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Last Build Date: Mon, 18 Dec 2017 07:40:51 -0500


GAO-18-180, Transportation Security Administration: Surface Transportation Inspector Activities Should Align More Closely With Identified Risks, December 14, 2017

Thu, 14 Dec 2017 12:00:00 -0500

What GAO Found Transportation Security Administration (TSA) surface transportation security inspectors—known as surface inspectors—conduct a variety of activities to implement the agency's surface security mission, including: Regulatory Inspections: Surface inspectors enforce freight rail, passenger rail, and maritime security regulations. GAO found that, according to TSA data, surface inspectors reported spending approximately 20 percent of their time on these activities from fiscal years 2013 to 2017. Non-regulatory assessments and assistance: Surface inspectors conduct voluntary assessments and provide training to surface transportation entities, among other things. GAO found that, according to TSA data, inspectors reported spending approximately 80 percent of their time on these activities. In addition to mission-related activities, surface inspectors can assist with aviation-related activities. However, GAO found that TSA has incomplete information on the total time surface inspectors spend on these activities because of limitations in TSA's data system. Addressing these limitations would provide TSA with complete information when making decisions about inspector activities. GAO also found that TSA prioritized inspector activities in the surface transportation mode with the lowest risk because TSA did not incorporate risk assessment results when planning and monitoring activities. Specifically, in fiscal year 2016, the last full year for which data on inspectors' activities in the surface modes was available, surface inspectors reported spending more than twice as much time on the lowest risk surface transportation mode according to TSA risk assessments than on the highest risk surface transportation mode. Incorporating risk assessment results when prioritizing inspector activities would help TSA ensure that its surface security resources address the highest risks. In fiscal year 2017, TSA fully implemented a new risk mitigation program—Risk Mitigation Activities for Surface Transportation (RMAST)—intended to focus time and resources on high-risk surface transportation entities and locations. However, GAO found that TSA has not identified or prioritized these high-risk entities and locations, or defined the RMAST program's objectives and associated activities in a measurable and clear way. According to TSA officials, they have not done so because there are too many potential entities to list them all for prioritization and TSA has not identified an approach for determining the effectiveness of activities under the program. However, prioritizing high-risk entities, such as by type, characteristics, or location does not require a complete list of entities. By identifying and prioritizing high-risk entities and locations for RMAST, and clearly defining the program's activities and objectives, TSA would be better able to implement RMAST activities in a risk-based manner and measure their effectiveness. This is a public version of a sensitive report that GAO issued in October 2017. Information that TSA deemed sensitive has been omitted. Why GAO Did This Study The global terrorist threat to surface transportation – freight and passenger rail, mass transit, highway, maritime and pipeline systems – has increased in recent years, as demonstrated by the 2017 London vehicle attacks and a 2016 thwarted attack on mass transit in the New York area. TSA is the primary federal agency responsible for securing surface transportation in the United States. GAO was asked to review TSA surface inspector activities. This report addresses (1) how TSA surface inspectors implement the agency's surface transportation security mission, and (2) the extent to which TSA has used a risk-based approach to prioritize and implement surface inspector activities. GAO analyzed TSA data on surface inspector activities from fiscal year 2013 through March 24, 2017, reviewed TSA program and risk documents and guidance, and observed surface inspectors conducting multiple activities. GAO also interviewed TSA officia[...]

GAO-18-68, Health Insurance Exchanges: Changes in Benchmark Plans and Premiums and Effects of Automatic Re-enrollment on Consumers' Costs, November 14, 2017

Thu, 14 Dec 2017 12:00:00 -0500

What GAO Found Through the exchanges established under the Patient Protection and Affordable Care Act, consumers can directly compare and select among health plans based on a variety of factors, including premiums. Most consumers who purchase health plans through the exchanges receive tax credits to help them pay for their premiums. The value of a consumer's premium tax credit is based, in part, on the premium for the benchmark plan, which is the second lowest cost option available in the consumer's local area within the exchange's silver metal tier (one of four metal tiers that indicate the value of plans). Because plan premiums and plan availability can change over time, the benchmark plan in each local market can also change over time. GAO analyzed changes in benchmark plans and premiums from 2015 through 2017 and found: In most of the nearly 2,600 counties included in the analysis, the plans identified as benchmark plans, and the premiums for these plans, changed from year to year. For example, in 85 percent of counties, the 2015 benchmark plans were not benchmark plans in either 2016 or 2017. Gross benchmark premiums (exclusive of tax credits) increased from year to year, and increases were higher from 2016 to 2017 than they were from 2015 to 2016. Premium tax credits would limit the costs of increasing premiums for most consumers, though some consumers, including those not eligible for premium tax credits, would have incurred more or all of the higher premium costs. During the annual open enrollment period, consumers who do not make an active plan selection are automatically reenrolled into their existing plan or, if that plan is no longer available, they are generally re-enrolled into a similar plan if one has been identified. GAO analyzed information from the Office of the Assistant Secretary for Planning and Evaluation (ASPE) for consumers enrolled in both 2015 and 2016 and found: About 30 percent of consumers were automatically re-enrolled in 2016, while the remaining 70 percent chose to actively re-enroll. Median net monthly premiums—what consumers paid after premium tax credits—increased less from 2015 to 2016 for those who actively enrolled ($5) than for those who were automatically reenrolled ($22), although there was variation. Our findings are consistent with other work by ASPE that suggests that consumers consider possible cost savings when deciding to switch plans. The Department of Health and Human Services provided technical comments on a draft of this report, which GAO incorporated as appropriate. Why GAO Did This Study During open enrollment, eligible returning consumers may re-enroll in their existing health insurance exchange plan or choose a different plan. Those who do not actively enroll in a plan may be automatically reenrolled into a plan. According to the Department of Health and Human Services, automatic re-enrollment is intended to help ensure consumers' continuity in coverage. However, some have questioned whether automatic reenrollment could have unintended financial consequences for consumers. GAO was asked to review automatic reenrollment and benchmark plans. GAO examined 1) the extent to which plans identified as benchmark plans remained the same plans from year to year, and how premiums for benchmark plans changed; 2) the proportion of exchange consumers who were automatically re-enrolled into the same or similar plans, and how these proportions compared to those for consumers who actively re-enrolled, and 3) the extent to which consumers' financial responsibility for premiums changed for those who were automatically re-enrolled compared to those who actively re-enrolled. GAO reviewed relevant guidance and analyzed county-based data from the Centers for Medicare & Medicaid Services (CMS) for the 37 states that used the federal information platform,, from 2015 through 2017. GAO also interviewed CMS and ASPE officials and analyzed information from ASPE on reenrollment from 2015 to 2016. F[...]

GAO-18-91, Federal Pay: Opportunities Exist to Enhance Strategic Use of Special Payments, December 07, 2017

Thu, 14 Dec 2017 12:00:00 -0500

What GAO Found Generally, federal agencies have seven broadly available government-wide special payment authorities to help address recruitment and retention challenges. Chief Human Capital Officer (CHCO) Council agencies reported using these authorities to varying degrees but overall for few employees in fiscal years 2014-2016. For example, in fiscal year 2016, less than 6 percent of the over 2 million CHCO agencies' employees received compensation from at least one of the authorities (see figure). The two most frequently used—special rates and retention incentives—were used for over 74,000 employees and over 13,000 employees, respectively, each year. The least-used—critical position pay—was used for as few as seven employees a year. CHCO agencies also reported using the range of authorities to help address skills gaps, particularly for science, technology, engineering, and mathematics occupations. CHCO Agency Employees Receiving Special Payments, Fiscal Year 2016 CHCO agencies reported that these authorities had positive impacts—such as on-staff retention and applicant quality—but had few documented effectiveness assessments. Nine of 10 agencies that reported having documented assessments provided them, but GAO found that only 3 had information on effectiveness, such as its impact on meeting staffing needs. The Office of Personnel Management (OPM) collects agency data on use but has not tracked data to analyze how much authorities help agencies improve recruitment and retention government-wide. OPM may be missing opportunities to promote strategic use by providing guidance and tools on assessing effectiveness. For example, OPM has not explored reasons for trends in use of critical position pay or consistently shared best practices and innovative ways to use authorities. Without tracking data and providing guidance to help agencies assess effectiveness, OPM will be unable to determine whether use of special payment authorities helps agencies to improve recruitment and retention. Why GAO Did This Study Federal agencies can provide additional compensation by using seven broadly available special payment authorities to recruit and retain employees to address needed skills. Though special payments can help fill mission-critical skills gaps, agencies also face constrained budgets, which underscores the importance of cost-effective use of authorities. OPM and the CHCO Council play important roles in assuring effective federal human capital management. GAO was asked to examine agency use, challenges, and improvements needed, if any. This report 1) describes CHCO agencies' use of special payment authorities in fiscal years 2014-2016; 2) assesses to what extent CHCO agencies examined effectiveness; and 3) evaluates how OPM has helped agencies address recruitment and retention needs. GAO obtained information from CHCO agencies on use of authorities through a questionnaire. GAO also analyzed OPM personnel data and agency documents, and interviewed agency officials. What GAO Recommends GAO is making three recommendations, including that OPM should work with the CHCO Council on tracking data and providing guidance and tools to assess effectiveness of authorities, among others. OPM concurred or partially concurred with all recommendations, and described planned steps to implement them. For more information, contact Yvonne D. Jones at (202) 512-2717 or

GAO-18-136, Democracy Assistance: State Should Improve Accountability Over Funding; USAID Should Assess Whether New Processes Have Improved Award Documentation, December 14, 2017

Thu, 14 Dec 2017 12:00:00 -0500

What GAO Found In fiscal years 2012–2016, the U.S. Agency for International Development (USAID) obligated $5.5 billion and the National Endowment for Democracy (NED) obligated $610.2 million in democracy assistance funding. The total funding the Department of State (State) obligated for democracy assistance could not be reliably determined. One-third of all USAID obligations were provided through public international organizations (PIOs), which under USAID guidance are composed principally of countries or other organizations designated by USAID; 94 percent of PIO obligations were provided to the World Bank for democracy assistance projects in Afghanistan. The remaining two-thirds of USAID obligations were provided through contracts, grants (excluding PIOs), and cooperative agreements. Of the 10 State bureaus providing democracy assistance, 3 were unable to provide reliable funding data for fiscal years 2012–2016. Data from these bureaus were incomplete, nonstandard, or inaccurate. Federal internal control standards call for agencies to use quality information from reliable sources to achieve intended objectives and to monitor activities. Without such data, State cannot effectively monitor its democracy assistance programming and report reliable data externally. For the awards GAO sampled, USAID generally did not document decisions about whether to award a contract, grant, or cooperative agreement (known as award-type decisions) in a complete and timely manner. According to applicable USAID guidance, agency officials were required to (1) document the final award-type decision with their written determination, including a rationale based on the requirements of the Federal Grant and Cooperative Agreement Act, and (2) complete this documentation before award solicitation occurs or, for noncompetitive awards, before USAID initiated communications with a potential sole-source awardee. However, USAID provided both complete and timely documentation of the award-type decision for 5 of the 41 awards GAO sampled. For the remaining 36 awards, the documentation was either incomplete, not timely or timeliness was indeterminate, or both (see table). While USAID has taken steps to improve documentation for award-type decisions by updating its guidance and templates, it has not assessed whether these updates have resulted in complete and timely documentation. It is important that USAID document these decisions in advance of solicitation because the selection of an award type may affect requirements for administering the award, including competition and oversight requirements and whether or not profit is permissible. Documentation and Timeliness of Award-Type Decision for Selected USAID Awards Award type Awards in sample Awards lacking any documentation Awards with partial or complete documentation Timely Not timely/ timeliness indeterminate Contracts 13 3a 10 2 8 Grants 5 1 4 2 2 Cooperative agreements 23 6 17 2 15 Total 41 10 31 6 b 25 Source: GAO analysis of U.S. Agency for International Development (USAID) information. | GAO-18-136 aThree of the contracts in the sample were base awards with task orders issued under them; GAO did not receive documentation of the award-type decision for the base awards. bOne award that GAO deemed timely did not have complete documentation of the award-type decision. Why GAO Did This Study Supporting efforts to promote democracy h[...]

GAO-18-16, Commercial Fishing Vessels: More Information Needed to Improve Classification Implementation, December 14, 2017

Thu, 14 Dec 2017 12:00:00 -0500

What GAO Found The Coast Guard, the only military service within the Department of Homeland Security (DHS), investigated 2,101 commercial fishing vessel accidents between 2006 and 2015 that occurred in federal waters; however, because there are no reliable data on the total number of commercial fishing vessels that are actively fishing, rates of accidents, injuries, and fatalities cannot be determined. Agencies, such as the Coast Guard, keep records of accidents, but without reliable data on active vessels, trend information cannot be determined. The Coast Guard and the National Marine Fisheries Service have separate efforts to collect data that could be used to develop an estimate of active commercial fishing vessels, but each agency is taking a different approach to do so. These and other agencies agreed that it is important to calculate rates to assess commercial fishing vessel accidents, injuries, and fatalities. Establishing a mechanism—such as a working group—to coordinate efforts and collect reliable data on the number of active vessels and key characteristics, such as vessel age and length, would allow the agencies to do so in an efficient manner. Commercial Fishing Vessel While data on the costs to design, construct, and maintain classed vessels are limited, vessel owners, builders, and classification societies agree that classification increases costs and told GAO that the perceived costs of classing may affect vessel owners' decisions to purchase new vessels to avoid classification requirements. However, they also agree that classification is one of many factors that contribute to safety. The alternative-to-class approach is more flexible than classing—for example, in its use of marine surveyors to verify vessel construction. Industry stakeholders and GAO's analysis, however, identified numerous questions and uncertainties regarding implementation of the approach, including licensing requirements for naval engineers and architects. The Coast Guard has not issued regulations or guidance to address these issues on the alternative-to-class approach due, in part, to its ongoing efforts to issue regulations to implement safety-related legislation enacted in 2010 and 2012. However, without specific written procedures—either in the form of regulations or guidance—the Coast Guard cannot ensure consistent implementation of the alternative-to-class approach. Why GAO Did This Study Commercial fishing has one of the highest death rates of any industry in the United States. Fishing vessels that are at least 50 feet long and were built after 2013 are required by law to be built and maintained to rules developed by a classification society, a process known as classing. Congress created an alternative-to-class approach in 2016, allowing certain size vessels to be designed and built to equivalent standards in lieu of classing. The Coast Guard Authorization Act of 2015 included a provision for GAO to review the costs and benefits of classing commercial fishing vessels. This report assesses (1) known numbers and rates of commercial fishing vessel accidents, injuries, and fatalities; (2) what is known about the costs, effects, and benefits of constructing and maintaining classed vessels; and (3) how the alternative-to-class approach compares with classing. GAO collected data on vessel accidents, injuries, and fatalities; interviewed vessel owners, builders, classification societies, Coast Guard, and other agencies; and studied classing costs. What GAO Recommends Among GAO's recommendations, the Coast Guard and other agencies should form a working group to collect reliable data on the number of active fishing vessels. The Coast Guard should also issue regulations or guidance to address questions about the alternative-to-class approach. The agencies generally concurred with the recommendations, but DHS did not concur that the Coast Guard assess vessel accident rates. GAO revised this recomm[...]

GAO-18-275T, Department of Justice: Continued Action Needed To Address Incarceration Challenges and Offenders' Reentry, December 13, 2017

Wed, 13 Dec 2017 12:00:00 -0500

What GAO Found The Department of Justice (DOJ) has fully addressed two of six GAO recommendations related to its incarceration reduction initiatives . In June 2015 and June 2016, GAO reported that to help address challenges associated with incarceration, DOJ had, among other things, taken steps to reduce the prison population by pursuing initiatives to use alternatives to incarceration for low-level nonviolent crimes. GAO made six recommendations to DOJ related to these efforts. As of December 2017, DOJ has implemented two of the six recommendations and has not fully addressed the remaining four. Specifically, to enhance efforts to measure program outcomes, DOJ issued guidance on proper data entry and began tracking data on different types of pretrial diversion programs that allow certain offenders to avoid incarceration if they satisfy program requirements. In addition, as of December 2017, DOJ has taken steps to partially implement GAO's recommendation to address unnecessary delays in reviewing inmates' petitions to commute their sentences. DOJ has not taken action to address recommendations to better assess the results of pretrial diversion programs or another effort to prioritize prosecutions and reform sentencing to eliminate unfair disparities, among other goals. Further, in December 2017, DOJ noted there had been policy changes since GAO made a recommendation related to enhancing measures to monitor prioritizing prosecution and sentencing reform. Although DOJ reported taking some actions to implement GAO's recommendation, these actions did not include establishing measures that incorporate key elements of successful performance measurement systems. DOJ has addressed two of four GAO recommendations related to its reentry programs . As part of its mission to protect public safety, DOJ's Federal Bureau of Prisons (BOP) provides reentry programming that aims to facilitate offenders' successful return to the community and reduce recidivism (a return to prison or criminal behavior).  These reentry efforts include programs offered in BOP facilities as well as contractor-managed residential reentry centers (RRC)—also known as halfway houses—and home confinement services that allow inmates to serve the final months of their sentences in the community.  GAO issued three reports in February 2012, June 2015, and June 2016 and made four recommendations to BOP in this area. As of December 2017, DOJ has implemented two of the four recommendations and has begun to take action to address one of the remaining two. Specifically, to implement one of GAO's recommendations, DOJ established a plan to evaluate the effectiveness of all the 18 reentry programs it offers to inmates in BOP facilities. To implement another GAO recommendation to improve cost management, DOJ began requiring contractors to submit separate prices for RRC beds and home confinement services. As of December 2017, DOJ noted it has taken initial steps to address a recommendation to track outcome data for its RRC and home confinement programs; however, it has not taken action to develop measures to assess the performance of these programs. Why GAO Did This Study BOP's rising costs and offender recidivism present incarceration challenges to both DOJ and the nation. For example, BOP's operating costs have generally increased over time, and in fiscal year 2017 amounted to more than $6.9 billion, or 24 percent of DOJ's total discretionary budget. In addition, from 1980 through 2013, BOP's prison population increased by almost 800 percent, from 24,640 to 219,298. While the prison population began to decline in 2013, DOJ has continued to identify prison crowding as a critical issue. GAO has examined a number of DOJ efforts to slow the growth of the prison population and to reduce recidivism through the use of reentry programs to help offenders successfully return to the community. This statement summarizes fi[...]

GAO-18-206, Climate Change Adaptation: DOD Needs to Better Incorporate Adaptation into Planning and Collaboration at Overseas Installations, November 13, 2017

Wed, 13 Dec 2017 12:00:00 -0500

What GAO Found The expected impacts of weather effects associated with climate change pose operational and budgetary risks to overseas infrastructure according to the Department of Defense (DOD), but DOD does not consistently track the impacts' estimated costs. Operational risks (including interruptions to training, testing, and missions) and budgetary risks (including costs of repairing damages) are linked to these impacts. However, installations inconsistently track these costs because there is no requirement for such tracking. Without a requirement to systematically track such costs, DOD will not have the information it needs to integrate climate-related impact resource considerations into future budgets. Severe Erosion at a Department of Defense (DOD) Munitions Storage Complex in the Pacific DOD surveyed overseas installations on their vulnerability to the operational and budgetary risks of weather effects associated with climate change, but the approach used to gather survey data on the impacts that cause these risks was incomplete and not comprehensive. Specifically, DOD exempted dozens of overseas sites from completing the vulnerability assessment, and did not include key national security sites. As a result, DOD did not obtain information on risks posed by weather effects associated with climate change at many key overseas installations, which is critical for managing such risks at these locations. While the military services have begun to integrate climate change adaptation into installations' plans and project designs, this integration has been limited. For example, only about one-third of the plans that GAO reviewed addressed climate change adaptation. Similarly, projects GAO discussed with DOD officials were rarely designed to include climate change adaptation. This is due to the inconsistent inclusion of climate change adaptation in training and design standards for installation planners and engineers. As a result, planners and engineers do not have the information needed to ensure that climate change-related risks are addressed in installation plans and project designs. DOD collaborates with host nations at both the national and installation level, but cost sharing agreements and other collaboration efforts generally do not include climate change adaptation. Without more fully including adaptation into its agreements with host nations, DOD may miss opportunities to increase the resilience of host-nation-built infrastructure at overseas installations to risks posed by the weather effects associated with climate change. Why GAO Did This Study According to DOD, climate change will have serious implications on the ability to maintain infrastructure and ensure military readiness. DOD has identified risks posed by climate change and begun to integrate adaptation in guidance. GAO was asked to assess DOD's actions to adapt overseas infrastructure to the expected challenges of climate change. GAO examined the extent to which DOD (1) identified operational and budgetary risks posed by weather effects associated with climate change on overseas infrastructure; (2) collected data to effectively manage risks to infrastructure; (3) integrated climate change adaptation into planning and design efforts; and (4) collaborated with host nations on adapting infrastructure and sharing costs. GAO reviewed DOD data and documents on climate change, planning, and cost-sharing and visited or contacted a nongeneralizable sample of 45 overseas installations reporting climate change impacts. What GAO Recommends GAO is making six recommendations, including that DOD require overseas installations to systematically track costs associated with climate impacts; re-administer its vulnerability assessment survey to include all relevant sites; integrate climate change adaptation into relevant standards; and include climate change adaptation in host-nation ag[...]

GAO-18-29, Personnel Security Clearances: Additional Actions Needed to Ensure Quality, Address Timeliness, and Reduce Investigation Backlog, December 12, 2017

Tue, 12 Dec 2017 12:00:00 -0500

What GAO Found Executive branch agencies have made progress reforming the security clearance process, but long-standing key initiatives remain incomplete. Progress includes the issuance of common federal adjudicative guidelines and updated strategic documents to help sustain the reform effort. However, agencies face challenges in implementing certain aspects of the 2012 Federal Investigative Standards—criteria for conducting background investigations—including establishing a continuous evaluation program, and the issuance of a reciprocity policy to guide agencies in honoring previously granted clearances by other agencies remains incomplete. Executive branch agencies have taken recent steps to prioritize over 50 reform initiatives to help focus agency efforts and facilitate their completion. In addition, while agencies have taken steps to establish government-wide performance measures for the quality of investigations, neither the Director of National Intelligence (DNI) nor the Security, Suitability, and Credentialing Performance Accountability Council (PAC) have set a milestone for their completion. Without establishing such a milestone, completion may be further delayed and agencies will not have a schedule against which they can track progress or to which they are accountable. The number of executive branch agencies meeting established timeliness objectives for initial security clearances decreased from fiscal years 2012 through 2016, and reporting has been limited. For example, 59 percent of the executive branch agencies reviewed by GAO reported meeting investigation and adjudication timeliness objectives for initial top secret clearances in fiscal year 2012, compared with 10 percent in fiscal year 2016. The Intelligence Reform and Terrorism Prevention Act of 2004 (IRTPA) required the executive branch to submit an annual report, through 2011, to appropriate congressional committees on, among other things, the time required to conduct investigations, adjudicate cases, and grant clearances. Since the requirement ended, reporting has been limited to a portion of the intelligence community. Without comprehensive reporting, Congress will not be able to monitor agencies' progress in meeting timeliness objectives, identify corrections, or effectively execute its oversight role. The National Background Investigations Bureau (NBIB), within the Office of Personnel Management (OPM), has taken steps to improve the background investigation process, but it faces operational challenges in addressing the investigation backlog and increasing investigator capacity. While NBIB has taken positive steps to improve its oversight of background investigation contracts, it faces operational challenges in reducing the investigation backlog—which grew from 190,000 cases in August 2014 to more than 709,000 in September 2017. To increase capacity NBIB has hired additional federal investigators and increased the number of its investigative fieldwork contracts, but it has not developed a plan for reducing the backlog or established goals for increasing total investigator capacity. Without such a plan and goals, the backlog may persist and executive branch agencies will continue to lack the cleared personnel needed to help execute their respective missions. The bill for the National Defense Authorization Act for Fiscal Year 2018, passed by Congress in November 2017, would authorize DOD to conduct its own background investigations. Why GAO Did This Study A high-quality personnel security clearance process is necessary to minimize the risks of unauthorized disclosures of classified information and to help ensure that security-relevant information is identified and assessed. The passage of IRTPA initiated an effort to reform the security clearance process government-wide. This report assesses the extent to which (1) executive branch agencies m[...]

GAO-18-74, Global Positioning System: Better Planning and Coordination Needed to Improve Prospects for Fielding Modernized Capability, December 12, 2017

Tue, 12 Dec 2017 12:00:00 -0500

What GAO Found The Department of Defense's (DOD) acquisition of the next generation Global Positioning System (GPS) satellites, known as GPS III, faces a number of acquisition challenges, but these challenges do not threaten DOD's ability to continue operating the current GPS system, which DOD refers to as the constellation, in the near term. Projections for how long the current constellation will be fully capable have increased by nearly 2 years to June 2021, affording some buffer to offset any additional satellite delays. While the first GPS III satellite has a known parts problem, six follow-on satellites—which do not—are currently scheduled to be launched by June 2021. DOD is relying on a high-risk acquisition schedule to develop a new ground system, known as OCX, to control the broadcast of a modernized military GPS signal. OCX remains at risk for further delays and cost growth. To mitigate continuing delays to the new ground control system, the Air Force has begun a second new program—Military-code (M-code) Early Use—to deliver an interim, limited broadcast encrypted GPS signal for military use by modifying the current ground system. GAO will continue to monitor OCX progress. DOD has made some progress on initial testing of the receiver cards needed to utilize the M-code signal. However, additional development is necessary to make M-code work with over 700 weapon systems that require it. DOD has begun initial planning for some weapon systems, but more remains to be done to understand the cost and schedule needed to transition to M-code receivers. The preliminary estimate for integrating and testing a fraction of the weapon systems that need the receiver cards is over $2.5 billion through fiscal year 2021 with only 28 fully and 72 partially funded (see figure). The cost will increase by billions when as yet unfunded weapon systems are included. Status of Weapon Systems That Have Determined the Cost Needed to Transition to M-code Receivers through Fiscal Year 2021, as of February 2017 The level of development and procurement effort beyond the initial receiver cards is significant and will require close coordination across DOD. After the Air Force develops initial cards, the breadth and complexity of this acquisition will multiply, as the offices responsible for upgrading hundreds of weapon systems begin their own individual efforts to further develop and test the cards. However, DOD does not have an organization assigned to collect test data, lessons learned, and design solutions so that common design solutions are employed to avoid duplication of effort as multiple entities separately mature receiver cards. DOD therefore risks paying to repeatedly find design solutions to solve common problems because each program office is likely to undertake its own uncoordinated development effort. Why GAO Did This Study GPS provides positioning, navigation, and timing data to civilian and military users who depend on this satellite-based system. Since 2000, DOD—led by the Air Force—has been working to modernize GPS and to keep the current system of satellites—known as the GPS constellation—operational, although these efforts have experienced cost and schedule growth. The National Defense Authorization Act for Fiscal Year 2016 contained a provision that the Air Force provide reports to GAO on GPS acquisition programs and that GAO brief the congressional defense committees. GAO briefed the committees in 2016 and 2017. This report summarizes and expands on information presented in those briefings. This report assesses the extent to which DOD faces acquisition challenges (1) sustaining the GPS constellation; (2) developing a new ground control system; and (3) developing and fielding modernized receivers. GAO analyzed GPS quarterly acquisition reports and data, acquisition strate[...]

GAO-18-92, Federal Housing Administration: Capital Requirements and Stress Testing Practices Need Strengthening, November 09, 2017

Mon, 11 Dec 2017 12:00:00 -0500

What GAO Found The Federal Housing Administration's (FHA) budgetary reviews of the Mutual Mortgage Insurance Fund (MMI Fund) assess whether it needs more budget authority to cover expected future costs, and independent actuarial reviews provide complementary information on the fund's finances. FHA uses the actuarial reviews to assess whether the MMI Fund's capital ratio (economic value divided by insurance obligations) meets the 2 percent requirement and how fund components would perform under alternative economic scenarios. While the actuarial assessment does not directly determine the need for additional budget authority, it evaluates the fund's ability to absorb unexpected losses and may prompt changes in FHA policies and insurance premiums. Capital requirements and stress testing practices—tools for managing financial risks—for the MMI Fund are not consistent with all elements of a framework GAO developed to help assess these tools in the context of FHA's single-family mortgage insurance programs. In accordance with the framework, FHA's capital assessments and stress tests are transparent and incorporate a number of relevant risk factors. However, areas of inconsistency include the following: Scenario-based requirement . The statutory capital requirement is intended to help ensure the fund can absorb unexpected losses but is not based on a specified risk threshold, such as an adverse economic scenario the fund would be expected to withstand without requiring supplemental funds. Accountability mechanisms . The capital requirement also does not include accountability mechanisms, such as a set of steps FHA would have to take if the capital ratio again fell below the 2 percent minimum. Fund-wide stress tests . FHA has conducted separate stress tests—projections of financial condition under adverse scenarios—of its forward (traditional) and reverse mortgage (loans against home equity available to seniors) portfolios, but has not performed tests on a fund-wide basis. Stress test objectives . FHA has not defined specific objectives for its stress tests such as determining the amount of additional capital, if any, that would be needed to withstand conditions similar to the last housing crisis. Strengthening FHA's capital requirement and stress testing practices could help ensure that the MMI Fund is able to withstand economic downturns and that stress test results are as relevant and useful as possible for risk management. Including reverse mortgages in the fund's capital assessment has advantages and disadvantages. Unlike for stress tests, FHA jointly assesses forward and reverse mortgages to calculate a combined capital ratio. Subjecting the reverse mortgage portfolio to capital assessment has made its financial condition more transparent. But, the portfolio's sensitivity to changes in economic assumptions makes the combined ratio more unpredictable. Alternative approaches also pose trade-offs. For example, a separate reverse mortgage capital requirement may help ensure the financial transparency of both portfolios, but requiring FHA to hold more capital to account for the volatility of the reverse mortgage portfolio could compel FHA to raise insurance premiums or lower borrowing limits. Why GAO Did This Study FHA insures private lenders against losses from defaults on single-family mortgages. According to independent actuarial reviews, in fiscal years 2009–2014, FHA's MMI Fund (which insures $1.2 trillion in single-family traditional and reverse mortgages) did not meet its statutory 2 percent capital requirement. Also, a budgetary review determined that the fund required $1.69 billion in supplemental funds in fiscal year 2013. GAO was asked to examine issues concerning the MMI Fund's capital requirement and actuarial reviews. T[...]

GAO-18-64, Financial Services Industry: Trends in Management Representation of Minorities and Women and Diversity Practices, 2007-2015, November 08, 2017

Fri, 08 Dec 2017 12:00:00 -0500

What GAO Found Overall representation of minorities in first-, mid-, and senior-level management positions in the financial services industry increased from about 17 percent to 21 percent from 2007 through 2015. However, as shown in the figure below representation varied by race/ethnicity group and management level. Specifically, representation of African-Americans at various management levels decreased while representation of other minorities increased during this period. Overall representation of women was generally unchanged during this period. Representation of women among first- and mid-level managers remained around 48 percent and senior-level managers remained about 29 percent from 2007 through 2015. Representation of Specific Races/Ethnicities in Various Management Levels in the Financial Services Industry, 2007 and 2015 Note: The “Other” category includes Native Hawaiian or Pacific Islander, Native American or Alaska Native, and “two or more races.” Potential employees for the financial services industry, including those that could become managers, come from external and internal pools. For example, the external pool includes those with undergraduate or graduate degrees, such as a Master of Business Administration. In 2015, about 33 percent of the external pool included minorities and around 60 percent were women. The internal talent pool for potential managers in financial services includes those already in professional positions. In 2015, nearly 28 percent of professional positions in financial services were held by minorities and just over 51 percent were held by women. Research, financial services firm representatives, and financial industry stakeholders described challenges to recruiting and retaining members of racial/ethnic minority groups and women and practices that could help address these challenges, including recruiting from a wider variety of schools. Firm representatives said that it is important for firms to assess firm-level data on diversity and inclusiveness. However, firm representatives and other stakeholders differed in their views on whether firm-level diversity data should be made public. For example, one stakeholder stated that sharing diversity data publicly would create incentives for improvement. However, a firm representative said that for firms that are not diverse, making employee diversity data public could make improvement of workforce diversity more difficult for them. Why GAO Did This Study The U.S. workforce force has become increasingly diverse and is projected to become even more diverse in the coming decades. As a result, many private sector organizations have recognized the importance of recruiting and retaining minorities and women for key positions to improve their business or organizational performance and help them better meet the needs of a diverse customer base. The financial services industry is a major source of employment in the United States and affects the economic well-being of its customers. However, questions remain about diversity in the financial services industry, which provides services that help families build wealth and are essential to economic growth. GAO was asked to analyze diversity trends in the financial services industry, particularly in management positions. This report examines (1) trends in management-level diversity in the financial services industry from 2007 through 2015, (2) trends in diversity among potential talent pools, and (3) challenges financial services firms identified in trying to increase workforce diversity and practices firms used to address them. GAO analyzed data from the Equal Employment Opportunity Commission (EEOC) and the Department of Education. The most recent available data were from 2015. GAO also reviewed studies on [...]

GAO-18-128, European Reassurance Initiative: DOD Needs to Prioritize Posture Initiatives and Plan for and Report their Future Cost, December 08, 2017

Fri, 08 Dec 2017 12:00:00 -0500

What GAO Found Since 2014, the Department of Defense (DOD) has expanded the European Reassurance Initiative's (ERI) objectives, increased its funding, and planned enhancements to European posture. DOD expanded ERI's objectives from the short-term reassurance of allies and partners to include deterring Russian aggression in the long term and developing the capacity to field a credible combined force should deterrence fail. With respect to funding, DOD will have requested approximately $4.5 billion for ERI's posture enhancements through the end of fiscal year 2017 (about $3.2 billion for fiscal year 2017 alone), and in July 2016 EUCOM identified funding needs for future posture initiatives. The expansion of ERI's objectives has contributed to DOD's enhancing its posture in Europe. Specifically, DOD has increased the size and duration of Army combat unit deployments, planned to preposition Army equipment in Eastern Europe, added new enduring locations (e.g., locations that DOD expects to access and use to support U.S. security interests for the foreseeable future), improved infrastructure, and negotiated new agreements with European nations. As of April 2017, DOD was considering further force enhancements under ERI as part of the department's ERI budget request. DOD also was reviewing whether new enduring locations to support ERI were needed and was considering other improvements to existing infrastructure. DOD's process for planning ERI has not established priorities among posture initiatives funded under ERI relative to those in its base budget, nor estimated long-term sustainment costs for some posture initiatives funded under ERI, nor communicated future costs to Congress. ERI is being planned using a separate process from DOD's established processes and is funded from DOD's overseas contingency operations (OCO) appropriations. GAO found several weaknesses: Lack of prioritization: DOD establishes priorities among ERI posture initiatives but has not evaluated them against base budget initiatives using its posture management process. As a result, DOD lacks an understanding of the relative importance of ERI initiatives and may be investing in projects that it will not continue should OCO funding become unavailable. Lack of sustainment costs: EUCOM and the military services have not fully estimated the long-term costs to sustain equipment and construction funded under ERI. Based on DOD's approach for calculating rough order sustainment costs, GAO determined that these costs could be substantial. DOD officials said that GAO correctly applied DOD's approach for estimating sustainment costs, but noted that actual costs may be lower, because the military services may not fully fund sustainment. In the absence of comprehensive estimates, DOD has been limited in its ability to assess affordability and plan for future costs. Not communicating future costs: DOD limits Congress's visibility into the resources needed to implement ERI and achieve its objectives because it does not include future costs in its ERI budget request. This is a public version of a classified report issued in August 2017. Information on specific posture planning, guidance, and budget estimates that DOD deemed to be classified have been omitted from this report. Why GAO Did This Study In response to Russia's annexation of Crimea in March 2014, the President announced the ERI, to reassure allies in Europe of U.S. commitment to their security. This initiative has been funded using OCO appropriations, which Congress provides in addition to DOD's base budget appropriations. The Joint Explanatory Statement accompanying the Continuing Appropriations and Military Construction, Veterans Affairs, and Related Agencies Appropriations Act, 2017,[...]

GAO-18-12, Workplace Safety and Health: Better Outreach, Collaboration, and Information Needed to Help Protect Workers at Meat and Poultry Plants, November 09, 2017

Thu, 07 Dec 2017 12:00:00 -0500

What GAO Found The Department of Labor's Occupational Safety and Health Administration (OSHA) increased its annual inspections of the meat and poultry industry from 177 in 2005 to 244 in 2016. OSHA officials told GAO that this increase was related to several new enforcement programs focusing on the poultry industry, as well as new reporting requirements that prompt additional inspections. However, OSHA faces challenges identifying and addressing worker safety concerns because workers may be reluctant to contact OSHA for fear of employer retaliation, although employers are prohibited from doing so by federal law. If workers are afraid to share concerns, OSHA may not be able to identify or address conditions that endanger them. In particular, OSHA may not be aware of the scope of problems workers could face gaining timely access to bathrooms. When asked by GAO, workers in five selected states cited bathroom access as a concern and said they fear speaking up at work, where OSHA inspectors typically interview them. Taking additional steps to encourage workers to disclose sensitive concerns and gathering additional information to determine the scope of bathroom access issues could enable OSHA to better identify worker safety and health concerns. OSHA's and the Department of Agriculture's Food Safety and Inspection Service's (FSIS) main vehicle for collaboration on worker safety is their 1994 memorandum of understanding (MOU), but efforts to implement and evaluate the MOU have been limited. The MOU outlines plans for collaboration, such as referrals of plant hazards to OSHA by FSIS inspectors, training of FSIS staff, and information sharing. OSHA and FSIS have taken some steps to implement the policies and procedures outlined in the MOU. However, GAO found issues with the MOU's implementation in these three areas, hampering achievement of the MOU's goals. For example, according to FSIS officials, FSIS inspectors may be reluctant to make referrals to OSHA about hazards in plants because they fear it could trigger an OSHA inspection of FSIS. Further, the agencies have not evaluated the implementation of the MOU. Evaluating the implementation of the MOU and making any needed changes would help ensure the goals of the MOU are met and further protect the safety and health of both plant workers and FSIS inspectors. Gaps in federal efforts create challenges to protecting workers from certain chemical hazards. For example, depending on a chemical's intended use, it may not undergo a federal review of the risks it poses to worker safety and health before it is used in a plant. FSIS collects information on how to protect its inspectors from new chemicals, but it does not have a process to share this information with OSHA or plants, among others, so that plant workers can be similarly protected. By FSIS establishing a process to regularly share the worker safety information it collects, the federal government will be better positioned to use existing resources to support the safety and health of plant workers and FSIS inspectors. Why GAO Did This Study Meat and poultry slaughter and processing is one of the most hazardous industries in the United States. GAO was asked to review federal efforts to help ensure meat and poultry worker safety and health. This report (1) describes the efforts OSHA has made to help ensure worker safety and assesses any challenges to these efforts, (2) examines how OSHA and FSIS have collaborated to ensure worker safety, and (3) assesses factors that may affect OSHA and FSIS efforts to protect workers from chemical hazards. GAO analyzed OSHA inspection data from 2005—when GAO last reported on this issue—through 2016. GAO also interviewed OSHA staff in headquarters and six[...]

GAO-18-267T, Veterans Affairs Information Technology: Historical Perspective on Health System Modernization Contracts and Update on Efforts to Address Key FITARA-Related Areas, December 07, 2017

Thu, 07 Dec 2017 12:00:00 -0500

What GAO Found For nearly two decades, the Department of Veterans Affairs (VA) has undertaken multiple efforts to modernize its health information system—the Veterans Health Information Systems and Technology Architecture (known as VistA). Two of VA's most recent efforts included the Integrated Electronic Health Record (iEHR) program, a joint program with the Department of Defense (DOD) intended to replace separate systems used by VA and DOD with a single system; and the VistA Evolution program, which was to modernize VistA with additional capabilities and a better interface for all users. VA has relied extensively on assistance from contractors for these efforts. VA obligated over $1.1 billion for contracts with 138 contractors during fiscal years 2011 through 2016 for iEHR and VistA Evolution. Contract data showed that the 15 key contractors that worked on both programs accounted for $741 million of the funding obligated for system development, project management, and operations and maintenance to support the two programs (see figure). VA recently announced that it intends to change its VistA modernization approach and acquire the same electronic health record system that DOD is implementing. Funding Obligated to Key VistA Modernization Contractors for 2011-2016 With respect to key FITARA-related areas, the department has reported progress on consolidating and optimizing its data centers, although this progress has fallen short of targets set by the Office of Management and Budget. VA has also reported $23.61 million in data center-related cost savings, yet does not expect to realize further savings from additional closures. In addition, VA's Chief Information Officer (CIO) certified the use of adequate incremental development for 10 of the department's major IT investments; however, VA has not yet updated its policy and process for CIO certification as GAO recommended. Finally, VA has issued a software licensing policy and has generated an inventory of its software licenses to inform future investment decisions. Why GAO Did This Study The use of IT is crucial to helping VA effectively serve the nation's veterans and, each year, the department spends billions of dollars on its information systems and assets. However, VA has faced challenges spanning a number of critical initiatives related to modernizing its major systems. To improve all major federal agencies' acquisitions and hold them accountable for reducing duplication and achieving cost savings, in December 2014 Congress enacted federal IT acquisition reform legislation (commonly referred to as the Federal Information Technology Acquisition Reform Act, or FITARA). GAO was asked to summarize its previous and ongoing work regarding VA's history of efforts to modernize VistA, including past use of contractors, and the department's recent effort to acquire a commercial electronic health record system to replace VistA. GAO was also asked to provide an update on VA's progress in key FITARA-related areas, including (1) data center consolidation and optimization, (2) incremental system development practices, and (3) software license management. VA generally agreed with the information upon which this statement is based. What GAO Recommends GAO has made multiple recommendations to VA aimed at improving the department's IT management. VA has generally agreed with the recommendations and begun taking responsive actions. For more information, contact David A. Powner at (202) 512-9286 or

GAO-18-274T, Veterans Affairs Contracting: Improvements in Buying Medical and Surgical Supplies Could Yield Cost Savings and Efficiency, December 07, 2017

Thu, 07 Dec 2017 12:00:00 -0500

What GAO Found The Department of Veterans Affairs (VA) established the Medical Surgical Prime Vendor-Next Generation (MSPV-NG) program to provide an efficient, cost-effective way for its facilities to order supplies, but its initial implementation did not have an overarching strategy, stable leadership, and workforce capacity that could have facilitated medical center buy-in for the change. VA also developed requirements for a broad range of MSPV-NG items with limited clinical input. Further, starting in June 2015, VA planned to award competitive contracts, but instead, 79 percent of the items available for purchase under MSPV-NG were added through non-competitive agreements. (See figure). VA's Use of Non-Competitive Agreements Spiked Late in 2016 As a result, the program did not meet the needs of medical centers, and usage remained below VA's 40 percent target. (See figure.) Utilization of Medical Surgical Prime Vendor-Next Generation (MSPV-NG) Program at Six Selected Medical Centers (May 2017) VA has taken steps to address some deficiencies and is developing a new approach to the program. However, VA will likely continue to face challenges in meeting its goals until it fully addresses these existing shortcomings. Why GAO Did This Study VA spends hundreds of millions of dollars annually on medical supplies to meet the health care needs of about 7 million veterans. To provide a more efficient, cost-effective way for its medical centers to order supplies, the VA established the MSPV-NG program. The program's goals include involving clinicians in requirements development, leveraging buying power when making competitive awards, and consolidating supplies used across medical centers. VA began developing requirements in early 2015 and launched the program in December 2016. This testimony summarizes key information contained in GAO's November 2017 report, GAO-18-34. Specifically, it addresses the extent to which VA's implementation of MSPV-NG has been effective in meeting program goals. GAO analyzed VA's requirements development and contracting processes, and identified key supply chain practices cited by four leading hospital networks. GAO also met with contracting and clinical officials at six medical centers, selected based on high dollar contract obligations in fiscal years 2014-2016 and geographic representation. What GAO Recommends GAO made 10 recommendations in its November 2017 report, including that VA develop an overarching strategy, expand clinician input in requirements development, and establish a plan for awarding future competitive contracts. VA agreed with GAO's recommendations. For more information, contact Shelby S. Oakley at (202) 512-4841 or

GAO-18-255T, Office of Financial Research: Observations on GAO Access to Information on Programs and Activities, December 07, 2017

Thu, 07 Dec 2017 12:00:00 -0500

GAO Views GAO has broad statutory authority to audit and evaluate agency transactions, programs, and activities, as well as a broad statutory right of access to agency records. Auditing standards require that analysts and financial auditors promptly obtain sufficient, relevant evidence to provide a reasonable basis for any related findings and conclusions. Therefore, prompt access to all records and other relevant information is needed for the effective and efficient performance of GAO's work. GAO has promulgated protocols describing how it will interact with the agencies it audits. Among other things, GAO expects that agencies will promptly comply with requests for all categories of needed information. GAO also expects to receive full and timely access to agency officials who have stewardship over the requested records and to agency employees responsible for the programs, issues, and other factors covered by such records. During the course of its review of the Office of Financial Research (OFR), GAO experienced repeated problems with gaining access to both people and documents. Many meetings took months to schedule, some were canceled with short notice, and responses to requests for documentation and other information were delayed. GAO made repeated attempts to obtain required documentation and to schedule interviews with agency officials. These attempts included frequent follow-up emails and phone calls, the imposition of deadlines for document delivery that were either not complied with or resulted in production of some but not all required documents, and a discussion between GAO Counsel and the Chief Counsel of OFR regarding the agency's continuing delays. Despite these extensive efforts, GAO experienced significant delays in getting access to officials and agency documents. Whistleblower allegations raised additional concerns about the quality of information that OFR provided GAO. As GAO discussed with House Committee on Financial Services staff, in June 2016 GAO was contacted by an anonymous whistleblower who alleged that OFR had manipulated the information it provided. GAO subsequently learned that the Department of the Treasury's Office of Inspector General (Treasury OIG) was conducting an investigation of similar allegations from whistleblowers. Because of concerns about the quality of OFR's information and the fact that the Treasury OIG was conducting an investigation, GAO decided to terminate the engagement consistent with GAO protocols and practices. However, GAO agreed with Committee staff that, following the completion of the Treasury OIG's investigation, GAO would be in a better position to initiate a new review of OFR. Why GAO Prepared This Statement In September 2014, the House Committee on Financial Services requested that GAO review OFR, an office within the Department of the Treasury. Among other things, GAO was asked to assess the agency's usefulness to regulators and Congress in assessing systemic risk in the financial system and any delays or set-backs in its major undertakings. GAO subsequently initiated a review of OFR in January 2015. However, during the course of its review, GAO encountered substantial delays in obtaining access to agency officials and information. Separately, whistleblower allegations and an ongoing Treasury OIG investigation led GAO to terminate the engagement. This statement discusses (1) GAO's audit standards and protocols regarding access to agency information, (2) issues GAO encountered in accessing information at OFR, and (3) GAO's decision to terminate the engagement without issuing a product. For more information, contact Lawrance L. Evans, Jr., at (2[...]

GAO-18-284T, Homeland Security: DHS's Chemical, Biological, Radiological, and Nuclear Program Consolidation Efforts, December 07, 2017

Thu, 07 Dec 2017 12:00:00 -0500

What GAO Found GAO's prior work has shown that the Department of Homeland Security (DHS) should complete, document, and make available analyses of key questions related to its chemical, biological, radiological, nuclear, and explosives (CBRNE) consolidation proposal. In August 2016, we reported that several key factors were not included when DHS evaluated its organizational consolidation of CBRNE functions. For example, DHS did not fully assess and document potential problems that could result from consolidation or include a comparison of benefits and costs. Further, DHS conducted limited external stakeholder outreach, thus the proposal may not sufficiently account for stakeholder concerns. Attention to these key areas, identified from GAO's analysis of previous organizational consolidations, would help provide DHS, Congress, and other stakeholders, such as DHS components with assurance that important aspects of effective organizational changes are addressed as part of the agency's CBRNE reorganization decision-making process. GAO previously recommended that DHS complete, document, and make available analyses of key questions related to its consolidation proposal, including: (1) what problems, if any, consolidation may create; (2) a comparison of the benefits and costs the consolidation may entail; and (3) a broader range of external stakeholder input including a discussion of how it was obtained and considered. DHS did not concur, asserting that the recommendation did not acknowledge the extent to which these questions were discussed both internally within DHS and externally with Congress and that DHS's decision to consolidate CBRNE functions had already been made which would make additional analysis redundant. GAO closed this recommendation as not implemented. While GAO has not fully assessed DHS's most recent reorganization plans, GAO continues to believe that documenting information and analyses used to assess the benefits and limitations of its consolidation plan would assist DHS in fully demonstrating how its proposal will lead to an integrated, high-performance organization. GAO's prior work found that key mergers and organizational transformation practices could further benefit DHS in its proposed CBRNE consolidation. GAO reported in July 2003 on key practices and implementation steps for mergers and organizational transformations that range from ensuring top leadership drives the transformation to involving employees in the implementation process to obtain their ideas and gain their ownership for the transformation. In August 2016, GAO recommended that DHS use key mergers and organizational transformation practices identified in GAO's previous work to help ensure that lessons learned from other reorganizations are considered during the consolidation effort. DHS concurred with the recommendation and stated in its October 2017 consolidation notice to Congress that it will consult the practices during consolidation implementation. GAO will monitor DHS's implementation of the key practices which will help to ensure that lessons learned from other organizations are considered during the consolidation effort. Why GAO Did This Study Chemical, biological, radiological, nuclear, and explosive weapons, also known as weapons of mass destruction (WMD), have the potential to kill thousands of people in a single incident. In 2013 Congress directed DHS to review its WMD programs, including the consolidation of CBRNE mission functions. DHS recently notified Congress that consolidation would begin in December 2017. This testimony is based on GAO findings from an August 2016 report on (1[...]

GAO-18-131, Electricity Markets: Four Regions Use Capacity Markets to Help Ensure Adequate Resources, but FERC Has Not Fully Assessed Their Performance, December 07, 2017

Thu, 07 Dec 2017 12:00:00 -0500

What GAO Found In four regions of the United States, the Federal Energy Regulatory Commission (FERC) has approved capacity markets. These markets are generally designed to provide an additional financial incentive to build and retain enough power plants to meet electricity needs, beyond incentives provided through other electricity markets. However, these four capacity markets have differences. For example, two obtain commitments from plant owners 3 years before electricity is needed, while two obtain commitments closer to when electricity is needed. Available information on the level of resource adequacy—the availability of adequate power plants and other resources to meet customers' electricity needs—and related costs in regions with and without capacity markets is not comprehensive or consistent. For example, available data show that regions with capacity markets spent over $51 billion from 2013 through 2016 for commitments from power plant owners that their plants would be available to provide electricity. However, these payments may not reflect the full cost of resource adequacy in these regions, and data on the other costs were not available. Moreover, consistent data on historical trends in resource adequacy and related costs are not available for regions without capacity markets, though forward-looking projections based on the latest available data indicate that most of the country is expected to have adequate resources through 2026. FERC collects some useful information in regions with and without capacity markets, but GAO identified problems with data quality, such as inconsistent data. According to federal standards for internal control, agencies should use quality information to achieve their objectives. By improving data quality, FERC's and Congress' ability to understand and oversee the capacity markets could be enhanced. FERC, with assistance from grid operators and others, conducts oversight of capacity markets to, among other things, detect potential misconduct by market participants. However, FERC has not fully assessed the overall performance of capacity markets. In particular, FERC has not established performance goals for capacity markets, measured progress against those goals, or used performance information to make changes to capacity markets as needed. GAO's prior work has found that federal agencies can use performance information to improve results. Additional performance goals could be useful, based on GAO's review of FERC and other documents. For example, in 2013, in an internal examination of one region's capacity market, FERC staff identified five desirable characteristics—for example, whether power plants and other resources receiving capacity payments were available when needed—against which FERC conducted a one-time assessment. This represents one example of performance goals that FERC could develop to measure capacity market performance, but FERC has not conducted this analysis for other regions with capacity markets nor updated this analysis. Capacity markets have faced performance problems in the past, with three regions raising concerns since 2014 that the design of their markets was not sufficient to ensure that there were adequate resources to meet customer demand in their regions. By more fully assessing performance, FERC may increase opportunities to identify and address potential performance problems and to share effective approaches across capacity markets. This may help ensure customers do not pay more than necessary for resource adequacy. Why GAO Did This Study Electricity grid operators, who operate [...]

GAO-18-277T, NASA: Preliminary Observations on the Management of Space Telescopes, December 06, 2017

Wed, 06 Dec 2017 12:00:00 -0500

What GAO Found The National Aeronautics and Space Administration's (NASA) current portfolio of major space telescopes includes three projects that vary in cost, complexity, and phase of the acquisition life cycle. Table: Current Phase, Cost, and Schedule Status of National Aeronautics and Space Administration's (NASA) Major Space Telescope Projects Project Phase Preliminary Cost Estimate (dollars in millions) Preliminary Schedule Wide-Field Infrared Survey Telescope Formulation (early phase) 3,200-3,800 2024-2026   Current Cost Estimate (dollars in millions) Change from Baseline (dollars in millions) Target launch date Change from baseline (months) Transiting Exoplanet Survey Satellite Implementation (building, launching, and operating) 336.7 -41.7a March 2018 -3 James Webb Space Telescope Implementation (building, launching, and operating) 8,825.4 3,861.8 March-June 2019 57-60 Source: GAO analysis of National Aeronautics and Space Administration data. | GAO-18-277T aThe dollar change reflects a decrease of $26.7 million after launch vehicle selection in 2014 due to the reduction in planned costs and a decision by NASA in August 2017 to reallocate $15 million of the project's headquarters-held reserves to the Wide-Field Infrared Survey Telescope project. GAO's ongoing work indicates that these projects are each making progress in line with their phase of the acquisition cycle but also face some challenges. For example, the current launch date for the James Webb Space Telescope (JWST) project reflects a 57-60-month delay from the project's original schedule. GAO's preliminary observations indicate this project still has significant integration and testing to complete, with very little schedule reserve remaining to account for delays. Therefore, additional delays beyond the delay of up to 8 months recently announced are likely, and funding available under the $8 billion Congressional cost cap for formulation and development may be inadequate. There are a number of lessons learned from its acquisitions that NASA could consider to increase the likelihood of successful outcomes for its telescope projects, as well as for its larger portfolio of projects, such as its human spaceflight projects. For example, twice in the history of the JWST program, independent reviews found that the program was not holding adequate cost and schedule reserves. GAO has found that NASA has not applied this lesson learned to all of its large projects, and similar outcomes to JWST have started to emerge. For example, NASA did not incorporate this lesson with its human spaceflight programs. In July 2016 and April 2017, GAO found that these programs were holding inadequate levels of cost and schedule reserves to cover unexpected cost increases or delays. In April 2017, GAO recommended that NASA reassess the date of the programs' first test flight. NASA concurred and, in November 2017, announced a launch delay of up to 19 months. Why GAO Did This Study Acquisition management has been a long-standing challenge at NASA, although GAO has reported on improvements the agency has made in recent years. Three space telescope projects are the key enablers for NASA to achieve its astro[...]

GAO-18-118, Large Bank Supervision: Improved Implementation of Federal Reserve Policies Could Help Mitigate Threats to Independence, November 06, 2017

Wed, 06 Dec 2017 12:00:00 -0500

What GAO Found The Board of Governors of the Federal Reserve System (Board) has not finalized and implemented its enterprise risk management (ERM) framework, and as a result, it may have limited ability to manage risks across the Large Institution Supervisory Coordinating Committee (LISCC) program. One such risk is regulatory capture, a condition that exists when a regulator acts in service of private interests, such as the interests of the regulated industry, at the expense of the public interest. GAO has previously found that regulators should be independent of inappropriate influence, including undue influence from the industry they are regulating. LISCC is a supervisory program developed by the Board to enhance the oversight of large, complex financial institutions. LISCC takes a cross-cutting approach to supervision, drawing staff from across the Federal Reserve System including the Board and four Federal Reserve Banks, and risks of regulatory capture span various aspects of the LISCC program. To help the Board manage its diverse risks, the Board has recognized the advantages of implementing an ERM, which the Office of Management and Budget (OMB) encourages all federal agencies to do. The Board began to develop an ERM framework in 2017, but it has not yet developed some of OMB's recommended key elements, such as risk identification and assessment. Completing and implementing the ERM framework should position the Board to better manage regulatory capture risks across the LISCC program. The LISCC program has other policies to mitigate threats to independence for supervisory staff. For example, under the LISCC program, four Reserve Banks supervise the largest financial institutions with oversight from the Board, which increases the transparency and accountability of supervisory decisions and helps to ensure those decisions are free of inappropriate influence. In addition, the Federal Reserve has mechanisms for Reserve Bank staff to communicate their views directly to Board officials. However, GAO found weaknesses in some internal controls related to guidance and monitoring mechanisms. These limit the Board's assurance that policies are being implemented consistently across the LISCC program. Because of these weaknesses, the four Reserve Banks may not be mitigating regulatory capture risks and threats to supervisory independence as effectively or consistently as possible. The Board and the four Reserve Banks have also implemented various conflict-of-interest and other ethics policies for LISCC examiners and other types of supervisory employees. While these policies are not explicitly designed to address regulatory capture, Federal Reserve officials said they use them in part for this purpose. However, GAO found weaknesses in the Federal Reserve's implementation of these policies. For example, the Federal Reserve officials said that they have policies to help mitigate threats to independence posed by the revolving door—that is, the movement of employees between the financial industry and the Federal Reserve—but they do not systematically collect employment data needed to implement these policies effectively. Without addressing this and other weaknesses, the Federal Reserve may be limited in its ability to use its ethics policies to mitigate regulatory capture. Why GAO Did This Study The Board of Governors created LISCC in 2010, in the wake of the financial crisis of 2007–2009, to strengthen supervision of the largest U.S. financial institutions that pose the greatest risk to the economy. Howeve[...]

GAO-18-88, Medicare and Medicaid: CMS Needs to Fully Align Its Antifraud Efforts with the Fraud Risk Framework, December 05, 2017

Tue, 05 Dec 2017 12:00:00 -0500

What GAO Found The approach that the Centers for Medicare & Medicaid Services (CMS) has taken for managing fraud risks across its four principal programs—Medicare, Medicaid, the Children's Health Insurance Program (CHIP), and the health-insurance marketplaces—is incorporated into its broader program-integrity approach. According to CMS officials, this broader program-integrity approach can help the agency develop control activities to address multiple sources of improper payments, including fraud. As the figure below shows, CMS views fraud as part of a spectrum of actions that may result in improper payments. Centers for Medicare & Medicaid Services (CMS) Description of How the Agency Addresses the Spectrum of Fraud, Waste, and Abuse CMS's efforts managing fraud risks in Medicare and Medicaid partially align with GAO's 2015 A Framework for Managing Fraud Risks in Federal Programs (Fraud Risk Framework). This framework describes leading practices in four components: commit , assess , design and implement , and evaluate and adapt . CMS has shown commitment to combating fraud in part by establishing a dedicated entity—the Center for Program Integrity—to lead antifraud efforts. Furthermore, CMS is offering and requiring antifraud training for stakeholder groups such as providers, beneficiaries, and health-insurance plans. However, CMS does not require fraud-awareness training on a regular basis for employees, a practice that the framework identifies as a way agencies can help create a culture of integrity and compliance. Regarding the assess and design and implement components, CMS has taken steps to identify fraud risks, such as by designating specific provider types as high risk and developing associated control activities. However, it has not conducted a fraud risk assessment for Medicare or Medicaid, and has not designed and implemented a risk-based antifraud strategy. A fraud risk assessment allows managers to fully consider fraud risks to their programs, analyze their likelihood and impact, and prioritize risks. Managers can then design and implement a strategy with specific control activities to mitigate these fraud risks, as well as an appropriate evaluation approach consistent with the evaluate and adapt component. By developing a fraud risk assessment and using that assessment to create an antifraud strategy and evaluation approach, CMS could better ensure that it is addressing the full portfolio of risks and strategically targeting the most-significant fraud risks facing Medicare and Medicaid. Why GAO Did This Study CMS, an agency within the Department of Health and Human Services (HHS), provides health coverage for over 145 million Americans through its four principal programs, with annual outlays of about $1.1 trillion. GAO has designated the two largest programs, Medicare and Medicaid, as high risk partly due to their vulnerability to fraud, waste, and abuse. In fiscal year 2016, improper payment estimates for these programs totaled about $95 billion. GAO's Fraud Risk Framework and the subsequent enactment of the Fraud Reduction and Data Analytics Act of 2015 have called attention to the importance of federal agencies' antifraud efforts. This report examines (1) CMS's approach for managing fraud risks across its four principal programs, and (2) how CMS's efforts managing fraud risks in Medicare and Medicaid align with the Fraud Risk Framework. GAO reviewed laws and regulations and HHS and CMS documents, such as program-integ[...]

GAO-18-4, Voters with Disabilities: Observations on Polling Place Accessibility and Related Federal Guidance [Reissued on December 4, 2017], October 03, 2017

Mon, 04 Dec 2017 12:00:00 -0500

What GAO Found GAO examined a nongeneralizable sample of 178 polling places during early in-person voting and on Election Day 2016. At these polling places, GAO examined a number of features outside and inside the voting area. Outside the voting area, GAO was able to examine features at all 178 polling places and found that 60 percent (107) had one or more potential impediments. The most common were steep ramps located outside buildings, lack of signs indicating accessible paths, and poor parking or path surfaces (see figure).   Of the 178 polling places, GAO was able to fully examine voting stations inside the voting area at 137. Of these 137 polling places, 65 percent (89) had a voting station with an accessible voting system that could impede the casting of a private and independent vote. For example, some voting stations were not set up to accommodate people using wheelchairs, which might have required someone else to help them vote. GAO was not able to fully examine voting stations at 41 polling places due to voting area restrictions. Most states that completed GAO's survey reported taking actions during the 2016 general election to facilitate voting access for voters with disabilities, including having accessibility requirements, providing election worker training, and conducting oversight. For example, 44 states reported having accessibility standards for polling places, and 48 states reported conducting at least one oversight activity, such as analyzing accessibility complaints. The Department of Justice's (DOJ) guidance does not clearly specify the extent to which certain federal accessibility requirements are applicable to early in-person voting, an increasingly common form of voting at a designated location before Election Day. In this context, GAO found some variation in the extent to which accessible voting systems are provided for early in-person voting. GAO found one county without accessible voting systems at five of its early in-person voting locations. Also, officials from four states said that these systems are not required by their state laws for in-person voting before Election Day. Given that voting has evolved since federal accessibility requirements were enacted, studying the implementation of these requirements in the context of early in-person voting could position DOJ to determine the extent to which any changes to its guidance are necessary. Why GAO Did This Study Federal law generally requires all polling places for federal elections to be accessible to all voters, and each polling place to have a system for casting ballots that is accessible for people with disabilities. GAO's work during the 2000 and 2008 general elections showed mixed results on polling place accessibility. GAO was asked to examine voting access for people with disabilities during the 2016 general election. This report examines in-person voting before and on Election Day 2016. GAO examined (1) the extent to which selected polling places had features that might impede voting access; (2) actions states took to facilitate voting access; and (3) guidance DOJ provided on the extent to which federal accessibility requirements apply to early in-person voting. GAO examined features at a nongeneralizable sample of 178 polling places, identified by selecting 21 counties in 12 states and the District of Columbia (DC). Counties were selected for variation in population size, geographic location, and type of election administration. GAO did not as[...]

GAO-18-34, Veterans Affairs Contracting: Improvements in Buying Medical and Surgical Supplies Could Yield Cost Savings and Efficiency, November 09, 2017

Mon, 04 Dec 2017 12:00:00 -0500

What GAO Found The Department of Veterans Affairs (VA) established the Medical Surgical Prime Vendor-Next Generation (MSPV-NG) program to provide an efficient, cost-effective way for its facilities to order supplies, but its initial implementation was flawed, lacked an overarching strategy, stable leadership, and sufficient workforce that could have facilitated medical center buy-in. VA developed requirements for a broad range of MSPV-NG items with limited clinical input. As a result, the program has not met medical centers' needs, and usage remains far below VA's 40 percent target. VA also established cost avoidance as a goal for MSPV-NG, but currently only has a metric in place to measure broader supply chain cost avoidance, not savings specific to MSPV-NG. Also, starting in June 2015, VA planned to award competitive contracts for MSPV-NG items, but instead, 79 percent were added using non-competitive agreements. (See figure.) This was done primarily to meet VA's December 2016 deadline to establish the formulary, the list of items available for purchase through MSPV-NG. Total Number of Items by Award Type on MSPV-NG Formulary, Jan. 2017 The roll-out of MSPV-NG ran counter to practices of leading hospitals that GAO spoke with, which highlighted key steps, such as prioritizing supply categories and obtaining continuing clinician input to guide decision-making. VA has taken steps to address some deficiencies identified in the first phase of implementation and is considering a new approach for this program. However, until VA addresses the existing shortcomings in the MSPV-NG program, such as the lack of medical center buy-in, it will face challenges in meeting its goals. Medical centers often rely on emergency procurements to obtain routine goods and services—some of which could be made available at lower cost via MSPV-NG. Sixteen of the 18 contracts in GAO's sample were not competed, which puts the government at risk of paying more. For instance, one medical center procured medical gas on an emergency basis through consecutive non-competitive contracts over a 3-year period. VA policy clearly defines emergency actions; however, inefficiencies in planning, funding, and communication at the medical centers contributed to emergency procurements, resulting in the contracting officers quickly awarding contracts with no competition. Why GAO Did This Study VA medical centers spend hundreds of millions of dollars annually on medical supplies and services. In December 2016, VA instituted a major change in how it purchases medical supplies—the MSPV-NG program—to gain effectiveness and efficiencies. GAO was asked to examine VA's transition to the MSPV-NG program and its use of emergency procurements. This report assesses the extent to which (1) VA's implementation of MSPV-NG was effective in meeting program goals, and (2) VA awards contracts on an emergency basis. GAO analyzed VA's MSPV-NG requirements development and contracting processes, and identified key supply chain practices cited by four leading hospital networks. GAO also reviewed a non-generalizable sample of 18 contracts designated in VA's database as emergency procurements with high dollar values; and met with contracting, logistics, and clinical officials at 6 medical centers, selected based on high dollar contract obligations in fiscal years 2014-2016 and geographic representation. What GAO Recommends GAO is making 10 recommendations, including that VA[...]

GAO-18-53, Housing Choice Voucher Program: Limited Indications of Potential Fraud against Participants Identified, December 04, 2017

Mon, 04 Dec 2017 12:00:00 -0500

What GAO Found Public Housing Agencies (PHA) have reported various types of fraud schemes against Housing Choice Voucher (HCV) participants, including older adults, but were aware of limited instances of such schemes. Similarly, GAO identified few potential indicators of these schemes in online covert testing of rental ads and websites. According to GAO's analysis of fraud alerts and complaint data, the type of fraud participants may encounter—such as waiting-list, rental, and side-payment fraud—depends on where they are in the HCV process and whether they are applicants, voucher holders, or landlords, as shown in the figure below. For example, side-payment fraud involves agreements—mutual or compelled—in which the voucher holder pays additional rent or other payments to the landlord for benefits, for example to secure a rental or avoid eviction. Types of Reported Fraud in the Housing Choice Voucher Process According to GAO's survey of PHAs representing approximately 1.9 million households, PHAs reported few incidents of the various fraud types, although side-payment fraud, a program violation, was noted most frequently. Specifically, GAO estimates that while 41 percent of PHAs were aware of instances of side-payment fraud in the prior year, most reported 2 to 5 incidents in the prior year. In addition, 3 to 10 percent of PHAs were aware of instances of the other types of fraud GAO identified. GAO's online covert testing also found few indicators of potential fraud. For example, some websites requested payment for information about the HCV application process, but none explicitly offered to do something prohibited by program rules, such as placing someone on a waiting list for a fee. The Department of Housing and Urban Development's (HUD) and PHAs' antifraud regulations, guidance, and information largely focus on efforts to protect the HCV program. For example, PHAs are required by HUD to inform families of program-related fraud and abuse, including the prohibition against side payments. In addition, GAO found that several PHAs voluntarily provide targeted messages to participants about fraud schemes by outside parties. Through industry associations, PHAs have mechanisms through which they share best practices that could include these and other issues. Why GAO Did This Study With the goal of providing safe, decent, affordable housing, HUD provides rental assistance to low-income households through its HCV program, administered locally by approximately 2,200 PHAs around the country. In fiscal year 2016, the HCV program received approximately $20 billion in funding and provided rental assistance to approximately 2.4 million households. Local demand in the program may exceed voucher supply, and individuals may wait years before receiving a voucher. After receiving a voucher, participants have a limited amount of time to secure a rental. Accordingly, PHAs have issued alerts about criminals targeting program participants with fraud schemes, such as by claiming to offer admission to the program for a fee. This report describes (1) the types of reported fraud schemes against HCV participants, including older adults, PHAs' awareness of such schemes and their frequency, and indicators of such schemes online; and (2) HUD's and PHAs' antifraud regulations, guidance, and information related to fraud risks affecting program participants. GAO reviewed online fraud alerts and consumer complai[...]

GAO-18-121, Federal Student Aid: Better Program Management and Oversight of Postsecondary Schools Needed to Protect Student Information [Reissued on December 15, 2017], November 27, 2017

Mon, 04 Dec 2017 12:00:00 -0500

What GAO Found The Department of Education's (Education) Office of Federal Student Aid (FSA) and postsecondary schools collect, use, and share a variety of information—including personally identifiable information (PII)—from students, their families, and others to support the administration of student aid. This information is used to make decisions about the eligibility of schools to participate in federal student aid programs, the processing of student applications and students' eligibility to receive various types of aid, the disbursement of funds to aid recipients, and the repayment of loans and recovery of defaulted loan payments. Education and FSA have established policies and procedures for managing and protecting student information that are aligned with applicable federal laws. However, shortcomings in key areas hinder the effectiveness of FSA's procedures. For example, FSA established procedures and tools for managing and organizing records and scheduling them for disposition, but did not fully establish such procedures for electronic data, ensure that employees regularly received training, or conduct a required internal assessment of its records management program. Regarding the protection of student information, FSA did not consistently analyze privacy risks for its electronic information systems, and policies and procedures for protecting information systems were not always up to date. FSA's shortcomings are consistent with the Education Inspector General's identification of persistent weaknesses in the department's information security policies, procedures, and controls. Recommendations to address these weaknesses are not yet fully implemented. Until FSA implements the recommendations, it increases the risk of improper disclosure of information contained in student aid records. Based on a GAO survey of schools, the majority (an estimated 95 percent of all schools) of those participating in the federal student aid process reported having policies in place, including records retention and disposition policies. However, schools varied in the methods they used to store records, the retention periods for paper and electronic records, and the disposition control activities they employed (such as the authorization and approval process for destroying records). FSA oversees schools' participation in student aid programs, but this oversight does not extend to schools' information security programs. To oversee schools' compliance, FSA conducts reviews of schools' student aid programs, based on a number of risk factors. However, it has not identified implementation of information security programs as a factor to consider in selecting schools for program reviews, even though schools have reported serious data breaches. GAO's review of selected schools' policies found that schools did not always include required information security elements, such as assessing risks or designing and implementing safeguards. Moreover, Education's implementing regulations do not require schools to demonstrate their ability to protect student information as a condition for participating in federal aid programs. This raises concerns about FSA's oversight and how effectively schools are protecting student aid information. Until Education ensures that information security requirements are considered in program reviews of schools, FSA will lack assurance that schools have effective inform[...]