:
United States Senate: 

The Honorable Claire McCaskill:
United States Senate: 

The Honorable Mark R. Warner:
United States Senate: 

[End of section] 

Enclosure I: Overall Progress Made in Each of the 81 Areas: 

This enclosure presents a summary of GAO's assessment of the overall 
progress made in each of the 81 areas that we identified in our March 
2011 report[Footnote 8] in which the Congress and the executive branch 
could take actions to reduce or eliminate potential duplication, 
overlap, and fragmentation or achieve other potential financial 
benefits. For each of the 34 areas related to duplication, overlap, or 
fragmentation that GAO identified, table 1 presents GAO's assessment 
of the overall progress made in implementing the actions needed in 
that area. For each of the 47 areas where GAO identified cost saving 
or revenue enhancement opportunities, table 2 presents GAO's 
assessment of the overall progress made in implementing the actions 
GAO identified. 

Table 1: Overall Progress Made in Each of the GAO Identified Areas of 
Potential Duplication, Overlap, and Fragmentation, as of February 10, 
2012: 

Mission: Agriculture; 

Areas identified: 1. Fragmented food safety system has caused 
inconsistent oversight, ineffective coordination, and inefficient use 
of resources; 
Assessment: Partially Addressed; 
Page: 14. 

Mission: Defense; 

Areas identified: 2. Realigning DOD's military medical command 
structures and consolidating common functions could increase 
efficiency and result in projected savings ranging from $281 million 
to $460 million annually; 
Assessment: Partially Addressed; 
Page: 15. 

Areas identified: 3. Opportunities exist for consolidation and 
increased efficiencies to maximize response to warfighter urgent needs; 
Assessment: Partially Addressed; 
Page: 16. 

Areas identified: 4. Opportunities exist to avoid unnecessary 
redundancies and improve the coordination of counter-improvised 
explosive device efforts; 
Assessment: Partially Addressed; 
Page: 17. 

Areas identified: 5. Opportunities exist to avoid unnecessary 
redundancies and maximize the efficient use of intelligence, 
surveillance, and reconnaissance capabilities; 
Assessment: Partially Addressed; 
Page: 18. 

Areas identified: 6. A departmentwide acquisition strategy could 
reduce DOD's risk of costly duplication in purchasing Tactical Wheeled 
Vehicles; 
Assessment: Partially Addressed; 
Page: 19. 

Areas identified: 7. Improved joint oversight of DOD's prepositioning 
programs for equipment and supplies may reduce unnecessary duplication; 
Assessment: Partially Addressed; 
Page: 20. 

Areas identified: 8. DOD's business systems modernization: 
opportunities exist for optimizing business operations and systems; 
Assessment: Partially Addressed; 
Page: 21. 

Mission: Economic development; 

Areas identified: 9. The efficiency and effectiveness of fragmented 
economic development programs are unclear; 
Assessment: Partially Addressed; 
Page: 23. 

Areas identified: 10. The federal approach to surface transportation 
is fragmented, lacks clear goals, and is not accountable for results; 
Assessment: Partially Addressed; 
Page: 25. 

Areas identified: 11. Fragmented federal efforts to meet water needs 
in the U.S.-Mexico border region have resulted in an administrative 
burden, redundant activities, and an overall inefficient use of 
resources; 
Assessment: Not Addressed; 
Page: 26. 

Mission: Energy; 

Areas identified: 12. Resolving conflicting requirements could more 
effectively achieve federal fleet energy goals; 
Assessment: Not Addressed; 
Page: 27. 

Areas identified: 3. Addressing duplicative federal efforts directed 
at increasing domestic ethanol production could reduce revenue losses 
by more than $5.7 billion annually; 
Assessment: Addressed; 
Page: 28. 

Mission: General government; 

Areas identified: 14. Enterprise architectures: key mechanisms for 
identifying potential overlap and duplication; 
Assessment: Partially Addressed; 
Page: 29. 

Areas identified: 15. Consolidating federal data centers provides 
opportunity to improve government efficiency; 
Assessment: Partially Addressed; 
Page: 30. 

Areas identified: 16. Collecting improved data on interagency 
contracting to minimize duplication could help the government leverage 
its vast buying power; 
Assessment: Partially Addressed; 
Page: 31. 

Areas identified: 17. Periodic reviews could help identify ineffective 
tax expenditures and redundancies in related tax and spending 
programs, potentially reducing revenue losses by billions of dollars; 
Assessment: Not Addressed; 
Page: 32. 

Mission: Health; 

Areas identified: 18. Opportunities exist for DOD and VA to jointly 
modernize their electronic health record systems; 
Assessment: Partially Addressed; 
Page: 34. 

Areas identified: 19. VA and DOD need to control drug costs and 
increase joint contracting wherever it is cost-effective; 
Assessment: Partially Addressed; 
Page: 35. 

Areas identified: 20. HHS needs an overall strategy to better 
integrate nationwide public health information systems; 
Assessment: Not Addressed; 
Page: 37. 

Mission: Homeland security/Law enforcement; 

Areas identified: 21. Strategic oversight mechanisms could help 
integrate fragmented interagency efforts to defend against biological 
threats; 
Assessment: Partially Addressed; 
Page: 38. 

Areas identified: 22. DHS oversight could help eliminate potential 
duplicating efforts of interagency forums in securing the northern 
border; 
Assessment: Not Addressed; 
Page: 39. 

Areas identified: 23. The Department of Justice plans actions to 
reduce overlap in explosives investigations, but monitoring is needed 
to ensure successful implementation; 
Assessment: Addressed; 
Page: Mission: 40. 

Areas identified: Mission: 24. TSA's security assessments on 
commercial trucking companies overlap with those of another agency, 
but efforts are under way to address the overlap; 
Assessment: Partially Addressed; 
Page: 41. 

Areas identified: 25. DHS could streamline mechanisms for sharing 
security-related information with public transit agencies to help 
address overlapping information; 
Assessment: Partially Addressed; 
Page: 42. 

Areas identified: 26. FEMA needs to improve its oversight of grants 
and establish a framework for assessing capabilities to identify gaps 
and prioritize investments; 
Assessment: Partially Addressed; 
Page: 43. 

Mission: International affairs; 

Areas identified: 27. Lack of information sharing could create the 
potential for duplication of efforts between U.S. agencies involved in 
development efforts in Afghanistan; 
Assessment: Partially Addressed; 
Page: 46. 

Areas identified: 28. Despite restructuring, overlapping roles and 
functions still exist at State's Arms Control and Nonproliferation 
Bureaus; 
Assessment: Addressed; 
Page: 47. 

Mission: Social services; 

Areas identified: 29. Actions needed to reduce administrative overlap 
among domestic food assistance programs; 
Assessment: Not Addressed; 
Page: 48. 

Areas identified: 30. Better coordination of federal homelessness 
programs may minimize fragmentation and overlap; 
Assessment: Partially Addressed; 
Page: 49. 

Areas identified: 31. Further steps needed to improve cost-
effectiveness and enhance services for transportation-disadvantaged 
persons; 
Assessment: Partially Addressed; 
Page: 50. 

Mission: Training, employment, and education; 

Areas identified: 32. Multiple employment and training programs: 
providing information on colocating services and consolidating 
administrative structures could promote efficiencies; 
Assessment: Partially Addressed; 
Page: 51. 

Areas identified: 33. Teacher quality: proliferation of programs 
complicates federal efforts to invest dollars effectively; 
Assessment: Partially Addressed; 
Page: 53. 

Areas identified: 34. Fragmentation of financial literacy efforts 
makes coordination essential; 
Assessment: Partially Addressed; 
Page: 54. 

Legend: 

Addressed: meaning all actions needed in that area were addressed. 

Partially addressed: meaning at least one action needed in that area 
showed some progress toward implementation, but not all actions were 
addressed. 

Not addressed: meaning none of the actions needed in that area were 
addressed. 

Source: GAO analysis. 

[End of table] 

As noted above, table 2 presents GAO's assessment of the overall 
progress made in addressing the 47 cost-saving and revenue-enhancing 
areas. 

Table 2: Overall Progress Made to Address GAO Identified Cost-Saving 
and Revenue-Enhancing Areas, as of February 10, 2012: 

Mission: Agriculture; 

Areas identified: 35. Reducing some farm program payments could result 
in savings from $800 million over 10 years to up to $5 billion 
annually; 
Assessment: Not Addressed; 
Page: 56. 

Mission: Defense; 

Areas identified: 36. DOD should assess costs and benefits of overseas 
military presence options before committing to costly personnel 
realignments and construction plans, thereby possibly saving billions 
of dollars; 
Assessment: Partially Addressed; 
Page: 57. 

Areas identified: 37. Total compensation approach is needed to manage 
significant growth in military personnel costs; 
Assessment: Partially Addressed; 
Page: 58. 

Areas identified: 38. Employing best management practices could help 
DOD save money on its weapon systems acquisition programs; 
Assessment: Partially Addressed; 
Page: 59. 

Areas identified: 39. More efficient management could limit future 
costs of DOD's spare parts inventory; 
Assessment: Partially Addressed; 
Page: 60. 

Areas identified: 40. More comprehensive and complete cost data can 
help DOD improve the cost-effectiveness of sustaining weapon systems; 
Assessment: Partially Addressed; 
Page: 61. 

Areas identified: 41. Improved corrosion prevention and control 
practices could help DOD avoid billions in unnecessary costs over time; 
Assessment: Partially Addressed; 
Page: 63. 

Mission: Economic development; 

Areas identified: 42. Revising the essential air service program could 
improve efficiency; 
Assessment: Partially Addressed; 
Page: 64. 

Areas identified: 43. Improved design and management of the universal 
service fund as it expands to support broadband could help avoid cost 
increases for consumers; 
Assessment: Partially Addressed; 
Page: 66. 

Areas identified: 44. The Corps of Engineers should provide Congress 
with project-level information on unobligated balances; 
Assessment: Partially Addressed; 
Page: 67. 

Mission: Energy; 

Areas identified: 45. Improved management of federal oil and gas 
resources could result in approximately $1.8 billion over 10 years[A]; 
Assessment: Partially Addressed; 
Page: 68. 

Mission: General government; 

Areas identified: 46. Efforts to address governmentwide improper 
payments could result in significant cost savings; 
Assessment: Partially Addressed; 
Page: 70. 

Areas identified: 47. Promoting competition for the over $500 billion 
in federal contracts could potentially save billions of dollars over 
time; 
Assessment: Partially Addressed; 
Page: 71. 

Areas identified: 48. Applying strategic sourcing best practices 
throughout the federal procurement system could saves billions of 
dollars annually; 
Assessment: Partially Addressed; 
Page: 74. 

Areas identified: 49. Adherence to new guidance on award fee contracts 
could improve agencies' use of award fees to produce savings; 
Assessment: Partially Addressed; 
Page: 73. 

Areas identified: 50. Agencies could realize cost savings of at least 
$3 billion by continued disposal of unneeded federal real property; 
Assessment: Partially Addressed; 
Page: 4. 

Areas identified: 51. Improved cost analyses used for making federal 
facility ownership and leasing decisions could save tens of millions 
of dollars; 
Assessment: Partially Addressed; 
Page: 75. 

Areas identified: 52. The Office of Management and Budget's IT 
Dashboard reportedly has already resulted in $3 billion in savings and 
can further help identify opportunities to invest more efficiently in 
information technology; 
Assessment: Partially Addressed; 
Page: 76. 

Areas identified: 53. Increasing electronic filing of individual 
income tax returns could reduce IRS's processing costs and increase 
revenues by hundreds of millions of dollars; 
Assessment: Partially Addressed; 
Page: 77. 

Areas identified: 54. Using return on investment information to better 
target IRS enforcement could reduce the tax gap; 
for example, a 1 percent reduction would increase tax revenues by $3 
billion[B]; 
Assessment: Partially Addressed; 
Page: 78. 

Areas identified: 55. Better management of tax debt collection may 
resolve cases faster with lower IRS costs and increase debt collected; 
Assessment: Partially Addressed; 
Page: 79. 

Areas identified: 56. Broadening IRS's authority to correct simple tax 
return errors could facilitate correct tax payments and help IRS avoid 
costly, burdensome audits; 
Assessment: Not Addressed; 
Page: 80. 

Areas identified: 57. Enhancing mortgage interest information 
reporting could improve tax compliance; 
Assessment: Not Addressed; 
Page: 81. 

Areas identified: 58. More information on the types and uses of 
canceled debt could help IRS limit revenue losses of forgiven mortgage 
debt; 
Assessment: Partially Addressed; 
Page: 82. 

Areas identified: 59. Better information and outreach could help 
increase revenues by tens or hundreds of millions of dollars annually 
by addressing overstated real estate tax deductions; 
Assessment: Partially Addressed; 
Page: 83. 

Areas identified: 60. Revisions to content and use of Form 1098-T 
could help IRS enforce higher education requirements and increase 
revenues; 
Assessment: Partially Addressed; 
Page: 84. 

Areas identified: 61. Many options could improve the tax compliance of 
sole proprietors and begin to reduce their $68 billion portion of the 
tax gap; 
Assessment: Not Addressed; 
Page: 85. 

Areas identified: 62. IRS could find additional businesses not filing 
tax returns by using third-party data, which show such businesses have 
billions of dollars in sales; 
Assessment: Partially Addressed; 
Page: 86. 

Areas identified: 63. Congress and IRS can help S corporations and 
their shareholders be more tax compliant, potentially increasing tax 
revenues by hundreds of millions of dollars each year; 
Assessment: Partially Addressed; 
Page: 87. 

Areas identified: 64. IRS needs an agencywide approach for addressing 
tax evasion among the at least 1 million networks of businesses and 
related entities; 
Assessment: Partially Addressed; 
Page: 88. 

Areas identified: 65. Opportunities exist to improve the targeting of 
the $6 billion research tax credit and reduce forgone revenue; 
Assessment: Not Addressed; 
Page: 89. 

Areas identified: 66. Converting the new markets tax credit to a grant 
program may increase program efficiency and significantly reduce the 
$3.8 billion 5-year revenue cost of the program; 
Assessment: Not Addressed; 
Page: 90. 

Areas identified: 67. Limiting the tax-exempt status of certain 
governmental bonds could yield revenue; 
Assessment: Not Addressed; 
Page: 91. 

Areas identified: 68. Adjusting civil tax penalties for inflation 
potentially could increase revenues by tens of millions of dollars per 
year, not counting any revenues that may result from maintaining the 
penalties' deterrent effect; 
Assessment: Partially Addressed; 
Page: 92. 

Areas identified: 69. IRS may be able to systematically identify 
nonresident aliens reporting unallowed tax deductions or credits; 
Assessment: Addressed; 
Page: 93. 

Areas identified: 70. Tracking undisbursed balances in expired grant 
accounts could facilitate the reallocation of scarce resources or the 
return of funding to the Treasury; 
Assessment: Not Addressed; 
Page: 94. 

Mission: Health; 

Areas identified: 71. Preventing billions in Medicaid improper 
payments requires sustained attention and action by CMS; 
Assessment: Partially Addressed; 
Page: 95. 

Areas identified: 72. Federal oversight over Medicaid supplemental 
payments needs improvement, which could lead to substantial cost 
savings; 
Assessment: Not Addressed; 
Page: 96. 

Areas identified: 73. Better targeting of Medicare's claims review 
could reduce improper payments; 
Assessment: Partially Addressed; 
Page: 97. 

Areas identified: 74. Potential savings in Medicare's payment for 
health care; 
Assessment: Partially Addressed; 
Page: 98. 

Mission: Homeland security/Law enforcement; 

Areas identified: 75. DHS's management of acquisitions could be 
strengthened to reduce cost overruns and schedule and performance 
shortfalls; 
Assessment: Partially Addressed; 
Page: 100. 

Areas identified: 76. Improvements in managing research and 
development could help reduce inefficiencies and costs for homeland 
security; 
Assessment: Partially Addressed; 
Page: 102. 

Areas identified: 77. Validation of TSA's behavior-based screening 
program is needed to justify funding or expansion; 
Assessment: Partially Addressed; 
Page: 104. 

Areas identified: 78. More efficient baggage screening systems could 
result in about $470 million in reduced TSA personnel costs over the 
next 5 years; 
Assessment: Partially Addressed; 
Page: 106. 

Areas identified: 79. Clarifying availability of certain customs fee 
collections could produce a one-time savings of $640 million; 
Assessment: Partially Addressed; 
Page: 107. 

Mission: Income security; 

Areas identified: 80. Social Security needs data on pensions from 
noncovered earnings to better enforce offsets and ensure benefit 
fairness, estimated to result in $2.4-$2.9 billion savings over 10 
years; 
Assessment: Not Addressed; 
Page: 108. 

Mission: International affairs; 

Areas identified: 81. Congress could pursue several options to improve 
collection of antidumping and countervailing duties; 
Assessment: Not Addressed; 
Page: 109. 

Legend: 

Addressed: meaning all actions needed in that area were addressed. 

Partially addressed: meaning at least one action needed in that area 
showed some progress toward implementation, but not all actions were 
addressed. 

Not addressed: meaning none of the actions needed in that area were 
addressed. 

Source: GAO analysis. 

[A] The Department of the Interior, Bureau of Land Management, updated 
the anticipated revenues from $1.75 billion to $1.8 billion in its 
fiscal year 2012 budget justification. 

[B] The net tax gap was updated in 2012 and estimated to be $385 
billion for the 2006 tax year. Thus, a 1 percent reduction would 
increase tax revenues by $3.8 billion. 

[End of table] 

[End of section] 

Enclosure II: Progress Update for Each of the 176 Actions Needed 
within the 81 Areas: 

Agriculture: 

1. Fragmented food safety system has caused inconsistent oversight, 
ineffective coordination, and inefficient use of resources. 

Overall assessment: Partially addressed. 

Action 1: 
The Office of Management and Budget (OMB) in consultation with the 
relevant agencies should develop a governmentwide performance plan for 
food safety that includes results-oriented goals and performance 
measures and a discussion of strategies and resources. 
Partially addressed. 

Action 1 progress: 
OMB participates in the President's Food Safety Working Group, created 
in March 2009, to coordinate federal efforts and set food safety goals 
to make food safer. OMB and the federal agencies that have food safety 
responsibilities have not developed a plan to improve coordination and 
provide a comprehensive picture of, or performance measures for, the 
federal government's food safety efforts. However, governmentwide 
coordination may be fostered by the provisions of the FDA Food Safety 
Modernization Act that require interagency coordination, including the 
preparation of certain reports and plans.[Footnote 8] For example, in 
April 2011, the Department of Health and Human Services (HHS) issued 
its first annual report on interagency coordination and cooperation on 
food safety inspections, as required by the act. In addition, in 
December 2011 the Food Safety Working Group released a report 
describing the steps it has taken over the past 2 years to improve 
food safety, its plans for the next year, and how the agencies are 
coordinating on these efforts. Taken together, these reports by HHS 
and the Food Safety Working Group are first steps that may help 
address interagency coordination on food safety and inform a 
governmentwide plan. 

Action 2: 
Congress should consider commissioning the National Academy of 
Sciences or a blue ribbon panel to conduct a detailed analysis of 
alternative food safety organizational structures. 
Not addressed. 

Action 2 progress: 
No legislative action identified. 

Action 3: 
Congress should consider enacting comprehensive risk-based food safety 
legislation. 
Not addressed. 

Action 3 progress 
The FDA Food Safety Modernization Act, which was signed into law in 
January 2011, is intended to strengthen a major part of the food 
safety system, but does not apply to the entire federal food safety 
system or create a new risk-based food safety structure. The law does, 
however, include several sections that require interagency 
coordination on food safety oversight in areas such as inspections, 
seafood safety, and food imports. 

For more information, contact Lisa Shames at (202) 512-3841 or 
shamesl@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

Defense: 

2. Realigning DOD's military medical command structures and 
consolidating common functions could increase efficiency and result in 
projected savings ranging from $281 million to $460 million annually. 
[Footnote 9] 

Overall assessment: Partially addressed. 

Action 1: 
The Department of Defense (DOD) could take action to further assess 
alternatives for restructuring the governance structure of the 
military health care system.
Partially addressed. 

Action 1 progress: 
In June 2011, the Deputy Secretary of Defense commissioned a task 
force to provide a report that includes an assessment of the 
governance of the military health system as a whole and in multi-
service medical markets. This review was completed in September 2011, 
but the final report, with recommendations, has not been officially 
released. According to senior DOD officials, this report will be used 
as the basis for a report required by the National Defense 
Authorization Act for Fiscal Year 2012;[Footnote 10] however, the act 
did not establish a completion date for the report. Specifically, the 
act requires the Secretary of Defense to submit to Congress a report 
that includes, among other things, a description of options developed 
and considered for the military health system's governance model, 
analysis of the strengths and weaknesses of each option, and estimated 
costs savings of each option, if any. The act also mandated that the 
Comptroller General conduct a detailed review of those governance 
options, and report on that review to Congress not later than 180 days 
after the submission of the Secretary of Defense's report. The act 
restricts the ability of the Secretary of Defense to restructure or 
reorganize the military health system until 120 days after the 
Comptroller General's report is submitted. 

For more information, contact Brenda S. Farrell at (202) 512-3604 or 
FarrellB@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

Defense: 

3. Opportunities exist for consolidation and increased efficiencies to 
maximize response to warfighter urgent needs. 

Overall assessment: Partially addressed. 

Action 1: 
The Department of Defense (DOD) needs to perform its own analysis of 
options aimed at potential consolidations and increased efficiencies 
in streamlining its urgent needs entities and processes. This analysis 
should carefully weigh the advantages and disadvantages of the options 
identified to determine the optimal course of action. 
Partially addressed. 

Action 1 progress: 
In March 2011, DOD began an evaluation of the department's processes 
for the rapid fielding of capabilities in response to urgent 
operational needs, as required by the Ike Skelton National Defense 
Authorization Act for Fiscal Year 2011;4 however, the department has 
not yet completed its evaluation. According to the department, this 
evaluation, which was due in January 2012, will be delivered later in 
2012 and will examine areas of duplication identified by GAO, evaluate 
the potential for consolidations, and describe specific policy actions 
implemented to improve the department's overall urgent needs 
processes. DOD officials also noted other actions it has taken, 
including the establishment of a senior-level working group in June 
2011 to provide oversight of DOD-wide efforts to fulfill urgent needs. 
Also, DOD issued guidance in January 2012, in part to standardize the 
definition of an urgent operational need. 

For more information, contact Cary Russell at (404) 679-1808 or 
russellc@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

Defense: 

4. Opportunities exist to avoid unnecessary redundancies and improve 
the coordination of counter-improvised explosive device efforts. 

Overall assessment: Partially addressed. 

Action 1: 
The Department of Defense's (DOD) senior leadership, to include the 
Deputy Secretary of Defense, should consider what actions the 
department can take to assure that the Joint Improvised Explosive 
Device Defeat Organization (JIEDDO) can centrally collect information 
and coordinate efforts, and whether it should enhance its tools to 
ensure all information on departmentwide counter-improvised explosive 
device (IED) programs is centrally collected and evaluated to limit 
unnecessary duplication, overlap, and fragmentation. 
Partially addressed. 

Action 1 progress: 
JIEDDO is currently developing a new information technology 
architecture, and plans to develop a database for counter-IED efforts 
across DOD as part of this new architecture. However, this effort is 
in the conceptualization stage, and DOD officials do not anticipate 
completion before the end of fiscal year 2012. Further, according to 
JIEDDO, in early 2012 DOD plans to revise the directive establishing 
JIEDDO to require the services and DOD agencies to report counter-IED 
initiatives to JIEDDO. 

For more information, contact Cary Russell at (404) 679-1808 or 
russellc@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

Defense: 

5. Opportunities exist to avoid unnecessary redundancies and maximize 
the efficient use of intelligence, surveillance, and reconnaissance 
capabilities. 

Overall assessment: Partially addressed. 

Action 1: 
The Department of Defense (DOD) could develop an integrated 
intelligence, surveillance, and reconnaissance architecture, including 
manned and unmanned systems, to align departmentwide strategic goals.
Partially addressed. 

Action 1 progress: 
DOD is designing an intelligence, surveillance, and reconnaissance 
architecture, called the "Defense Intelligence Information 
Enterprise," to provide a common framework of tools for security and 
intelligence sharing. DOD plans to begin implementing the Defense 
Intelligence Information Enterprise framework in fiscal year 2013 and 
intends to revise its departmentwide strategic goals in its next 
intelligence, surveillance, and reconnaissance strategic plan. 

Action 2: 
DOD could continue to develop tools-such as the Joint Staff's decision 
support tool-and performance measures to inform investment decisions.
Partially addressed. 

Action 2 progress: 
DOD continues to explore collaborative portfolio management tools that 
capture operational needs and consider the measured or projected 
performance of intelligence, surveillance, and reconnaissance systems. 
The Office of the Under Secretary of Defense for Intelligence is 
collaborating with the Joint Staff to enhance their developmental 
decision support tool to address operational requirements and inform 
investment decisions across its intelligence enterprise. DOD has not 
yet completed development of this tool. In addition, DOD plans to 
develop and include performance metrics in its 2012 strategic plan. 

Action 3: 
DOD could establish linkages between intelligence, surveillance, and 
reconnaissance acquisition plans and strategic goals to better inform 
investment decisions.
Partially addressed. 

Action 3 progress: 
Recent agreements between the Director of National Intelligence and 
the Under Secretary of Defense (Intelligence) have resulted in the 
creation of the Consolidated Intelligence Guidance, which is expected 
to help synchronize investments between the Director of National 
Intelligence and DOD. According to DOD, this guidance, issued for 
fiscal year 2012, is goal-based and is designed to improve 
effectiveness in managing the shorter-term decisions in future defense 
budgets, acquisition plans, and investment decisions. DOD officials 
stated that this guidance has resulted in better alignment of 
investments with strategic goals. DOD plans to explicitly address the 
linkages between strategic goals and planned investments in the next 
intelligence, surveillance, and reconnaissance strategic plan 
scheduled for release in spring 2012. 

Action 4: 
DOD could develop and enforce commonality and interoperability 
standards for sharing of intelligence, surveillance, and 
reconnaissance data and establish timelines for implementation.
Partially addressed. 

Action 4 progress: 
DOD stated that it is developing new methodologies for intelligence 
information sharing, such as the Distributed Common Ground/Surface 
System, to facilitate integration of intelligence capabilities, 
provide tools and systems that can work together to fulfill mission 
requirements, and share information among war fighting and coalition 
partners. DOD officials stated that the department plans to include 
standards for information sharing and timelines for information 
sharing in its new Defense Intelligence Information Enterprise 
framework. 

For more information, contact Brian Lepore at (202) 512-4523 or 
leporeb@gao.gov. 

See GAO-11-318SP Actions Needed 

[End of assessment] 

Defense: 

6. A departmentwide acquisition strategy could reduce DOD's risk of 
costly duplication in purchasing Tactical Wheeled Vehicles. 

Overall assessment: Partially addressed. 

Action 1: 
The Department of Defense (DOD) needs to complete its planned 
departmentwide tactical wheeled vehicle strategy to determine (1) what 
capabilities the Joint Light Tactical Vehicle will have, (2) the scope 
and cost of any recapitalization of other vehicles or production 
effort, and (3) the sustainment cost of placing the Mine Resistant 
Ambush Protected family of vehicles in its force structures. DOD 
should include in the strategy a cost-benefit analysis that could 
minimize the collective acquisition and support costs of the various 
tactical wheeled vehicle programs and reduce the risk of unplanned 
overlap or duplication. 
Partially addressed. 

Action 1 progress: 
DOD has taken steps to begin implementing this action; however, the 
department has not completed a tactical wheeled vehicle strategy or 
conducted a cost-benefit analysis for the acquisition and support 
costs of various programs. The Office of the Under Secretary of 
Defense for Acquisition, Technology, and Logistics has initiated a 
Ground Vehicle Portfolio Review, through which it plans to develop a 
unified, comprehensive, long-term tactical wheeled vehicle strategy 
that describes to key stakeholders how DOD plans to acquire and 
sustain an operationally relevant fleet. According to DOD officials, 
the portfolio review is planned to be continuous; outputs will support 
relevant program milestone decisions and annual program reviews, and 
will be closely coordinated with the service strategies. Phase 1 of 
the portfolio review, which is intended to build a comprehensive 
description of the current Tactical Wheeled Vehicle and Ground Combat 
Vehicle fleets, is under way. Milestones for subsequent phases will be 
established during Phase 1. Subsequent phases of the portfolio review 
should benefit from the knowledge resulting from planned near-term 
decisions, including budget decisions, regarding Joint Light Tactical 
Vehicle capabilities, High Mobility Multipurpose Wheeled Vehicle 
recapitalization, sustainment of the Mine Resistant Ambush Protected 
family of vehicles, and budgeted acquisition and support costs 
associated with those vehicles. In addition, the Army and Marine Corps 
updated their individual tactical wheeled vehicle strategies in 
January 2011 and June 2011, respectively. 

Additionally, in March 2011, as directed by the Senate Armed Services 
Committee, both services provided congressional defense committees 
with acquisition strategies and plans for recapitalizing their 
respective High Mobility Multipurpose Wheeled Vehicle fleets. These 
plans are currently under review in light of the department's ongoing 
work to align strategic priorities and its budget. 

For more information, contact Belva Martin at (202) 512-4841 or 
martinb@gao.gov. 

See GAO-11-318SP Actions Needed 

[End of assessment] 

Defense: 

7. Improved joint oversight of DOD's prepositioning programs for 
equipment and supplies may reduce unnecessary duplication. 

Overall assessment: Partially addressed. 

Action 1: 
The Secretary of Defense should direct the Under Secretary of Defense 
for Acquisition, Technology, and Logistics, in coordination with the 
Chairman of the Joint Chiefs of Staff, to strengthen the Department of 
Defense's (DOD) joint oversight of its prepositioned stocks through 
such actions as clarifying lines of authority and reporting between 
the joint prepositioning working group and other components within DOD. 
Partially addressed. 

Action 1 progress: 
DOD has taken some actions to strengthen joint oversight of 
prepositioned stocks. For example, DOD broadened membership of its 
Global Prepositioning Materiel Capabilities Working Group to include a 
core member from the Office of the Under Secretary of Defense for 
Policy, the office responsible for developing related departmentwide 
prepositioned stocks strategy. DOD has also added joint staff 
representatives to this group. However, additional action is needed to 
codify lines of authority and reporting between the working group and 
DOD components. 

Action 2: 
The Secretary of Defense should direct the Chairman of the Joint 
Chiefs of Staff and the Secretaries of the military services to 
synchronize at a departmentwide level, as appropriate, the services' 
prepositioning programs so that they include updated requirements and 
maximize efficiency in managing prepositioned assets and activities 
across the department to reduce unnecessary duplication.
Partially addressed. 

Action 2 progress: 
DOD officials have stated that the department is examining 
opportunities to synchronize DOD prepositioning efforts as part of two 
ongoing departmentwide studies to determine how to manage 
prepositioned stocks. One study was planned for completion in the fall 
of 2011, but has not yet been released. According to a DOD official, 
the other study is projected for completion in 2012. However, DOD has 
not yet completed updating its requirements or identifying specific 
ways that prepositioned assets can be managed more efficiently. 

Action 3: 
The Secretary of Defense should direct the Office of the Under 
Secretary of Defense for Policy to develop strategic guidance that 
includes planning and resource priorities, linking the department's 
current and future needs for prepositioned stocks to evolving national 
defense objectives. 
Not addressed. 

Action 3 progress: 
No executive action taken. 

For more information, contact Cary Russell at (404) 679-1808 or 
russellc@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

Defense: 

8. DOD's business systems modernization: opportunities exist for 
optimizing business operations and systems 

Overall assessment: Partially addressed. 

Action 1: 
The Department of Defense (DOD) needs to develop supporting component 
architectures and align them with its corporate architecture to 
complete the federated business enterprise architecture.
Partially addressed. 

Action 1 progress: 
DOD continues to release updates to its corporate enterprise 
architecture, but the architecture has yet to be federated through 
development of aligned subordinate architectures for each of the 
military departments. In this regard, each of the military departments 
has made progress in managing its respective architecture program. For 
example, each department has established or is in the process of 
establishing an executive committee with responsibility and 
accountability for the enterprise architecture. However, there are 
still limitations in the scope and completeness, as well as the 
maturity of the military department architecture programs. For 
example, no military department has fully developed an enterprise 
architecture methodology or a well-defined business enterprise 
architecture and transition plan to guide and constrain business 
transformation initiatives. 

In April 2011, DOD's Deputy Chief Management Officer issued a 
memorandum that requires integration of end-to-end business models and 
use of common standards for the development of the Business Enterprise 
Architecture and all subordinate architectures that federate or assert 
compliance with the Business Enterprise Architecture. While DOD 
recently drafted a technical transition plan that describes a vision 
for how standards will benefit the implementation of and ensure 
compliance with the Business Enterprise Architecture, the department 
has yet to finalize this plan or provide additional details for the 
plan's execution with associated timelines and metrics. 

Action 2: 
DOD should leverage its federated architecture to avoid investments 
that provide similar but duplicative functionality in support of 
common DOD activities.
Not addressed. 

Action 2 progress: 
DOD has taken minimal steps to avoid duplicative investments, and it 
has yet to develop a well-defined federated architecture along with 
well-defined investment management policies and procedures that it 
could use to manage the thousands of business systems in a consistent, 
repeatable, and effective manner and that, among other things, 
maximizes mission performance while minimizing or eliminating system 
overlap and duplication. DOD officials have stated that operational 
activities identified by programs in its systems repository can be 
compared by the investment review boards to identify those activities 
that are 100 percent identical. However, this process depends on self-
reported data from the programs, and there is little validation or 
verification of the information. DOD officials have also stated that 
they are working on selecting tools that, along with their adoption of 
common business process modeling standards, will allow them to compare 
activities proposed in a new investment to activities and services 
defined in the architecture. However, success of this type of tool 
depends on the amount of activities and services defined in the 
architecture, and the department has more work to do in this area. For 
example, DOD has identified 15 business processes to be defined in the 
Business Enterprise Architecture; however, only 2 of these processes 
will be fully defined by the end of fiscal year 2012. 

Action 3: 
DOD should work to institutionalize its business systems investment 
process at all levels of the organization.
Partially addressed. 

Action 3 progress 
DOD continues to establish investment management processes, but 
neither department-level organizations nor the military departments 
have institutionalized the full range of project-level and portfolio-
based information technology investment management policies and 
procedures that are necessary to meet the investment selection and 
control provisions of the Clinger-Cohen Act of 1996.[Footnote 12] 
Specifically, GAO found that the DOD enterprise, Air Force, and Navy 
have yet to fully define 56 percent of the project-level practices, 
and Army has yet to do so for 78 percent of the practices.[Footnote 
13] With regard to the portfolio-level practices, DOD enterprise, Air 
Force, and Navy have yet to fully define 80 percent, and Army has yet 
to do so for any of the practices. For example, while DOD and the 
military departments have a process that calls for investments to be, 
among other things, compliant with DOD's Business Enterprise 
Architecture and economically justified, this process does not specify 
how the investment review boards are to use the full range of cost, 
schedule, and benefit data in making selection (i.e., certification) 
decisions. 

Action 4: 
DOD must ensure that effective system acquisition management controls 
are implemented on each business system investment.
Partially addressed. 

Action 4 progress: 
DOD has taken steps to increase acquisition oversight for some 
business system modernization investments, but ensuring that effective 
system acquisition and management controls are implemented on each 
business system investment continues to remain a formidable challenge. 
GAO continues to identify weaknesses in such areas as architectural 
alignment, informed investment decision making, earned value 
management, economic justification, risk management, requirements 
management, and test management.[Footnote 14] In February 2011, the 
milestone decision authority for major business systems (except for 
logistics) was delegated to the Deputy Chief Management Officer, who 
was also given authority to assign an overarching integrated product 
team lead to coordinate preparation for acquisition decisions. This 
change in policy should provide the Deputy Chief Management Officer 
with increased acquisition insight and control for several of the 
largest business systems modernization investments, which include key 
enterprise resource programs that account for billions of dollars of 
development funding intended to transform DOD's business operations. 
Further, in June 2011, the Under Secretary of Defense for Acquisition, 
Technology, and Logistics established a policy requiring the use of 
the Business Capabilities Lifecycle as the acquisition process for 
defense business systems modernizations with a total cost of over $1 
million. While the Business Capabilities Lifecycle is intended to 
divide system development into discrete, fully-funded, and manageable 
increments to facilitate development and implementation, it is too 
early to determine the extent to which this new process will improve 
acquisition management controls. An independent risk assessment for 
major investments was developed to provide information to milestone 
decision authorities before major milestone decisions. According to 
officials, four such reviews have occurred in the last 2 years. 
However, DOD has not fully demonstrated how these risk assessments 
have influenced investment decision makers. 

For more information, contact Valerie C. Melvin at (202) 512-6304 or 
melvinv@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

Economic Development: 

9. The efficiency and effectiveness of fragmented economic development 
programs are unclear. 

Overall assessment: Partially addressed. 

Action 1: 
The Departments of Commerce, Housing and Urban Development, and 
Agriculture, and the Small Business Administration need to further 
utilize promising practices for enhanced collaboration. The actions 
that the four agencies should consider include seeking more 
opportunities for resource-sharing across economic development 
programs with shared outcomes, and identifying ways to leverage each 
program's strengths to improve their existing collaborative efforts.
Partially addressed. 

Action 1 progress: 
Three of the four agencies have taken initial steps to implement at 
least one of the collaborative practices that GAO has previously 
identified to administer their economic development programs.[Footnote 
15] For example, in April 2010 the U.S. Department of Agriculture 
(USDA) and the Small Business Administration (SBA) signed a memorandum 
of understanding (MOU) in response to GAO's recommendation that 
defined and articulated a common outcome focused on improving service 
delivery to small businesses in underserved rural areas. Under the 
MOU, USDA and SBA agreed that their field offices would advise 
potential borrowers of the other agency's programs that may meet their 
small business financing needs and coordinate the referral of small 
business applicants to one another where appropriate, work to make 
each agency's programs more complementary by minimizing differences in 
program fees and processing and closing procedures, and develop joint 
training seminars on each agency's programs. In addition, USDA and SBA 
agreed to measure progress under the MOU. USDA's April 2011 survey of 
state directors indicates progress under the MOU in several areas, 
including field offices advising borrowers of SBA's programs, 
referring borrowers to SBA and its resource partners, and exploring 
ways to make USDA and SBA programs more complementary. The Department 
of Commerce (Commerce) also provided information on its collaborative 
efforts with other federal agencies. For example, according to 
Economic Development Administration (EDA) officials, the agency has 
led an interagency effort called the i6 Challenge, which leverages 
resources from multiple federal agencies, with the common goal of 
spurring commercialization and manufacturing. The Department of 
Housing and Urban Development (HUD) has not taken similar steps to 
define and articulate common outcomes with other federal agencies. 
Moreover, HUD, USDA, and SBA have provided limited evidence that they 
have taken steps to develop compatible policies or procedures with 
other federal agencies, or to search for opportunities to leverage 
physical and administrative resources with their federal partners. 

Action 2: 
The Departments of Commerce, Housing and Urban Development, and 
Agriculture, and the Small Business Administration need to collect 
accurate and complete data on program outcomes and use the information 
to assess each program's effectiveness. 
Not addressed. 

Action 2 progress 
The four agencies have made minimal progress to collect more accurate 
and complete data on the outcomes for each of their economic 
development programs and to use the information to assess the 
effectiveness of each program. However, each agency has recently 
provided information on its plans to address this action. For example, 
EDA is developing a new performance management logic model to help EDA 
understand how various inputs, activities, outputs, and outcomes lead 
the agency to its desired vision of economic growth and prosperity. In 
addition, HUD officials told us that the department has plans for 
improving the quality of data for its Community Development Block 
Grant (CDBG) programs. In fiscal year 2012, HUD plans to fund 
improvements to its Integrated Disbursement and Information System; 
these improvements are intended to improve HUD's ability to track the 
progress of CDBG grantees in implementing activities and gather 
improved performance data. Similarly, according to USDA officials, the 
Rural Business Program office is in the process of updating its 
policies, procedures, and program guidelines in an effort to improve 
the accuracy and reliability of its program data. Finally, according 
to SBA officials, its Offices of International Trade and 
Entrepreneurial Development are implementing processes to capture 
outcomes for their respective programs. 

Action 3: 
Additional work to assess progress in collaboration and evaluation 
could identify areas for improvement, consolidation, or elimination. 
More analysis is needed by the Departments of Commerce, Housing and 
Urban Development, and Agriculture, and the Small Business 
Administration and the Office of Management and Budget to determine 
the actual amount of duplicative spending in programs that are 
designed to target similar economic development activities, locations, 
and applicants.
Not addressed. 

Action 3 progress: 
No executive action taken. 

For more information, contact William B. Shear at (202) 512-8678 or 
shearw@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

Economic Development: 

10. The federal approach to surface transportation is fragmented, 
lacks clear goals, and is not accountable for results. 

Overall assessment: Partially addressed. 

Action 1: 
A fundamental re-examination and reform of the nation's surface 
transportation policies is needed. GAO has identified a number of 
principles that can help guide Congress in re-examining and reforming 
the nation's surface transportation policies. These principles include 
ensuring the federal role is defined based on identified areas of 
national interest and goals, incorporating accountability for results 
by entities receiving federal funds, employing the best tools and 
approaches to emphasize return on targeted federal investment, and 
ensuring fiscal sustainability. Applying these principles to a re-
examination and reform of surface transportation programs would 
potentially result in a more clearly defined federal role in relation 
to other levels of government and thus a more targeted federal role 
focused around evident national interests. 
Partially addressed. 

Action 1 progress: 
Comprehensive legislative action has not been taken to fundamentally 
re-examine the nation's surface transportation policies. However, 
several congressional committees have approved bills to reauthorize 
and reform surface transportation programs. For example, the Senate 
Environment and Public Works Committee approved a bill on November 9, 
2011, reauthorizing the highway portion of the surface transportation 
program.[Footnote 16] This bill contains measures to increase 
accountability for results by entities receiving federal funds and 
consolidate federal programs. In addition, the House Transportation 
and Infrastructure Committee approved a bill on February 2, 2012, that 
includes consolidating or eliminating a number of programs.[Footnote 
17] When GAO completed its work for this report, floor action was 
pending in the Senate. GAO is evaluating the extent to which ongoing 
legislative actions better define federal roles and goals, incorporate 
accountability for results, emphasize return on federal investment, 
and ensure fiscal sustainability. 

For more information, contact Susan Fleming at (202) 512-2834 or 
FlemingS@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

Economic Development: 

11. Fragmented federal efforts to meet water needs in the U.S.-Mexico 
border region have resulted in an administrative burden, redundant 
activities, and an overall inefficient use of resources 

Overall assessment: Not addressed. 

Action 1: 
Congress may wish to consider requiring federal agencies to establish 
an interagency mechanism or process, such as a task force on water and 
wastewater infrastructure, in the border region. Congress could direct 
a group or task force to conduct certain activities. Specifically, GAO 
suggested that a task force, in partnership with state and local 
officials, should leverage collective resources to identify needs 
within the border region and establish compatible and coordinated 
polices across relevant agencies, such as a coordinated process for 
the selection of projects, and standardize applications, environmental 
review requirements, and engineering requirements to the extent 
possible.
Not addressed. 

Action 1 progress: 
No legislative action identified. 

In January 2012, officials from several of the federal agencies11 said 
they are working to coordinate their efforts in the border region 
within the current statutory authorities that exist; however, GAO 
continues to believe that a task force would allow the agencies to 
better coordinate. GAO notes that the administration has established 
the White House Rural Council to coordinate federal funding provided 
to rural communities, which may provide the opportunity to coordinate 
agencies' infrastructure funding in the border region. 

For more information, contact David C. Trimble at (202) 512-3841 or 
trimbled@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

Energy: 

12. Resolving conflicting requirements could more effectively achieve 
federal fleet energy goals. 

Overall assessment: Not addressed. 

Action 1: 
Changes in existing laws could streamline the requirements and provide 
fleet managers with more flexibility in meeting goals.
Not addressed. 

Action 1 progress: 
No legislative action identified. 

However, there has been related executive branch action. In May 2011, 
the President issued additional directives for federal fleet managers 
in his Presidential Memorandum on Federal Fleet Performance. Among 
other activities, this memorandum directs that by the end of 2015, all 
light-duty federal fleet vehicle acquisitions must be alternative-
fueled vehicles. According to Department of Energy officials, this 
order does not reconcile conflicting requirements that federal fleets 
increase use of alternative fuels, reduce petroleum use, and reduce 
greenhouse gas emissions or provide additional flexibility to fleet 
managers, but the order does require activities that will help meet 
existing requirements. 

For more information, contact Susan Fleming at (202) 512-2834 or 
flemings@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

Energy: 

13. Addressing duplicative federal efforts directed at increasing 
domestic ethanol production could reduce revenue losses by more than 
$5.7 billion annually. 

Overall assessment: Addressed. 

Action 1: 
Congress may wish to consider whether revisions to the ethanol tax 
credit are needed. Options could include the following: 
* Maintain the volumetric ethanol excise tax credit (VEETC) at current 
levels.
* Allow the VEETC to expire at the end of 2011.
* Reduce the VEETC as Congress did in the 2008 Farm Bill, when the 
ethanol tax credit was reduced from 51 cents to 45 cents per gallon.
* Phase out the VEETC over a number of years. 
* Modify the VEETC to counteract fluctuations in other commodities 
that can influence ethanol production, such as changes in crude oil 
prices. For instance, the ethanol tax credit could increase when crude 
oil prices are low and decrease when crude oil prices are high.
Addressed. 

Action 1 progress: 
Congress allowed the VEETC to expire at the end of 2011. The most 
recent extension of the credit-set at 45-cents-per-gallon in the Tax 
Relief, Unemployment Insurance Reauthorization, and Job Creation Act 
of 201012-expired on December 31, 2011. Fuel blenders that purchase 
and blend ethanol with gasoline no longer receive the credit. 

For more information, contact Frank Rusco at (202) 512-3841 or 
ruscof@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

General Government: 
14. Enterprise architectures: key mechanisms for identifying potential 
overlap and duplication. 

Overall assessment: Partially addressed. 

Action 1: 
Agencies should measure and report enterprise architecture results and 
outcomes (e.g., costs avoided through eliminating duplicative 
information technology investments).
Partially addressed. 

Action 1 progress: 
The majority of the enterprise architecture efforts of the 27 agencies 
GAO reviewed can still be viewed as a work in progress, with much 
remaining to be accomplished. Since we reported in March 2011 that the 
Department of the Interior demonstrated that it had used enterprise 
architecture to avoid costs, an additional 4 agencies have measured 
and reported financial benefits from their respective enterprise 
architecture programs: 

* Department of Agriculture expects to save $27 million over 5 years 
(2011 through 2015) by moving 120,000 e-mail users to a cloud-based 
solution. 

* Department of Defense, Office of the Secretary, described in its 
April 2011 Congressional Report on Defense Business Operations about 
$179 million in financial savings between fiscal years 2008 and 2010 
by streamlining Navy business operations, retiring legacy systems, and 
moving toward a real-time paperless business environment that reduces 
time and costs for processing vendor payments. 

* Nuclear Regulatory Commission achieved an estimated $1.3 million 
cost avoidance in 2011 by eliminating duplicative staff planning 
systems. 

* Department of Health and Human Services saved about $21 million 
while sustaining increased network usage in fiscal year 2011 by moving 
to a new telecommunications contract, which was facilitated by its 
enterprise architecture program. 

Twelve agencies reported financial benefits; however, they did not 
reliably measure them (i.e., they did not provide supporting 
documentation): 
* Department of Commerce;
* Department of Education; 
* Department of Energy; 
* Department of Homeland Security;
* Department of Justice; 
* Department of Transportation; 
* Office of Personnel Management;
* General Services Administration; 
* Small Business Administration;
* Social Security Administration;
* Department of the Army; and; 
* Department of State. 

An additional 10 agencies did not report financial benefits, although 
8 of these agencies reported that they have established or expect to 
establish a process to measure benefits in the future: 

* Department of the Air Force; 
* Department of Housing and Urban Development; 
* Department of Labor; 
* Department of the Navy;
* Department of the Treasury;
* Department of Veterans Affairs; 
* Environmental Protection Agency; 
* National Aeronautics and Space Administration;
* National Science Foundation; and. 
* U.S. Agency for International Development. 

For more information, contact David A. Powner at (202) 512-9286 or 
pownerd@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

General Government: 

15. Consolidating federal data centers provides opportunity to improve 
government efficiency. 

Overall assessment: Partially addressed. 

Action 1: 
It will be important for individual agencies to move quickly to 
correct any missing items in their plans, establish sound baselines so 
that progress and efficiencies can be measured, begin their 
consolidation efforts, track their progress, and report to the Office 
of Management and Budget (OMB) on their progress over time.
Partially addressed. 

Action 1 progress: 
The administration's Implementation Plan to Reform Information 
Technology, dated December 2010, identifies steps and milestones to 
(1) consolidate at least 800 federal data centers by 2015, and (2) 
establish a governmentwide marketplace for data center availability in 
2012. 

In July 2011, OMB required the 24 federal agencies participating in 
the Federal Data Center Consolidation Initiative to complete their 
consolidation plans. Beginning in October 2011, all of the agencies 
posted their updated plans online. GAO has ongoing work assessing the 
completeness of these plans. A preliminary analysis shows that not all 
agency plans have been updated to include all required information. 

In December 2011, the Federal Chief Information Officer (CIO) 
announced that the definition of a data center had been expanded from 
facilities over 500 square feet to one that includes data centers of 
all sizes. This change resulted in an expanded data center baseline of 
3,133 centers, an increase from the 2,094 centers originally reported 
by agencies. The Federal CIO reported that agencies planned to close 
525 of these centers by the end of calendar year 2012 and 1,080 by the 
end of 2015. The Federal CIO also announced a further goal of closing 
40 percent, or at least 1,200, of the 3,133 centers. 

Action 2: 
OMB should work with agencies to establish goals and targets for 
consolidation (both in terms of cost savings and reduced data 
centers), maintain strong oversight of the agencies' efforts, and look 
for consolidation opportunities across agencies.
Partially addressed. 

Action 2 progress: 
The Analytical Perspectives for the President's budget for fiscal year 
2012 also addresses data center consolidation. It notes the importance 
of the federal data center consolidation effort and identifies for 
each of the 24 participating agencies, the number of data centers in 
2010, as well as the agencies' 2015 consolidation targets. 

As noted above, in July 2011, OMB required the 24 federal agencies 
participating in the Federal Data Center Consolidation Initiative to 
complete their consolidation plans, including required information on 
consolidation savings and goals. Beginning in October 2011, all of the 
agencies posted their updated plans online. GAO has ongoing work 
assessing the extent to which agencies have updated this required 
information. A preliminary analysis shows that not all agency plans 
have been updated to include all required information. GAO also has 
ongoing work assessing OMB's continuing oversight of the consolidation 
initiative. 

OMB also has a planned initiative to look for consolidation 
opportunities across agencies. Specifically, it plans to develop a 
governmentwide marketplace for data center availability in 2012. 
Further, OMB has developed a cost model for agencies to use to 
estimate consolidation cost savings. 

OMB's continued oversight of agencies' data center consolidation 
efforts will help better ensure that the federal consolidation 
initiative meets its cost savings and data center reduction targets. 

For more information, contact David Powner at (202) 512-9286 or 
pownerd@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

General Government: 

16. Collecting improved data on interagency contracting to minimize 
duplication could help the government leverage its vast buying power. 

Overall assessment: Partially addressed. 

Action 1: 
The Office of Management and Budget (OMB) will need to fully implement 
the steps it is taking to address identified shortcomings in the 
management of interagency contracting. 
Partially addressed. 

Action 1 progress: 
OMB is working with agencies to improve data on interagency 
contracting, and some actions are in the early stages of 
implementation. OMB notes that continued investment in centralized 
procurement data systems is required in order to sustain improvements 
in the collection and use of procurement data, including data on 
interagency contracts, and that the first phase of a centralized data 
system, called the System for Award Management, is scheduled to be 
launched in May 2012. OMB's Office of Federal Procurement Policy 
(OFPP) provided an update describing actions it is taking to address 
identified shortcomings in the management of interagency contracting. 
In particular, OFPP noted that it is working with agencies to update 
current data on interagency contracts. OFPP also noted that it may not 
be necessary to create a new database on interagency contracts because 
much of this information is already available. OFPP plans to notify 
agencies of a new page on OMB's budget information Web site with links 
to information on existing interagency contract vehicles, new 
multiagency contracts, and new multiagency blanket purchase 
agreements. OFPP still needs to decide on the need to create a 
centralized database containing this information. 

Action 2: 
The General Services Administration (GSA) will need to fully implement 
the steps it is taking to address identified shortcomings in the 
management of interagency contracting. 
Partially addressed. 

Action 2 progress: 
GSA has prepared an action plan that addresses identified shortcomings 
in the management of interagency contracting, but the action plan has 
not yet been fully implemented. GSA has completed a high-level 
analysis of options for collecting transactional data on orders 
through the Multiple Award Schedule program and plans to implement and 
evaluate a pilot program for collecting this information. 

Action 3: 
Improvements are still needed regarding the accuracy of the federal 
contracts database in order to determine whether the contracts are 
being used in an efficient and effective manner.
Addressed. 

Action 3 progress: 
OFPP has worked with agencies to ensure that data in the Federal 
Procurement Data System are accurate and complete, including a random 
sampling of fiscal year 2010 contract actions, which reflected a 96.5 
percent accuracy rate. OFPP also established an interagency 
procurement data quality working group to review various efforts 
agencies are employing to improve data quality and leverage successful 
efforts across the acquisition community. 

Action 4: 
Require business case analyses for new multiagency contracts. 
Addressed. 

Action 4 progress: 
On September 29, 2011, the Administrator of OFPP issued a memorandum 
that provided guidance for development of a business case analysis for 
certain interagency contracts, including new multiagency contracts. 
[Footnote 20] In addition, on January 3, 2012, a final rule was issued 
amending the Federal Acquisition Regulation to require a business case 
analysis to support the creation of certain of these 
contracts.[Footnote 21] 

For more information, contact William T. Woods at (202) 512-4841 or 
WoodsW@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

General Government: 

17. Periodic reviews could help identify ineffective tax expenditures 
and redundancies in related tax and spending programs, potentially 
reducing revenue losses by billions of dollars. 

Overall assessment: Not addressed. 

Action 1: 
The Director of the Office of Management and Budget (OMB) in 
consultation with the Secretary of the Treasury should present tax 
expenditures in the budget together with related outlay programs. 
Not addressed. 

Action 1 progress: 
No executive action taken. OMB did not agree with this recommendation 
and favors reporting tax expenditures separately from the rest of the 
budget. Although OMB had begun presenting tax expenditure sums 
alongside outlays and credit activity for each budget function in the 
federal budget from fiscal year 1998 through fiscal year 2002, OMB 
discontinued the practice. Tax expenditures were not integrated in the 
President's fiscal year 2012 budget. 

Action 2: 
The Director of OMB in consultation with the Secretary of the Treasury 
should develop and implement a framework for conducting performance 
reviews of tax expenditures. This includes (1) outlining leadership 
responsibilities and coordination among agencies with related 
responsibilities; (2) setting a review schedule; (3) identifying 
review methods and ways to address the lack of credible tax 
expenditure performance information; and (4) identifying resources 
needed for tax expenditure reviews. 
Not addressed. 

Action 2 progress: 
The Director of OMB has not developed a framework for reviewing tax 
expenditure performance. The President's fiscal year 2012 budget 
stated that developing an evaluation framework is a significant 
challenge and that the administration's focus is on addressing 
challenges with data availability and analytical constraints so that 
the administration can work towards crosscutting analyses examining 
tax expenditures alongside related spending programs; however, no 
timetable or specifics were included. In January 2012, OMB officials 
stated that the President's fiscal year 2012 budget proposed numerous 
reforms to tax expenditures, which it estimated would save billions in 
total; published evaluations supporting the proposals were not 
available. 

Action 3: 
The Director of OMB in consultation with the Secretary of the Treasury 
should develop guidance on incorporating tax expenditures in agencies' 
strategic plans and performance reports. 
Not addressed. 

Action 3 progress: 
OMB guidance has not explicitly addressed how agencies should 
incorporate tax expenditures in strategic plans and annual performance 
plans and reports. Moving forward, the GPRA Modernization Act of 2010 
(GPRAMA)15 calls for a more coordinated approach to focus on results 
and improve government performance. OMB, in coordination with 
agencies, is to develop a limited number of outcome-oriented, 
crosscutting policy goals and indicates that it will identify the 
relevant agencies and federal activities-including tax expenditures-
that contribute to each crosscutting goal. OMB has issued some 
guidance to help agencies implement GPRAMA, and OMB plans to address 
tax expenditures in guidance forthcoming in 2012. 

Action 4: 
The Director of OMB in consultation with the Secretary of the Treasury 
should require that tax expenditures be included in Executive Branch 
budget and performance review processes. 
Not addressed. 

Action 4 progress: 
OMB has not made progress on systematically including tax expenditures 
along with related outlay programs in the Executive Branch's budget 
and performance review processes. The President's fiscal year 2012 
budget stated that the Administration will be working towards 
examining the objectives and effects of the wide range of tax 
expenditures in the budget, though no timetable or specifics were 
provided. 

Effective GPRAMA implementation could help inform reexamination or 
restructuring efforts and lead to more efficient and economical 
service delivery in overlapping program areas by identifying the 
various agencies and federal activities-including tax expenditures-
that contribute to crosscutting outcomes. As noted above, OMB has 
stated that forthcoming OMB GPRAMA guidance will address tax 
expenditures. 

For more information, contact Michael Brostek at (202) 512-9110 or 
brostekm@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

Health: 

18. Opportunities exist for DOD and VA to jointly modernize their 
electronic health record systems. 

Overall assessment: Partially addressed. 

Action 1: 
The Secretaries of Defense and Veterans Affairs should revise the 
departments' joint strategic plan to include information discussing 
their electronic health record system modernization efforts and how 
those efforts will address the departments' common health care 
business needs. 
Partially addressed. 

Action 1 progress: 
The Departments of Defense (DOD) and Veterans Affairs (VA) have taken 
steps to discuss and improve their electronic health record system 
capabilities, but they have not yet revised their joint strategic plan 
to include these efforts or indicate how they will address common 
health care business needs. The Secretaries of DOD and VA have met to 
discuss their respective departments' efforts to pursue joint 
development and acquisition of integrated electronic health record 
(iEHR) capabilities. Among other things, the Secretaries have 
established the departments' interagency program office as the single 
point of accountability for the development and implementation of the 
iEHR, while also improving their efforts to further implement joint 
health information technology (IT) capabilities at DOD and VA's first 
fully integrated health care center in North Chicago, Illinois. The 
departments plan further action to address this area. Specifically, 
DOD and VA intend to issue an addendum to their joint strategic plan 
for fiscal years 2011 through 2013 that is to include objectives and 
goals related to the departments' iEHR efforts. 

Action 2: 
The Secretaries of Defense and Veterans Affairs should further develop 
the departments' joint health architecture to include their planned 
future state and transition plan from their current state to the next 
generation of electronic health record capabilities. 
Partially addressed. 

Action 2 progress: 
The DOD and VA have taken steps toward developing a joint health 
architecture, but the architecture is not sufficiently mature and the 
departments have not defined how they intend to transition from their 
current architecture to a planned future state. The Secretaries of DOD 
and VA agreed in May 2011 that the departments would implement a 
common architecture for the iEHR. The departments have since 
developed, and the Secretaries have approved, a high-level 
representation of the "to be" architecture for the iEHR. In addition, 
the interagency program office is to facilitate further development 
and maintenance of the iEHR architecture in conjunction with the 
departments' Health Executive Council and the recently established 
Health Architecture Review Board. Nevertheless, DOD and VA have not 
yet fully developed a joint health architecture that includes a plan 
for transitioning from their current state to the next generation of 
electronic health record capabilities. 

Action 3: 
The Secretaries of Defense and Veterans Affairs should define and 
implement a process, including criteria that considers costs, 
benefits, schedule, and risks, for identifying and selecting joint IT 
investments to meet the departments' common health care business needs. 
Partially addressed. 

Action 3 progress: 
The Secretaries of DOD and VA have agreed to develop a process for 
identifying and selecting joint IT investments; however, the 
departments have not yet implemented this process. Specifically, both 
Secretaries have agreed to develop and implement the iEHR and they 
have approved a governance structure that defines how they intend to 
accomplish this effort. This structure includes the departments 
themselves, which have responsibility for establishing their 
respective health care requirements; joint forums such as the Health 
Executive Council, which is to collaborate with the interagency 
program office to collect the requirements; and the program office 
itself, which is to identify the IT investments to meet the 
requirements. However, the departments have not yet implemented this 
process. 

For more information, contact Valerie C. Melvin at (202) 512-6304 or 
melvinv@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

Health: 

19. VA and DOD need to control drug costs and increase joint 
contracting wherever it is cost-effective. 

Overall assessment: Partially addressed. 

Action 1: 
The Department of Veterans Affairs (VA) and the Department of Defense 
(DOD) should analyze whether greater cost savings could be achieved 
through joint contracting for brand name drugs than are currently 
achieved through their independent strategies, and determine whether 
it would be cost-effective to take steps to resume joint contracting 
for brand name drugs.
Partially addressed. 

Action 1 progress: 
Neither DOD nor VA indicated that either agency intended to analyze 
whether it would be cost-effective to resume joint contracting for 
brand name drugs. However, in January 2012, the agencies indicated 
that they are coordinating on joint contracting opportunities for 
brand name drugs through the Contracting Subcommittee of the VA 
Federal Pharmacy Executive Steering Committee, whose purpose is to 
coordinate federal pharmacy activities across federal agencies. For 
example, in November 2011, VA and DOD entered into a joint contract 
for a brand name drug, and VA reported that it would continue its 
practice of coordinating with DOD on opportunities for contracts for 
brand name drugs. However, according to DOD officials, there was 
evidence from VA and DOD's joint contracting experience that joint 
contracting does not necessarily result in lower prices for either or 
both agencies. DOD cited past experiences in which the agencies did 
not receive a single bid in response to some large joint generic drug 
contract solicitations. DOD also noted that differences in the design 
of VA's and DOD's pharmacy benefits programs make cost-effective 
opportunities, as currently designed, for brand-name drug joint 
contracts less common than they were prior to DOD's fiscal year 2005 
implementation of its uniform formulary process. 
 
Action 2: 
DOD should identify, implement, and monitor efforts to control retail 
pharmacy spending, an area for which drug spending is increasing and 
cannot be controlled through joint contracting efforts. 
Addressed. 

Action 2 progress: 
DOD reported that a number of initiatives to control retail pharmacy 
costs had been identified and implemented, and that it continues to 
monitor its cost control efforts. 
* As a result of applying federal pricing arrangements-which generally 
result in prices lower than retail prices-to drugs dispensed at retail 
pharmacies, DOD reported that as of July 31, 2011, DOD had received 
$2.7 billion in manufacturer refunds for fiscal years 2009, 2010, and 
2011. 

* DOD reported that its uniform formulary process has ensured use of 
the most clinically- and cost-effective agents at all three points of 
pharmacy service through the use of formulary management tools such as 
step therapy. For example, DOD reported that step therapy for 
cholesterol lowering agents implemented in May 2010 enabled DOD to 
save approximately $82.8 million in the first year after 
implementation. The 3-year cost avoidance projection for this class of 
drugs is $141.6 million. 

* Also, in January 2010, DOD implemented an in-depth communications 
plan to promote the use of a less costly pharmacy option. DOD 
officials told GAO that this effort has resulted in higher use of the 
less-expensive TRICARE Mail Order Pharmacy venue and savings to the 
government, which they estimate to be over $30 million in 2010. 
Additionally, DOD reports that an adjustment to prescription drug 
copayments, effective October 1, 2011, will further encourage the use 
of the TRICARE Mail Order Pharmacy and should result in additional 
savings. 

Action 3: 
VA and DOD should continue their efforts to jointly contract for 
generic drugs, and look for opportunities to increase joint 
contracting efforts as generic versions of existing brand name drugs 
become available.
Addressed. 

Action 3 progress: 
VA continues to collaborate with DOD to identify opportunities for 
joint contracting for generic drugs through the Federal Pharmacy 
Executive Steering Committee. Additionally, DOD noted in January 2012 
that joint contracts had been awarded for several generic drugs that 
had previously been "blockbuster" brand name drugs, and additional 
joint contract negotiations were under way. 

For more information, contact Randall B. Williamson at (202) 512-7114 
or williamsonr@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

Health: 

20. HHS needs an overall strategy to better integrate nationwide 
public health information systems. 

Overall assessment: Not addressed. 

Action 1
The Secretary of Health and Human Services should develop and 
implement a strategic plan that defines goals, objectives, and 
priorities for establishing an electronic public health situational 
awareness network. Such a plan should include performance measures for 
evaluating capabilities of existing and planned information systems. 
The strategic plan should integrate related strategies and information 
technology initiatives within the Department of Health and Human 
Services (HHS) for sharing information among federal, state, local, 
and tribal entities.
Not addressed. 

Action 1 progress: 
HHS has not finalized a strategic plan for establishing an electronic 
nationwide public health situational awareness network. HHS officials 
with the Office of the Assistant Secretary for Preparedness and 
Response stated that they intend to release an Implementation Plan for 
the National Health Security Strategy. This plan is to incorporate a 
strategy for integrating the goals and objectives of the various 
offices' disparate plans to implement information systems in support 
of the nationwide public health situational awareness network 
capabilities required by section 202 of the Pandemic and All-Hazards 
Preparedness Act.[Footnote 23] Although HHS intended to release the 
Implementation Plan in early 2011, it has not yet done so. Department 
officials stated that they now expect to release the plan in early 
2012. 

For more information, contact Valerie C. Melvin at (202) 512-6304 or 
melvinv@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

Homeland Security/Law Enforcement: 

21. Strategic oversight mechanisms could help integrate fragmented 
interagency efforts to defend against biological threats. 

Overall assessment: Partially addressed. 

Action 1: 
The Homeland Security Council should consider establishing a focal 
point to coordinate federal biodefense activities, including 
biosurveillance.
Partially addressed. 

Action 1 progress: 
In August 2011, the National Security Staff (NSS), which supports the 
Homeland Security Council, stated that two of its directorates serve 
as focal points to coordinate federal biodefense activities, as 
suggested in GAO's March 2011 report. However, the NSS did not provide 
any details about how these directorates will provide the strategic 
and integrated oversight of the entire biodefense enterprise, which 
GAO reported was lacking. 

Action 2: 
The overarching biodefense enterprise would benefit from strategic 
oversight mechanisms, including a national strategy, to ensure 
efficient, effective, and accountable results.
Not addressed. 

Action 2 progress: 
NSS officials stated that they are overseeing the development of a 
national strategy for biosurveillance, but that strategy has not yet 
been developed and does not cover the full biodefense enterprise. In 
August 2011, the NSS indicated that two of its directorates are 
overseeing the development of the strategy. However, the NSS did not 
provide a timeline for completing these actions. The strategy also 
would not address the overarching biodefense enterprise, as GAO 
previously recommended. 

For more information, contact William O. Jenkins, Jr., at (202) 512-
8777 or jenkinswo@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

Homeland Security/Law Enforcement: 

22. DHS oversight could help eliminate potential duplicating efforts 
of interagency forums in securing the northern border. 

Overall assessment: Not addressed. 

Action 1: 
The Department of Homeland Security (DHS) should provide guidance and 
oversight for interagency forums-which include both Integrated Border 
Enforcement Team (IBET) and Border Enforcement Security Task Force 
(BEST) interagency forums-to help prevent duplication of effort and 
help efficiently utilize personnel resources to strengthen DHS's 
coordination efforts along the northern border. 
Not addressed. 

Action 1 progress: 
No executive branch action has been taken. 

Draft legislation has been introduced in Congress that would require 
DHS to consider whether the establishment of a new interagency forum 
would duplicate an existing forum's effort; the bill, however, has yet 
to be enacted and does not address duplication among existing 
interagency forums. On March 3, 2011, the Jaime Zapata Border 
Enforcement Security Task Force Act was introduced in Congress. 
[Footnote 24] This draft bill would provide authorization of 
appropriations to establish and operate a BEST program in areas 
designated by the Secretary of Homeland Security. The House Homeland 
Security Committee approved the bill, as amended, by voice vote on 
September 21, 2011, and the bill was officially reported out of 
committee on November 4, 2011. The bill, as amended, requires the 
Secretary to consider whether an IBET already exists in an area under 
consideration for establishment of a BEST unit. However, the bill does 
not specifically discuss addressing areas of overlap or duplication 
among existing IBETs and BEST units. 

Action 2: 
As DHS establishes a mechanism for determining the benefits of 
participating in the IBET and BEST interagency forums, DHS could lead 
efforts to develop a framework for identifying the costs incurred by 
all partners participating in each forum.
Not addressed. 

Action 2 progress: 
No executive action taken. 

For more information, contact Rebecca Gambler at (202) 512-6912 or 
GamblerR@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

Homeland Security/Law Enforcement: 

23. The Department of Justice plans actions to reduce overlap in 
explosives investigations, but monitoring is needed to ensure 
successful implementation. 

Overall assessment: Addressed. 

Action 1: 
Continually monitoring the actions planned by the Department of 
Justice (Justice); the Bureau of Alcohol, Tobacco, Firearms, and 
Explosives (ATF); and the Federal Bureau of Investigation (FBI) in 
four areas of explosives investigations-including jurisdiction, 
explosives training, shared explosives databases, and laboratories-
could help Justice ensure the successful implementation of those 
actions to reduce duplication and overlap and to improve coordination. 
Addressed. 

Action 1 progress: 
Executive branch action has been taken in each of the four identified 
areas where duplication and redundant efforts needed to be addressed. 

Jurisdiction: To address jurisdictional disputes in explosives 
investigations, as of May 2011, Justice created a National Explosives 
Task Force where ATF and FBI are collocated in headquarters. This task 
force monitors explosives investigations, may determine the lead 
agency in investigations when there is uncertainty among field agents, 
and ensures that ATF and FBI are coordinating. 

Training: To address fragmentation in the explosives training provided 
by ATF and FBI, the two agencies created a joint curriculum for their 
post-blast training as of May 2011. According to ATF and FBI, the new 
curriculum has resulted in both agencies providing consistent 
information to the agents and state and local bomb squads whom they 
train. They are also considering creating other joint curricula in 
areas such as homemade explosives. 

Explosive database: To ensure that both agencies are aware of 
explosives incidents, ATF released a more user friendly version of the 
Bomb and Arson Tracking System-an explosives incident reporting system-
in May 2011. Both ATF and FBI have issued new protocols requiring 
agents to enter explosives incidents into the Bomb and Arson Tracking 
System. In addition, both the ATF and FBI are requiring that all 
explosives incidents be reported to their respective Strategic 
Information Operation Centers (SIOC). The SIOCs will notify each other 
when an incident is reported. In addition, explosives incidents are 
also reported to the National Explosives Task Force. According to ATF 
and FBI, these multiple reporting mechanisms ensure that both ATF and 
FBI are aware of all explosives incidents and that the incidents are 
entered in the Bomb and Arson Tracking System. 

Explosive laboratories: To better leverage their explosives forensic 
capabilities, according to officials, ATF and FBI laboratories meet on 
a regular basis to discuss options where coordination can be 
increased. According to ATF and FBI officials, both laboratories are 
at capacity, but they have agreed to utilize a joint lab information 
management system and joint training of laboratory staff. DOJ plans to 
lay out implementation steps during fiscal year 2012. 

Additionally, according to ATF and FBI officials, the Office of the 
Deputy Attorney General meets regularly with ATF and FBI to monitor 
their progress and address any potential concerns. This coordination 
is important to help ensure that the above improvements are sustained. 

For more information, contact Eileen Larence at (202) 512-6510 or 
LarenceE@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

Homeland Security/Law Enforcement: 

24. TSA's security assessments on commercial trucking companies 
overlap with those of another agency, but efforts are under way to 
address the overlap. 

Overall assessment: Partially addressed. 

Action 1: 
The Transportation Security Administration (TSA) and the Federal Motor 
Carrier Safety Administration (FMCSA) could improve interagency 
coordination by sharing each other's schedules for conducting future 
security reviews, and avoid scheduling reviews on hazardous material 
trucking companies that have recently received, or are scheduled to 
receive, a review from the other agency. TSA could also discontinue 
conducting voluntary security reviews on hazardous material trucking 
companies, thereby enabling TSA to increase its security efforts in 
other areas.
Addressed. 

Action 1 progress: 
In August 2011, TSA reported that the agency had discontinued 
conducting security reviews on trucking companies that are covered by 
the FMCSA program. Discontinuing such reviews should eliminate the 
short-term overlap between TSA and FMCSA's reviews of hazardous 
material trucking companies. 

Action 2: 
TSA could request that the full results of past FMCSA security reviews 
of trucking companies be provided through an existing Department of 
Transportation (DOT) Web portal. Doing so would require cooperation 
from FMCSA.
Not addressed. 

Action 2 progress: 
No executive action taken. In January 2012, TSA reported that due, in 
part, to data subscription costs, the agency had decided to 
discontinue access to FMCSA's data for hazardous material trucking 
companies until TSA has full regulatory oversight in this area. TSA 
officials had previously reported that the agency would have little 
use for FMCSA data until TSA assumes such regulatory responsibility, 
and said the data are limited to FMCSA-related regulations and do not 
provide information about a carrier's overall security preparedness. 
TSA officials also reported that they are confident that FMCSA would 
provide TSA with security review results for individual motor carriers 
if security conditions warrant such a request. However, GAO continues 
to believe that utilization of FMCSA's security information in the DOT 
Web portal could benefit TSA because a considerable amount of the data 
in FMCSA's review is the same or similar to the data TSA was 
previously collecting. In addition, FMCSA conducts approximately 1,800 
security reviews per year. TSA officials said that they were not in a 
position to estimate when the regulations will be issued and thus did 
not know when TSA would assume full regulatory responsibility from 
FMCSA. 

Action 3: 
TSA and FMCSA should continue efforts toward the long-term goal of TSA 
assuming full regulatory responsibility from FMCSA for commercial 
trucking security, thereby reducing fragmentation.
Partially addressed. 

Action 3 progress: 
In October 2011, TSA reported that the agency had drafted proposed 
regulations for hazardous material trucking security, which would give 
TSA regulatory responsibility for this area, and that the proposed 
regulations were undergoing TSA review. TSA officials did not have an 
estimate for when the regulations would be issued and thus did not 
know when TSA would assume full regulatory responsibility from FMCSA. 

For more information, contact Steve Lord at (202) 512-4379 or 
lords@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

Homeland Security/Law Enforcement: 

25. DHS could streamline mechanisms for sharing security-related 
information with public transit agencies to help address overlapping 
information. 

Overall assessment: Partially addressed. 

Action 1: 
The Department of Homeland Security (DHS) and Transportation Security 
Administration (TSA) could identify and implement ways to more 
efficiently share security-related information by assessing the 
various mechanisms available to public transit agencies--including 
DHS's information network, TSA's portal on the network, and the public 
transit analysis center--as well as the information they provide, and 
identify opportunities to streamline these mechanisms. 
Partially addressed. 

Action 1 progress: 
TSA helped launch a new report that streamlines and shares security-
related information among public transit agencies, but security-
related information has yet to be fully incorporated from all three 
mechanisms that GAO identified as potentially duplicative. In February 
2011, TSA, in coordination with federal and industry stakeholders 
through an information-sharing working group, launched the Transit and 
Rail Intelligence Awareness Daily (TRIAD) Report. The overall intent 
of the TRIAD is to streamline the analysis, share, and exchange 
intelligence and security information, and help public transit 
stakeholders more efficiently share information by reducing the number 
of e-mails that stakeholders receive, and the number of persons 
sending those e-mails. However, the TRIAD does not yet reference 
specific information from the DHS information network or TSA's portal 
on the network, although the working group has discussed doing so. 

TSA officials reported that maintaining different information-sharing 
mechanisms is necessary at this time to ensure that the diversity of 
information is covered. However, GAO continues to believe that 
maintaining separate systems to provide similar information to similar 
user groups is not efficient and that this potential overlap could 
overwhelm public transit agencies with similar information. Until the 
information-sharing working group completes its efforts to filter 
security-related information obtained from all three mechanisms 
through the TRIAD, public transit agencies will continue to receive 
information from multiple sources, making it difficult for them to 
discern relevant security-related information. 

Action 2: 
DHS could develop and track verifiable cost data specific to each of 
its information-sharing mechanisms, as part of TSA's streamlining and 
financial management efforts. Developing such baseline cost data could 
assist TSA in identifying potential cost savings resulting from the 
consolidation of these mechanisms and provide opportunities for the 
agency to better allocate its information-sharing resources.
Not addressed. 

Action 2 progress: 
No executive action taken. 

For more information, contact Steve Lord at (202) 512-4379 or 
LordS@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

Homeland Security/Law Enforcement: 

26. FEMA needs to improve its oversight of grants and establish a 
framework for assessing capabilities to identify gaps and prioritize 
investments. 

Overall assessment: Partially addressed, 

Action 1: 
The Federal Emergency Management Agency (FEMA) could benefit from 
examining its grant programs and coordinating its application process 
to eliminate or reduce redundancy among grant recipients and program 
purposes.
Partially addressed. 

Action 1 progress: 
The Department of Homeland Security (DHS) has sought to consolidate 
several of FEMA's smaller grant programs within larger grant programs, 
but FEMA has not coordinated application reviews of grant projects 
across four of the largest preparedness grant programs, which have 
similar goals, fund similar types of projects, and are awarded in many 
of the same urban areas. DHS's fiscal year 2012 budget request, 
similar to its 2011 request, proposed the elimination of six stove-
piped and duplicative stand-alone grant programs, consolidating them 
into broader grants awarded to states and localities based on risk. 
This approach would provide greater flexibility for state and local 
officials to fill critical homeland security capability gaps and would 
significantly streamline the application process. Specifically, the 
President's fiscal year 2012 budget proposed to incorporate some of 
the smaller grant programs as allowable expenses within the larger 
programs. For instance, investments previously funded under the 
Driver's License Security Grant Program, the Citizen Corps Grant 
Program, and the former Interoperable Emergency Communications Grant 
Program would be treated as allowable expenses under the State 
Homeland Security Grant Program. The consolidated appropriations act 
for fiscal year 2012 appropriated a lump sum of $1.35 billion for FEMA 
preparedness grant programs, allowing DHS to determine the 
distribution among the various grant programs.[Footnote 25] However, 
four of the largest preparedness grant programs, which have similar 
allowable costs, are being reviewed by two separate divisions, and 
FEMA has not yet developed a mechanism to coordinate the review of 
grant project applications internally to identify unwarranted overlap 
and mitigate the potential for unnecessary duplication across grant 
applications. According to FEMA officials, the agency plans to phase 
in a new grants management system, which is scheduled for completion 
by fiscal year 2014, to help, among other things, eliminate 
redundancies in its grants programs. However, it is not clear to what 
extent this new system will provide FEMA with the means to coordinate 
application reviews of its grant programs. 

Additionally, The Amateur Radio Emergency Communications Enhancement 
Act of 2011, as reported out by the Senate Committee on Homeland 
Security and Governmental Affairs in June 2011, would require the DHS 
Inspector General to determine whether and to what degree FEMA grant 
programs provide duplicative or overlapping assistance, and make 
recommendations for the consolidation and elimination of grant 
programs to reduce duplication of assistance.[Footnote 26] 

Action 2: 
Congress may wish to consider limiting preparedness grant funding to 
maintaining existing capabilities (as determined by FEMA) until FEMA 
completes a national preparedness assessment of capability gaps at 
each level based on tiered, capability-specific performance objectives 
to enable prioritization of grant funding.
Partially Addressed. 

Action 2 progress: 

In the continuing appropriations act for fiscal year 2011, Congress 
appropriated $875 million less for FEMA preparedness grants than the 
amount requested in the President's fiscal year 2011 budget.[Footnote 
27] Similarly, the consolidated appropriations act for fiscal year 
2012 appropriated $1.7 billion for FEMA preparedness grants, $1.28 
billion less than requested.[Footnote 28] The Senate Committee report 
accompanying the DHS appropriations bill for fiscal year 2012 directs 
FEMA to develop guidance for grantees on best practices to manage 
current funding to ensure the most necessary capabilities are 
sustained. The report encourages FEMA to provide flexibility in grant 
expenditures to ensure the least amount of degradation to current 
capabilities occurs and directs the agency to brief the Committee 
quarterly on the specific processes being put in place to manage the 
grant programs in a way that promotes sustainability of current 
capacity.[Footnote 29] 

In December 2011, DHS officials said that they had not yet completed 
the development and implementation of the preparedness system 
(additional discussion of this issue is included below). However, in 
the interim, FEMA officials stated that FEMA has clarified grant 
guidance and reporting to support maintenance needed to sustain 
current capabilities in response to grantee concerns regarding 
allowable uses of grant funds. 

Action 3: 
FEMA should complete a national preparedness assessment of capability 
gaps at each level based on tiered, capability-specific performance 
objectives to enable prioritization of grant funding, and FEMA could 
identify the potential costs for establishing and maintaining those 
capabilities at each level and determine what capabilities federal 
agencies should provide.
Not addressed. 

Action 3 progress: 
DHS has announced plans to develop and implement a national 
preparedness system that would enable it to assess these capability 
gaps, but the system remains under development. Therefore, actions on 
the assessment of capability gaps have not yet begun. In its May 2011, 
Implementation Plan for Presidential Policy Directive 8: National 
Preparedness, DHS announced plans to develop and implement a national 
preparedness system to provide an integrated approach to preparedness 
that can be implemented and measured at all levels of government to 
link together programs and requirements into a comprehensive system, 
driving rational decision making and allowing for a direct and 
defensible assessment of progress against clearly defined objectives. 
According to the plan, the national preparedness system will be based 
on a consistent methodology for assessing the threats and hazards that 
drive planning, including resource requirements, existing capabilities 
and capability gaps, and investments to close those gaps. FEMA 
officials described efforts they have underway, which are aimed at 
assessing state-level capabilities, that they said would provide a new 
baseline to meet or exceed several aspects of this action. However, 
FEMA has not yet begun to develop and implement a system to assess 
capability gaps on a national level. 

Action 4: 
Once FEMA has completed its assessment, Congress may wish to consider 
limiting the use of federal preparedness grant programs to fund only 
projects that support the development of identified, validated, and 
documented capability gaps that may (or may not) include maintaining 
existing capabilities developed.
Not addressed. 

Action 4 progress: 

Because FEMA has not yet completed its assessment, this suggested 
action cannot yet be considered by Congress. 

For more information, contact William O. Jenkins, Jr. at (202) 512-
8757 or jenkinswo@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

International Affairs: 

27. Lack of information sharing could create the potential for 
duplication of efforts between U.S. agencies involved in development 
efforts in Afghanistan. 

Overall assessment: Partially addressed. 

Action 1: 
The U.S. Agency for International Development (USAID), in consultation 
with the Department of Defense (DOD) and other relevant U.S. agencies, 
should consider designating Afghan Info or some other database as the 
centralized U.S. government database for U.S. development efforts in 
Afghanistan. This database should, among other things, ensure that the 
information in the database (1) captures all agency development 
efforts and (2) is accessible to all U.S. government agencies involved 
in U.S.-funded development projects in Afghanistan.
Partially addressed. 

Action 1 progress: 

The Afghan Info database has been designated as the centralized 
database for U.S. development efforts in Afghanistan, but it does not 
readily capture relevant DOD data. On October 2, 2011, the Deputy 
Ambassador, U.S. Embassy Kabul, signed a memo requiring that all 
Embassy agencies and sections utilizing foreign assistance funds 
report information on their programs and projects into Afghan Info. 
Additionally, a November 2011 U.S. Status Report: Afghanistan and 
Pakistan Civilian Engagement issued by the Office of the Special 
Representative for Afghanistan and Pakistan and signed by the 
Secretary of State noted that Embassy Kabul is taking steps to utilize 
the Afghan Info database to capture all foreign assistance activities 
being implemented by U.S. government agencies. However, DOD's 
Commander's Emergency Response Program data is still not in the Afghan 
Info database. USAID has started discussions with DOD about how to get 
Commander's Emergency Response Program data into the database because, 
according to USAID, the Ambassador only has direct authority over 
Chief of Mission offices and agencies. USAID officials said that 
Afghan Info is in the process of being transitioned, by late February 
2012, to an internet-based system that will allow all agencies access. 

For more information, contact Charles Johnson at (202) 512-7331 or 
johnsoncm@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

International Affairs: 

28. Despite restructuring, overlapping roles and functions still exist 
at State's Arms Control and Nonproliferation Bureaus. 

Overall assessment: Addressed. 

Action 1: 
The Department of State (State) should implement GAO's recommendations 
to formally delineate in the Foreign Affairs Manual (FAM) the roles of 
the two new bureaus.
Addressed. 

Action 1 progress: 
State updated the FAM in February and April 2011 to formally delineate 
the roles of the Bureau of Arms Control, Verification and Compliance 
and the Bureau of International Security and Nonproliferation. By 
making these improvements, State could reduce personnel and other 
overhead costs by helping address the multiple mission redundancies 
identified among the offices and functions of the new International 
Security and Nonproliferation and Arms Control, Verification, and 
Compliance bureaus. 

Action 2: 
State should implement GAO's recommendations to direct that key 
transformation practices and steps be incorporated into the FAM. 
Addressed: 

Action 2 progress: 
State updated the FAM in May 2011 to direct that, to the extent 
practicable, major reorganizations of bureaus or offices at State 
should follow GAO's key transformation practices. Such key practices 
include ensuring that top leadership drives the transformation and 
establishing a coherent mission and integrated strategic goals to 
guide the transformation. 

For more information, contact Thomas Melito at (202) 512-9601 or 
melitot@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

Social Services: 

29. Actions needed to reduce administrative overlap among domestic 
food assistance programs. 

Overall assessment: Not addressed. 

Action 1: 
The U.S. Department of Agriculture (USDA) should identify and develop 
methods for addressing potential inefficiencies and reducing 
unnecessary overlap among its smaller food assistance programs while 
ensuring that those who are eligible receive the assistance they need. 
These methods could include conducting a study as a first step; 
convening a group of experts; identifying which of the lesser-studied 
programs need further research and taking steps to fill the research 
gap; or identifying and piloting proposed changes. 
Not addressed. 

Action 1 progress: 
No executive action taken. 

Action 2: 
USDA could broaden its efforts to simplify, streamline, or better 
align eligibility procedures and criteria across programs to the 
extent that it is permitted by law. Options such as consolidating or 
eliminating overlapping programs also have the potential to reduce 
administrative costs but may not reduce spending on benefits unless 
fewer individuals are served as a result.
Not addressed. 

Action 2 progress: 
No executive action taken. 

For more information, contact Kay E. Brown at (202) 512-7215 or 
brownke@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

Social Services: 

30. Better coordination of federal homelessness programs may minimize 
fragmentation and overlap. 

Overall assessment: Partially addressed. 

Action 1: 
It will be important for the federal agencies that have adopted the 
Federal Strategic Plan to Prevent and End Homelessness (the Federal 
Strategic Plan) to develop implementation plans that include but are 
not limited to a project schedule, resource allocation, outreach 
measures, and a performance measurement strategy to evaluate their 
progress. 
Partially addressed. 

Action 1 progress: 
While not all members of the U.S. Interagency Council on Homelessness 
(USICH) are expected to do so, the three key member agencies-the 
Departments of Health and Human Services (HHS), Housing and Urban 
Development (HUD), and Veterans Affairs (VA)-have either adopted or 
aligned their strategic plans with the Federal Strategic Plan, which 
was developed in 2010. GAO has ongoing audit work to determine the 
extent to which council member agencies have implementation plans in 
place and the extent to which those plans incorporate the recommended 
elements. 

Action 2: 
Agencies need to improve collaborative efforts as outlined in the U.S. 
Interagency Council on Homelessness's 
(USICH) Federal Strategic Plan.
Partially addressed. 

Action 2 progress: 
Better collaboration is part of the mission of the USICH and one of 
the objectives of the Federal Strategic Plan. Collaborative steps have 
been taken by some agencies as they address the issue of homelessness, 
but not all agencies are as far along in the process. For example, HHS 
and VA have been working with HUD to better coordinate collection, 
analysis, and reporting of homelessness data within those three 
agencies. In addition, during fiscal year 2012, the USICH is 
facilitating discussions among and between agencies about the 
feasibility of creating a common data standard regarding housing 
stability across relevant federal programs. If adopted, such a common 
data standard would also allow for greater collaboration among 
agencies. Agencies have also stated that increased collaboration has 
occurred between both targeted and mainstream federal homelessness 
programs. For instance, Department of Agriculture officials stated 
that as a result of their involvement with USICH, they have begun to 
plan strategies with another agency to increase access to mainstream 
programs. However, providers GAO spoke with stated that greater 
collaboration of homelessness efforts is still needed among agencies, 
especially those that provide housing and health services. Providers 
acknowledged that coordination can be difficult because agencies are 
not set up to work together and coordination efforts take time and 
resources to be successfully implemented. Therefore, while agency 
actions to improve collaboration are in process, additional 
collaboration is still needed to further coordinate the federal 
response to homelessness. GAO is currently assessing agency efforts to 
improve collaboration and will report on this later this year. 

For more information, contact Alicia Puente Cackley at (202) 512-8678 
or cackleya@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

Social Services: 

31. Further steps needed to improve cost-effectiveness and enhance 
services for transportation-disadvantaged persons. 

Overall assessment: Partially addressed. 

Action 1: 
Federal departments on the Interagency Transportation Coordinating 
Council on Access and Mobility (Coordinating Council), including the 
Departments of Agriculture, Education, Health and Human Services, 
Housing and Urban Development, Interior, Labor, Transportation, and 
Veterans Affairs, should identify and assess their transportation 
programs and related expenditures and work with other departments to 
identify potential opportunities for additional coordination. The 
Coordinating Council should develop the means for collecting and 
sharing this information by establishing agency roles and 
responsibilities and developing a strategy to reinforce cooperation.
Partially addressed. 

Action 1 progress: 
The Department of Transportation, which is the head of the 
Coordinating Council, maintains a comprehensive inventory of its 
programs, but most participating federal departments do not have an 
inventory of existing programs or related expenditure information for 
transportation services and have not been actively working with other 
departments to identify potential opportunities for additional 
coordination. One of seven Coordinating Council working groups in 
fiscal year 2011, however, has identified a new opportunity to 
coordinate certain services for a targeted group of transportation-
disadvantaged persons. As part of the Coordinating Council's Veteran's 
Affairs working group, the Departments of Health and Human Services, 
Labor, Transportation, and Veterans Affairs recently worked together 
to develop a Veteran's Transportation & Community Living Initiative, 
launched in July 2011. Through this initiative, the Federal Transit 
Administration has made over $34 million in Bus and Bus Facilities 
grant funding available to local governmental agencies to finance the 
capital costs of implementing, expanding, or increasing access to 
local One-Call/One-Click Transportation Resource Centers. In addition, 
a Web site exists (the Coordinating Council's United We Ride Web site) 
to collect and share program information, but the information provided 
does not comprehensively address all relevant transportation programs 
for transportation-disadvantaged persons. 

Action 2: 
Federal departments on the Coordinating Council should develop and 
disseminate policies and grantee guidance for coordinating 
transportation services.
Partially addressed. 

Action 2 progress: 
Most federal departments on the Coordinating Council have not 
disseminated policies and grantee guidance for coordinating 
transportation services since March 2011. One of eight federal 
departments we reviewed, however, recently disseminated guidance for 
their grantees for coordinating transportation services. The 
Department of Labor's Employment and Training Administration and 
Office of Disability Employment Policy jointly issued a Training and 
Employment Notice on January 3, 2012 for the public workforce system 
on meeting employment-related transportation needs of businesses and 
job seekers. This guidance provides strategies for connecting 
individuals, including those with disabilities and other challenges, 
to employment with transportation to jobs and training. 

For more information, contact David Wise at (202) 512-2834 or 
WiseD@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

Training, Employment, and Education: 

32. Multiple employment and training programs: providing information 
on collocating services and consolidating administrative structures 
could promote efficiencies. 

Overall assessment: Partially addressed. 

Action 1: 
The Secretaries of Labor and Health and Human Services should work 
together to develop and disseminate information that could inform 
efforts by states and localities in increasing administrative 
efficiencies in employment and training programs, including 
initiatives to consolidate program administrative structures and 
collocate new partners at one-stop centers. 
Partially addressed: 

Action 1 progress 
According to department officials, the Departments of Labor (Labor) 
and Health and Human Services (HHS) are collaboratively pursuing 
efforts which may increase administrative efficiencies. These efforts 
include testing innovative strategies, developing technical 
assistance, and conducting joint evaluation activities. Department 
officials cited the following: 

* Labor will be awarding competitive grants intended to improve 
services and job seeker and employer outcomes and lower costs or 
reduce program overlap and administrative cost; 

* HHS and Labor have jointly developed and disseminated information 
through technical assistance to cross-agency teams to support the 
improvement of employment, training, and education outcomes for low-
skilled adults; and; 

* HHS is collaborating with Labor to conduct an evaluation to better 
understand policies, practices, and service delivery strategies that 
lead to better alignment of the Workforce Investment Act and Temporary 
Assistance for Needy Families (TANF), including promising state and 
local practices for successful coordination between these programs. 

As part of its proposed changes to the Workforce Investment Act, the 
President's fiscal year 2012 budget request proposed consolidating the 
Vocational Rehabilitation (VR) States Grants program, Supported 
Employment State Grants, Projects with Industry, Migrant and Seasonal 
Farmworkers, and the in-service training portion of VR Training 
program. The administration also proposed consolidating Education's 
Career and Technical Education-Basic Grants to States and Tech Prep 
Education programs, at the same time reducing program funding. 
According to an official at the Department of Education, the fiscal 
year 2012 appropriations[Footnote 30] did not consolidate these 
programs. However, the fiscal year 2012 appropriation provided no 
funds for the Projects with Industry; provided funds to pay only the 
continuation costs of the Migrant and Seasonal Farmworkers program's 
current projects; and the fiscal year 2011 appropriation eliminated 
funding for Tech Prep, according to the official. 

In addition, the administration proposed transferring the Senior 
Community Service Employment Program from Labor to HHS, while reducing 
the program's funding. According to a Labor official, the fiscal year 
2012 appropriation did not transfer the program to HHS. There was a 
small reduction in funding relative to the fiscal year 2011 
appropriation. 

Action 2: 
Labor and HHS should examine the incentives for states and localities 
to undertake initiatives in increasing administrative efficiencies in 
employment and training programs and, as warranted, identify options 
for increasing such incentives.
Partially addressed. 

Action 2 progress: 
Labor reported that it will be awarding competitive grants to 
encourage states to (1) achieve outcomes for lower cost; (2) reduce 
program overlap and administrative costs; and (3) strengthen 
coordination and alignment across programs and funding streams. Part 
of this grant money will be made available through a pilot program 
that pays for services only after defined outcomes are achieved 
through effective, promising strategies, according to department 
officials. In addition, officials reported that Labor and HHS, along 
with other federal agencies, have been meeting to identify 
opportunities for promoting joint strategic planning across programs. 
Officials said the departments will be examining incentives for states 
and localities to undertake strategic planning across programs as a 
way to increase administrative efficiencies and alignment of core 
public workforce, as well as partner programs such as Temporary 
Assistance for Needy Families. 

For more information, contact Andrew Sherrill at (202) 512-7252 or 
sherrilla@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

Training, Employment, and Education: 

33. Teacher quality: proliferation of programs complicates federal 
efforts to invest dollars effectively. 

Overall assessment: Partially addressed. 

Action 1: 
The Secretary of Education should work with other agencies as 
appropriate to develop a coordinated approach for routinely and 
systematically sharing information that can assist federal programs, 
states, and local providers in achieving efficient service delivery.
Not addressed. 

Action 1 progress: 
No executive action taken. The Department of Education noted barriers 
to program alignment, such as programs with differing definitions for 
similar populations of grantees, which create an impediment to 
coordination. 

Action 2: 
Congress could help eliminate some of the barriers to program 
alignment through legislation, particularly through the pending 
reauthorization of the Elementary and Secondary Education Act of 1965 
(ESEA) and other key education bills. Specifically, Congress may 
choose either to eliminate programs that are too small to evaluate 
cost-effectively or combine programs serving similar target groups 
into a larger program.
Partially addressed. 

Action 2 progress: 
Two proposed bills currently pending before Congress would, in part, 
repeal provisions of the ESEA, as amended. The Setting New Priorities 
in Education Spending Act was introduced in the House on May 13, 2011, 
with the intended purpose of repealing ineffective or unnecessary 
education programs.[Footnote 31] According to the committee reporting 
the bill, it would repeal the authorization for more than 40 education 
programs, some of which are related to teacher quality. In addition, 
the Senate Committee on Health, Education, Labor and Pensions reported 
an original bill, the Elementary and Secondary Education 
Reauthorization Act of 2011, on October 20, 2011, which would also 
repeal various ESEA provisions that may impact teacher quality 
programs.[Footnote 32] 

Action 3: 
Congress might also include legislative provisions to help the 
Department of Education reduce fragmentation, such as by giving 
broader discretion to the agency to move resources away from certain 
programs. Congress could provide the department guidelines for 
selecting these programs. To the extent that overlapping programs 
continue to be authorized, they could be better aligned with each 
other in a way that allows for comparison and evaluation to ensure 
they are complementary rather than duplicative.
Not addressed. 

Action 3 progress: 
No legislative action identified. 

For more information, contact George A. Scott at (202) 512-7215 or 
scottG@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

Economic Development: 

34. Fragmentation of financial literacy efforts makes coordination 
essential. 

Overall assessment: Partially addressed. 

Action 1: 
The Financial Literacy and Education Commission should enhance its 
efforts to coordinate federal activities, such as by exploring further 
opportunities to strengthen its role as a central clearinghouse for 
federal financial literacy resources.
Partially addressed. 

Action 1 progress: 
If implemented, the Financial Literacy and Education Commission's 2011 
National Strategy will address GAO's suggestion to strengthen the 
Commission's coordination and clearinghouse efforts. The strategy 
identifies coordination as one of five action areas and sets a goal of 
establishing a clearinghouse of federal research, best practices, and 
other information related to financial literacy. According to 
Commission staff, their goal is to initiate the clearinghouse in early 
2012. 

Action 2: 
The Office of Financial Education, within the Bureau of Consumer 
Financial Protection, and the Office of Financial Education and 
Financial Access, within the Department of the Treasury, will need to 
coordinate their roles and activities closely to avoid unnecessary 
overlap and make the most productive use of their respective resources.
Partially addressed. 

Action 2 progress: 
As the new Bureau of Consumer Financial Protection has been hiring 
staff and planning its financial education activities, it has been in 
regular communication with the Department of the Treasury. Department 
officials told us that the two agencies meet about once a month in an 
effort to coordinate their respective roles and activities. These 
coordination efforts are ongoing and not enough time has passed to 
assess their results. 

Action 3: 
The Financial Literacy and Education Commission should build on 
progress it has made in recent years in promoting partnerships among 
the federal, state, local, nonprofit, and private sectors. 
Partially addressed. 

Action 3 progress: 
The Financial Literacy and Education Commission's 2011 National 
Strategy and accompanying implementation plan discuss strategies for 
involving and working with nonfederal entities in achieving the 
commission's goals, but not enough time has passed to assess the 
execution of the National Strategy. 

Action 4: 
Federal agencies should measure the outcomes of their financial 
literacy efforts and federal financial literacy resources should be 
focused on those agencies and programs with the most expertise and 
best track records. The Financial Literacy and Education Commission 
and the Bureau of Consumer Financial Protection could potentially play 
a role in developing or disseminating a standard set of evaluation 
tools or benchmarks that would help assess which federal initiatives 
have the most effective outcomes. 
Partially addressed. 

Action 4 progress: 
The 2011 National Strategy for Financial Literacy sets goals for 
encouraging evidence-based research and outcome-based program 
evaluation, although evaluation tools have yet to be completed and 
disseminated to federal agencies. The Financial Literacy and Education 
Commission's 2011 implementation plan includes developing a federal 
action plan for these goals and the Departments of the Treasury and 
Education have plans to share lessons learned from existing research 
with other federal agencies. However, the National Strategy does not 
make recommendations for allocating federal resources accordingly. 

For more information, contact Alicia Puente Cackley at (202) 512-8678 
or cackleya@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

Agriculture: 

35. Reducing some farm program payments could result in savings from 
$800 million over 10 years to up to $5 billion annually. 

Overall assessment: Not addressed. 

Action 1: 
Congress may wish to consider reducing or eliminating fixed annual 
payments to farmers, called direct payments, by (1) lowering payment 
or income eligibility limits; (2) reducing the portion of a farm's 
acres eligible for the payments; or (3) terminating or phasing out 
direct payments.
Not addressed. 

Action 1 progress: 
No legislative action identified. 

For more information, contact Lisa Shames at (202) 512-3841or 
shamesl@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

Defense: 

36. DOD should assess costs and benefits of overseas military presence 
options before committing to costly personnel realignments and 
construction plans, thereby possibly saving billions of dollars. 

Overall assessment: Partially addressed. 

Action 1: 
The Department of Defense (DOD) should conduct a comprehensive 
reassessment of its overseas presence, including the costs and 
benefits of various alternatives.
Partially addressed. 

Action 1 progress: 

DOD has taken some steps that would facilitate such a reassessment, 
but has not completed a comprehensive reassessment of its overseas 
presence that includes the costs and benefits of alternatives. For 
example, DOD has instituted a global posture prioritization panel 
wherein the combatant commands, the services, the Office of the 
Secretary of Defense, and other relevant DOD organizations prioritize 
global posture initiatives collectively and do so in time for those 
initiatives that are selected to be included in each service's budget 
plan. In addition, DOD has issued guidance that requires combatant 
commands to report costs associated with planned projects in their 
respective posture plans but has not finalized the instruction that 
would implement this guidance. 

Additionally, in the report accompanying the Senate bill for the 
National Defense Authorization Act for Fiscal Year 2012, the Senate 
Armed Services Committee discussed the importance of using an 
objective and transparent methodology to capture the full current cost 
and estimate the future cost of military overseas presence.[Footnote 
33] For example, the committee directed DOD to provide an update on 
its plans to implement GAO recommendations to more accurately and 
comprehensively account for costs related to overseas posture plans. 

Action 2: 
To address specific regional issues in Europe, DOD should reassess 
plans in Europe, including the costs and benefits of keeping Army 
brigades in Germany and the appropriateness of building a new Army 
headquarters given the potential changes in force structure.
Partially addressed. 

Action 2 progress: 
In January 2012, the administration announced that the Army will 
remove two brigade combat teams from Europe, but did not specify when 
this would occur. Also, DOD is considering increasing its naval 
presence overseas to meet ballistic missile defense requirements for 
the region. At present, DOD is assessing the cost and benefits of 
stationing naval forces in Spain to meet the requirement. According to 
DOD officials, the Department will provide an overview of planned 
changes to posture in Europe in its annual report to Congress on 
global defense posture in spring 2012. 

Action 3: 
To address specific regional issues in Africa, DOD should reassess 
missions of the combined joint task force in Djibouti as well as 
identifying the projected costs for the task force and, in concert 
with DOD or the Navy, developing a realistic funding plan for the task 
force's sustainability.
Partially addressed. 

Action 3 progress: 
DOD is taking steps to determine the future task force's presence in 
Djibouti and how it will be funded and sustained, but has not yet 
developed specific plans and funding estimates. DOD officials told GAO 
that U.S. Africa Command has assessed the need for the task force and 
determined the task force to be integral to the U.S. presence in East 
Africa through at least 2017, and that final decisions about specific 
needs will be made later in 2012 as part of the department's review of 
worldwide posture plans. 

In a committee report, the Senate Appropriations Committee directed 
the Secretary of the Navy to submit a master plan that would include 
information on the planned facilities for Camp Lemonier in Djibouti. 
An annual update to the master plan is to be submitted to the defense 
committees with the budget submission,[Footnote 34] which usually 
occurs in February each year. According to DOD officials, the Navy is 
currently conducting a facilities-planning effort and the department 
will submit the master plan to Congress in August 2012. 

For more information, contact John Pendleton at (202) 512-3489 or 
pendletonj@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

Defense: 

37. Total compensation approach is needed to manage significant growth 
in military personnel costs. 

Overall assessment: Partially addressed. 

Action 1: 
The Department of Defense (DOD) could recognize long-term cost 
avoidance by addressing in a compensation strategy what types of 
compensation are effective, and not incurring costs for compensation 
that may not be effective, in helping the department achieve its 
recruiting and retention goals. 
Partially addressed. 

Action 1 progress: 
DOD has taken some steps to determine the effectiveness of select 
special and incentive pays. For example, DOD employed a contractor to 
help develop a compensation analysis model for selected officer 
communities and anticipates using it, once completed, to help set 
effective compensation for those officer communities. In August 2011, 
DOD hired the RAND Corporation to develop and apply a model to analyze 
the effect of special and incentive pays on the staff of selected 
officer communities to ensure that staffing goals of the officer 
community can be met and that compensation is efficient. DOD officials 
anticipate that this analysis will be used to help the department and 
the services more efficiently use and set rates for special and 
incentive pay compensation to influence a member's retention decision. 
The study, entitled Officer Special and Incentive Pay Analysis, is 
ongoing and expected to be completed in August 2012. 

To achieve additional progress on this action, DOD should continue 
analyzing special and incentive pays to determine the most efficient 
amount to offer to meet staffing goals, including expanding this study 
to include the enlisted servicemember population. While DOD's efforts 
to assess officers' special and incentive pays shows progress, special 
and incentive pays are one of many compensation tools that DOD uses to 
recruit and retain its active duty personnel. Further, special and 
incentive pays represented less than 5 percent of DOD's compensation 
costs for active duty personnel. To completely address GAO's action 
needed, DOD should assess the extent its other pays and benefits 
contribute to its recruiting and retention goals, and use this 
information to formulate a clear compensation strategy that includes 
performance measures. 

For more information, contact Brenda S. Farrell at (202) 512-3604 or 
farrellb@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

Defense: 

38. Employing best management practices could help DOD save money on 
its weapon systems acquisition programs. 

Overall assessment: Partially addressed. 

Action 1: 
The Department of Defense (DOD) could achieve significant cost savings 
by employing best management practices at all phases of its weapon 
system acquisition process-including early systems engineering, 
analyzing alternatives, managing changes in system requirements, and 
more prototyping early in programs development testing. 
Partially addressed. 

Action 1 progress: 
DOD has made some progress in implementing several best practices on 
weapon system acquisition programs, but not all best practices are 
being applied by all acquisition programs and more consistent 
implementation is needed. For example, in March 2011, GAO reported 
that almost all of the 14 planned major defense acquisition programs 
reviewed intended to conduct early systems engineering reviews before 
starting development, but fewer are taking other actions, such as 
developing early prototypes, that could improve their chances of 
success.[Footnote 35] GAO also reported in July 2011 that the military 
departments held configuration steering board meetings--a key 
mechanism for managing changes in system requirements--for 74 of 96 
major defense acquisition programs they managed in 2010.[Footnote 36] 
GAO made several recommendations to ensure that DOD holds 
configuration steering boards for all programs, and the department is 
planning to take action to address them. 

Action 2: 
DOD has started the process of reviewing the potential cost of 
individual weapon system programs to meet warfighters' most pressing 
needs, but the department must still address the overall affordability 
of its major weapon system investment portfolio.
Partially addressed. 

Action 2 progress: 
DOD has started to address the affordability of its weapon programs on 
an individual basis, but not as a whole. DOD has started to implement 
its September 2010 guidance that requires "should cost" estimates and 
affordability targets be set for each new weapon system acquisition 
program.[Footnote 37] However, in June 2011, GAO reported that DOD's 
process for validating new weapon system requirements still does not 
take into account a requirement's affordability or set priorities in a 
way that can be used to help manage DOD's overall weapon system 
investments.[Footnote 38] In January 2012, DOD revised its 
requirements process to include joint prioritization, which should be 
a useful input for balancing weapon system investments. 

Action 3: 
DOD needs to do a better job planning and executing programs on a day-
to-day basis to achieve better outcomes. Critical to achieving 
successful outcomes is establishing and sustaining knowledge-based, 
realistic program baselines. 
Partially addressed. 

Action 3 progress 
DOD has made some progress in implementing, but has not yet fully 
adhered to, knowledge-based acquisition approaches. In March 2011, GAO 
reported that newer weapon programs are demonstrating higher levels of 
knowledge at key decision points, but most are still not fully 
adhering to a knowledge-based acquisition approach.[Footnote 39] 

For more information, contact Michael J. Sullivan at (202) 512-4841 or 
sullivanm@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

Defense: 
39. More efficient management could limit future costs of DOD's spare 
parts inventory. 

Overall assessment: Partially addressed. 

Action 1: 
The Department of Defense (DOD) could limit future costs by focusing 
its efforts on better managing on-order inventory. Specifically, DOD 
should focus on reducing on-order inventory levels that are not needed 
for current needs or projected demand. 
Partially addressed. 

Action 1 progress: 
DOD is in the process of implementing its November 2010 Comprehensive 
Inventory Management Improvement Plan (the Plan). In 2011, GAO found 
that DOD's Plan, which was required by the National Defense 
Authorization Act for Fiscal Year 2010 (Pub. L. No. 111-84, § 328), 
provides a comprehensive plan for improving inventory management 
systems of the military departments and the Defense Logistics 
Agency.[Footnote 40] One of two goals in the Plan is to reduce the 
amount of on-order excess inventory[Footnote 41] from 8.5 percent of 
on-order dollars above the approved acquisition objective across DOD 
for fiscal year 2009 to 6 percent in fiscal year 2014 and 4 percent in 
fiscal year 2016. Additionally, DOD and its components are in the 
process of reviewing and strengthening its approval and reporting 
procedures for on-order excess, which may result in needed updates to 
DOD and component policy and regulations. Implementation of the Plan 
is ongoing, and DOD does not expect to complete the related action 
items until fiscal year 2015. In May 2012, GAO will report on its 
assessment of DOD's implementation of the Plan. 

Action 2: 
DOD should address systemic weaknesses in demand forecasting, revise 
management practices to incorporate flexibility needed to minimize the 
impact of demand fluctuations, and track the cost efficiency of its 
inventory management processes.
Partially addressed. 

Action 2 progress: 
DOD continues to implement its November 2010 Plan, which is, in part, 
focused on improving demand forecasting practices and tracking the 
efficiency of inventory processes. One of the Plan's nine subplans 
directly addresses demand forecasting weaknesses, including (1) 
identifying improved methods and techniques for demand forecasting, 
(2) identifying and implementing standard metrics to assess 
forecasting accuracy and bias, (3) expanding and refining a 
departmentwide structure for collaborative forecasting, (4) modifying 
approaches to setting of inventory levels for low-demand items, and 
(5) examining how investment risk for new consumable items can be 
reduced between the Defense Logistics Agency and the military 
departments. Efforts to address these weaknesses are scheduled to 
occur into fiscal year 2015; therefore, it is too early to assess 
DOD's progress in improving demand forecasting. Additionally, the Plan 
includes an action to establish departmentwide metrics to track and 
monitor the efficiency of DOD inventory operations; however, these 
efforts are ongoing and have not been finalized. 

For more information, contact Zina Merritt at (202) 512-4300 or 
merritz@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

Defense: 

40. More comprehensive and complete cost data can help DOD improve the 
cost-effectiveness of sustaining weapon systems. 

Overall assessment: Partially addressed. 

Action 1: 
The Department of Defense (DOD) should revise guidance to specifically 
require the retention of life-cycle operating and support (O&S) cost 
estimates for major weapon systems, as well as the supporting 
documentation used to develop these estimates. 
Partially addressed. 

Action 1 progress: 
According to DOD officials, DOD is revising its acquisition and cost-
estimating policies to include this requirement. These policies are 
expected to be issued in 2012. 

Additionally, the National Defense Authorization Act for Fiscal Year 
2012 requires the Secretary of Defense to issue guidance regarding O&S 
costs for major weapon systems, including requiring the military 
departments to retain each estimate of O&S costs that is developed at 
any time during the life-cycle of a major weapon system, together with 
supporting documentation used to develop the estimate.[Footnote 42] 
The guidance was due not later than 180 days after the date of the 
enactment of the act, which was on December 31, 2011. As of February 
10, 2012, the guidance had not been issued. 

Action 2: 
DOD should identify the cost elements needed to track and assess 
actual O&S costs for effective cost analysis and program management 
for major weapon systems, and require the collection of these elements 
in the services' O&S cost visibility data systems.
Partially addressed. 

Action 2 progress: 
According to DOD officials, DOD has studied potential improvements to 
the services' O&S cost visibility data systems and is in the process 
of revising guidance. 

The Secretary of Defense was also required under the above act to 
issue guidance to establish standard requirements for the collection 
of data on O&S costs for major weapon systems and require the military 
departments to revise their cost visibility data systems to ensure 
that they collect complete and accurate data and make such data 
available in a timely manner.[Footnote 43] This guidance has not yet 
been issued. 

Action 3: 
DOD should require the services to periodically update life-cycle O&S 
cost estimates for major weapon systems after these systems are 
acquired, which would enhance DOD's ability to compare actual 
performance to planned or expected results.
Partially addressed. 

Action 3 progress: 
According to DOD officials, DOD is revising its acquisition policy to 
include this requirement. The revised acquisition policy is expected 
to be issued in 2012. 

The Secretary of Defense was also required under the act to issue 
guidance to require the military departments to update estimates of 
O&S costs periodically throughout the life-cycle of a major weapon 
system, to determine whether preliminary information and assumptions 
remain relevant and accurate, and to identify and record reasons for 
variances.[Footnote 44] Guidance in this area has not yet been issued. 

Action 4: 
DOD should require program offices to collect and report detailed 
support cost data for their performance-based logistics arrangements.
Partially addressed. 

Action 4 progress: 
DOD has been evaluating alternatives to improve contractor cost 
reporting. On the basis of their evaluation, DOD officials expect to 
make policy revisions in 2012. 

Additionally, the National Defense Authorization Act for Fiscal Year 
2012 requires the Secretary of Defense to issue guidance to establish 
standard requirements for the collection and reporting of data on O&S 
costs for major weapon systems by contractors performing weapon system 
sustainment functions in an appropriate format, and develop contract 
clauses to ensure that contractors comply with such requirements. 
[Footnote 45] As noted above, guidance has not yet been issued. 

Action 5: 
DOD should revise guidance to require the development of performance-
based logistics business case analyses to better support the decision-
making process on the use of these arrangements.
Partially addressed. 

Action 5 progress: 
According to DOD officials, DOD is in the process of revising its 
acquisition policy to include this requirement. Further, an interim 
directive, valid through December 2012, was issued that requires the 
periodic revalidation of business case analyses for major defense 
acquisition programs and major weapon system programs. However, DOD 
has not yet formally revised its acquisition policy. 

Action 6: 
DOD should define the elements to be included in these performance-
based logistics business case analyses so they are comprehensive and 
sound. 
Addressed. 

Action 6 progress: 
In April 2011, DOD issued a Product Support Business Case Analysis 
Guidebook that provides additional details regarding the elements of a 
business case analysis. The updated guidebook also indicates that 
program offices will revalidate the previous product support strategy 
business case analysis every 5 years or prior to a change in the 
weapon system's product support strategy, as required of product 
support managers by a provision in the National Defense Authorization 
Act for Fiscal Year 2010.[Footnote 46] 

For more information, contact Cary B. Russell at (404) 679-1808 or 
RussellC@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

Defense: 

41. Improved corrosion prevention and control practices could help DOD 
avoid billions in unnecessary costs over time. 

Overall assessment: Partially addressed. 

Action 1: 
If the Corrosion Office wishes to convince the Department of Defense 
(DOD) and congressional decision makers that more fully funding its 
corrosion prevention programs could provide significant return on 
investment, the Corrosion Office needs to complete the validation of 
return on investment estimates in order to demonstrate the costs and 
benefits of its corrosion prevention and control projects.
Partially addressed. 

Action 1 progress: 
According to DOD officials, DOD has begun to validate the return on 
investments on corrosion projects that have been completed to 
demonstrate the costs and benefits of the projects. DOD's Corrosion 
Prevention and Mitigation Strategic Plan suggests that for corrosion 
projects that have completed research and development, transitioned to 
service use, and been in use for 2 years, a project review will be 
done to validate the overall impact and return on investment.[Footnote 
47] According to DOD officials, the department has completed 
validating returns on investment on 33 out of 112 projects that were 
identified in fiscal years 2005 through 2008. However, DOD needs to 
effectively implement the ongoing process to validate projects' return 
on investments. According to DOD officials, the department plans to 
validate all the completed projects. 

For more information, contact Zina Merritt at (202) 512-4300 or 
merritz@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

Economic Development: 

42. Revising the Essential Air Service program could improve 
efficiency. 

Overall assessment: Partially addressed. 

Action 1: 
Congress may wish to consider updating eligibility criteria and 
targeting service, including terminating service at airports that are 
less remote from medium- or large-hub airports as well as changing 
other program criteria to consolidate subsidized air service.
Addressed. 

Action 1 progress: 
As of February 6, 2012, the House and Senate had adopted a conference 
report on the FAA Modernization and Reform Act of 2012, but the 
legislation had not been signed by the President at the time our work 
was completed on February 10, 2012. 

The conference report updates eligibility criteria and limits program 
eligibility, including the following changes: 

* Only locations that have at least 10 enplanements per day during the 
most recent fiscal year beginning after September 30, 2012, except for 
locations beyond 175 miles of a large- or medium-hub airport, are 
considered eligible under the Essential Air Service (EAS) program, but 
the Secretary of Transportation is allowed to restore eligibility if 
certain conditions are met. Alaska and Hawaii are exempted from this 
change. 

* For communities in the 48 contiguous United States, eligibility is 
limited to communities that, at any time between September 30, 2010 
and September 30, 2011 (1) received Essential Air Service, or (2) 
received a 90-day notice of intent to terminate air service from an 
air carrier and the Secretary of Transportation required the air 
carrier to continue service.[Footnote 48] 

Action 2: 
Congress may wish to consider revising the program's operating 
requirements for providing air service to communities to improve 
efficiency and to better match capacity with community use.
Partially addressed. 

Action 2 progress: 
The Consolidated and Further Continuing Appropriations Act, 2012 
eliminated the requirement that aircraft providing service under the 
program have a minimum 15-seat passenger capacity for fiscal year 
2012.[Footnote 49] However, changes to other operating requirements, 
such as flexibility in the number of flights provided or 
regionalization of air service, are possible. 

Action 3: 
Congress may wish to consider assessing multimodal solutions, such as 
more cost-effective bus service to hub airports or air taxi service, 
to provide communities alternatives to Essential Air Service.
Not addressed. 

Action 3 progress: 
No legislative action identified. 

Action 4: 
The Department of Transportation may wish to consider assessing 
multimodal solutions, such as more cost-effective bus service to hub 
airports or air taxi service, to provide communities alternatives to 
Essential Air Service.
Addressed. 

Action 4 progress: 
In responding to this report, Department of Transportation officials 
stated that the department is prepared to consider multimodal or 
surface solutions should communities choose to apply to participate in 
the "Alternative EAS" program authorized by the Vision 100-Century of 
Aviation Reauthorization. 

For more information, contact Gerald Dillingham at (202) 512-2834 or 
dillinghamg@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

Economic Development: 

43. Improved design and management of the universal service fund as it 
expands to support broadband could help avoid cost increases for 
consumers. 

Overall assessment: Partially addressed. 

Action 1: 
The Federal Communications Commission (FCC) needs to undertake a 
broader rethinking of the vision, size, structure, and goals of the 
Universal Service Fund.
Partially addressed. 

Action 1 progress 
FCC has taken action to reform two of the four Universal Service Fund 
programs. FCC adopted an order in October 2011 to comprehensively 
reform and modernize the Universal Service Fund high-cost support 
mechanisms.[Footnote 50] This was a significant step by FCC to 
restructure the high-cost program-the largest of the four Universal 
Service Fund programs. The design of the restructured program is 
intended to better target funding to bring broadband services to 
unserved areas. In June 2011, FCC adopted changes to the low-income 
program to detect and prevent duplicative claims from the same 
consumer[Footnote 51] and, on January 31, 2012, adopted an order 
containing additional low-income program reforms.[Footnote 52] 
According to FCC, these reforms will modernize the program and further 
reduce waste, fraud, and abuse by program participants. However, FCC 
is still considering some proposed changes to the rural health care 
program and has not undertaken any comprehensive reforms of the E-rate 
program. 

Action 2: 
FCC needs to improve its management of the Universal Service Fund 
programs to address a number of GAO recommendations, including that 
FCC establish clear performance goals and measures for the programs. 
Partially addressed. 

Action 2 progress: 
FCC has taken action to address some of GAO's recommendations for the 
four Universal Service Fund programs. FCC adopted an order in October 
2011 to comprehensively reform and modernize the Universal Service 
Fund high-cost support mechanisms. The order adopts some goals and 
performance measures for the restructured high-cost program, 
establishes a budget-although not a price cap-for the program, and 
reforms some of the accountability and oversight procedures governing 
the companies that participate in the program. FCC also established 
some goals and performance measures for the low-income program in its 
January 2012 order. In addition, FCC has taken action to improve 
internal controls over the Universal Service Fund programs, including 
conducting risk assessments of the E-rate and low income programs. FCC 
will still need to conduct performance evaluations to determine if its 
reforms are working and should conduct needs assessments to inform 
changes to and the establishment of goals and performance measures for 
the E-rate and rural health care programs. 

For more information, contact Mark Goldstein at (202) 512-2834 or 
goldsteinm@gao.gov. 

See GAO-11-318SP Actions Needed. 
 
[End of assessment] 

Economic Development: 

44. The Corps of Engineers should provide Congress with project-level 
information on unobligated balances. 

Overall assessment: Partially addressed. 

Action 1: 
The U.S. Army Corps of Engineers (the Corps) should provide Congress 
with information on estimated project-level unobligated balances as a 
supplement to its budget presentation. 
Partially addressed. 

Action 1 progress: 
According to the Corps, it has taken action to compile information on 
project-level unobligated balances and plans to include this 
information in its fiscal year 2013 budget presentation, which should 
be released in mid-February 2012. 

For more information, contact Anu K. Mittal at (202) 512-3841, 
mittala@gao.gov or Melissa Emrey-Arras at (202) 512-6806, 
emreyarrasm@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

Energy: 

45. Improved management of federal oil and gas resources could result 
in approximately $1.8 billion[Footnote 53] over 10 years. 

Overall assessment: Partially addressed. 

Action 1: 
The Department of the Interior (Interior) should take steps to 
increase the diligent development of federal lands and waters leased 
for oil and gas exploration and production. 
Partially addressed. 

Action 1 progress: 
Nonfederal oil and gas resource owners are employing a range of 
policies to encourage diligent development of oil and gas leases, 
including increasing rental rates, offering shorter lease terms, and 
escalating royalty rates.[Footnote 54] Interior is, to some extent, 
taking similar steps. Specifically, for a recent lease sale Interior 
increased the base rental rate from $6.25/acre to $7.00/acre in water 
depths of less than 200 meters and from $9.50/acre to $11/acre for 
leases in 200 meters or deeper. Interior estimates the additional 
nominal rental revenue received by the federal government over the 
life of leases issued from this sale is $27 million over the term of 
the leases. 

Additionally, to encourage diligent development of federal oil and gas 
leases, both onshore and offshore, Interior sought authority to charge 
a $4.00/acre annual fee on nonproducing federal oil and gas leases in 
the fiscal year 2011 and 2012 budget requests, which would become 
effective upon congressional action. However, the fiscal year 2012 
appropriations bill for Interior did not provide the department with 
such authority. 

Action 2: 
Congress may need to take action to authorize or encourage Interior to 
revise its rental fee structure in ways that are beyond what is 
specifically authorized to increase rental payments for nonproducing 
leases.
Not addressed. 

Action 2 progress: 
No legislative action identified. 

Action 3: 
Interior should complete its study examining how other oil and gas 
resource owners select fiscal parameters for leasing and adjusting oil 
and gas royalty rates and use that information to adjust, as 
appropriate, its royalty rates to a level that ensures the government 
a fair return. In doing so, it should ensure opportunities for 
substantive, two-way communication with program stakeholders.
Partially addressed. 

Action 3 progress: 
In order to examine whether current U.S. royalty rates produce a fair 
return for the government overall, Interior contracted for a study to 
examine the total federal revenues that result from development of oil 
and gas resources on federal lands and waters. The study was completed 
in late 2011 and released publicly in 2012. Interior officials have 
not indicated how the information will affect royalty or other policies.
In addition, Interior has taken steps to examine royalty rates for 
onshore leases. Interior's Bureau of Land Management (BLM) has 
completed benefit-cost and economic impact analyses on adjusting 
onshore royalty rates. According to BLM, it is now in the process of 
finalizing a proposed rule to adjust royalty rates. The proposed rule 
is under review by Interior officials, after which it will go to OMB 
for review. BLM expects to publish the proposed rule in the Federal 
Register in early 2012. 

Action 4: 
Depending on the results of the study, Congress may wish to provide 
additional guidance or take additional actions to enable Interior to 
change how it oversees federal lands and waters and the revenues 
derived from production of oil and gas there.
Not addressed. 

Action 4 progress: 
No legislative action identified. 

Action 5: 
Interior should implement GAO's recommendations from prior reports 
addressing a variety of oil and gas measurement factors.
Partially addressed. 

Action 5 progress: 
GAO has documented that Interior has taken action to implement 5 of 
the 19 recommendations GAO made in its March 2010 report to improve 
oversight of oil and gas measurement and improve confidence that the 
federal government is receiving its fair share of oil and gas produced 
from federal lands.[Footnote 55] However, 14 recommendations remain 
open. 

For more information, contact Frank Rusco at (202) 512-3841 or 
ruscof@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

General Government: 

46. Efforts to address governmentwide improper payments could result 
in significant cost savings. 

Overall assessment: Partially addressed. 

Action 1: 
Until the federal government has implemented effective processes to 
determine the full extent to which improper payments occur and to 
reasonably assure that appropriate actions are taken across entities 
and programs to effectively recover and reduce improper payments, the 
federal government will not have reasonable assurance that the use of 
taxpayer funds is adequately safeguarded.
Partially addressed. 

Action 1 progress: 
Federal entities reported estimates of improper payment amounts that 
totaled $115.3 billion in fiscal year 2011, a decrease from the prior 
year revised estimate of $120.6 billion. Included were improper 
payment estimates for nine additional programs in fiscal year 2011 
that did not report an estimate in fiscal year 2010, with the 
Department of Health and Human Services (HHS) Medicare Part D program 
having the highest estimate of the additional reporting programs. 
Nevertheless, the federal government continues to face challenges in 
determining the full extent of improper payments. For example, another 
three programs providing estimates for the first time were not 
included in the governmentwide totals because those programs were 
still developing their estimating methodologies. Also, three federal 
entities did not report fiscal year 2011 estimated improper payment 
amounts for four risk-susceptible programs, including HHS's Children's 
Health Insurance Program and Temporary Assistance for Needy Families. 
Audits of federal agencies also continue to identify internal control 
deficiencies over financial reporting, such as financial system 
limitations and information system control weaknesses, which 
significantly increase the risk that improper payments may occur and 
then may not be detected promptly. 

Action 2: 
The level of importance the agencies and the administration place on 
the efforts to implement the requirements established by the Improper 
Payments Elimination and Recovery Act of 2010 (IPERA); Executive Order 
13520, Reducing Improper Payments; and other guidance will be a key 
factor in determining their overall effectiveness in reducing improper 
payments and ensuring that federal funds are used efficiently and for 
their intended purposes.
Partially addressed. 

Action 2 progress: 
In April 2011, the Office of Management and Budget (OMB) issued 
guidance on agency implementation of IPERA requirements for, among 
other things, reporting recovery auditing results, which are conducted 
to identify and reclaim overpayments. Accordingly, agencies reported 
recoveries of contractor and vendor overpayments of $1.2 billion 
during fiscal year 2011. Implementation of IPERA requirements is a 
step in the right direction toward providing additional transparency 
and helping to improve oversight and accountability, but continued 
agency top management attention is needed to further reduce the 
federal government's vulnerability to improper payments. Under OMB 
implementation guidance for Executive Order 13520, fiscal year 2011 
was the first year that agencies were required to identify and report 
their improper payments in three distinct error categories. This 
additional information should be useful in identifying the causes of 
improper payments and developing corrective actions, and could assist 
in OMB's plans to enhance agencies' deployment of forensic 
technologies to help prevent fraud and error. 

Additionally, the Senate Committee on Appropriations increased 
oversight of Department of Veterans Affairs' improper payments by 
directing the department to report to the Committees on Appropriations 
of both chambers of Congress on what steps have been taken to adopt 
recovery audits as a means of reducing and recovering improper 
payments.[Footnote 56] 

For more information, contact Susan Ragland at (202) 512-9500 or 
raglands@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

General Government: 

47. Promoting competition for the over $500 billion in federal 
contracts could potentially save billions of dollars over time. 

Overall assessment: Partially addressed. 

Action 1: 
The Office of Management and Budget (OMB) needs to continue to focus 
on reducing obligations under high-risk contracts, including those 
awarded noncompetitively.
Partially addressed. 

Action 1 progress: 
OMB has made progress in promoting competition, but needs to continue 
this effort. Specifically, OMB has called for agencies to reduce 
obligations under new, high-risk contract actions, including contracts 
awarded noncompetitively, by 10 percent in fiscal year 2010, but the 
extent to which agencies met this goal is unclear. In November 2011, 
GAO made a number of recommendations, including that OMB continue to 
focus on its savings initiative and clarify how it aligns with other 
new initiatives, clarify guidance on how agencies' initiatives are 
defined and reported, and expand the initiative to include all high-
risk actions.[Footnote 57] GAO also recommended that OMB report on the 
results of the initiative through fiscal year 2011. The agency agreed 
to adopt, where appropriate, GAO's recommendations regarding 
methodological and data concerns. 

Action 2: 
Program and contracting officials need to actively promote competition.
Partially addressed. 

Action 2 progress: 
The largest federal contracting agency, the Department of Defense 
(DOD), has taken some actions to promote competition, specifically 
focusing on maximizing competition in situations where only one offer 
is received in a procurement utilizing competitive procedures. An 
April 2011 memorandum directs that if a solicitation was advertised 
for less than 30 days and only one offer is received, the contracting 
officer shall cancel and re-solicit for an additional 30 days, unless 
an exception or waiver is granted. Other guidance further directs that 
if the solicitation was open for at least 30 days, or has been re-
advertised and still only one offer is received, the contracting 
officer shall conduct negotiations with the offeror, unless a waiver 
is granted, but in no event should the negotiated price exceed the 
price originally offered. If this guidance is implemented effectively, 
DOD should realize the benefits of enhanced competition. We will 
continue to monitor progress in promoting competition by DOD and by 
civilian agencies as well. 

For more information, contact John P. Hutton at (202) 512-4841 or 
huttonj@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

General Government: 

48. Applying strategic sourcing best practices throughout the federal 
procurement system could save billions of dollars annually. 

Overall assessment: Partially addressed. 

Action 1: 
Acquisition leaders across the government need to more fully embrace 
the strategic sourcing initiative, beginning with collecting, 
maintaining, and analyzing data on current procurement spending. Then, 
agencies have to conduct assessments of acquisition and supply chain 
functions to initiate enterprisewide transformations. 
Partially addressed. 

Action 1 progress: 
Federal agencies made progress using strategic sourcing approaches to 
achieve cost savings and other efficiencies, but some agencies, such 
as the Department of Defense (DOD), have not fully collected 
information on the use of strategic sourcing. In November 2011, GAO 
reported that almost all of the 24 largest federal agencies reported 
some savings in fiscal year 2010 associated with the use of strategic 
sourcing.[Footnote 58] For example, after conducting a spend analysis 
of its air ambulatory services, the Bureau of Prisons reported savings 
of 30 percent, or about $1.5 million, from negotiating a nationwide 
agreement rather than relying on locally competed contracts. The 
Department of Homeland Security (DHS) established a departmentwide 
strategic sourcing program office, which reported saving about $347 
million in fiscal year 2010 through a portfolio of more than 300 
departmentwide contracts and by participating in the General Service 
Administration's Federal Strategic Sourcing Initiative. The office 
reported that DHS components leveraged their buying power to save more 
than $60 million by using volume software license agreements, $1.3 
million on purchases of body armor, and about $2.8 million on office 
supplies. Several governmentwide federal strategic sourcing 
initiatives are in place and, according to officials from the Office 
of Management and Budget (OMB), have produced savings in areas such as 
domestic delivery services and wireless telecommunications. For 
example, OMB officials estimated the savings for fiscal year 2011 from 
governmentwide Federal Strategic Sourcing Initiatives for domestic 
delivery services to be approximately $31 million, and approximately 
$5.3 million on wireless telecommunications expense management 
services. GAO has not independently verified these estimates. In 
addition, GAO reported in December 2011 that one of these initiatives 
for office supplies produced an estimated savings of $16 million from 
June 2010 through August 2011.[Footnote 59] However, further efforts 
are needed to more fully embrace strategic sourcing initiatives. For 
example, DOD, the government's largest purchaser, has not fully 
collected and assessed cost savings and other information from 
strategic sourcing initiatives. 

For more information, contact Cristina Chaplain at (202) 512-4841 or 
chaplainc@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

General Government: 

49. Adherence to new guidance on award fee contracts could improve 
agencies' use of award fees and produce savings. 

Overall assessment: Partially addressed. 

Action 1: 
Sustained progress in the use of award fees will require that 
contracting agencies adhere to the recent changes to the Federal 
Acquisition Regulation, which in 2009 prohibited the practices of 
rollover of unearned award fees and awarding fees to contractors that 
have performed unsatisfactorily.[Footnote 60] Further efforts are 
needed by agencies to identify methods to evaluate the effectiveness 
of award fees as a tool for improving contractor performance.
Partially addressed. 

Action 1 progress: 

The five contracting agencies GAO reviewed in 2009 are working to 
develop and refine ways to implement and manage the use of award fees 
in accordance with the Federal Acquisition Regulation; however, it is 
too soon to determine the full impact of these actions. From August 
2009 to February 2011, the National Aeronautics and Space 
Administration and the Departments of Defense, Energy, Homeland 
Security, and Health and Human Services, which comprised more than 95 
percent of spending using award fees in 2008, took action by issuing 
policy guidance or updating agency regulation or guidance to be more 
consistent with the Federal Acquisition Regulation or in response to 
GAO's recommendations. These actions were aimed at improving award fee 
contracting, such as ensuring that all award fee plans include 
criteria related to cost, schedule, and performance and that award 
fees are only earned for successful outcomes. Improving agency 
guidance, while an important step, will need to be consistently 
implemented over time to achieve the desired effect of motivating 
excellent contractor performance. GAO will be evaluating the agencies' 
implementation of this action. 

For more information, contact John P. Hutton at (202) 512-4841 or 
huttonj@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

General Government: 

50. Agencies aim to save at least $3 billion by continued disposal of 
unneeded federal real property. 

Overall assessment: Partially addressed. 

Action 1: 
The Office of Management and Budget (OMB) could assist agencies in 
meeting a June 2010 Presidential Memorandum target of $3 billion in 
savings related to property disposals and other methods by developing 
an action plan to address key problems associated with disposing of 
unneeded real property, including reducing the effect of competing 
stakeholder interests on real property decisions. 
Partially addressed. 

Action 1 progress: 
OMB did not develop the recommended action plan. However, OMB is 
coordinating with federal agencies to finalize the governmentwide cost 
savings plans that it projects will exceed the $3 billion target by 
half a billion dollars, according to OMB officials. Further, OMB 
officials reported that as of the end of 2011, agencies have achieved 
in total $1.5 billion dollars of the $3 billion goal. GAO has not 
independently verified these estimates. In addition, the Civilian Real 
Property Realignment Act (CPRA), included in the President's fiscal 
year 2012 budget proposal, would streamline the real property disposal 
process by establishing an independent board to assist agencies in 
identifying unneeded real property. The proposed independent board 
partially responds to the challenges GAO has identified. It could 
address stakeholder influences by recommending federal properties for 
disposal or consolidation after receiving recommendations from 
civilian landholding agencies and independently reviewing the 
agencies' recommendations. CPRA would also establish an Asset Proceeds 
and Space Management Fund that could be used to reimburse agencies for 
necessary disposal costs. 

A version of CPRA similar to the President's proposal was introduced 
in the House on May 4, 2011.[Footnote 61] The bill was reported out of 
the House Transportation and Infrastructure Committee and passed the 
House of Representatives on February 7, 2012. In the Senate, CPRA was 
introduced on August 2, 2011.[Footnote 62] 

For more information, contact David Wise at (202) 512-2834 or 
wised@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

General Government: 

51. Improved cost analyses used for making federal facility ownership 
and leasing decisions could save millions of dollars. 

Overall assessment: Partially addressed. 

Action 1: 
The Office of Management and Budget (OMB) should develop a strategy to 
reduce agencies' reliance on costly leasing where ownership would 
result in long-term savings. Such a strategy could identify the 
conditions under which leasing is an acceptable alternative, include 
an analysis of real property budget scoring issues, and provide an 
assessment of viable alternatives. 
Partially addressed. 

Action 1 progress: 
OMB has not directly addressed leasing issues by developing the 
recommended strategy. OMB, however, indicated that lease savings will 
account for some of the targeted $3 billion savings from property 
disposals and other methods. The Civilian Real Property Realignment 
Act (CPRA), included in the President's fiscal year 2012 budget 
proposal, did not explicitly address the government's overreliance on 
leasing, but could help do so by facilitating consolidated operations 
where appropriate. 

A similar legislative version of CPRA was introduced on May 4, 2011, 
which stated that one of the purposes of the act was to "reduce the 
reliance on costly leased space."[Footnote 63] The bill was reported 
out of the House Transportation and Infrastructure Committee and 
passed the House of Representatives on February 7, 2012. In the 
Senate, CPRA was introduced on August 2, 2011, and also stated that 
one of its purposes was to "reduce the reliance on costly leased 
space."[Footnote 64] 

For more information, contact David Wise at (202) 512-2834 or 
wised@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

General Government: 

52. The Office of Management and Budget's IT Dashboard reportedly has 
already resulted in savings and can further help identify 
opportunities to invest more efficiently in information technology. 

Overall assessment: Partially addressed. 

Action 1: 
Office of Management and Budget (OMB) should complete planned 
improvements to its IT Dashboard, as well as implementation of GAO's 
recommendations. 
Partially addressed. 

Action 1 progress: 
OMB has begun implementing its planned improvements to its IT 
Dashboard. For example, in September 2011, OMB officials stated that 
work is under way to change the Dashboard's cost and schedule ratings 
calculations to improve insight into current performance. 
Specifically, officials said that the new calculations will emphasize 
ongoing work and reflect only development efforts, not operations and 
maintenance activities. In addition, in July 2011, OMB issued guidance 
requiring agencies to report investment work activities in increments 
of 6 months or less. OMB officials stated that this revised reporting 
process and the updated rating calculations will be reflected in a new 
version of the Dashboard, which is to be publicly deployed upon 
release of the President's Budget for fiscal year 2013. Once fully 
implemented by OMB, these changes could be significant steps toward 
improving insight into current investment performance on the 
Dashboard. GAO plans to evaluate the new version of the Dashboard once 
it is publicly available in 2012. 

Action 2: 
Additional opportunities for potential cost savings exist with the 
continued use of the Dashboard by congressional committees to support 
critical oversight efforts. 
Addressed. 

Action 2 progress: 
In 2011, congressional committees requested that GAO further review 
the accuracy of the data on the IT Dashboard and inform Congress on 
the costs and schedule performance of IT investments to help improve 
congressional oversight efforts. A congressional committee also 
recently asked GAO to utilize the Dashboard to conduct performance 
trend analyses of agencies' IT investments to determine if they are 
improving over time, and to report to Congress on the results of the 
review. 

For more information, contact David A. Powner at (202) 512-9286 or 
pownerd@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

General Government: 

53. Increasing electronic filing of individual income tax returns 
could reduce IRS's processing costs and increase revenues by hundreds 
of millions of dollars. 

Overall assessment: Partially addressed. 

Action 1: 
If the Internal Revenue Service (IRS) were to collect more information 
via expanded software identification numbers on tax returns, such 
information could support research into how software affects 
electronic filing. 
Addressed. 

Action 1 progress: 
IRS updated its publication to require all tax preparation software 
firms to print an identifier on paper returns created with their tax 
preparation software. 

Action 2: 
IRS needs to develop a tax return reject prevention strategy, include 
external stakeholders in its reject working group, develop an action 
plan for that group, and provide clearer descriptions of why returns 
are being rejected. 
Addressed. 

Action 2 progress: 
IRS developed a reject prevention strategy that engaged stakeholders 
and has helped provide clearer reject descriptions. 

Action 3: 
IRS should determine actions needed to require software vendors to 
include bar codes on printed individual income tax returns and the 
cost of those actions. GAO continues to believe that bar coding of 
printed returns has the potential to reduce processing costs, 
facilitate access to taxpayer information, and improve compliance. 
Partially addressed. 

Action 3 progress: 
IRS's 2012 revenue proposals included a legislative proposal that 
would require all taxpayers who prepare their returns electronically 
but print and file them on paper to print the returns with a 2-D 
barcode. There has been no action on this legislative proposal. 

Action 4: 
IRS should develop an overall strategy for increasing electronic filing.
Not addressed. 

Action 4 progress: 
No executive action taken. IRS updated its Advanced E-file report in 
December 2010, which identified options to increase electronic filing, 
but it has yet to define an overall strategy. 

For more information, contact James R. White at (202) 512-9110 or 
whitej@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

General Government: 

54. Using return on investment information to better target IRS 
enforcement could reduce the tax gap; for example, a 1 percent 
reduction would increase tax revenues by $3.8 billion.[Footnote 65] 

Overall assessment: Partially addressed. 

Action 1: 
The Internal Revenue Service (IRS) should continue to increase its use 
of return on investment (ROI) information. This will require 
additional research to identify the impacts of specific programs, 
including the effect on voluntary compliance by taxpayers.
Not addressed. 

Action 1 progress: 
While IRS officials have reported that ROI is one of many useful 
management tools, IRS has not moved to extend ROI to existing 
enforcement programs. 

Action 2: 
Once actual ROI statistics are developed for programs, and 
supplemented with compliance cost information, IRS could compare: 
* results across programs and; 
* actual ROI to projected ROI to determine if anticipated results were 
actually achieved.
Partially addressed. 

Action 2 progress: 
IRS has developed a preliminary means of determining actual revenue 
collected from enforcement initiatives proposed in the fiscal year 
2009 budget justification. However, actual cost information, 
particularly a process for determining indirect costs, is still under 
development. IRS cannot make comparisons without actual ROI. 

Action 3: 
IRS should coordinate with the Department of the Treasury to provide 
Congress with preliminary cost estimates or descriptions of resource 
needs for legislative proposals in future budget justifications.
Addressed. 

Action 3 progress: 
For its fiscal year 2012 budget justification, IRS worked with the 
Department of the Treasury to determine which legislative proposals 
would be included in the budget, and then IRS provided aggregate cost 
information for all legislative proposals formulated in time to 
develop a cost estimate. As a result, Congress and other stakeholders 
obtained preliminary cost information to use when weighing the 
proposals. 

For more information, contact James R. White at (202) 512-9110 or 
whitej@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

General Government: 

55. Better management of tax debt collection may resolve cases faster 
with lower IRS costs and increase debt collected. 

Overall assessment: Partially addressed. 

Action 1: 
The Internal Revenue Service (IRS) needs to establish objectives and 
performance measures for the notice phase of its collection process 
for individual taxpayers as well as management responsibility for 
reviewing the performance of the notice phase. 
Partially addressed. 

Action 1 progress: 
IRS established objectives and performance measures for the notice 
phase-the first phase of IRS's three-phase process for resolving 
individuals' unpaid tax debts-in February 2011. In addition, IRS has 
tasked the Office of Taxpayer Correspondence with responsibility for 
overseeing improvements to IRS correspondence, including collection 
notices. Although IRS has planned for its Collection Governance 
Council to be responsible for an annual management review of how well 
the notice phase of the collection process performed, IRS has not yet 
completed the needed review. 

Action 2: 
IRS needs to better document the business rules and their rationales, 
and periodically evaluate how well they are working.
Partially addressed. 

Action 2 progress: 
IRS better documented the business rules and their rationales by 
preparing notice effectiveness reports for the three highest-volume 
collection notices, including detailed descriptions of the notices and 
rationales for business rules. IRS also planned an annual evaluation 
of the business rules. However, IRS has not yet fully implemented the 
plan or completed the first annual evaluation. IRS officials expect to 
finalize the evaluation by April 2012. 

For more information, contact Michael Brostek at (202) 512-9110 or 
brostekm@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

General Government: 

56. Broadening IRS's authority to correct simple tax return errors 
could facilitate correct tax payments and help IRS avoid costly, 
burdensome audits. 

Overall assessment: Not addressed. 

Action 1: 
Congress many want to consider granting the Internal Revenue Service 
(IRS) broader math error authority, with appropriate safeguards 
against misuse of that authority, to correct errors during tax return 
processing.
Not addressed. 

Action 1 progress: 
No legislative action identified. 

For more information, contact Michael Brostek or James R. White at 
(202) 512-9110 or brostekm@gao.gov or whitej@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

General Government: 

57. Enhancing mortgage interest information reporting could improve 
tax compliance. 

Overall assessment: Not addressed. 

Action 1: 
The Internal Revenue Service (IRS) should revise Form 1098, the 
Mortgage Interest Statement, to include information on the address of 
a property securing a mortgage, mortgage balances, and an indicator of 
whether the mortgage is for a current year refinancing. 
Not addressed. 

Action 1 progress: 
IRS indicated that its research staff would study changing Form 1098 
to include additional information but does not have sufficient data on 
the volume and magnitude of noncompliance to make any changes yet. 

Action 2: 
IRS should require mortgage-secured property addresses to be reported 
on other forms to help IRS detect taxpayers who fail to pay taxes on 
certain forgiven mortgage debt. 
Not addressed. 

Action 2 progress: 
IRS disagreed with this recommendation after performing a benefits and 
impact analysis on making the change, and said that its existing 
enforcement programs identify and address noncompliance. IRS officials 
also said that the incremental benefits of the recommendation are 
outweighed by the additional burden that would be imposed on third-
party records. GAO maintains that adding address information would be 
helpful for achieving greater compliance. 

For more information, contact James R. White at (202) 512-9110 or 
whitej@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

General Government: 
58. More information on the types and uses of canceled debt could help 
IRS limit revenue losses of forgiven mortgage debt. 

Overall assessment: Partially addressed. 

Action 1: 
The Internal Revenue Service (IRS) could determine how much additional 
revenue could be gained by refocusing mortgage debt enforcement 
efforts by taking some relatively low-cost steps, including revising 
the associated forms, collecting more information from taxpayers and 
lenders, and using third-party data to determine whether taxpayers are 
correctly excluding mortgage debt from taxable income. 
Partially addressed. 

Action 1 progress: 
IRS agreed that third-party data would be useful in identifying 
whether the debt being excluded is for a principal residence, and IRS 
began using these data sources in the examination process. 
IRS also agreed to consider modifying some, but not all, of the forms 
associated with forgiven mortgage debts. Some of the modifications 
will enable IRS to collect more information from lenders about the 
types of debt being forgiven. However, the IRS has not yet implemented 
all of these form changes. 

For more information, contact James R. White at (202) 512-9110 or 
whitej@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

General Government: 

59. Better information and outreach could help increase revenues by 
tens or hundreds of millions of dollars annually by addressing 
overstated real estate tax deductions. 

Overall assessment: Partially addressed. 

Action 1: 
To improve the Internal Revenue Service (IRS) examinations of the real 
estate tax deduction, examination guidance needs to clarify the type 
of evidence for verifying deductibility and to require examiners to 
ask taxpayers to substantiate deductions that appear to include 
nondeductible charges that are large, unusual, or questionable.
Not addressed. 

Action 1 progress: 
No executive action taken. 

Action 2: 
IRS needs to develop a cost-effective means of identifying local 
governments with potentially large nondeductible charges on their real 
estate tax bills, which will support targeted efforts to improve 
compliance. IRS then should work with these local governments to 
identify charges that are nondeductible and work with the localities 
and other third parties to help taxpayers correctly claim the 
deduction by clarifying for them what they can and cannot deduct. IRS 
should also use the information to target examinations covering the 
real estate tax deduction.
Addressed. 

Action 2 progress: 
IRS took steps to develop a cost-effective means of identifying local 
governments with potentially large nondeductible charges on their real 
estate tax bills, but determined that no cost-effective means was 
available. As a result, IRS has not been able to use such information 
to perform targeted outreach to improve compliance as GAO recommended. 
However, to meet the spirit of GAO's recommendation, IRS in 2010 
distributed guidance to local jurisdictions that provided examples of 
what is and is not deductible and suggested that local governments 
consider modifying their tax bills to alert taxpayers that certain 
items are not allowable as deductions on their federal income tax 
returns. 

For more information, contact Michael Brostek at (202) 512-9110 or 
brostekm@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

General Government: 

60. Revisions to content and use of Form 1098-T could help IRS enforce 
higher education requirements and increase revenues. 

Overall assessment: Partially addressed. 

Action 1: 
The Internal Revenue Service (IRS) should determine the feasibility of 
using current information reported on Form 1098-T in its compliance 
computer matching systems. 
Partially addressed. 

Action 1 progress: 
IRS is evaluating the feasibility of using current information 
reported on the Form 1098-T, which educational institutions use to 
report information about qualifying education expenses to taxpayers 
and IRS, in its compliance programs. For example, IRS has begun 
testing compliance initiatives that involve making better use of Form 
1098-T information. 

Action 2: 
IRS should revise Form 1098-T to improve the usefulness of information 
on qualifying education expenses. 
Partially addressed. 

Action 2 progress: 
IRS is taking steps to address possible changes to the Form 1098-T. 
However, before making changes to the form, IRS plans to address 
issues identified with the accuracy of data on Form 1098-T through 
outreach efforts to educational institutions. 

For more information, contact James R. White at (202) 512-9110 or 
whitej@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

General Government: 

61. Many options could improve the tax compliance of sole proprietors 
and begin to reduce their $68 billion portion of the tax gap. 

Overall assessment: Not addressed. 

Action 1: 
The Department of the Treasury's tax gap strategy should cover sole 
proprietor compliance in detail while coordinating it with broader tax 
gap reduction efforts. Such a strategy could include a mix of numerous 
options. 
Not addressed. 

Action 1 progress: 
No executive action taken. 

Action 2: 
The Internal Revenue Service (IRS) should use its ongoing research 
efforts to develop a better understanding of the nature of sole 
proprietor noncompliance, including sole proprietors improperly 
claiming business losses. 
Not addressed. 

Action 2 progress: 
IRS has made minimal progress, as much is left to be done to better 
understand sole proprietor noncompliance, such as the improper 
claiming of losses. IRS has started to collect some nongeneralizable 
data on certain types of claimed losses during examinations of sole 
proprietor tax returns. IRS also is planning a research effort on tax 
noncompliance that is to include sole proprietors, but that research 
will not start until 2015. 

For more information, contact James R. White at (202) 512-9110 or 
whitej@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

General Government: 

62. IRS could find additional businesses not filing tax returns by 
using third-party data, which show such businesses have billions of 
dollars in sales. 

Overall assessment: Partially addressed. 

Action 1: 
The Internal Revenue Service (IRS) should develop at least a partial 
estimate for the business nonfiler rate based on its existing 
inventory of cases. 
Not addressed. 

Action 1 progress: 
IRS does not plan to develop a partial estimate of the business 
nonfiler rate, and funding to do so using operational data would 
likely not be available. IRS believes its existing operational data on 
business nonfilers are sufficient. However, a more comprehensive 
estimate could give IRS information that would be useful in its 
strategic planning and determining what priority it should place on 
this type of noncompliance. 

Action 2: 
IRS should set a deadline for developing performance data on its 
business nonfiler efforts. 
Not addressed. 

Action 2 progress: 
IRS has determined that it does not have the necessary data that could 
be used to measure its business nonfiler efforts across IRS. IRS 
believes that developing such data would be prohibitively costly and 
plans to continue to use data at the operating division level. 

Action 3: 
IRS should develop a plan for evaluating its new initiative, including 
codes for selecting nonfiler cases to pursue. 
Partially addressed. 

Action 3 progress: 
IRS has identified ways to monitor and evaluate its codes for 
selecting nonfiler cases on a regular basis, but does not yet have a 
formal evaluation plan to guide this effort. 

Action 4: 
IRS should better use income data and selection codes in verifying 
taxpayer statements about their filing requirements. 
Addressed. 

Action 4 progress: 
IRS has disseminated training material on using selection codes to 
verify taxpayer statements. IRS has updated the Internal Revenue 
Manual on the codes' use for some collections staff. 

Action 5: 
IRS should study the feasibility and cost-effectiveness of using non-
IRS, private data to verify taxpayer statements. 
Partially addressed. 

Action 5 progress: 
IRS has requested additional unpublished data from GAO's analysis to 
help it explore the feasibility of third-party data use. In addition, 
IRS is seeking access to the Central Contractor Registry file, which 
contains self-reported revenue and employment data on businesses that 
register annually to be awarded federal contracts. Collecting these 
data is an initial step in studying the use of the data. 

For more information, contact James R. White at (202) 512-9110 or 
whitej@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

General Government: 

63. Congress and IRS can help S corporations and their shareholders be 
more tax compliant, potentially increasing tax revenues by hundreds of 
millions of dollars each year. 

Overall assessment: Partially addressed. 

Action 1: 
Congress could require S corporations to use information already 
available to them to calculate shareholders' basis as completely as 
possible and report it to shareholders and the Internal Revenue 
Service (IRS). 
Not addressed. 

Action 1 progress: 
No legislative action identified. 

Action 2: 
IRS should evaluate options for improving paid tax return preparer 
performance, send additional guidance on S corporation requirements 
such as on basis calculations and adequate wage determinations to new 
S corporations, and provide more guidance to shareholders and tax 
preparers on determining adequate shareholder compensation. 
Partially addressed. 

Action 2 progress: 
IRS has an ongoing project to identify potential preparer 
noncompliance of flow-through returns. 

IRS plans to work on guidance on S corporation requirements, such as 
on-basis calculations, during 2013. 

IRS updated its guidance to S Corporations on adequate shareholder 
compensation about 6 months before GAO issued its December 2009 report 
on noncompliance with S Corporation tax rules,[Footnote 66] but has 
not issued more guidance since then and has no scheduled date for 
issuing more guidance. 

For more information, contact Michael Brostek at (202) 512-9110 or 
brostekm@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

General Government: 

64. IRS needs an agencywide approach for addressing tax evasion among 
the at least 1 million networks of businesses and related entities. 

Overall assessment: Partially addressed. 

Action 1: 
The Internal Revenue Service (IRS) should create an agencywide 
strategy with goals to coordinate and plan its enforcement efforts on 
network tax evasion. The strategy should include (1) assessing the 
effectiveness of network analysis tools to ensure that resources are 
being devoted to those that provide the largest return on investment; 
(2) determining whether to increase access to IRS data or collect new 
data for network analysis; (3) developing network analysis tools on a 
specific time schedule; and (4) deciding how to manage network efforts 
across IRS. 
Partially addressed. 

Action 1 progress: 
IRS has not yet created a documented, agencywide strategy to manage 
network noncompliance efforts; however, it has elements of the 
strategy. For example, it continues to focus on making iterative 
improvements to its network analysis tools. Although these 
improvements are not contained within an IRS-wide strategy, they touch 
on assessing effectiveness. For example, IRS has taken steps to assess 
its most predominantly used network analysis tool. As part of an 
annual survey, IRS asked users of this tool about its effectiveness 
and to suggest improvements. IRS also certified the tool as conforming 
to agency guidelines and requirements for usefulness. The agency 
continues to develop other data and tools to address network-related 
noncompliance but not on a specific time schedule. IRS also had plans 
to create a research center that would focus on the detection of tax 
schemes and other abusive transactions. IRS envisioned that the 
proposed center would promote collaboration across IRS, help develop 
and use a suite of tools for addressing abusive transactions, and 
centralize datasets into a cohesive data-sharing strategy. However, 
the program was not funded in IRS's fiscal year 2011 budget. To 
fulfill the recommendation, IRS would at least need to create a 
specific approach on managing network compliance efforts across IRS 
that includes time frames for network analysis tool development. 

Action 2: 
IRS should ensure that its staff understand the network tools and 
establish formal ways for users to interact with tool programmers and 
analysts to ensure that the network tools are easy to use and achieve 
goals. 
Addressed. 

Action 2 progress: 
IRS completed an annual survey of staff using yK-1, a network analysis 
tool. Results from the survey were used to enhance staff knowledge 
about yK-1. For example, IRS added an index to an existing yK-1 users' 
manual. Agency officials also reported adding updated information to 
training programs for new staff using yK-1. As part of the survey 
process, IRS held feedback sessions between programmers and users of 
the tool. During these discussions, participants discussed ways to 
make the yK-1 tool more effective. Officials representing the Large 
Business and International Division, which is a user of yK-1, said 
they were satisfied with the way the feedback loop operated. 

For more information, contact James R. White at (202) 512-9110 or 
whitej@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

General Government: 

65. Opportunities exist to improve the targeting of the $6 billion 
research tax credit and reduce forgone revenue. 

Overall assessment: Not addressed. 

Action 1: 
Congress could eliminate the regular credit and add a minimum base 
amount (equal to 50 percent of a taxpayer's current spending) to the 
method for computing the alternative simplified credit (ASC). 
Not addressed. 

Action 1 progress: 
No legislative action identified. 

The Department of the Treasury issued a report on March 25, 2011, that 
acknowledged problems with the "regular" method for computing the 
credit. Despite those problems, the Department of the Treasury's 
report recommended making both the regular credit and the ASC 
permanent so as not to "disrupt" taxpayers. 

For more information, contact James R. White at (202) 512-9110 or 
whitej@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

General Government: 

66. Converting the new markets tax credit to a grant program may 
increase program efficiency and significantly reduce the $3.8 billion 
5-year revenue cost of the program. 

Overall assessment: Not addressed. 

Action 1: 
Congress should consider offering grants in lieu of credits to 
Community Development Entities (CDE) if it extends the program again. 
If it does so, Congress should require the Department of the Treasury 
to gather appropriate data to assess whether and to what extent the 
grant program increases the amount of federal subsidy provided to low-
income community businesses compared to the New Markets Tax Credit; 
how costs for administering the program incurred by the Community 
Development Financial Institutions Fund, CDEs, and investors would 
change; and whether the grant program otherwise affects the success of 
efforts to assist low-income communities. One option would be for 
Congress to set aside a portion of funds to be used as grants and a 
portion to be used as tax credit allocation authority under the 
current structure of the program to facilitate comparison of the two 
program structures. 
Not addressed. 

Action 1 progress: 
No legislative action identified. 

For more information, contact Michael Brostek at (202) 512-9110 or 
brostekm@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

General Government: 
67. Limiting the tax-exempt status of certain governmental bonds could 
yield revenue. 

Overall assessment: Not addressed. 

Action 1: 
Congress should consider whether facilities, including hotels and golf 
courses, that are privately used should be financed with tax-exempt 
governmental bonds. 
Not addressed. 

Action 1 progress: 
No legislative action identified. 

For more information, contact Michael Brostek at (202) 512-9110 or 
brostekm@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

General Government: 

68. Adjusting civil tax penalties for inflation potentially could 
increase revenues by tens of millions of dollars per year, not 
counting any revenues that may result from maintaining the penalties' 
deterrent effect. 

Overall assessment: Partially addressed. 

Action 1: 
Congress may want to consider requiring the Internal Revenue Service 
(IRS) to periodically adjust for inflation, and round appropriately, 
the fixed-dollar amounts of civil tax penalties to account for the 
decrease in real value over time and so that penalties for the same 
infraction are consistent over time. 
Partially addressed. 

Action 1 progress: 
In October 2011, Congress enacted the United States-Korea Free Trade 
Agreement Implementation Act, which included a provision increasing 
from $100 to $500 the penalty imposed on paid tax preparers who fail 
to comply with earned income tax credit due diligence requirements. 
[Footnote 67] 

No legislation has been identified that would require periodic 
inflation adjustments for all fixed penalties. 

For more information, contact Michael Brostek or James R. White at 
(202) 512-9110 or brostekm@gao.gov or whitej@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

General Government: 

69. IRS may be able to systematically identify nonresident aliens 
reporting unallowed tax deductions or credits. 

Overall assessment: Addressed. 

Action 1: 
The Internal Revenue Service (IRS) should determine if creating an 
automated program to identify nonresident aliens who may have 
improperly filed Form 1040 instead of Form 1040NR would be a cost-
effective means to improve compliance. 
Addressed. 

Action 1 progress: 
Using various data sources, IRS studied ways to systematically 
identify nonresident aliens who may have improperly filed Form 1040 
instead of Form 1040NR. IRS determined that establishing an automated 
program to identify this type of noncompliance is not cost effective 
at this time. 

For more information, contact Michael Brostek at (202) 512-9110 or 
brostekm@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

General Government: 

70. Tracking undisbursed balances in expired grant accounts could 
facilitate the reallocation of scarce resources or the return of 
funding to the Treasury. 

Overall assessment: Not addressed. 

Action 1: 
The Office of Management and Budget (OMB) should instruct all 
executive departments and independent agencies to track undisbursed 
balances in expired grant accounts and report on the resolution of 
this funding in their annual performance plan and Performance and 
Accountability Reports (PAR). 
Not addressed. 

Action 1 progress: 
OMB issued guidance in 2010 and 2011 only to certain federal 
departments and entities covered by the Commerce, Justice, Science, 
and Related Agencies Appropriations Act. OMB's guidance directed them 
to track and report in their respective PARs or Agency Financial 
Reports on undisbursed balances in grant accounts. However, its 
guidance included grant accounts that were still available for 
disbursement and was not limited only to those grant accounts eligible 
for closeout, as described in GAO's 2008 report. Funds in these 
accounts should no longer be disbursed to grantees because the period 
of availability to the grantee has expired. 

In 2008, GAO recommended that OMB's guidance be governmentwide, not 
just limited to certain agencies. Because OMB's guidance included 
grant accounts with funds still available for disbursement, agencies 
have reported balances in active grant accounts, not just those 
eligible for closeout. Later this year, GAO plans to issue a report on 
the actions OMB and agencies have taken to track undisbursed balances 
in grant accounts that are eligible for closeout. 

For more information, contact Stanley L. Czerwinski at (202) 512-6806 
or czerwinskis@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

Health: 

71. Preventing billions in Medicaid improper payments requires 
sustained attention and action by CMS. 

Overall assessment: Partially addressed. 

Action 1: 
The Centers for Medicare & Medicaid Services (CMS) should issue 
guidance to states to implement processes that better prevent payment 
of improper claims for controlled substances in Medicaid.
Addressed. 

Action 1 progress: 
Between December 2010 and June 2011, CMS took a number of steps to 
help prevent improper payments, including payments for controlled 
substances. Actions included the following: 

* issuing a final rule to help ensure that payments are not made to 
providers and pharmacies debarred or excluded from Medicaid; 

* issuing guidance to states to acquire and use the Drug Enforcement 
Administration Controlled Substance Registration File; and; 

* issuing guidance to states to help them prevent making payments to 
dead beneficiaries. 

While GAO assessed this action as addressed, improper payments are a 
continuing concern. This area will require continued diligence by the 
agency to prevent such payments. 

Action 2: 
CMS should improve its oversight of projects developed by consultants 
on a contingency-fee basis, in part, by routinely requesting 
information on these projects and associated claims.
Not addressed. 

Action 2 progress: 
CMS has not yet established a means by which the agency can routinely 
identify states' contingency-fee projects to maximize federal Medicaid 
reimbursements. CMS officials told GAO that they do not have the 
authority to require states to regularly report this information, and 
they were unsuccessful in their attempt to obtain such authority from 
Congress in 2005. In 2008, CMS stated that it was working to develop a 
method to regularly determine states use of contingency-fee 
consultants to guide its oversight efforts, but as of 2011, the agency 
had not done so. In addition, in response to a congressional inquiry 
CMS surveyed its regional offices in 2008 to identify the extent of 
states' use of contingency-fee consultants for federal revenue 
maximization projects. CMS officials told GAO in July 2011 that no 
plans exist to conduct another such survey. Without a means to 
routinely identify states' use of contingency-fee consultants, GAO 
remains concerned about CMS's oversight of federal revenue 
maximization projects. 

For more information, contact Katherine Iritani at (202) 512-7114 or 
iritanik@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

Health: 

72. Federal oversight over Medicaid supplemental payments needs 
improvement, which could lead to substantial cost savings. 

Overall assessment: Not addressed. 

Action 1: 
The Centers for Medicare & Medicaid Services (CMS) should: 
* establish uniform guidance for states that set acceptable methods 
for calculating non-Disproportionate Share Hospital payment amounts, 

* require facility specific reporting of non-Disproportionate Share 
Hospital supplemental payments, and, 

* develop a strategy to ensure that all state supplemental payment 
arrangements have been reviewed by CMS.
Not addressed. 

Action 1 progress: 
No executive action taken. In 2011, CMS officials stated that they 
have not established the recommended standard guidance, that 
legislation would be needed to give CMS the authority to require 
facility specific reporting, and that they have not developed a 
strategy to ensure that all existing supplemental payment arrangements 
have been reviewed. 

For more information, contact Katherine Iritani at (202) 512-7114 or 
iritanik@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

Health: 
73. Better targeting of Medicare's claims review could reduce improper 
payments. 

Overall assessment: Partially addressed. 

Action 1: 
The Centers for Medicare & Medicaid Services (CMS) should require its 
contractors to develop thresholds for unexplained increases in billing 
and use them to develop automated prepayment controls. 
Partially addressed. 

Action 1 progress: 
CMS took action to improve Medicare payment accuracy by introducing 
predictive analytics to help identify patterns of potentially improper 
claims, but has not begun to use predictive analytics or other methods 
to implement this specific recommendation. The Small Business Jobs Act 
of 2010 requires CMS to use predictive modeling and other analytic 
techniques--known as predictive analytic technologies--to identify 
improper claims and to prevent improper payments under the Medicare 
fee-for-service program.[Footnote 68] CMS officials told GAO that the 
agency issued a contract to implement predictive modeling, and its 
contractors began analyzing claims before payment to identify 
potential fraud in June 2011. The predictive modeling system assigns 
risk scores to groups of claims. CMS's contractors have begun to 
investigate whether the highest risk-scored groups of claims are 
fraudulent, but it is too early to determine the full impact that this 
may have on reducing improper payments. However, CMS has not begun to 
use predictive analytics or other methods to implement this specific 
recommendation, which is to have automated prepayment controls based 
on particular thresholds related to unexplained increases in billing 
and has not indicated that it plans to do so. 

Action 2: 
CMS should conduct postpayment reviews on claims submitted by home 
health agencies with high rates of improper billing identified through 
prepayment review. 
Not addressed. 

Action 2 progress: 
CMS has indicated that its contractors conduct postpayment medical 
reviews for agencies with high rates of home health services billing, 
as their resources permit. However, CMS has not reported any specific 
efforts to routinely conduct postpayment reviews on home health 
agencies with high rates of improper billing identified through 
prepayment review. 

Action 3: 
CMS should require that physicians receive a statement of home health 
services that beneficiaries received based on the physicians' 
certification. 
Not addressed. 

Action 3 progress: 
CMS has indicated that this recommendation could be costly and 
difficult to implement and has not reported any efforts to implement 
it. However, CMS has not provided any information about cost or 
feasibility, or tried to implement this recommendation as a 
demonstration in high-fraud areas to determine its cost-effectiveness 
as a strategy. 

Action 4: 
CMS should direct contractors to focus on services where recovery 
audit contractors (RACs) are not expected to focus their reviews, and 
where improper payments are known to be high, specifically home health 
services. Such direction could make other contractors' postpayment 
review activities more valuable. 
Addressed. 

Action 4 progress: 
Because funding for medical review by the claims administration 
contractors is limited, starting in April 2011, CMS required each 
claims administration contractor to develop plans on how they would 
collaborate with the RACs on medical reviews. CMS required each claims 
administration contractor's plan to cover the types of claims best 
reviewed by the claims administration contractor versus the RAC, 
issues that the RACs could potentially review or known improper 
payment vulnerabilities that the RAC could help address, and providers 
that could be referred to the RACs for review. CMS also required and 
has received regular reporting on the results of this collaboration. 
The claims administration contractors are now reporting to CMS when 
they have referred to the RACs, or plan to refer as appropriate, 
specific issues or providers of certain services whose claims warrant 
further review to identify improper payments. 

For more information, contact Kathleen King at (202) 512-7114 or 
kingk@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

Health: 

74. Potential savings in Medicare's payment for health care. 

Overall assessment: Partially addressed. 

Action 1: 
The Centers for Medicare & Medicaid Services (CMS) should develop a 
profiling system to identify individual physicians with inefficient 
practice patterns and use the results to improve the efficiency of 
care financed by Medicare.
Partially addressed. 

Action 1 progress: 

CMS continues its phased implementation of the Medicare Physician 
Feedback Program, which it developed to, among other things, identify 
physicians with inefficient practice patterns and help those 
physicians reduce their service costs. CMS established the program in 
2008 and is distributing feedback reports to an increasing number of 
physicians. These reports can help control costs in several ways, such 
as providing information to physicians on how their resource use 
compares to their peers' and helping them develop strategies for 
reducing costs in their practices. In September 2011, CMS provided 
reports to 35 physician groups and plans to provide reports to over 
20,000 individual physicians in early 2012 and to over 100,000 
physicians later in 2012. CMS plans to do further testing of the 
reports with the goal of providing feedback reports to all applicable 
physicians by 2017. However, in previous testing of the reports, CMS 
found that physicians did not generally access those reports. 

Action 2: 
CMS would likely have to seek legislative changes to maximize the 
usefulness of a physician profiling system-for example, changes that 
would allow CMS to incentivize beneficiaries to select efficient 
providers.
Not addressed. 

Action 2 progress: 
CMS has not sought such legislative changes, but it is planning to 
publicly report measures of physician quality and patient experience 
on its Web site beginning January 1, 2013. The law[Footnote 69] 
provides for confidential reporting of measures of resource use to 
physicians. Consequently, these measures, which are used in 
combination with quality measures to determine efficiency, will not be 
publicly reported. 

Action 3: 
CMS should examine the feasibility of addressing rapid growth in 
Medicare spending on imaging services by expanding payment safeguard 
mechanisms such as prior authorization for imaging services. 
Not addressed. 

Action 3 progress: 
CMS has not implemented safeguards such as prior authorization.
However, CMS has taken steps to discourage excess utilization by 
expanding its use of the multiple procedure payment reduction for 
imaging services when a physician furnishes two or more services to a 
patient in the same session on the same day. It had previously applied 
the multiple procedure payment reduction to the technical component of 
certain imaging services. In 2012, CMS also applied the reduction to 
the professional component of the same services. 

Action 4: 
Congress could consider reducing Medicare home oxygen payment rates to 
align them more closely with the costs of supplying home oxygen. 
Not addressed. 

Action 4 progress: 
Congress did not restructure home oxygen payment rates. However, under 
existing provisions of law, competitive bidding for home oxygen was 
extended to 91 additional geographic areas. The rates from competitive 
bidding will likely be lower than rates currently paid by Medicare in 
those areas. Competitive bidding is currently underway and the 
resulting contracts and payment rates are scheduled to take effect 
July 1, 2013. 

Action 5: 
CMS should address the issue of paying for overlapping services that 
are furnished together by systematically reviewing such services and 
implementing a multiple procedure payment reduction (MPPR) to capture 
efficiencies, where appropriate, by reducing payments to reflect the 
efficiencies. CMS should focus on those services that have the 
greatest impact on Medicare spending.
Partially addressed. 

Action 5 progress: 
In its 2012 Final Rule with Comment covering Payment Policies Under 
the Physician Fee Schedule and Other Revisions to Part B for CY 2012, 
CMS reported its analysis of advanced imaging services. For 2012, CMS 
is adopting an MPPR that applies a 25 percent reduction to the 
professional (physician's work) component of certain advanced imaging 
services furnished together. However, a budget neutrality provision 
applies. Therefore, these "savings" are redistributed to increase 
payments for other services and do not accrue to the Medicare program. 
The budget neutrality provision is law; therefore, Congress would have 
to remove that provision as it applies to the MPPR as it has done in 
certain specified cases so that savings accrue to the program. 

Action 6: 
CMS should expand the scope of its MPPR for services furnished 
together by applying it to nonsurgical and nonimaging services and 
applying the MPPR to the part of the payment that covers a physician's 
work. 
Not addressed. 

Action 6 progress: 
CMS has not taken executive action to expand the scope of the MPPR to 
nonsurgical and nonimaging services. However, in its 2012 physician 
fee schedule proposed rule, CMS asked for comment on two proposals for 
expanding the MPPR in the future: applying the MPPR to the technical 
portion of the payment for all imaging procedures; and applying the 
MPPR to the physician work portion of the payment for all imaging 
services as well as applying it to the technical portion of the 
payment to all diagnostic tests, such as cardiology and audiology. CMS 
may propose changes in future rulemaking. 

Action 7: 
Congress could exempt from the budget neutrality requirement savings 
attributable to policies that reflect efficiencies occurring when 
services are furnished together. 
Partially addressed. 

Action 7 progress: 
Congress has exempted certain imaging services from the budget 
neutrality provision. However, other imaging services remain subject 
to budget neutrality; "savings" from these services are redistributed 
to other services and do not accrue to the Medicare program. 

For more information, contact James Cosgrove at (202) 512-7029 or 
cosgrovej@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

Homeland Security/Law Enforcement: 

75. DHS's management of acquisitions could be strengthened to reduce 
cost overruns and schedule and performance shortfalls. 

Overall assessment: Partially addressed. 

Action 1: 
The Department of Homeland Security (DHS) should ensure that 
requirements and cost estimates are well defined up front. 
Partially addressed. 

Action 1 progress: 
DHS has developed plans to address management of acquisitions, 
including ensuring that requirements and cost estimates are well 
defined, and has begun to take actions to implement those plans. 
Specifically, to strengthen its overall acquisition management 
efforts, DHS reported that it planned to implement an integrated 
investment life cycle model (IILCM) to establish a decision-making 
process for investments' life cycles and that, as of December 2011, 
the department had chosen three portfolios to pilot this process. 
Further, in December 2011, DHS reported that it plans to examine 
lessons learned from the pilot and develop, among other things, an 
IILCM schedule and risk management plan, while conducting executive 
steering committee meetings over the next 6 months with a goal of 
beginning IILCM operations in the fourth quarter of 2012. 

As part of this model and its other planned acquisition management 
reforms, DHS reported that it increased its staff during fiscal year 
2011 for developing and validating life cycle cost estimates and began 
to develop independent cost estimates to strengthen the accuracy and 
credibility of program costs. To date, DHS has completed 4 validated 
cost estimates and is currently working to complete others. In 
December 2011, DHS reported that it developed a cost estimating Center 
of Excellence to assist components in developing reliable cost 
estimates and has set goals to complete baseline cost estimates for 
every major program and validate life-cycle cost estimates for 75 
percent, or 34, of the Level 1 programs.[Footnote 70] DHS also 
reported that the percentage of major programs with a validated cost 
estimate will be a key measure of its progress toward achieving these 
goals. 

DHS also plans to establish various oversight structures and 
processes, such as a capabilities and requirements council to validate 
investment strategies and approve analyses of alternatives and 
operational requirements documents up front. DHS reported in June 2011 
that the department planned to form the capabilities and requirements 
council early in the fourth quarter of 2011. However, as of December 
2011, the council has not yet met. 

These actions are positive steps that should help strengthen DHS's 
acquisition management processes to improve the department's ability 
to deliver major acquisition programs that meet critical mission needs 
on time and within budget. However, as GAO reported in July 2011, DHS 
is in the early stages of implementing these actions, thus it is too 
soon to assess their impact on reducing acquisition cost overruns and 
schedule and performance shortfalls at this time.[Footnote 71] 

Action 2: 
DHS should establish and measure performance against department-
approved baselines and indicators for major acquisition programs.
Partially addressed. 

Action 2 progress: 
As part of its IILCM, DHS is developing a decision support tool to 
track programs' cost, schedule, and performance indicators. DHS 
reported in December 2011 that it planned to develop training and a 
communications plan for institutionalizing the decision support tool 
and fully implement the tool by the fourth quarter of 2012. According 
to DHS, this tool is intended to monitor acquisition activities for 
all of its programs. 

Action 3: 
DHS should ensure that its investment decisions are transparent and 
documented; budget decisions are informed by the results of 
acquisition reviews, including acquisition information and cost 
estimates; sufficient management resources are identified and aligned, 
such as acquisition staff, to implement oversight reviews in a timely 
manner; and acquisition program requirements are reviewed and validated.
Partially addressed. 

Action 3 progress/l 
Among other things, DHS reported in December 2011, that it plans to 
have its Investment Review Board, once established, meet regularly to 
approve major program initiation decisions and assign programs to 
appropriate executive steering committees, which are to provide better 
governance to the department's highest-risk programs. DHS also 
reported in December 2011 that it plans to establish a program review 
board to allocate funds to prioritized programs and set implementation 
goals and timelines. 

DHS reported in June 2011 that it conducted a survey of its major 
acquisition programs and acquisition oversight offices to identify 
gaps in its acquisition workforce. In addition, DHS reported in June 
2011 that its first cohort of 10 contracting professionals graduated 
in February 2011 from a 3-year development program it established to 
recruit individuals into acquisition career fields, such as program 
management and cost estimating. In December 2011, DHS reported that 14 
additional staff graduated from this program. Further, as of December 
2011, DHS reported that it is developing a procurement staffing model 
and has completed 90 percent of the model. DHS plans to complete the 
model by the end of the second quarter of fiscal year 2012. 

For more information, contact David C. Maurer at (202) 512-9627 or 
maurerd@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

Homeland Security/Law Enforcement: 

76. Improvements in managing research and development could help 
reduce inefficiencies and costs for homeland security. 

Overall assessment: Partially addressed. 

Action 1: 
The Department of Homeland Security (DHS) could take further actions 
to improve its management of research and development (R&D) efforts 
and reduce costs in procuring and deploying programs that have not 
been fully tested, including rigorously testing devices using actual 
agency operational tactics before making decisions on acquisitions.
Partially addressed. 

Action 1 progress: 
In June and December 2011, DHS reported that it planned to establish a 
new model for managing departmentwide investments across their life 
cycles and that the Science and Technology Directorate (S&T) has 
become an integral part of DHS's acquisition review process. In July 
2011, GAO reported that under this plan, S&T was to be involved in 
each phase of the investment life cycle and participate in new 
councils and boards that DHS was planning to create to help ensure 
that test and evaluation methods are appropriately considered as part 
of DHS's overall R&D investment strategies.[Footnote 72] GAO further 
reported that the new councils and boards DHS was planning to 
establish were to be responsible for overseeing key acquisition 
decisions for major programs, including ensuring that testing and 
evaluation (T&E) is completed. DHS plans to complete the design, 
testing, and roll out this new approach, including the establishment 
of new councils and boards, by the end of fiscal year 2012 and has 
taken steps to do so. For example, since its June 2011 update, DHS 
established a new Executive Steering Council to test this new approach 
for enhancing oversight. 

In June 2011, GAO reported that S&T was meeting some of its T&E 
oversight requirements, but additional steps were needed to ensure 
that all requirements were met.[Footnote 73] GAO also reported that 
S&T's T&E Council was working with component program managers to 
strengthen R&D and T&E processes, such as developing program 
requirements and ensuring the appropriate T&E is complete before 
implementation. In addition, GAO reported in November 2011 that S&T 
recently reorganized and established an office to provide operations 
analysis, systems engineering, test and evaluation, and standards 
development support to DHS component program offices.[Footnote 74] 

While DHS has made some progress in these areas, it will be important 
for the agency to follow through on the establishment of these new 
processes and councils. 

Action 2: 
DHS should conduct cost-benefit analyses as part of research, 
development, and testing efforts, which would help DHS and 
congressional decision makers better assess and prioritize investment 
decisions, including assessing possible program alternatives that 
could be more cost-effective.
Partially addressed. 

Action 2 progress: 
DHS reported in December 2011 that it is working with its components 
to improve the quality and accuracy of cost estimates and has 
increased its staff during fiscal year 2011 to develop independent 
cost estimates, a GAO best practice, to ensure the accuracy and 
credibility of program costs. However, in June 2011, DHS also reported 
that it was unable to hire the staff needed to fully implement its 
plans due to lack of resources. GAO reported in June 2011 that such 
cost estimates are important first steps for agencies in allowing them 
to conduct cost-benefit analyses and analyses of alternatives. 
[Footnote 75] To date, DHS has completed 4 validated cost estimates 
out of 135 major programs over the last year and is currently working 
to complete others. In December 2011, DHS reported that it developed a 
cost estimating Center of Excellence to assist components in 
developing reliable cost estimates and has set a goal to complete cost 
estimates for all major programs. DHS also reported that the 
percentage of major programs with a validated cost estimate will now 
be a key goal. 

DHS also plans to establish various structures and processes to 
oversee program research, development, and testing, including the 
Capabilities and Requirements Council, which is to validate investment 
strategies and approve program analyses of alternatives and 
operational requirements documents up front. DHS reported in June 2011 
that the department planned to form the Capabilities and Requirements 
Council early in the fourth quarter of 2011; however, as of December 
2011 the council has not yet met. In addition, GAO reported in June 
and November 2011 that S&T reviewed and approved key T&E documents and 
plans for major investments as required by DHS's T&E directive, such 
as documents outlining a program requirements and capabilities. 
[Footnote 76] However, GAO reported that S&T could better document its 
review of component acquisition documents and recommended that they 
develop a mechanism to do so. 

While DHS has made some progress in the areas of assessing costs and 
program alternatives and benefits, it will be important for the agency 
to follow through on its new processes and councils. 

For more information, contact David C. Maurer at (202) 512-9627 or 
maurerd@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

Homeland Security/Law Enforcement: 

77. Validation of TSA's behavior-based screening program is needed to 
justify funding or expansion. 

Overall assessment: Partially addressed. 

Action 1: 
The Department of Homeland Security (DHS) should use an independent 
panel of experts to assess the methodology of its initial validation 
study of the Transportation Security Administration's (TSA) behavior 
detection program to provide DHS with additional assurance regarding 
whether the study's methodology is sufficiently comprehensive to 
validate the Screening of Passengers by Observation Techniques (SPOT) 
program.
Partially addressed. 

Action 1 progress: 

In April 2011, DHS completed an initial validation study. However, 
this study's methodology was not sufficiently comprehensive to 
validate the program and determine the extent to which behavior-based 
screening can be used for counterterrorism purposes in the aviation 
environment. Instead, the study was designed to determine the extent 
to which SPOT was more effective than random screening at identifying 
security threats and how the program's behaviors correlate to 
identifying high-risk travelers. DHS's study made recommendations 
related to the need for further validation efforts, comparing SPOT 
with other screening programs, and broader program evaluation issues, 
some of which echoed previous GAO recommendations. These 
recommendations are intended to help the program conduct a more 
comprehensive validation of whether the science can be used for 
counterterrorism purposes in the aviation environment. Given the broad 
scope of the additional work and related resources identified by DHS 
for addressing the recommendations, it could take several years to 
complete. According to TSA, the program is undertaking actions to 
address some of DHS's recommendations, such as conducting additional 
analysis of the program's behaviors and associated SPOT scoring system 
in coordination with DHS's Science and Technology Directorate. 
According to TSA, a refined list of the behaviors and appearances used 
in the SPOT program to identify high-risk passengers will be completed 
by mid-2012. TSA is taking actions to refine the program, but 
questions related to the program's validity will remain until TSA 
demonstrates that using behavior detection techniques can help secure 
the aviation system against terrorist threats. 

Action 2: 
DHS could conduct additional research to provide additional 
information on the extent to which SPOT can be effectively implemented 
in airports and to help determine the need for periodic refresher 
training.
Partially addressed. 

Action 2 progress: 
TSA completed an annual training analysis to identify gaps in its 
training curricula related to SPOT and as a result, was developing a 
training plan as of November 2011. According to TSA, this plan will 
identify new training courses, additional recurrent training, and 
required updates to the current training curricula. TSA expects to 
complete this plan by early 2012 and revise it annually. TSA has begun 
to provide refresher training to all SPOT airports and plans to 
complete this effort by the end of 2012. 

Action 3; 
Congress may wish to consider limiting program funding pending receipt 
of an independent assessment of TSA's SPOT program. Specifically, 
Congress could consider freezing appropriation levels for the SPOT 
program at the 2010 level until the validation effort is completed.
Addressed. 

Action 3 progress: 
Program funds were frozen at fiscal year 2010 levels for fiscal year 
2011. The conference report accompanying the consolidated 
appropriations act for fiscal year 2012 stated that funding was 
included for 145 additional behavior detection officers.[Footnote 77] 
This increase is less than half of TSA's fiscal year 2012 request for 
350 full-time behavior detection officers. The conference report also 
directed TSA to brief congressional committees no later than 90 days 
after the enactment of the act on its plans and actions to implement 
recommendations from the DHS validation study and GAO's May 2010 
report.[Footnote 78] 

Action 4: 
Upon completion of the validation effort, Congress may also wish to 
consider the study's results--including the program's effectiveness in 
using behavior-based screening techniques to detect terrorists in the 
aviation environment--in making future funding decisions regarding the 
program.
Partially addressed. 

Action 4 progress: 
In July 2011, GAO reported to Congress on the initial validation 
study's results.[Footnote 79] As noted above, fiscal year 2011 SPOT 
program funds were frozen at fiscal year 2010 levels. According to TSA 
officials, as of January 2012, TSA continues to conduct research, 
develop additional training, assess additional concepts of operation 
for the program, and develop outcome-based performance measures. 
However, given the broad scope of the additional work remaining to 
validate the science for using behavior detection techniques for 
counterterrorism purposes in an airport environment, additional 
information on these efforts could help Congress make future funding 
decisions regarding the SPOT program. 

For more information, contact Stephen M. Lord at (202) 512-4379 or 
lords@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

Homeland Security/Law Enforcement: 

78. More efficient baggage screening systems could result in about 
$470 million in reduced TSA personnel costs over the next 5 years. 

Overall assessment: Partially addressed. 

Action 1: 
The Transportation Security Administration (TSA) might achieve savings 
in screening personnel costs by continuing to replace or modify older 
checked baggage screening systems with more efficient solutions, 
including in-line screening systems.
Partially addressed. 

Action 1 progress: 

In 2011, GAO reported that TSA could achieve up to $470 million in net 
savings based on reduced TSA staffing costs through the replacement or 
modification of existing checked baggage screening systems with more 
efficient solutions over the next 5 years. TSA agreed that the 
deployment of more efficient systems offers potential personnel cost 
savings to the federal government. 

Since the issuance of GAO's 2011 report, TSA has replaced 60 stand-
alone checked baggage screening machines with more efficient in-line 
screening systems. The Full-Year Continuing Appropriations Act, 2011, 
required the Secretary of Homeland Security to submit a detailed 
report to the Committees on Appropriations of the Senate and House of 
Representatives on, among other things, labor savings it achieves from 
the deployment of improved technologies for passengers and checked 
baggage screening and how those savings are being used to offset 
security costs or reinvested to address security vulnerabilities by 
August 15, 2011.[Footnote 80] In January 2012, TSA stated that this 
report is currently under internal review and could not provide a date 
by which it expects to submit the labor savings to the committees. 

However, as of August 2011, TSA anticipates that over the next 5 years 
it will support fewer projects to install more efficient systems than 
in the past due to TSA's shift in strategic focus from completion of 
optimal airport systems to replacement and upgrade of the aging 
explosive detection system fleet. As a result, the assumptions that 
GAO used to calculate projected potential savings of $470 million are 
now outdated. Under its new plan, however, TSA continues to deploy in-
line baggage screening systems to airports with facilities capable of 
accommodating them, and will support projects to facilitate the 
installation of in-line systems if TSA determines that such systems 
are an optimal and cost-effective solution for a particular airport. 
Because TSA has changed its plan to focus on replacement of the aging 
fleet, it is unclear when the agency will be capable of completing the 
installation of more efficient solutions, including in-line screening 
systems, at all airports where such solutions are warranted. While 
TSA's plans to replace and upgrade its aging explosive detection 
system fleet are understandable, we believe that TSA should continue 
to pursue the installation of more efficient screening solutions to 
the extent possible. 

For more information, contact Stephen M. Lord at (202) 512-4379 or 
lords@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

General Government: 

79. Clarifying availability of certain customs fee collections could 
produce a one-time savings of $640 million. 

Overall assessment: Partially addressed. 

Action 1: 
Congress could clarify the purposes for which the $639.4 million in 
unobligated balances are available. The unobligated balances have 
remained in U.S. Customs and Border Protection's (CBP) Customs User 
Fee Account for more than 10 years.
Partially addressed. 

Action 1 progress: 

The House Report accompanying the 2012 Department of Homeland Security 
Appropriations bill[Footnote 81] directed the Office of the Chief 
Financial Officer and CBP to report on the appropriate application of 
these funds no later than 30 days after the date of enactment of the 
2012 Appropriations Act (i.e., January 23, 2012.) 

On January 27, 2012, officials from the Department of Homeland 
Security stated that the department is working with CBP and the 
Appropriations Committees to schedule a briefing on this issue. 

For more information, contact Susan Irving at (202) 512-6806 or 
irvings@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

Income Security: 

80. Social Security needs data on pensions from noncovered earnings to 
better enforce offsets and ensure benefit fairness, estimated to 
result in $2.4-$2.9 billion savings over 10 years. 

Overall assessment: Not addressed. 

Action 1: 
Congress could consider giving the Internal Revenue Service (IRS) the 
authority to collect the information that the Social Security 
Administration needs on government pension income to administer the 
Government Pension Offset and the Windfall Elimination Provision 
accurately and fairly.
Not addressed. 

Action 1 progress: 
No legislative action identified. 

For more information, contact Charles A. Jeszeck at (202) 512-7036 or 
JeszeckC@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

International Affairs: 

81. Congress could pursue several options to improve collection of 
antidumping and countervailing duties. 

Overall assessment: Not addressed. 

Action 1: 
Congress could eliminate the retrospective component of the U.S. 
antidumping and countervailing duty system and, instead, treat the 
antidumping and countervailing duties assessed at the time the product 
enters the country as final. 
Not addressed. 

Action 1 progress: 
No legislative action identified. 

Action 2: 
Congress could choose to provide the Department of Commerce the 
discretion to require companies applying for a new shipper review to 
have a greater volume of imports before establishing an individual 
antidumping and countervailing duty rate. 
Not addressed. 

Action 2 progress: 
No legislative action identified. 

For more information, contact Alfredo Gomez at (202) 512-4101 or 
gomezJ@gao.gov. 

See GAO-11-318SP Actions Needed. 

[End of assessment] 

[End of section] 

Enclosure III: Scope and Methodology: 

In March 2011, GAO issued its first annual report to the Congress on 
potential duplication, overlap, and fragmentation in the federal 
government.[Footnote 82] The report also identified opportunities to 
achieve cost savings and enhance revenues. We identified 81 areas--
which span a wide range of government missions[Footnote 83]--with a 
total of 176 actions[Footnote 84] that the Congress and the executive 
branch could take to reduce or eliminate unnecessary duplication, 
overlap, and fragmentation or achieve other potential financial 
benefits. We also presented areas where programs may be able to 
achieve greater efficiencies or become more effective in providing 
government services. In many areas, we suggested actions--identifying 
some new options, as well as underscoring numerous existing GAO 
recommendations--that policymakers could consider. 

To examine the extent to which the legislative and executive branches 
have made progress in implementing actions in the 81 areas, we 
reviewed relevant legislation and documents such as budgets, policies, 
strategic and implementation plans, guidance, and other information 
related to the 176 actions included in our report. We also analyzed, 
to the extent possible, whether or not financial or other benefits 
have been attained, and included this information as appropriate. In 
addition, we discussed the implementation status of the areas with 
officials at the relevant agencies. 

To assess the progress of the legislative and executive branches in 
implementing the 176 actions, we developed and used the following 
scales: 

For legislative branch actions: 

* "addressed," means relevant legislation was enacted and addresses 
all aspects of the action needed;[Footnote 85] 

* "partially addressed," means a relevant bill has passed a committee, 
the House or Senate, or relevant legislation has been enacted, but 
only addressed part of the action needed; and: 

* "not addressed," means a bill may have been introduced, but did not 
pass out of a committee, or no relevant legislation has been 
introduced. 

For executive branch actions: 

* "addressed," means implementation of the action needed has been 
completed; 

* "partially addressed," means the action needed is in development, 
started but not yet completed; 

* "not addressed," means the administration and/or agencies have made 
minimal or no progress toward implementing the action needed. 

Using the legislation and documentation collected from agencies, GAO 
analysts and specialists working on defense, domestic, and 
international areas assessed progress for each of the 176 actions 
within their areas of expertise. A core group of GAO staff examined 
all 176 assessments to ensure consistent and systematic application of 
the criteria, and made adjustments as appropriate. 

After GAO analysts completed their assessments of the 176 actions, we 
made an overall assessment for each of the 81 areas using the 
following scale: 

* "addressed" if all actions needed in that area were addressed; 

* "partially addressed" if at least one action needed in that area 
showed some progress toward implementation, but not all actions were 
addressed; and: 

* "not addressed" if none of the actions needed in that area were 
addressed. 

Finally, GAO provided the draft to the agencies involved and the 
Office of Management and Budget for their comments and incorporated 
comments as appropriate. 

To prepare this report, we conducted our work from July 2011 through 
February 2012 in accordance with all sections of GAO's Quality 
Assurance Framework that are relevant to our objectives. The framework 
requires that we plan and perform the engagement to meet our stated 
objectives and to discuss any limitations in our work. We believe that 
the information and data obtained, and the analysis conducted, provide 
a reasonable basis for any findings and conclusions in this product. 
The information in this report is current as of February 10, 2012 and 
does not reflect any actions that might have been taken after that 
date. 

[End of section] 

Footnotes: 

[1] GAO, Opportunities to Reduce Potential Duplication in Government 
Programs, Save Tax Dollars, and Enhance Revenue, [hyperlink, 
http://www.gao.gov/products/GAO-11-318SP] (Washington, D.C.: Mar. 1, 
2011). This report was issued in response to a new statutory 
requirement that GAO identify federal programs, agencies, offices, and 
initiatives, either within departments or governmentwide, which have 
duplicative goals or activities. Congress asked GAO to conduct this 
work and to report annually on our findings. See Pub. L. No. 111-139, 
§21, 124 Stat. 29 (2010), 31 U.S.C. § 712 Note. 

[2] Agriculture, defense, economic development, energy, general 
government, health, homeland security, international affairs, and 
social services were among the government missions included in the 
March 2011 report. 

[3] These actions were identified in the "Actions Needed" section for 
each respective issue area. 

[4] In one instance, the legislative action needed required Congress 
to consider several options, including allowing a tax credit to 
expire. Thus, because Congress did not renew the provision, the action 
was considered addressed. 

[5] Members of Congress have introduced a wide range of bills and 
amendments, that if enacted, could help address a number of the issues 
raised in our March 2011 report. However, for the purposes of this 
report, only those bills that have passed a committee are discussed in 
the progress updates contained in Enclosure II. 

[6] In situations where our action needed suggested that Congress 
should let a provision expire, we classified it as "addressed" if 
Congress permitted such expiration to happen. 

[7] GAO, 2012 Annual Report: Opportunities to Reduce Duplication, 
Overlap and Fragmentation, Achieve Savings, and Enhance Revenue, 
[hyperlink, http://www.gao.gov/products/GAO-12-342SP] (Washington, 
D.C.: February 28, 2012). 

[8] Pub. L. No. 111-353 (2011). 

[9] CNA's Center for Naval Analyses developed the savings estimates, 
and GAO adjusted the estimates from 2005 to 2010 dollars. 

[10] Pub. L. No. 112-81, § 716 (2011). 

[11] See Pub. L. No. 111-383, § 804(a) (2011) (10 U.S.C. § 2302 note). 

[12] 40 U.S.C. §§ 11311-11313. 

[13] GAO, Department of Defense: Further Actions Needed to 
Institutionalize Key Business System Modernization Management 
Controls, [hyperlink, http://www.gao.gov/products/GAO-11-684] 
(Washington, D.C.: June 29, 2011). 

[14] [hyperlink, http://www.gao.gov/products/GAO-11-684] and GAO, High-
Risk Series: An Update, [hyperlink, 
http://www.gao.gov/products/GAO-11-278] (Washington, D.C.: February 
2011). 

[15] GAO, Opportunities to Reduce Potential Duplication in Government 
Programs, Save Tax Dollars, and Enhance Revenue, [hyperlink, 
http://www.gao.gov/products/GAO-11-318SP] (Washington, D.C.: Mar. 2, 
2011). 

[16] S. 1813, 112th Cong. (2011). 

[17] H.R. 7, 112th Cong. (2012). 

[18] These federal agencies include the Environmental Protection 
Agency, the Department of Agriculture, the Department of Housing and 
Urban Development, the U.S. Army Corps of Engineers, the Department of 
Health and Human Service's Indian Health Service, the Department of 
Commerce's Economic Development Administration, and the Department of 
the Interior's Bureau of Reclamation. 

[19] Pub. L. No. 111-312 (2010). 

[20] OFPP Memorandum, "Development, Review and Approval of Business 
Cases for Certain Interagency and Agency-Specific Acquisitions" (Sept. 
29, 2011). 

[21] 77 Fed. Reg. 183 (Jan. 3, 2012). 

[22] Pub. L. No. 111-352 (2011). 

[23] 42 U.S.C. § 247d-4(d). The act requires that a strategic plan be 
submitted to congressional committees no later than June 18, 2007, and 
that the electronic nationwide public health situational awareness 
network be established no later than December 19, 2008. 

[24] H.R. 915, 112th Cong. (as reported by H.R. Comm. on Homeland 
Security, Nov. 4, 2011). 

[25] H.R. Rep. No. 112-331, at 175-77 (2011) (Conf. Rep.). 

[26] S. 191, 112th Cong. (2011). 

[27] Pub. L. No. 112-10, § 1632 (2011). 

[28] This total includes all grant programs in the state and local 
programs account and the Emergency Management Performance Grant 
program but does not include funding appropriated for firefighter 
assistance grant programs. 

[29] S. Rep. No. 112-74, at 124 (2011). 

[30] Pub. L. No. 112-74 (2011). 

[31] H.R. 1891, 112th Cong. (2011). 

[32] Although this original bill has been reported out of the 
committee, as of January 27, 2012, it had not yet been introduced in 
the Senate and therefore does not have a bill number. For the text of 
the original bill, refer to [hyperlink, 
http://www.help.senate.gov/hearings/hearing/?id=b4d24a56-5056-9502-
5d73-a45a120b096b]. 

[33] See S. Rep. No. 112-26, at 191 (2011). 

[34] See S. Rep. No. 112-29, at 12-13 (2011). 

[35] GAO, Defense Acquisitions: Assessments of Selected Weapon 
Programs, [hyperlink, http://www.gao.gov/products/GAO-11-233SP] 
(Washington, D.C.; Mar. 29, 2011). 

[36] GAO, Defense Acquisitions: DOD Can Improve Its Management of 
Configuration Steering Boards, [hyperlink, 
http://www.gao.gov/products/GAO-11-640] (Washington, D.C.: July 7, 
2011). 

[37] "Should-cost" estimates are based on bottoms-up assessments of 
what programs should cost, if reasonable efficiency and productivity 
enhancements are undertaken. They can be used as a basis for contract 
negotiation and incentives. 

[38] GAO, DOD Weapon Systems: Missed Trade-off Opportunities During 
Requirements Reviews, [hyperlink, 
http://www.gao.gov/products/GAO-11-502] (Washington, D.C.: June 16, 
2011). 

[39] GAO, Defense Acquisitions: Assessments of Selected Weapon 
Programs, [hyperlink, http://www.gao.gov/products/GAO-11-233SP] 
(Washington, D.C.; Mar. 29, 2011). 

[40] GAO, DOD's 2010 Comprehensive Inventory Management Improvement 
Plan Addressed Statutory Requirements, But Faces Implementation 
Challenges, [hyperlink, http://www.gao.gov/products/GAO-11-240R] 
(Washington, D.C.: Jan. 7, 2011). 

[41] Inventory that is not in DOD's possession but for which a 
contract has been awarded or funds have been obligated is considered 
to be on-order. 

[42] See Pub. L. No. 112-81, § 832(a), (b)(2) (2011). 

[43] See § 832(b)(4). 

[44] See § 832(b)(3). 

[45] See § 832(b)(5). 

[46] See Pub. L. No. 111-84, § 805(b)(2)(F) (2009). 

[47] Department of Defense, Corrosion Policy and Oversight Office, 
Corrosion Prevention and Mitigation Strategic Plan, (February 2011). 

[48] H.R. Rep. 112-381, accompanying the FAA Modernization and Reform 
Act of 2012, H.R. 658, 112th Cong. (2012), as reported out on Feb. 1, 
2012. 

[49] Pub L. No. 112-55 (2011). 

[50] Connect America Fund et al., FCC 11-161, Report and Order and 
Further Notice of Proposed Rulemaking (rel. Nov. 18, 2011). 

[51] Lifeline and Link Up Reform and Modernization et al., FCC 11-97, 
Report and Order, 26 FCC Rcd 9022 (rel. June 21, 2011). 

[52] Lifeline and Link Up Reform and Modernization et al., FCC 12-11, 
Report and Order and Further Notice of Proposed Rulemaking (rel. Feb. 
6, 2012). 

[53] The Department of the Interior, Bureau of Land Management, 
updated the anticipated revenues from $1.75 billion to $1.8 billion in 
its fiscal year 2012 budget justification. 

[54] GAO, Oil and Gas Leasing: Interior Could Do More To Encourage 
Diligent Development, [hyperlink, 
http://www.gao.gov/products/GAO-09-74] (Washington, D.C.: October 3, 
2008). 

[55] GAO, Oil and Gas Management: Interior's Oil and Gas Production 
Verification Efforts Do Not Provide Reasonable Assurance of Accurate 
Measurement of Production Volumes, [hyperlink, 
http://www.gao.gov/products/GAO-10-313 (Washington, D.C.: Mar. 15, 
2010). 

[56] S. Rep. No. 112-29 (2011). 

[57] GAO, Federal Contracting: OMB's Acquisition Savings Initiative 
Had Results, but Improvements Needed, [hyperlink, 
http://www.gao.gov/products/GAO-12-57] (Washington, D.C.: Nov. 15, 
2011). 

[58] GAO, Federal Contracting: OMB's Acquisition Savings Initiative 
Had Results, but Improvements Needed, [hyperlink, 
http://www.gao.gov/products/GAO-12-57] (Washington D.C.: Nov. 15, 
2011). 

[59] GAO, Strategic Sourcing: Office Supplies Study Had Limitations, 
but New Initiative Shows Potential for Savings, [hyperlink, 
http://www.gao.gov/products/GAO-12-178] (Washington D.C.: Dec. 20, 
2011). 

[60] Rollover of unearned award fee is where unearned award fees are 
transferred from one evaluation period to a subsequent period, thus 
allowing contractors additional opportunities to earn previously 
unearned fees. 

[61] H.R. 1734, 112th Cong. (2011). 

[62] S. 1503, 112th Cong. (2011). 

[63] H.R. 1734, 112th Cong. (2011). 

[64] S. 1503, 112th Cong. (2011). 

[65] The net tax gap was updated in 2012 and estimated to be $385 
billion for the 2006 tax year. Thus, a 1 percent reduction would 
increase tax revenues by $3.8 billion. 

[66] GAO, Tax Gap: Actions Needed to Address Noncompliance with S 
Corporation Tax Rules, [hyperlink, 
http://www.gao.gov/products/GAO-10-195] (Washington, D.C.: Dec. 15, 
2009). 

[67] Pub. L. No. 112-41, § 501(a) (2011). 

[68] Pub. L. No. 111-240 (2010). 

[69] Pub. L. No. 111-148 (2010); Pub. L. No. 110-275 (2008). 

[70] Major programs consist of Level 1 and Level 2 acquisitions. Level 
1 acquisitions have life-cycle costs of $1 billion dollars or more. 
Level 2 acquisitions have life-cycle costs of $300 million or more, 
but less than $1 billion. In 2011, DHS identified 82 major acquisition 
programs, 45 of which were Level 1. 

[71] GAO, Homeland Security: DHS Could Strengthen Acquisitions and 
Development of New Technologies, [hyperlink, 
http://www.gao.gov/products/GAO-11-829T], (Washington, D.C.; July 15, 
2011). 

[72] GAO, Homeland Security: DHS Could Strengthen Acquisitions and 
Development of New Technologies, [hyperlink, 
http://www.gao.gov/products/GAO-11-829T] (Washington, D.C.: July 15, 
2011). 

[73] GAO, DHS Science and Technology: Additional Steps Needed to 
Ensure Test and Evaluation Requirements Are Met, [hyperlink, 
http://www.gao.gov/products/GAO-11-596] (Washington, D.C.: June 15, 
2011). 

[74] GAO, DHS Research and Development: Science and Technology 
Directorate's Test and Evaluation and Reorganization Efforts, 
[hyperlink, http://www.gao.gov/products/GAO-12-239T] (Washington, 
D.C.: Nov. 17, 2011). 

[75] GAO, DOD Weapon Systems: Missed Trade-off Opportunities During 
Requirements Reviews, [hyperlink, 
http://www.gao.gov/products/GAO-11-502] (Washington, D.C.: June 16, 
2011). 

[76] [hyperlink, http://www.gao.gov/products/GAO-11-596] and 
[hyperlink, http://www.gao.gov/products/GAO-12-239T]. 

[77] H.R. Rep. No. 112-331, at 971 (2011) (Conf. Rep.). 

[78] See GAO, Aviation Security: Efforts to Validate TSA's Passenger 
Screening Behavior Detection Program Underway, but Opportunities Exist 
to Strengthen Validation and Address Operational Challenges, 
[hyperlink, http://www.gao.gov/products/GAO-10-763] (Washington, D.C.: 
May 20, 2010). 

[79] See GAO, Aviation Security: TSA Has Taken Actions to Improve 
Security, but Additional Efforts Remain, [hyperlink, 
http://www.gao.gov/products/GAO-11-807T] (Washington, D.C.: July 13, 
2011). 

[80] Pub. L. No. 112-10, Div. B, § 1616 (2011). 

[81] H.R. Rep. No. 112-91, at 27 (2011). 

[82] GAO, Opportunities to Reduce Potential Duplication in Government 
Programs, Save Tax Dollars, and Enhance Revenue, [hyperlink, 
http://www.gao.gov/products/GAO-11-318SP] (Washington, D.C.: Mar. 1, 
2011). 

[83] GAO, Opportunities to Reduce Potential Duplication in Government 
Programs, Save Tax Dollars, and Enhance Revenue, [hyperlink, 
http://www.gao.gov/products/GAO-11-318SP] (Washington, D.C.: Mar. 1, 
2011). This report was issued in response to a new statutory 
requirement that GAO identify federal programs, agencies, offices, and 
initiatives, either within departments or governmentwide, which have 
duplicative goals or activities. Congress asked GAO to conduct this 
work and to report annually on our findings. See Pub. L. No. 111-139, 
§21, 124 Stat. 29 (2010), 31 U.S.C. § 712 Note. 

[84] Agriculture, defense, economic development, energy, general 
government, health, homeland security, international affairs, and 
social services were among the government missions included in the 
March 2011 report. 

[85] These actions were identified in the "Actions Needed" section for 
each respective issue area. 

[86] In situations where our action needed suggested that Congress 
should let a provision expire, we classified it as "addressed" if 
Congress permitted such expiration to happen. 

[End of section] 

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