Dedicated Leadership Needed to Address Limited Progress in Most High-Risk Areas (GAO-21-384T)
Summary
GAO testimony, GAO-21-384T, before the Senate Committee on Homeland Security and Governmental Affairs on March 2, 2021, the statement of Comptroller General Gene L. Dodaro on GAO's high-risk series. It explains that since the early 1990s the high-risk program has focused attention on government operations with greater vulnerabilities to fraud, waste, abuse and mismanagement. It states that the 2021 High-Risk List, released that day, includes 36 areas, that progress in most areas has been limited, and that overall ratings for 20 high-risk areas remain unchanged from 2019. The title calls for dedicated leadership to address the limited progress.
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United States Government Accountability Office
Testimony
Before the Committee on Homeland
Security and Governmental Affairs,
U.S. Senate
HIGH-RISK SERIES
For Release on Delivery
Expected at 2:30 p.m. ET
Tuesday, March 2, 2021
Dedicated Leadership
Needed to Address
Limited Progress in Most
High-Risk Areas
Statement of Gene L. Dodaro
Comptroller General of the United States
GAO-21-384T
Letter Letter
Chairman Peters, Ranking Member Portman, and Members of the
Committee:
Since the early 1990s, our high-risk program has focused attention on
government operations with greater vulnerabilities to fraud, waste, abuse,
and mismanagement, or that are in need of transformation to address
economy, efficiency, or effectiveness challenges. This effort, supported
by this committee and the House Committee on Oversight and Reform,
has brought much needed attention to problems impeding effective
government and costing billions of dollars each year.
Our 2021 High-Risk List, which is being released today, includes 36
areas, listed in the appendix. 1 In most areas, progress since our last high-
risk update has been limited. Overall ratings for 20 high-risk areas remain
unchanged from 2019. In five areas, the ratings actually declined, while in
seven areas they improved. 2
Where we have seen progress on high-risk issues, it has typically
involved three essential elements: congressional action or oversight,
commitment from top leaders at agencies, and active involvement by the
Office of Management and Budget (OMB).
Congress continues to take important actions such as recently passing
six laws that are helping to make progress on high-risk issues. However,
further attention by Congress can make a big difference. For example,
legislation is likely to be necessary to help address 14 of the 36 areas on
the High-Risk List.
Dedicated agency leadership is essential to address the limited progress
in most high-risk areas. Only 12 areas have met the leadership
commitment criterion to address high-risk issues. Also, agency leaders
need to do more to address the hundreds of open recommendations we
have made to reduce the government’s high-risk challenges.
OMB’s leadership role is especially important because many high-risk
areas are government-wide or involve multiple agencies. Also, there are
1High Risk Series: Dedicated Leadership Needed to Address Limited Progress in Most
High-Risk Areas, GAO-21-119SP (Washington, D.C.: March 2, 2021).
2We use five criteria to assess progress in addressing high-risk areas: (1) leadership
commitment, (2) agency capacity, (3) an action plan, (4) monitoring efforts, and (5)
demonstrated progress. We rate each high-risk area’s progress on the five criteria as met,
partially met, or not met.
Page 1 GAO-21-384T
resource investments associated with correcting a number of the high-risk
problems. In recent years, OMB has largely discontinued the regular
meetings it held with the OMB Deputy Director for Management, top
agency leaders, and GAO to discuss each of the high-risk areas. When
these meetings were held, they led to greater progress on high-risk
issues.
Where progress has been made in addressing high-risk areas, the results
have been substantial. For example, over the past 15 years (fiscal year
2006 through fiscal year 2020), financial benefits totaled nearly $575
billion, or an average of about $38 billion per year. Since our last update
in 2019, we recorded approximately $225 billion in financial benefits. 3
One area—Department of Defense (DOD) Support Infrastructure
Changes to the 2021 Management—improved to the point of removal from the list.
High Risk List
Two new areas—National Efforts to Prevent, Respond to, and Recover
from Drug Misuse and Emergency Loans for Small Businesses—are
being added to the list.
We are removing the DOD Support Infrastructure Management high-risk
DOD Support area. DOD has addressed the remaining actions and outcomes from our
Infrastructure 2019 High-Risk Report. For example, under an OMB program to restrict
the growth of excess or underutilized federal properties, DOD contributed
Removed from the to reductions of 68 percent of total government-wide office and
List warehouse space and 75 percent of other government-wide properties.
DOD also reduced base support costs by implementing our October 2018
recommendations to monitor and evaluate use of intergovernmental
support agreements between military installations and local governments.
In addition, DOD more efficiently utilized installation space through its
reduction of leases, reportedly saving millions of dollars. For example, the
Army reduced its leased footprint in the National Capital Region from a
peak of 3.9 million square feet in 2011 to roughly 1 million square feet as
of September 2019.
3Financial benefits are based on actions taken in response to our work, such as reducing
government expenditures, increasing revenues, or reallocating funds to other areas.
Page 2 GAO-21-384T
Additionally, congressional oversight was vital to progress. For example,
Congress:
• established a rigorous oversight structure for implementation of Base
Realignment and Closure (BRAC) rounds, including GAO’s role as an
independent and objective observer of the BRAC process 4;
• regularly directed us to review and report on infrastructure issues,
such as the condition of facilities; real property data, including on
utilization; and excess capacity 5;
• asked DOD to testify annually on its infrastructure budget and policy,
focusing on its priorities and risks related to sustainment and
modernization needs; and
• periodically required DOD to report on infrastructure issues such as its
actions to improve real property data. 6
While we are removing DOD Support Infrastructure from the High-Risk
List, we will continue to examine DOD’s efforts, including improving the
completeness and accuracy of its real property data, as part of our high-
risk areas on Managing Federal Real Property and DOD Financial
Management.
National Efforts to Prevent, Respond to, and Recover from Drug Misuse
National Efforts to is being added to the High-Risk List. National rates of drug misuse have
Prevent, Respond to, been increasing, and drug misuse has resulted in significant loss of life
and harmful effects to society and the economy.
and Recover from
Drug Misuse Added Almost 800,000 people died of drug overdoses in the United States from
2002 through 2019. During this time period, rates of drug misuse
to the High-Risk List increased, and the rates of drug overdose deaths have also generally
increased nationally from the early 2000s through 2019, as shown in
figure 1.
In December 2020, the Centers for Disease Control and Prevention
(CDC) reported, based on its analysis of National Center for Health
410 U.S.C. § 2687.
5See H. Rep. 114-102, at 353 (2015); 113-102, at 324–325 (2013); H. Rep. 111-491, at
506–507 (2010).
6See William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year
2021, Pub. L. No. 116-283, div. A, title XXVIII, § 2861, 134 Stat. 3388, 4356–4357 (2021);
National Defense Authorization Act for Fiscal Year 2020, Pub. L. No. 116-92, § 2823(a),
133 Stat. 1198, 1889 (2019).
Page 3 GAO-21-384T
Statistics provisional data available at the time, that the largest recorded
increase of drug overdose deaths occurred during the 12-month period
ending in May 2020. In particular, CDC reported a concerning
acceleration of the increase in drug overdose deaths from March 2020 to
May 2020, coinciding with the implementation of widespread mitigation
measures for the Coronavirus Disease 2019 (COVID-19) pandemic.
Provisional data from the CDC indicate that about 80,000 people died
from a drug overdose in the 12-month period ending in May 2020.
Figure 1: Rate of Drug Overdose Deaths in the United States, 2002—2019
Note: CDC adjusts drug overdose death rates for age and the population size to control for the
changing age distribution and size of the population, and thereby allows comparisons of rates over
time. Data are not yet available for all of 2020.
We identified several challenges in the federal government’s response,
such as a need for greater leadership and coordination of the national
effort, strategic guidance that fulfills all statutory requirements, and more
effective implementation and monitoring. Since fiscal year 2015, we have
made over 110 recommendations to National Drug Control Program
agencies, including the Office of National Drug Control Policy, related to
preventing, responding to, and recovering from drug misuse. Agencies
have generally agreed with our recommendations, but as of December
2020, more than 65 of our recommendations had not yet been
implemented.
Page 4 GAO-21-384T
Emergency Loans for Small Businesses is also being added to the list.
Emergency Loans for The Small Business Administration (SBA) has provided hundreds of
Small Businesses billions of dollars’ worth of loans and advances to help small businesses
cope with adverse economic impacts created by COVID-19. While loans
Added to the High- have greatly aided many small businesses, evidence of significant
Risk List program integrity risks need much greater oversight and management
attention. Specifically, SBA lacks finalized plans to oversee its Paycheck
Protection Program (PPP) and Economic Injury Disaster Loan (EIDL)
program, despite risk of hundreds of millions of dollars in improper
payments.
In December 2020, SBA’s independent financial statement auditor issued
a disclaimer of opinion on SBA’s consolidated financial statements as of
and for the year ended September 30, 2020, meaning the auditor was
unable to express an opinion due to insufficient evidence. As the basis for
the disclaimer, the auditor stated that SBA was unable to provide
adequate documentation to support a significant number of transactions
and account balances related to PPP and EIDL due to inadequate
processes and controls.
In its work, the auditor noted that PPP loans and EIDLs went to potentially
ineligible borrowers. For example, the auditor noted that there were over
2 million approved PPP loans (with an approximate total value of $189
billion) flagged by SBA that were potentially not in conformance with the
CARES Act and related legislation. The auditor also identified over 6,000
disbursed EIDLs (with a total value of over $212 million) that were issued
to potentially ineligible borrowers.
In January 2021, we reported that between May and October 2020,
financial institutions filed more than 21,000 and 20,000 suspicious activity
reports related to PPP and EIDL, respectively, with the Financial Crimes
Enforcement Network (FinCEN). According to FinCEN officials, these
financial transactions involved questionable activity and potential fraud
committed by PPP and EIDL loan recipients, such as the rapid movement
of funds, and possible identity theft and forgeries.
According to SBA’s Office of Inspector General (OIG), as of October 1,
2020, it had received tens of thousands of complaints of potential
wrongdoing on its hotline and initiated hundreds of investigations into
complaints of fraud associated with SBA loan programs, including PPP. In
October 2020, the OIG reported that its preliminary review revealed
strong indicators of widespread potential fraud in the EIDL program.
Page 5 GAO-21-384T
According to the report, the OIG and other law enforcement agencies had
seized over $450 million from over 15,000 fraudulent EIDL loans.
The Department of Justice (DOJ) has publicly announced charges in
more than 90 cases related to PPP and EIDL. The charges—filed across
the U.S. and investigated by a range of law enforcement agencies—
include allegations of making false statements and engaging in identity
theft, wire and bank fraud, and money laundering. As of November 2020,
DOJ estimated that the defendants in the PPP-related cases sought more
than $260 million from PPP.
Since June 2020, we have made three recommendations to strengthen
the management and integrity of emergency loans and advances. For
example, we recommended that SBA develop and implement plans to
identify and respond to risks in the PPP to ensure program integrity,
achieve program effectiveness, and address potential fraud.
Consistent with our recommendation, the Consolidated Appropriations
Act, 2021 requires SBA to submit to the Senate and House Small
Business Committees an audit plan that details the policies and
procedures for conducting forgiveness reviews and audits of PPP loans
within 45 days of enactment and to provide monthly updates thereafter. 7
Several long-standing high-risk areas would especially benefit from more
High Risk Areas focused attention.
Needing Significant
The Ensuring the Cybersecurity of the Nation high-risk area’s
Attention •
leadership commitment rating declined from met in 2019 to partially
met in 2021. This regression is due to the absence of (1) important
characteristics of a national strategy in the White House’s September
2018 National Cyber Strategy and the National Security Council’s
accompanying June 2019 Implementation Plan, and (2) a statutorily-
established central leader for coordinating the White House’s
approach to managing the nation’s cybersecurity. 8 Such a position
was created in January 2021 but has not yet been filled.
In September 2020, we reported that the strategy and implementation
plan address some, but not all, of the desirable characteristics of
national strategies. For example, although the implementation plan
7Pub. L. No. 116-260, div. N, § 307(a)(3), 134 Stat. 1182, 1998 (2020). The audit plan is
to also detail the metrics that SBA will use to determine which loans will be audited.
8Pub. L. No. 116-283, div. A, title XVII, § 1752, 134 Stat. at 4144–4149.
Page 6 GAO-21-384T
detailed 191 activities that federal entities are to undertake, the plan
did not include goals and timelines for 46 of the activities, identify the
resources needed to execute 160 activities, or specify a process for
monitoring agency progress.
Since 2010, we have made more than 3,300 recommendations to
agencies aimed at addressing cybersecurity challenges facing the
government. More than 750 of the recommendations had not been
fully implemented as of December 2020.
• The Strategic Human Capital Management high-risk area’s leadership
commitment rating declined from a met rating in 2019 to partially met
in 2021. This regression is due, in part, to the absence of Senate-
confirmed leadership at the Office of Personnel Management (OPM)
for 18 of the last 24 months, as of January 2021. As a result, the
federal government has lacked the attention from the highest levels
needed to address long-standing and emerging skills gaps.
Insufficient number of staff, inadequate workforce planning, and a lack
of training in critical skills are contributing to our designating 22 of the
35 other areas as high risk.
• The federal government currently invests more than $90 billion
annually in information technology (IT), and the Improving the
Management of IT Acquisitions and Operations high-risk area
continues to face significant challenges. These challenges include (1)
21 of 24 major federal agencies not modifying their practices to fully
address the role of their chief information officers; (2) agencies not
documenting modernization plans or not including key elements
identified in best practices in their plans; (3) agencies needing to take
further action to reduce duplicative IT contracts; (4) the General
Services Administration (GSA) and OMB having fewer funds available
than anticipated to award to new projects for replacing aging IT
systems; and (5) agencies not implementing our remaining 400 open
recommendations related to this high-risk area.
• The federal government has not made measurable progress to reduce
its fiscal exposure to climate change; therefore, the Limiting the
Federal Government’s Fiscal Exposure by Better Managing Climate
Change Risks high-risk area also warrants significant attention.
Among other things, the federal government needs to (1) address
structural issues in flood and crop insurance programs that send
inaccurate price signals to policyholders; (2) safeguard assets, as one
of the nation’s largest property holders, including structures, land, and
military installations domestically and abroad;(3) reform disaster
assistance to build in up front resilience and mitigation strategies; and
(4) lead the formation of a national climate strategy that prioritizes
Page 7 GAO-21-384T
working on infrastructure and investment projects with state and local
governments, the private sector, and nonprofit organizations.
• The federal government’s environmental liability will likely continue to
grow even as billions are spent each year on cleanup efforts. The
Department of Energy (DOE) and DOD are responsible for the largest
shares of the U.S. government’s environmental liability. For fiscal year
2020, DOE’s estimated environmental liability was $512 billion and
DOD’s was $75 billion. The U.S. Government’s Environmental Liability
high-risk area warrants significant attention as it has received not met
ratings for capacity, action plan, monitoring, and demonstrated
progress in both the 2019 and 2021 High-Risk Reports. For example,
DOE’s Office of Environmental Management has not developed a
strategic plan that incorporates the principles of risk-informed
decision-making.
• The U.S. Postal Service (USPS) Financial Viability high-risk area
declined from a partially met rating in 2019 to not met in 2021 for
capacity. The decline was due to the continued imbalance between
USPS’s revenues and expenses. USPS’s labor compensation costs
continued to increase by about $1 billion a year while total mail
volume continued to decline from 146 billion pieces in fiscal year 2018
to 129 billion pieces in fiscal year 2020. These factors combined to
result in a total net loss of $18 billion for fiscal years 2019 and 2020,
as compared to a total net loss of about $6.7 billion for fiscal years
2017 and 2018.
This imbalance further limits USPS’ ability to address its long-standing
capital needs, such as new vehicles and equipment to handle
packages more efficiently. USPS also did not make $63.2 billion in
required payments to fund postal retiree health and pension benefits
through fiscal year 2020. USPS reported that it did not make these
payments so that it could cover operating costs and make necessary
capital investments. We found in August 2018 that based on OPM
projections, the fund supporting postal retiree health benefits would be
depleted in fiscal year 2030 if USPS continues to miss all payments.
• The Transforming EPA’s Process for Assessing and Controlling Toxic
Chemicals high-risk area declined from a partially met rating in 2019
to not met in 2021 for monitoring. Additionally, three criteria in each of
the two segments declined to a not met rating in 2021. First, the
Integrated Risk Information System (IRIS) Program did not issue a
completed chemical assessment between August 2018 and
December 2020. Second, the Office of Pollution Prevention and
Toxics, which implements the Toxic Substances Control Act (TSCA),
did not complete workforce or workload planning to demonstrate
Page 8 GAO-21-384T
capacity to successfully produce TSCA requirements by statutory
deadlines.
• The Decennial Census high-risk area declined from a met rating in
2019 to partially met in 2021 for leadership commitment. This
regression is because the Department of Commerce requested that
the Census Bureau shorten data collection time frames and response
processing of census data in an effort to meet the apportionment
deadline of December 31, 2020, even though COVID-19 had forced
the Census Bureau to pause field data collection operations for
approximately 3 months. Compressing the time frame to collect data
and process responses has increased the risk of compromised data
quality.
The Census Bureau found data anomalies during the processing of
census responses that have delayed the delivery of apportionment
numbers, which as of February 2021 had not been delivered to the
President.
In addition to specific areas that we have designated as high risk, we
Emerging Issues have ongoing and planned work on two other major issues—the
Requiring Close Department of Health and Human Services’ (HHS) leadership and
coordination of public health emergencies and the management of the
Attention federal prison system—that may lead us to designate the issues as high
risk when that work is completed.
The current pandemic has underscored concerns that we have previously
raised and the recommendations we have made regarding HHS’s
leadership and coordination of public health emergencies.
Through our previous work on public health emergencies and the current
pandemic, we have made a number of recommendations, many of which
are based on the following four principles of an effective response: (1)
establish clear goals and define roles and responsibilities among those
responding to a crisis; (2) create mechanisms early on for accountability
and transparency; (3) provide clear and consistent communication; and
(4) collect and analyze adequate information to inform future decisions.
We have ongoing and planned work to continue to assess HHS’s
leadership and coordination of the COVID-19 response, as well as its
leadership and coordination of biodefense preparedness efforts, state and
local preparedness efforts, and the medical product supply chain and
Strategic National Stockpile, among other work.
Page 9 GAO-21-384T
Our work on the management of the federal prison system since 2010
includes 19 prison-related reports and 39 recommendations. Sixteen of
these recommendations have not yet been addressed.
Our work has shown that the Bureau of Prisons’ (BOP) deficiencies can
generally be categorized into three themes: (1) inadequate management
of staff and resources, (2) inadequate planning for new programs or
initiatives that help inmates prepare for a successful return to the
community, including drug treatment programs; and (3) insufficient
monitoring and evaluation of these inmate programs, which has led to
imprudent spending.
Furthermore, BOP has experienced significant leadership instability, with
the turnover of five different acting or permanent directors from 2016
through 2020. We also have found that many of BOP’s program
evaluations are almost 20 years old, and that outdated or limited program
evaluation has hampered BOP’s ability to gauge the benefits of its efforts.
Among our ongoing and planned studies reviewing BOP’s management
and operations, our work to assess BOP’s implementation of the First
Step Act of 2018 will be critical to determining BOPs progress in
enhancing inmate programs and reducing recidivism.
Substantial efforts are needed on all high-risk areas to achieve greater
progress and to address regress in some areas since the last high-risk
update in 2019. Tens of billions of dollars in additional benefits and
substantial improvements to the health, well-being, and security of the
nation would be achieved by fully addressing high-risk issues. Sustained
congressional attention, agency leadership, and OMB involvement remain
key to success.
Our high-risk program continues to be a top priority at GAO. We will
maintain our emphasis on identifying high-risk issues across government
and on providing recommendations and sustained attention to help
address them, by working with Congress, agency leaders, and OMB.
As a key part of this constructive approach, I plan to reach out to top
leaders as their nominations are confirmed to discuss solutions to
address high-risk issues. I also encourage Congress to actively engage
new leaders about high-risk areas and provide oversight and legislation to
make lasting improvements.
Page 10 GAO-21-384T
This high-risk update is intended to help inform the oversight agenda for
the 117th Congress and to guide efforts of the administration and
agencies to improve government performance and reduce waste and
risks.
Thank you, Chairman Peters, Ranking Member Portman, and Members
of the Committee. This concludes my testimony. I would be pleased to
answer any questions.
For further information on this testimony, please contact Michelle Sager at
(202) 512-6806 or SagerM@gao.gov. Contact points for the individual
high-risk areas are listed in the report and on our high-risk website.
Contact points for our Offices of Congressional Relations and Public
Affairs may be found on the last page of this statement.
Page 11 GAO-21-384T
Appendix: GAO’s 2021 High-Risk List Appendix: GAO’s 2021 High-Risk List
GAO’s 2021 High-Risk List
High-risk area Change since 2019
Strengthening the Foundation for Efficiency and Effectiveness
Strategic Human Capital Management
Managing Federal Real Propertya
Funding the Nation’s Surface Transportation Systemb c n/a
Modernizing the U.S. Financial Regulatory Systemb ●
Resolving the Federal Role in Housing Financeb ●
USPS Financial Viabilityb
Management of Federal Oil and Gas Resourcesa ●
Limiting the Federal Government’s Fiscal Exposure by Better Managing Climate Change Risksb ●
Improving the Management of IT Acquisitions and Operations ●
Improving Federal Management of Programs That Serve Tribes and Their Members ●
Decennial Census
U.S. Government’s Environmental Liabilityb ●
Emergency Loans for Small Businesses (new)c n/a
Transforming DOD Program Management
DOD Weapon Systems Acquisition ●
DOD Financial Management
DOD Business Systems Modernization ●
DOD Approach to Business Transformation ●
Ensuring Public Safety and Security
Government-wide Personnel Security Clearance Processb
Ensuring the Cybersecurity of the Nationb
Strengthening Department of Homeland Security Management Functions ●
Ensuring the Effective Protection of Technologies Critical to U.S. National Security Interests ●
Improving Federal Oversight of Food Safetyb ●
Protecting Public Health through Enhanced Oversight of Medical Products ●
Transforming EPA’s Process for Assessing and Controlling Toxic Chemicals
National Efforts to Prevent, Respond to, and Recover from Drug Misuse (new)c n/a
Managing Federal Contracting More Effectively
VA Acquisition Managementd n/a
DOE’s Contract and Project Management for the National Nuclear Security Administration and Office of
Environmental Management
NASA Acquisition Management
DOD Contract Managementa ●
Assessing the Efficiency and Effectiveness of Tax Law Administration
Enforcement of Tax Lawsb ●
Page 12 GAO-21-384T
Appendix: GAO’s 2021 High-Risk List
High-risk area Change since 2019
Modernizing and Safeguarding Insurance and Benefit Programs
Medicare Program & Improper Paymentse ●
Strengthening Medicaid Program Integrityb ●
Improving and Modernizing Federal Disability Programs ●
Pension Benefit Guaranty Corporation Insurance Programsb c n/a
National Flood Insurance Programb ●
Managing Risks and Improving VA Health Careb
( indicates area progressed on one or more criteria since 2019; indicates area declined on one or more criteria; ● indicates no change; n/a = not
applicable)
Source: GAO. | GAO-21-384T
a
Ratings for a segment within this high-risk area improved sufficiently that the segment was removed.
b
Legislation is likely to be necessary in order to effectively address this high-risk area.
c
Not rated, because this high-risk area is newly added or primarily involves congressional action.
d
Rated for the first time, because this high-risk area was newly added in 2019.
e
Only rated on one segment; we did not rate other elements of the Medicare program.
(104966)
Page 13 GAO-21-384T
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