Federal Programs Vulnerable to Mismanagement, Fraud, and Abuse

By CAGW, Special for  USDR

CAGW reacted strongly today to the release of the Government Accountability Office’s GAO’s biennial High Risk List, a compendium of 32 federal programs that merit concern “due to their vulnerabilities to fraud, waste, abuse, and mismanagement or are most in need of broad reform. The High Risk List has documented more than $40 billion in financial benefits and 866 other improvements related to high-risk areas.” According to GAO, 18 of the 30 high-risk areas on the 2013 list “at least partially met all of the criteria for removal from the list” and 11 “met at least one criteria and partially met all others.” The two new areas of the 2015 High Risk List are Managing Risks and Improving Health Care and Improving the Management of IT Acquisition and  Operations.

“The GAO High Risk Report is a roadmap to more effective expenditures of hard-earned taxpayer  dollars”

The House Oversight and Government Reform Committee is holding a hearing on the GAO report at 2:00 p.m.  today.

“While the GAO reports that some programs had made significant improvements, 12 areas have been on the GAO’s watch list for at least 18 years and six of them, including Medicare and Medicaid, have been on the list since its inception 25 years ago in 1990,” said CAGW President Tom  Schatz.

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

The United States Postal Service (USPS) also made the list again. GAO observed that even though the agency has cut costs by $8 billion since 2013, it lost $5 billion and $5.5 billion in FYs 2013 and 2014, respectively. First-class monopoly mail volume has dropped by 35 percent since 2006 and that trend will continue and accelerate. The USPS has been thrashing around searching for new revenue streams that unfairly compete with the private sector and show little promise of profitability, such as grocery delivery services and financial services, instead of radically reforming its labor infrastructure and business  practices.

It is unfortunately not surprising that IT acquisition is a new addition to the 2015 list. GAO has repeatedly emphasized that IT investments are chronically mismanaged, frequently not completed, and end up costing a lot more than projected. GAO has made 730 recommendations to help federal manager’s improve IT oversight and implementation over the last five years, only 23 percent which have been acted upon. Dozens of agency inspector general reports have also cited IT mismanagement and failures government-wide, including the Department of Veterans Affairs’ Core Financial and Logistics System, which cost taxpayers $249 million after six years of missed deadlines and milestones and the IRS’ Cyberfile program, which wasted $17 million before being discontinued at the IRS. The Office of Management and Budget has also tried to rein in duplicate IT projects and identify high risk projects; however, GAO found that these efforts have also encountered strong  headwinds.

“The GAO High Risk Report is a roadmap to more effective expenditures of hard-earned taxpayer dollars,” concluded Schatz. “Congress should be taking steps to make the list obsolete, rather than watching it  expand.”

Citizens Against Government Waste is the nation’s largest nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in  government.

All opinions expressed on USDR are those of the author and not necessarily those of US Daily Review.