Eyes and Ears on Spending

Willis Bretz

Mandates like the Digital Accountability and Transparency Act and Federal Information Technology Acquisition Reform Act have enormous potential to help the Government Accountability Office keep tabs on government spending. 

GAO is the nonpartisan bloodhound of Congress, identifying waste, fraud, mismanagement and abuse in the effort to get the most bang for taxpayer bucks. Historically, every dollar invested in GAO yields a $100 return on investment. The agency’s audits shine light on federal programs and help set Congress’ oversight and legislative agendas. 

Government Executive’s Frank Konkel sat down with Comptroller General Gene Dodaro, GAO’s top official, and David Powner, director of information technology management issues, to discuss how new data collection and reporting policies will affect transparency in government. The
following are excerpts:

Why is the DATA Act important?

Dodaro: If effectively implemented, the DATA Act can result in significant advancements in government transparency. And by transparency, I mean to the public, to policymakers and to agency officials. In addition, it can yield significant advances in accessibility of information and the reliability of that data. The DATA Act will provide more information than has been available through
USASpending.gov, and it will link that information to federal programs so you have more visibility across government. 

What does the USASpending.gov experience tell us about how agencies should go about implementing the DATA Act?

Dodaro: What USASpending.gov tells us is that it will be extremely important for agencies to not only populate the data but to make sure it is accurate. Our last look at USASpending.gov, we found over $600 billion in federal spending that was not reported at all.

There also were a lot of inaccuracies in the information. But agencies have the capability to improve, and the DATA Act will now require the [inspectors general] to audit the information. But I want to emphasize it is really management’s responsibility and program officials’ responsibility to get this right in the first place. The audit can’t take the place of management doing its job properly. You can have the best data standards in the world, but if they are not executed with accurate, reliable information, it’s not going to be helpful.

Tell us about GAO’s high-risk list.

Dodaro: The high-risk list looks across the entire federal government at the areas at the highest risk of fraud, waste, abuse, mismanagement, and areas in need of broad-based transformation. The list currently has 32 areas on it. Over time, more than one-third of the areas we’ve put on the high-risk list have come off. We do it every two years with the beginning of each new Congress, so it helps set the oversight agenda for the Congress. We identify areas where legislative changes are needed to fix these problems. Dating back to the Clinton administration, the high-risk list has become part of the president’s management agenda. I believe the high-risk list is one of the longest running, good-
government, bipartisan efforts in the federal government’s history.

You recently testified before Congress about the impact of improper payments and the tax gap, and the numbers were hard to comprehend. What’s being done in these areas?   

Dodaro: The amount of money is significant. From 2003 to 2014, the cumulative total of improper payments reported was close to $1 trillion. The latest estimate for the annual tax gap is $385 billion. These are very important areas. They won’t by themselves solve our unsustainable fiscal path, but they can make it a lot easier to accommodate fiscal policy changes.

What I’m concerned about is that half the improper payments are in health care programs—Medicare and Medicaid—and those are among the fastest growing programs, anywhere from 6 percent to 8 percent per year. Agencies need to find ways to stop improper payments in the first place, to use more predictive analytics and prevent bad actors from enrolling as providers and suppliers in health care systems. They also need to have good after-the-fact recovery efforts when improper payments are identified.

What else will GAO focus on in the coming year to improve transparency across government? 

Dodaro: We’re going to continue to report on the federal government’s long-term unsustainable fiscal path. Right now our debt held as a percent of GDP is the highest it’s been since World War II. We’re going into a period where there will be a lot of demographic changes—the baby boomer generation retiring and health care costs continue to grow quickly.

Our simulations show that by 2025, a $1 trillion deficit could occur again. Between 2029 and 2037, depending upon assumptions, debt held by the public could go over 100 percent of GDP, where the government would owe more than our entire economy is producing.

The Obama administration likes to say it aspires to be the most transparent administration in history. Each year, the government spends roughly $80 billion on IT. How transparent is the government on those numbers?

Powner: It starts with the IT Dashboard. It has greatly improved IT transparency. What it tells us is that we have about an $80 billion spend on IT on an annual basis. If you look at that breakdown, you have roughly 78 percent that goes to legacy systems, the remaining goes to new development. 

About half of the $80 billion spend is spent on major systems. The IT Dashboard will tell you that 75 percent of that $40 billion are low risk, or green status. So we have another 25 percent that are moderate to high risk. Those are the projects you really want to focus on from an oversight point of view. There are 170 of those totaling about $10 billion in risk. Not only do we know what we’re spending, but we have a pretty good picture of how some of these investments are performing.

What initiatives have proved successful in encouraging accountability and better oversight?

Powner: The IT Dashboard clearly is one of the main areas to improve accountability and oversight. Although overall spending is important and there is room for better accuracy; knowing which investments are low risk (green), moderate risk (yellow), or high risk (red) is very important. You can get more granular and get down to the project level. Also, two of the big cost-savings initiatives, data center consolidation and PortfolioStat—where we have unused capacity from a data center perspective and also duplicative spending with PortfolioStat—have been very important. 

Federal CIO Tony Scott has used GAO data to publicly call the government out for spending too much money on legacy systems as opposed to new technologies. Just how much is being spent on outdated technology, and how can agencies change direction?

Powner: Clearly, there is the potential to save money on inefficient spending with data center consolidation and PortfolioStat to root out duplicative investments, but the other thing is to look at old and archaic legacy systems and what we need to do to move those onto modern platforms and really modernize the federal government. 

You can go into the IT Dashboard right now and look at how old some of the major investments are. There are about 28 of the roughly 750 that are being reported as 25 years or older. There about 50 investments spending 100 percent [of their funding] on [operations and maintenance] and being reported on the dashboard as red or yellow, and the question is why? If something is 100 percent O&M, you would expect it to be green, so what’s the issue with these operational systems? That’s where the dashboard and a continued focus on legacy systems is really important.

Can you give us a preview of GAO’s research in 2016? 

Powner: There are many areas Congress has asked us to look at that support FITARA implementation. We’ll be looking at incremental development across agencies, taking a look at CIO ratings and we’ll be coming out with new baselines on savings under data center consolidation. 

We are looking at legacy systems and the extent agencies are decommissioning legacy systems. We also have some work looking at the U.S. Digital Service and 18F and the progress each of those organizations are making. Also, we have best practice work in cloud service-level agreements and integrated product teams for large acquisitions. Many of these reviews will be supporting the Congress as they come out with their FITARA implementation scorecard. 

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