From the U.S. Government Accountability Office, www.gao.gov Transcript for: 2015 Update to GAO’s High Risk List Description: Audio interview by GAO staff with Chris Mihm, Managing Director, Strategic Issues Related GAO Works: GAO-15-290: HIGH-RISK SERIES: An Update; GAO-15-371T: GAO’s 2015 High-Risk Series: An Update; and GAO-15-373T: GAO’s 2015 High-Risk Series: An Update Released: February 2015 [ Background Music ] [ Narrator: ] Welcome to GAO's Watchdog Report, your source for news and information from the U.S. Government Accountability Office. It's February 2015. Every 2 years at the start of a new Congress, GAO calls attention to agencies and program areas that are high risk due to their vulnerabilities to fraud, waste, abuse, and mismanagement or are most in need of transformation. A team led by Chris Mihm, Managing Director of GAO's Strategic Issues team, recently updated GAO's High Risk List for 2015. GAO's Jacques Arsenault sat down with Chris to talk about what they found. [ Jacques Arsenault: ] This year's update to the High Risk List added two new areas, IT acquisition and operations management and VA healthcare. Can you talk a little bit about them? [ Chris Mihm: ] Of course. Each year, the federal government invests about $80 billion in IT projects. This is across all federal agencies. And we go in and, of course, do an awful lot of evaluations and assessments of those at the request of the Congress. Unfortunately, fairly consistently, we find problems with these projects. And these seem to center on a lack of discipline and effective management practices, the need for improvements in project planning, and poor program oversight in governance. Over many years we've made hundreds of recommendations. A lot of those have been implemented. And progress has been made in a number of programs. However, we still have several hundred open recommendations. That is those that have not been yet fully implemented where we need to take aggressive action on that. And so what we're finding is that agencies need to do a good job in effectively better managing their programs. They need to implement some statutory tools that Congress gave them in December of 2014 that will give the CIOs, chief information officers, greater transparency and authority over investments in each of the agencies. This is a real high-risk effort both because of the importance of IT and obviously the size of the investment. [ Jacques Arsenault: ] And how about the other area of VA healthcare? [ Chris Mihm: ] Well, VA healthcare is, as you mentioned, the second area that we put on the High Risk List. VA operates over 150 different medical centers, 800 community-based outpatient clinics. Their health budget is about $55.5 billion a year. And so it's a very expensive program. And of course given the criticality of it, that is providing healthcare to our veterans, which is both a growing workload and also because of Iraq and Afghanistan they also have more and different types of injuries than we have typically seen in the past. We have found problems going back over many years in VA healthcare delivery on ambiguous policies, inconsistent processes, the need for strength in oversight and accountability, better IT investments. And we just talked about IT in the other high-risk area. Inadequate training of key staff and then finally unclear resource needs and priorities. This is another area where we have over a hundred open recommendations. The key to moving forward is really to start addressing the open recommendations that we have in this area, in the IT area, in fact across the entire portfolio of high-risk areas where we have been making recommendations. If agencies address those, they'll go a long way to resolving their high-risk issues. [ Jacques Arsenault: ] And on that point of resolving these issues. This year's high-risk update introduces a new rating tool. Can you talk about the star rating system and how it helps us measure progress? [ Chris Mihm: ] Yeah. We think the new rating tool and the star approach is going to be very helpful to agencies. The actual criteria itself are not new. In 2000, we issued a report.We worked closely with the CFO Council and the administration at that point to get very clear on what are the criteria that are in place for an agency to come off the High Risk List. And we've been using that to make judgments over the intervening years. This is the first time that we have been as clear in using, as you mentioned, the star. And if people go to and look at the report on GAO.gov they'll be able to see what we're talking about when I refer to the stars. They'll be able to see exactly on each of the high-risk area where they are against the five criteria. And those criteria are demonstrated top leadership commitment, the capacity of the agency to address the high-risk area, an action plan in place to address it, monitoring and oversight and effective implementation of that action plan, and finally and obviously most importantly, demonstrated progress to addressing the high-risk area. They'll be able to see for each of the high-risk areas what progress they're making on each of those five dimensions. [ Jacques Arsenault: ] So, then generally speaking, what progress have you seen addressing the 30 areas that are continuing on the risk list? [ Chris Mihm: ] We've seen some important progress this time around. Even though none of the issues are coming off, and that's a bit unfortunate because typically, you know, we will see enough progress that we'll be able to take one or more issues off. However, there are two of the big issues that are being narrowed this time around because of the progress that has been made. One is on protecting public health through enhanced oversight of medical products and the second is on DOD contract management. The other area where we have been able to see progress, and this gets back to the question you were asking a moment ago about the stars and the ratings. We have been able to array, and you'll be able to see this in the report, where each of the high-risk areas is. And so that will allow agencies and the administration and the Congress to be able to really pinpoint where they need to put additional emphasis and additional effort in order to get some of these off of the High Risk List. Eleven of the high-risk areas have either met or are well on their way to meeting each of the criteria. Those are the ones that we feel really are the closest to coming off the list. And so there's an enormous possibility to make progress in those areas. It's still going to take some work, but we think it can be done. [ Jacques Arsenault: ] And finally, what would you say is the bottom line of this year's High Risk List update? [ Chris Mihm: ] I think the bottom line is that while agencies have continued to make progress, and that's real progress. I mean there's billions of dollars in financial savings, and accomplishments have been made because of agency efforts who address high-risk issues and hundreds of other types of management improvements that have been made. Those are real. Nevertheless, there is still quite a ways to go on each of the 32 issues that are now on the High Risk List. And there's quite a gap, and in terms of risks of tens of billions of dollars, safety and wellbeing of the American people, which is among the criteria that we use when we're looking at putting an issue on the High Risk List. Plenty of opportunities for agencies to continue to make progress notwithstanding the progress that has been made. 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