Gene Dodaro said the budget's "long-range outlook is still unsustainable.”

Gene Dodaro said the budget's "long-range outlook is still unsustainable.” Alex Brandon/AP file photo

Comptroller warns government debt is unsustainable

GAO chief discusses improper payments, clean books, tax gap and duplication.

Congress and the president have credibly trimmed deficits in the past 18 months but more far-reaching actions are needed to curb long-term government debt, the comptroller general warned on Tuesday.

Laying out the Government Accountability Office’s agenda at the Association of Government Accountants National Leadership Conference, Gene Dodaro applauded the $2.1 trillion in 10-year spending cuts enacted under the 2011 Budget Control Act and the $600 billion in new revenue under the recently enacted tax relief bill. “If we stick to it, spending will be lower than at any time since the Eisenhower administration,” he said, “but the long-range outlook is still unsustainable.” Public debt is still 73 percent of gross domestic product, compared with only 40 percent in the 1970s through 1990s, he said.

In a separate panel, two federal experts on data mining outlined model programs for using analytics to reduce fraud and improper payments.

By 2018, Dodaro said, there will be a wave of additional federal expenses because of baby boomer retirements -- currently 8,000 per day but slated to rise to 11,000 per day. Their impact on spending on Social Security and Medicare “will be very significant,” and without more action, the debt would rise to more than 100 percent of GDP. The only time the government has owed more than the economy was producing was during World War II, he said.

The 2011 delay in raising the debt ceiling cost the government $1.3 billion in interest payments, Dodaro added. He reiterated a proposal to synchronize that decision with Congress’s policy choices on spending and revenues, rather than the current separate but irregularly timed vote. “We’re one of the few countries in the world that do it that way,” he said.

GAO in the coming months will be focused on the government’s progress in four areas: reducing improper payments; improving financial statements; shrinking the $385 billion tax gap; and curbing program overlap and duplication. Given the current budget crisis, Dodaro said, all of those are areas in which agency accountants can play a useful role.

Improper payments to ineligible recipients cost the government $107 billion in fiscal 2012, Dodaro said. Though 18 agencies are involved, the biggest problems show at the Health and Human Services Department’s Temporary Assistance for Needy Families program and the Education Department’s direct student loan program. Other agencies with related issues include the Treasury and Agriculture departments and the Social Security Administration.

A 2012 law added rigor to the internal accounting controls, he noted, and the Office of Management and Budget has launched a Do Not Pay list while holding program managers more accountable. “We will never get improper payments to zero, but we must get to acceptable levels.”

The government’s overall financial statement remains unauditable, Dodaro said, but there’s been progress since the late 1990s, when only six agencies had clean books, compared with 21 out of the 24 major departments now.

Thirty federal program areas remain on GAO’s high-risk list, which will be updated in a report set for release on Thursday. “Contrary to popular belief, you can get off the list,” Dodaro said, citing as an example the Pentagon’s improvements in processing security clearances. OMB and GAO have been cooperating in meeting with deputy secretaries for each agency on the list, he said.

The nation’s tax gap is caused mostly by underreporting of income and assets for every type of tax, he said. “It is difficult to justify revenue increases if people aren’t paying their fair share.’ He recommends that the IRS measure the gap more consistently and that it verify more tax return information through third parties, doing “compliance checks before issuing the refunds,” he said.

Duplicative or overlapping programs show up in 132 areas, from teacher training to job training, Dodaro said, noting that the third in a GAO series of reports on the subject is due in April. The report will provide a “scorecard” on how agencies have implemented previous GAO recommendations to curb duplication, as well as those suggesting revenue-producing changes such as inflation adjustments for user fees and civilian penalties. “Every dollar wasted adds to the debt,” he said. “and we all need to make a contribution.”

Among the most promising tools for preventing improper payments is data mining, a term that some consider passé, preferring “data analytics” or “advanced analytics,” to reflect the breadth of capability in standardizing data to showcase patterns that allow analysts to make reliable predictions on incidence of fraud.

In the other panel, Edward Slevin, director of computer assisted assessment techniques division at the Education Department’s inspector general’s office, gave a capsule history of the tools’ growth out of a 2003 GAO report on how the Pentagon IG’s office was detecting fraud in employee purchasing cards.

Slevin, who was then at the U.S. Postal Service, was asked to mimic that program but became frustrated when it was revealed that the data results contained too many “false positives.” Years spent putting raw data—such as grant applicants’ mailing addresses—into standardized formats and improving filters paid off when the Education Department uncovered rings of student loan fraudsters.

A prototype processing data from 15 schools uncovered criminals who would apply online for loans and distance learning courses at multiple schools, accumulating millions of dollars in illicit federal grants. In one school of 21,000 students, for example, data patterns revealed 89 ineligible recipients. His team eventually identified $181 million in probable losses due to fraud, while identifying additional perpetrators. “The Education Department has not put it in place in a way that it can be transferred to other inspectors general,” Slevin said.

Michael Wood, executive director of the Recovery Accountability and Transparency Board, said that while data analytics “is known to only a small group of people, the world will be excited if we get standards that fundamentally change how we do auditing and investigations.” His agency’s work tracking spending of stimulus money from the 2009 Recovery Act is now being broadened to include open source and “unstructured” data such as e-mail and social media. “If Facebook had been created by the CIA, no one would do it because of privacy worries, but now they do,” he said.

Quality of data is still a problem, Wood said, and databases can be expensive for government to acquire, even though commercial databases are not much “cleaner” or up-to-date.

With Recovery Act spending winding down, the board is working with inspectors general and OMB to reduce “silos” and share information on “capturing bad actors.”

The fact that Congress extended the Recovery Board’s life in the recent emergency relief bill for Hurricane Sandy, Wood said, “is a positive reinforcement that RATB techniques will provide some ongoing work for some of our capabilities.”

X
This website uses cookies to enhance user experience and to analyze performance and traffic on our website. We also share information about your use of our site with our social media, advertising and analytics partners. Learn More / Do Not Sell My Personal Information
Accept Cookies
X
Cookie Preferences Cookie List

Do Not Sell My Personal Information

When you visit our website, we store cookies on your browser to collect information. The information collected might relate to you, your preferences or your device, and is mostly used to make the site work as you expect it to and to provide a more personalized web experience. However, you can choose not to allow certain types of cookies, which may impact your experience of the site and the services we are able to offer. Click on the different category headings to find out more and change our default settings according to your preference. You cannot opt-out of our First Party Strictly Necessary Cookies as they are deployed in order to ensure the proper functioning of our website (such as prompting the cookie banner and remembering your settings, to log into your account, to redirect you when you log out, etc.). For more information about the First and Third Party Cookies used please follow this link.

Allow All Cookies

Manage Consent Preferences

Strictly Necessary Cookies - Always Active

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data, Targeting & Social Media Cookies

Under the California Consumer Privacy Act, you have the right to opt-out of the sale of your personal information to third parties. These cookies collect information for analytics and to personalize your experience with targeted ads. You may exercise your right to opt out of the sale of personal information by using this toggle switch. If you opt out we will not be able to offer you personalised ads and will not hand over your personal information to any third parties. Additionally, you may contact our legal department for further clarification about your rights as a California consumer by using this Exercise My Rights link

If you have enabled privacy controls on your browser (such as a plugin), we have to take that as a valid request to opt-out. Therefore we would not be able to track your activity through the web. This may affect our ability to personalize ads according to your preferences.

Targeting cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.

Social media cookies are set by a range of social media services that we have added to the site to enable you to share our content with your friends and networks. They are capable of tracking your browser across other sites and building up a profile of your interests. This may impact the content and messages you see on other websites you visit. If you do not allow these cookies you may not be able to use or see these sharing tools.

If you want to opt out of all of our lead reports and lists, please submit a privacy request at our Do Not Sell page.

Save Settings
Cookie Preferences Cookie List

Cookie List

A cookie is a small piece of data (text file) that a website – when visited by a user – asks your browser to store on your device in order to remember information about you, such as your language preference or login information. Those cookies are set by us and called first-party cookies. We also use third-party cookies – which are cookies from a domain different than the domain of the website you are visiting – for our advertising and marketing efforts. More specifically, we use cookies and other tracking technologies for the following purposes:

Strictly Necessary Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Functional Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Performance Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Social Media Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Targeting Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.