Office of Management and Budget

Building a 21st Century Government by Cutting Duplication, Fragmentation, and Waste

April 9, 2013

 

Executive Summary

  • The President has made it a priority of his Administration to change the way Washington works, save taxpayer dollars, streamline operations and improve government services, and to that end has waged an aggressive campaign to eliminate duplication and waste.
  • In each of his three previous budgets, the President identified, on average, more than 150 terminations, reductions, and savings, totaling nearly $25 billion each year.
    • The 2012 budget proposed nearly $25 billion in discretionary terminations, reductions, and savings; Congress reduced these programs by $23 billion, 92 percent of the requested reduction.
    • The 2013 budget proposed cuts, consolidations, and savings across the Government totaling more than $24 billion in the upcoming fiscal year, and $520 billion through 2022.
    • The 2014 budget will go even further, proposing 215 cuts, consolidations, and savings proposals, which are projected to save more than $25 billion in 2014. For example, the budget will include proposals to streamline Science, Technology, Engineering, and Math (STEM) programs and training and employment services; and terminate the Preventive Health and Health Services Block Grant (PHHSBG). 
  • On February 16, 2012, the Administration sent Congress the Consolidating and Reforming Government Act of 2012 which would allow the President to put forward proposals to consolidate government and eliminate wasteful duplication and fragmentation, subject to an up-or-down vote by the Congress. This proposal would restore to the President an authority that Presidents had for almost the entire period from 1932 through 1984.
  • On April 9th, GAO released its annual report on fragmentation, duplication, overlap, and other financial benefits.  This report provides updates on actions the Administration and Congress have taken on recommendations in GAO’s two previous reports on the same subject, and offers new recommendations.
    • GAO found that the Executive Branch and Congress, together, have made progress on 104 of the broad areas out of the 131 GAO has identified over the past two years.
    • In terms of the specific recommended actions within these broad areas, the Executive Branch has made progress on over 75 percent of the recommendations, with more than 20 percent fully addressed and at least another 55 percent partially addressed.  The Executive Branch fully addressed more than 50 actions and partially addressed more than 140 actions since 2011.
    • The GAO report also recognizes that there are many areas where additional action by Congress is needed.   GAO found that Congress has fully addressed about 20 percent of the recommendations for Congressional action since early 2011, and made progress on another 11 percent.
    • Of actions GAO recommended for Executive Branch attention which have not yet been addressed, many are in process and require longer-term implementation strategies, which GAO recognizes in its report.
  • The GAO report released today includes a new set of recommendations, which the Administration is just beginning to analyze.
    • Initial review indicates that the Administration is already taking action to coordinate across agencies in many of the areas identified in GAO’s new set of recommendations.
    • The Administration will carefully review the GAO recommendations to identify all opportunities to reduce fragmentation, overlap, and duplication and to achieve other financial benefits.
  • The Administration appreciates GAO’s work in these important areas, and looks forward to continuing to work with GAO, Congress, and others to identify and address opportunities for improved government efficiency. The Administration is strongly committed to reducing fragmentation, overlap, and duplication and pursuing all opportunities to cut waste and achieve other financial benefits. 

 

Administration Efforts to Reduce

Fragmentation, Overlap, and Duplication and Cut Waste

For our country to continue leading in the 21st Century economy, we need a 21st Century Government.  We need a Government that is lean, efficient, and continuously striving to do more with less, ensuring that every taxpayer dollar is used wisely and to the maximum effect.  And we need a Government that is responsive to the needs of its citizens and businesses, and is willing to embrace the rapid pace of technological innovation underway, ensuring that we remain globally competitive. 

Over the years, the Federal Government has become increasingly complex, as agencies have been assigned new missions and duties in their service to the American people.  At times, this has resulted in agencies with duplicative and overlapping responsibilities that have wasted taxpayer resources and made it harder for the public to navigate their Government. 

The Administration has been working to reduce duplication and fragmentation challenges over the last four years.  In June 2011, the President and Vice President launched the Campaign to Cut Waste.  In February 2012, the President submitted a proposal to Congress to reinstate Presidential authority to reorganize Federal agencies to reduce the number of overlapping government programs.  The 2013 Budget proposed cuts, consolidations, and savings across the Government totaling more than $24 billion in the upcoming fiscal year, and $520 billion through 2022, some of which Congress adopted.  The 2013 budget also established the first-ever government-wide Cross Agency Priority Goals, which tackle specific duplication and fragmentation problems.  The President’s 2014 budget goes even further, including 215 cuts, consolidations, and savings proposals, which are projected to save more than $25 billion in 2014.

Administration efforts to address unnecessary and wasteful spending include:

  • Cutting Improper Payments.  Every year, the Federal Government wastes billions of dollars on improper payments to individuals, organizations, and contractors.  These are payments made in the wrong amount, to the wrong person, or for the wrong reason.  When the President took office in 2009, the rate of wasteful government-wide improper payments was on the rise.  Since then, the Administration has taken forceful steps to cut down on improper payments, such as putting in place new measures to increase transparency and accountability, directing agencies to intensify and expand efforts to recover improper payments, establishing a “Do Not Pay” list for agencies to check before making payments, and implementing the landmark Improper Payments Elimination and Recovery Act of 2010 and the Improper Payments Elimination and Recovery Improvement Act of 2012.  The Administration has also moved quickly to deploy cutting-edge forensic technologies to crack down on waste, fraud, and abuse.  As a result of these efforts, the government-wide error rate decreased to 4.35 percent in 2012, having steadily declined from its high-water mark of 5.42 percent in 2009.  In total, over the last three years the government has avoided over $47 billion in improper payments and has recaptured a record $4.4 billion in overpayments to contractors.
  • Reducing Administrative Overhead.  As part of the Administration’s focus on reducing spending and finding efficiencies, in November 2011 the President issued an Executive Order to promote efficient spending that called for agencies to make a 20 percent reduction in their 2013 spending on administrative areas such as travel, advisory contracts, printing, employee IT devices, extraneous promotional items, and transportation.  To identify further savings, in May 2012 the Administration outlined a series of actions for reining in spending and increasing both transparency and oversight of Federal conference and travel activity.  As a result, agencies have reduced travel and conference spending by more than $2 billion thus far.  Overall, agencies have saved nearly $11 billion on administrative activities, which agencies are redirecting to higher priority programs.
  • Saving Billions of Dollars in Contracting.  The Administration has consistently challenged Federal agencies to strengthen their acquisition and contracting practices by eliminating inefficiencies, reducing risk, and buying smarter.  In response, agencies reduced contract spending by over $20 billion in 2012 compared to 2011, marking the largest single-year decrease on record.  This continues a three-year decline in spending from 2009 through 2012 – a dramatic reversal of the unsustainable 12 percent annual contract spending growth rate experienced from 2000 through 2008.

Savings are being achieved by buying less and buying smarter. For example, in FY 2012, agencies spent $7 billion, or 15 percent, less than they did in FY 2010 for management support services. Agencies have also been making more concerted efforts to coordinate the Government’s buying power through strategic sourcing.  Government-wide strategic sourcing of items such as office supplies and domestic shipping services has already saved nearly $200 million since 2010, and agency-level strategic sourcing of goods like IT and medical equipment have saved hundreds of millions more.  

  • Reforming Military Acquisition. The Department of Defense (DOD) has a responsibility to procure weapon systems and critical goods and services needed by the armed forces to successfully execute our national security mission.  The military departments (the Air Force, Army, and Navy) and defense agencies have a portfolio of 84 ongoing weapon system acquisition programs, and DOD contracts account for approximately 70 percent of all Federal procurement.

Through its “Better Buying Power” (BBP) reform, DOD is charting a path to greater productivity in the military acquisition system.  New BBP initiatives address current fiscal realities, including enforcing affordability caps; measuring cost performance; and aligning contractor profitability with acquisition goals.  DOD has also instituted best practices, including applying lessons learned; expanding strategic sourcing; establishing acquisition professional reviews; and instituting peer reviews to ensure effective competition.

  • Using PortfolioStat to Target Duplicative and Low-Value IT Spending.   In FY 2012, the Administration launched PortfolioStat, a new process for agencies to assess the current maturity of their entire IT portfolio, enabling them to identify and eliminate duplicative or low-value technology investments, and adopt intra- and inter-agency IT shared services, where applicable. PortfolioStat also encompasses the Federal Data Center Consolidation Initiative.  PortfolioStat efforts resulted in ambitious, forward-looking plans with the potential to save the Government $2.5 billion over the next three years by consolidating duplicative systems, buying in bulk, and ending or streamlining off-track projects.  In these initial agency assessments of planned savings, agencies focused on key categories of commodity IT spending, specifically purchases of IT assets or services that have become commonplace and that are not highly-customized for specific program support.  The Administration is continuing to execute PortfolioStat in FY2013 to drive continued savings and efficiencies across the federal IT portfolio.
  • Disposing of Excess or Under-Utilized Federal Property.  With over 1.1 million buildings, structures, and land parcels, the Federal Government is the largest property owner in the United States.  Over time, agencies have accumulated more properties than the Government needs to effectively meet its mission.  That is why, from his first days in office, the President has made it a priority to eliminate wasteful spending on Federal real estate.  We have already made significant progress.  In June 2010, the President directed agencies to accelerate efforts to shed unneeded property, reduce operating costs, and adopt more efficient real estate management practices to achieve $8 billion in savings by the end of 2012.  The President’s directive included two parts: $5 billion in savings through the Base Realignment and Closure Commission (BRAC) process, as well as $3 billion in non-BRAC savings.  As of the end of 2012, agencies achieved $5.1 billion in BRAC savings and $3.5 billion in non-BRAC savings, exceeding the President’s goals. 

Building on the lessons learned from this real estate savings initiative, the Administration’s new real property goal will track the square footage baseline from its recent “Freeze the Footprint” guidance, which will limit the growth of the Federal real property inventory even further.  In addition, individual agency co-location, consolidation, and disposal projects will be tracked on Performance.gov.

The Administration also will continue to pursue enactment of the Civilian Property Realignment Act (CPRA), which it first proposed in the 2012 Budget.  Building on the best practices of BRAC, CPRA would create an independent board of experts to identify opportunities to consolidate, reduce, and realign the Federal footprint, as well as expedite the disposal of properties. The proposal utilizes bundled recommendations, a fast-track congressional procedure, streamlined disposal and consolidation authorities, and a revolving fund to provide logistical and financial support to agencies.

The Administration’s continuing efforts to dispose of unneeded Federal property will generate at least $2 billion in net deficit reduction over the next 10 years.

  • Improving Data Sharing Among Grant-Making Components. The Department of Justice (DOJ) grant making agencies are currently conducting a feasibility study to improve information and data sharing among the grant-making components. Using a shared platform among the grant making agencies will allow for greater sharing of information to enhance collaboration and minimize potential duplication at both the program and grant award levels.  Already, the grant-making components have begun efforts to develop a data warehouse which will allow all components to access grant award level data using an organized common structure.  This will enable the assessment of data to identify potential unnecessary duplication of grant funding. Additionally, as a further information sharing effort, the Office of Justice Program’s Chief Information Officer is completing work to provide the Office of Community Oriented Policing Services staff with read-only access to Grants Management System and the Grants Payment Request System.
  • Coordinating Delivery on Cross-Agency Priority Goals.  The Administration is also improving coordination among existing programs by setting specific Cross-Agency Priority (CAP) Goals in areas where multiple programs are working toward a common goal. With the release of the 2013 Budget, the Administration announced 14 CAP Goals on Performance.gov. CAP Goals are set for: exports; entrepreneurship and small businesses; energy efficiency; broadband; science, technology, engineering, math (STEM) education; job training; and veterans. CAP Goals have also been set to improve sustainability, cybersecurity, and other aspects of Federal government operations, including strategic sourcing, improper payments, and information technology management. 

In order to accelerate progress on each goal, a senior White House official has been named as the Goal Leader to guide, coordinate, and assure progress on agency implementation efforts. In addition, the Office of Management and Budget reviews progress on the goals every quarter and follows up, when needed.  Progress updates for each CAP Goal, with performance milestones and indicators, are posted every quarter on Performance.gov.

  • Reducing Unwanted Duplication and Overlap Managing with Outcome-Focused Goals and Measurement Across Programs.  Beyond the Cross-Agency Priority Goals, the Administration has moved aggressively to set goals and measure progress focused on outcomes rather than activities, which is key to reducing fragmentation and unwanted duplication and overlap. In areas as diverse as water quality, veterans’ homelessness, and economic development technical assistance, significant progress is being made measuring, managing, and sharing lessons learned across programs. In addition, the Administration has efforts underway to identify the list of programs contributing to shared goals and relevant information to enable identification of and smarter decisions about unwanted duplication and overlap.
  • Reducing Duplicative or Outdated Congressionally Required Reporting.   Federal agencies annually produce thousands of congressionally-mandated plans and reports, and some that were once useful can become outdated, duplicative, or less useful over time. In 2010 Congress required Federal agencies to identify plans and reports that are outdated or duplicative for possible elimination or consolidation.  Agencies have identified for Congress a list of 376 plans and reports as potentially outdated, duplicative, or otherwise warranting modification.

 

Progress on GAO’s 2011 and 2012 Recommendations to the Executive Branch

The Government Accountability Office (GAO) also has taken an active role in analyzing the structure of the Federal government and recommending areas to reduce duplication and fragmentation. In 2011, GAO began annual reporting on specific opportunities for the Federal government to reduce duplication, overlap, and fragmentation and to pursue other financial opportunities. GAO’s independent analysis is a welcome addition to the effort to make government more effective and efficient and to modernize it for the 21st century. The GAO released a second annual report in 2012, and today, April 9, 2013, released its third annual report.

In total, the first two GAO reports include more than 300 recommended actions, many of which require the coordination of multiple Federal agencies or congressional committees to address.  In almost all areas, fully completing a recommended consolidation or reform takes time – a fact that GAO recognizes. Despite this challenge, the Administration is committed to getting the job done.     

An initial look at the 2013 report GAO released today indicates that it recognizes that significant progress is being made.

  • GAO found that the Executive Branch and Congress, together, have made progress on 104 of the broad areas out of the 131 GAO has identified over the past two years.
  • In terms of the specific recommended actions within these broad areas, the Executive Branch has made progress on over 75 percent of the recommendations, with more than 20 percent fully addressed and at least another 55 percent partially addressed.  The Executive Branch has fully addressed more than 50 actions and partially addressed more than 140 actions since 2011.

Selected accomplishments in areas where GAO previously made recommendations include:

  • Homelessness Programs (area 30, 2011). The U.S. Interagency Council on Homelessness (ICH) is fully addressing the GAO recommendations related to improving interagency collaboration. ICH has provided strong leadership on cross-cutting homeless issues, and has forged substantive links between agencies. For example, ICH is providing policy direction on youth homelessness, and is coordinating a joint pilot effort with the Departments of Housing and Urban Development and Health and Human Services to obtain better data and improve outreach efforts for this population. These and other ICH collaborative efforts are essential to achieving the goals outlined in the Federal Strategic Plan to Prevent and End Homelessness.
  • Financial Literacy (area 34, 2011).  The Federal Financial Literacy and Education Commission (FLEC), led by Treasury, has fully addressed the fragmentation recommendations related to federal financial literacy identified in the GAO report. The Commission has undertaken a number of steps in recent months to better coordinate financial education activities across the federal government and recently launched an exciting new effort to help enhance young American’s financial capability. The Starting Early for Financial Success initiative builds on the experience and resources of Treasury and key federal agencies to help young people have an understanding of financial basics as they begin their careers. The initiative also increases access to proven resources designed to help parents and teachers prepare young people for financial success.
  • Air Force Food Service (area 33, 2012).  Each Major Command has been tasked to have their bases conduct a review of existing food service contracts. The Air Force Personnel Center, Services Directorate now conducts an annual review of contracts as they approach renewal. The GAO reported in February 2012 that Air Force's review of eight installation contracts resulted in renegotiation and savings of over $2.5 million per year.  In addition, all food service contracts were validated during FY 2012, and with additional savings of $2.2 million per year realized. The Air Force will continue to review contracts annually for areas where costs can be reduced.
  • Food Safety (area 1, 2011).  Since its creation in 2009, the President’s Food Safety Working Group continues to make progress towards advancing its core principles of prioritizing prevention, strengthening surveillance and enforcement, and improving response and recovery. Over the years, the President’s Food Safety Working Group has taken substantial steps to coordinate implementation of crosscutting new requirements of the Food Safety Modernization Act and identify areas where greater efficiencies could be achieved.
  • Department of Homeland Security Grants Consolidation (area 26, 2011; area 17, 2012).   The President has proposed to reform the structure of a majority of Federal Emergency Management Agency (FEMA) grants by creating the National Preparedness Grant Program (NPGP) which would focus resources on building and sustaining core capabilities associated with the five mission areas of the National Preparedness Goal. As proposed, NPGP would break down existing program silos and shift the focus away from awarding funds based on State formulas or special interests toward a capability-enhancing regional approach. The new program would not be bound by a formula-based allocation, but would use competition and risk-informed assessments to close the gaps identified in a comprehensive Threat, Hazard, Identification and Risk Analyses (THIRAs), which are the product of a nation-wide needs assessment coordinated by FEMA. Deployable capabilities would be the only allowable expense within the NPGP program. Investment justifications would be assessed by FEMA with significant regional input, with the goal of meeting specific response-level targets nationwide.
  • Economic Development Programs (area 9, 2011).  The Administration continues to make progress in this area. The Administration has advanced two major initiatives aimed at addressing the duplication issues identified in the GAO report, BusinessUSA, the one-stop shop for businesses looking for Federal business assistance, and the proposed government reorganization of trade and economic agencies. BusinessUSA was launched last year and continues to grow. The reorganization was proposed in January 2012. The goal is to improve the effectiveness and cost-efficiency of Federal economic development programs. The proposal is awaiting Congressional action.
  • Support for Entrepreneurs (area 7, 2012). The Administration has taken a number steps to improve progress on the actions identified in the GAO report.
    • The Department of Commerce (DOC), Small Business Administration (SBA), and Department of Agriculture (USDA) are continuing to make progress on improving program evaluation and performance metrics.  All three agencies are part of an OMB/CEA-led interagency working group that is looking at what information is currently collected and what information may need to be collected in the future to track the impact of these technical assistance programs.
    • SBA and DOC are co-leading a “Smarter Data, Smarter Policy” initiative which seeks to identify current data gaps and take actions to address them in the areas of access to capital, women and minority-owned businesses, and job creation and growth.
    • BusinessUSA is also encouraging interagency collaboration on entrepreneurial development assistance programs.  The Administration also proposed in January 2012 a broad reorganization of agencies, including economic development activities in the Departments of Commerce, Agriculture, Health and Human Services, and the Treasury, as well as the Small Business Administration. The goals of this reorganization included improving the effectiveness and cost-efficiency of Federal economic development programs.
    • The Administration is managing a Cross-Agency Priority Goal aimed at improving coordination of federal services to entrepreneurs and small businesses with an emphasis on startups and growing firms as well as underserved markets.
  • Transportation-disadvantaged Persons (area 31, 2011).  The Federal Coordinating Council on Access and Mobility (CCAM), chaired by the Department of Transportation, has made significant progress in the effort to coordinate mobility, employment opportunities, and access to community services for persons who are transportation-disadvantaged.  GAO acknowledges the Council’s accomplishments on the updated inventory of federal programs serving the transportation-disadvantaged posted on the CCAM’s Web site, United We Ride, and the CCAM 2011-2013 strategic plan also posted on the site. The strategic plan encourages the growth of coordinated transportation networks that provide simplified access to health and wellness, jobs, and community services.  These accomplishments notwithstanding, there is still work to be done to fully implement the objectives outlined in the CCAM strategic plan.
  • Employment and Training (area 32, 2011).  As the economy changes, training and employment programs must innovate and adapt to help American workers gain the skills they need to find new jobs and careers. The Administration is exploring opportunities to revisit how the Federal Government funds job training programs that serve overlapping populations. The Administration already has taken steps in this direction through its Budgets. It has proposed a universal displaced worker program to provide those who lose their jobs with a single set of core services, consolidating two more narrowly targeted programs. It has also requested the elimination or consolidation of a few smaller job training programs in the Departments of Labor and Education.  However, the Administration believes any effort to streamline the current system must also improve services; provide easy one-stop access to those services, including for vulnerable populations; reflect employer and regional economic needs; enhance accountability and transparency; and promote continuous innovation and improvement. The Administration is managing a Cross-Agency Priority Goal aimed at improving coordination of federal job training efforts.
  • Teacher Quality (area 33, 2011).  The Administration has made significant progress in its efforts minimize the proliferation of teacher quality programs through its Elementary and Secondary Education Act (ESEA) reauthorization proposal to consolidate 38 narrow-purpose education programs into 11 more flexible results-oriented authorities.  Within the 38 program total, nine of them have the specific objective of improving teacher effectiveness and are consolidated into three more flexible authorities. Congress already has accepted the Administration’s recommendation to end funding for five of the nine programs proposed for consolidation, thus reducing duplication and overlap in teacher quality programs.  The Department of Education has established working groups both internally and with other agencies, and continues to look for ways to coordinate and streamline processes and programs given differing legislative requirements and definitions of similar populations.
  • Employment for People with Disabilities (area 30, 2012).  Since the release of the 2012 GAO report, the Administration has implemented Executive Order 13548 and 13543 and new hires of persons with disabilities rose from 10.3 percent to 14.7 percent.  In total, in FY 2011, the Federal Government hired 18,738 people with disabilities.  There are more people with disabilities in federal service both in numbers and by percentage than at any time in the past 20 years.  In addition, the Social Security Administration continues to enhance its return-to-work services, and recently launched an online report card tool for Ticket to Work providers to assist beneficiaries in selecting a provider that best meets their needs.
  • Undisbursed Balances in Expired Grant Accounts (area 70, 2011).  The OMB Controller issued an alert to agencies regarding this issue in July 2012.  The alert provides agencies with strategies on reducing grant closeout backlog and undisbursed balances in expired grant accounts and directs agencies to take appropriate action to closeout grants in a timely manner.  These actions include:
    • Establish strong program/Chief Financial Officer linkages to determine what timely closeout means for programs and how to achieve it.
    • Focus first on closing out expired grants that are several years past their end dates or have no remaining funds.
    • Establish policy and procedures describing when it is appropriate for the agency to unilaterally closeout grants.
    • Establish annual or semi-annual performance targets for timely grant closeout.
    • Leverage internal control procedures per OMB Circular A-123 to mitigate risk associated with not closing out grants in a timely manner.
    • Monitor closeout activity and track progress in reducing closeout backlog, if any.
  • Enterprise Architecture (area 14, 2011).  The Administration has made major progress in this area and expects to fully address the recommendations identified by GAO when the 2013 agency Enterprise Roadmaps are received in May 2013. The agency Enterprise Roadmap will provide high-level descriptions of the current business and technology architecture across all lines of business, as well as an IT asset inventory and the identification of agency actions to eliminate overlap and duplication as part of the future architecture that will be implemented over the next three to five years.
  • Tax Expenditures (area 17, 2011).  The President’s FY 2013 Budget demonstrated a commitment to reforming tax expenditures by proposing hundreds of billions of dollars of deficit reduction through such reforms.  In the FY 2013 Budget, the proposal to limit itemized deductions and certain other exclusions by itself would save $584 billion over ten years. The proposal to eliminate tax preferences for fossil fuels would save $41 billion over the ten year budget window.
  • Defense language training (area 5, 2012).  The Office of the Under Secretary of Defense for Personnel and Readiness and the Military Services have made significant progress in their efforts to eliminate any unnecessary fragmentation and overlap in training products.  In May 2012, the Defense Language and National Security Education Office (DLNSEO) convened a regional and cultural products action panel with representatives from the Military Services’ language and culture centers and defense agencies to address areas of overlap and duplication in cultural training and education curricula and products.  In November 2012, DLNSEO reported to GAO that the Services have elected not to renew contracts for commercial products, which were duplicative of government-produced language and cultural materials available on the Defense Language Institute website, assessing that these actions have virtually eliminated duplication in language acquisition materials.
  • Cybersecurity Human Capital (area 12, 2012).  The Office of Personnel Mangement (OPM) has worked with federal agencies to identify several areas with cross-agency critical skills gaps.  Chief among them is cybersecurity.  The OPM Director is leading a Cross-Agency Priority Goal to help close this gap, working with sub-goal leaders for each of the mission critical areas, including cybersecurity.  These teams are developing and beginning to implement plans to close this critical skills gap significantly over the next year. 
  • Overseas Administrative Services (area 20, 2012).  The U.S. Agency for International Development (USAID) has worked with Department of State to review progress of all missions’ compliance with consolidation efforts in 15 service areas agreed to in 2007 for collocated missions and 13 service areas agreed to in 2009 for non-collocated missions. Over 98 percent of these services across all the missions are now consolidated or have been granted temporary waivers.  In 2012, USAID joined the International Cooperative Administrative Support Services (ICASS) furniture and appliance pools at every mission effective September 30, 2012.  USAID also agreed for missions to use ICASS operated travel management centers for travel reservations. With the exception of a few locations where new contracts had to be awarded, this has been achieved.  The furniture and appliance pool initiative should save USAID approximately $4 million per year.

Of actions GAO recommended for Executive Branch attention which have not yet been addressed, many require longer-term implementation strategies, which GAO recognizes in its report.

The GAO report also recognizes that there are many areas where additional action by Congress is needed. As has been recognized during Congressional hearings on this topic, some unintentional duplication in government programs has been created by Congress over the course of decades, and Congress must engage as a partner with the Administration to address these challenges.  GAO found that Congress has fully addressed about 20 percent of the recommendations for Congressional action since early 2011, and made progress on another 11 percent. 

 

Administration Progress in Selected Areas Identified in GAO’s 2013 Recommendations

GAO’s 2013 report includes a new set of recommendations not covered in previous GAO reports.  The Administration is still reviewing GAO’s 2013 recommendations, but a preliminary review indicates that the Administration is already taking action in many of the areas identified by GAO.  Ongoing action includes:

  • Exports.  The President established the National Export Initiative as the cornerstone of the President’s plan to double U.S. exports over five years. The Export Promotion Cabinet (EPC), established by Executive Order 13534 in March 2010 to implement the NEI, has already made significant progress. In the September 2010 Report to the President on the National Export Initiative, the EPC and the Trade Promotion Coordinating Committee (TPCC) outlined 70 recommendations for Federal Government action along with a comprehensive set of NEI progress metrics. To improve coordination a CAP Goal has been set in this area.  See additional information on Performance.gov.
  • Veterans Employment and Training.  The White House and the Departments of Defense, Veterans Affair  and Labor formed a task force to design and implement strategies to increase the career readiness of all service members using four key strategies: (1) ensuring service members are fully prepared for separation by bolstering and standardizing the career counseling services  received prior to, during, and post separation with attention to issues such as financial counseling, personal goal-setting, and information sharing and referral and before departure from  service; (2) ensure that veterans and their families have high quality resources necessary to maximize their career potential,  transforming the approach to education, licensing and credentialing opportunities; (3) partnering with public/private industry to employ the unique skills veterans have received through the best military training in the world; and (4) fostering veteran entrepreneurship working closely with the Small Business Administration (SBA) and its resource partners to equip service members with the knowledge, tools, and resources they need to leverage opportunities and become successful entrepreneurs.  To improve coordination a CAP Goal has been set in this area.  See additional information on Performance.gov.
  • Strategic Sourcing.  Executive Branch agencies have been making more concerted efforts to coordinate the Government’s buying power through strategic sourcing.  Government-wide strategic sourcing of items such as office supplies and domestic shipping services has already saved nearly $200 million since 2010, and agency-level strategic sourcing of goods like IT and medical equipment have saved hundreds of millions more.  To improve coordination a CAP Goal has been set in this area.  See additional information on Performance.gov.
  • Cloud Computing. The Administration continues to emphasize its “Cloud First” policy as one of the primary ways that the cost of delivering IT services can be reduced in the future.  Increasing the use of cloud-based infrastructure, platform, and software services will increase agility while lowering operating expenses, especially when shared service delivery methods and strategic sourcing approaches to procurement are tied-in.
  • Catfish Inspections.  The FY 2014 Budget proposes to eliminate the funding requirement in USDA’s Food Safety and Inspection Service (FSIS) appropriations language which requires the agency to devote funding for a new catfish inspection program. Catfish inspection is already conducted by the Food and Drug Administration and the National Marine Fisheries Service. By freeing FSIS of this funding requirement the agency will be better able to focus on its core mission of ensuring the safety of the Nation’s meat and poultry supply.
  • Crop Insurance.  The 2014 Budget includes several legislative proposals to reduce the premium subsidies farmers receive on their crop insurance policies:
    • Reduce the subsidy for producer premiums by 3 percentage points for policies where the Government subsidizes more than 50 percent of the premium (previous proposals reduced these by only 2 percentage points).  The reduced premium levels will still provide a reasonable level of subsidy to the farmer, but not be overly generous, and the safety net will remain intact.  This is expected to save $4.2 billion over 10 years.
    • Reduce premium subsidy by 2 percentage points for revenue coverage that provides protection for upward price movements at harvest time. This proposal de-emphasizes the insuring price protection on the futures markets in favor of insuring expected returns for the actual crop at the time of planting. This is expected to save $3.2 billion over 10 years.
  • International Broadcasting. The Broadcasting Board of Governors (BBG) has made progress toward addressing the GAO’s recommendations.  Regarding the recommendation that the agency ensure that the language service review (LSR) process include systematic consideration of the cost and impact of internal overlap among entity services, BBG has begun work on an on-line information portal that will facilitate this analysis.  This strategic management tool will be designed to integrate information on research, strategy, development, budget, and performance by country, and will allow for more in-depth analysis of overlap.
  • Medicare and Medicaid Program Integrity and Oversight. The Administration has taken a number of steps to improve progress on the actions identified in the GAO report:
    • In 2011, CMS implemented the Fraud Prevention System (FPS), which uses sophisticated algorithms to screen all Medicare fee-for-service claims on a pre-payment basis. As cited in the First Year Report to Congress, the FPS prevented or identified nearly $115.4 million in improper payments, generated leads for 536 new investigations, and augmented information for 511 pre-existing investigations. Enhanced integration of the FPS and the claims processing system in the second year of operation will allow CMS to automatically deny certain improper claims, such as those that are medically unbelievable.
    • In September 2012, CMS implemented a Prior Authorization demonstration for certain power mobility devices in seven states with high error rates. This program will ensure that these devices are provided only to beneficiaries whose medical condition warrants the equipment under existing coverage guidelines.
    • Over the past two years, CMS has initiated changes to the National Medicaid Audit Program to reduce duplication. The new collaborative audits have proven to be an effective way to coordinate federal and state audit efforts and resources to better meet states’ needs, resulting in more timely and accurate audits.
    • For FY 2013, CMS is redesigning the State Program Integrity Assessment (SPIA), an annual activity to collect State Medicaid program integrity data, to address concerns raised by the GAO.  The redesign will develop and test a design that reduces duplication of data collection with other CMS reporting mechanisms, reduces the reporting burden on the states, eliminates the time lag in reporting SPIA data, and institutes more rigorous validation of data to prevent the reporting of erroneous information.
    • In March 2013, CMS released a State Medicaid Director letter on Federal and State oversight of Medicaid expenditures.  Consistent with GAO’s recommendation to improve the oversight of non-DSH supplemental payments, beginning in 2013, CMS will conduct an annual comprehensive review of state supplemental payment methodologies to ensure payments are compliant with Medicaid statute and regulation.
    • The 2014 President’s Budget includes a number of proposals to address program integrity in both Medicare and Medicaid. These proposals are detailed in the following section.
  • Higher Education.  The Administration has taken a number of actions to coordinate higher education assistance.
    • The report acknowledges the work that the Department of Education, Treasury, and the IRS have undertaken over the past six months to improve the coordination between student aid programs and the tax benefits available to students and their families, in particular the American Opportunity Tax Credit.
    • The Administration also has improved coordination between the Department of Education (Ed), Department of Defense (DOD), and the Department of Veterans Affairs (VA) on educational benefits for veterans and their families.  In April 2012, the President signed an Executive Order to: ensure that colleges provide more transparent information about their outcomes and financial aid options for students; require DOD to set rules for how educational institutions gain access to military installations;  direct the VA to register the term “GI Bill,” so that external websites and programs are not deceptively and fraudulently marketing educational services and benefits; provide veterans with a centralized complaint system; improve support services for service members and veterans; and require DOD, VA, and Ed to develop improved student outcome measures, such as completion rates for veterans.
    • The 2014 Budget also addresses the report’s recommendation to strengthen evaluation of higher education assistance programs. It provides $67 million in new funding to conduct research, evaluations, and demonstrations to test approaches for providing student financial aid in ways that promote postsecondary access, program completion, and high-quality, affordable education programs.
  • Renewable Energy Initiatives.  Clean energy is a high priority, and the Administration supports a broad range of renewable energy initiatives to address multiple opportunities and challenges that span different technologies, stages of technology development and deployment, types of recipients and projects, and multiple Congressional mandates.
    • The Federal government consistently seeks to promote better coordination.  For example, the Department of Energy (DOE) and Department of Agriculture (USDA) synchronize their biofuels activities through the Biomass Research and Development Board.
    • For the loan programs, DOE agreed with GAO’s recommendation and will formally document its evaluation of applicants’ assertions regarding their inability to finance their projects without a federal loan guarantee and will clarify how it considers the financial need of applicants when determining what amount of support to provide.
    • In administering its portfolio, USDA seeks to provide the necessary level of support to ensure projects will be built.  For example, in the Department’s largest renewable energy loan guarantee program the value of the loan guarantee is reduced by the amount of other Federal financial assistance provided.

 

The President’s 2014 Budget: Reorganizing, Consolidating, and Streamlining Government Programs

The Administration is committed to doing more to consolidate and streamline Government operations. In February 2012, the President asked the Congress to revive an authority that Presidents had for almost the entire period from 1932 through 1984: the ability to submit proposals to reorganize the Executive Branch via a fast-track procedure. In effect, the President asked to have the same authority that any business owner has to reorganize or streamline operations to meet changing circumstances and customer demand.

Building on proposals in previous budgets, many of which were adopted by Congress, the President’s 2014 budget offers proposals for 215 cuts, consolidations, and savings proposals, projected to save more than $25 billion in 2014.  The proposals in the FY 2014 Budget include:

  • STEM Reorganization.  Currently, Federal initiatives to promote science, technology, engineering, and mathematic (STEM) education are spread across the Government in more than 200 programs within 13 different agencies.  The Administration is proposing a reorganization of STEM education programs into four key areas: K-12 instruction; undergraduate education; graduate fellowships; and informal education activities that typically take place outside the classroom.  This reorganization involves the consolidation or restructuring of more than half of these programs and streamlining of functions across agencies to improve the delivery and impact of STEM education.
  • Modernize, Streamline, and Strengthen the Delivery of Training and Employment Services. Today more than 40 programs deliver job training and employment services.  The Administration is exploring opportunities to make these programs even more effective, including by reorganizing some of the existing training programs to make it easier for Americans to find a job or build their skills for a better one, and for employers to find well-qualified workers.  For example, the 2014 budget proposes a universal displaced worker program that will reach over a million workers a year with a set of core services, combining the best elements of two more narrowly-targeted programs.
  • Preventive Health and Health Services Block Grant.  The 2014 budget also terminates the Preventive Health and Health Services Block Grant (PHHSBG) because these activities are duplicative of other services across the Department of Health and Human Services and could be more effectively and efficiently implemented through existing disease-specific programs within the Centers for Disease Control and Prevention (CDC). When the PHHSBG was first authorized in 1981, there were minimal resources within CDC to support chronic disease.  Over the past thirty years, funding for CDC’s chronic disease and health promotion activities has grown and has become the most effective means of supporting State efforts to support health prevention activities.
  • Medicare and Medicaid Program Integrity.  The 2014 President’s Budget includes a number of proposals to address program integrity in both Medicare and Medicaid. Specifically:
    • The Budget proposes to repeal the discretionary cap adjustments for the Health Care Fraud and Abuse Control (HCFAC) program beginning in 2013, and instead provide a dedicated, dependable source of additional mandatory funding that will ensure that the Department of Health and Human Services and Department of Justice have the resources they need to conduct program integrity activities and make certain that only the right people receive the right payment for the right reason at the right time.
    • The Budget also includes a package of legislative proposals that will strengthen program integrity for Medicare, Medicaid, and Children's Health Insurance Program (CHIP), saving $4.1 billion over 10 years. This includes a new proposal to expand authorities to investigate and prosecute allegations of abuse or neglect of Medicaid beneficiaries in additional health care settings.
      • Catfish Inspections.  The FY 2014 Budget proposes to eliminate the funding requirement in USDA’s Food Safety and Inspection Service (FSIS) appropriations language which requires the agency to devote funding for a new catfish inspection program. Catfish inspection is already conducted by the Food and Drug Administration and the National Marine Fisheries Service. By freeing FSIS of this funding requirement the agency will be better able to focus on its core mission of ensuring the safety of the Nation’s meat and poultry supply.
      • Achieving Greater Savings in Contracting.  In 2014, a pilot effort to capture the prices agencies pay for commonly used goods and services will be established so that contracting officials, program managers, and those conducting market research can identify the best prices. This pilot is a key component of efforts to accelerate the pace of savings initiated by the recently launched Strategic Sourcing Leadership Council (SSLC) headed by OMB.  The SSLC is working to identify new opportunities to pool the government’s buying power and reduce the need for duplicative contracts.  The Small Business Administration will work alongside participating agencies to help maximize the participation of small businesses in these critical cost-savings efforts. 

The Budget also urges the Congress to lower the cap for reimbursing the costs of compensation for all contractor employees – both defense and civilian.  Under current law, contractors that are paid based on their incurred costs may demand reimbursement for executive and employee compensation (including salaries and other benefits) up to the level of the nation’s top private sector CEOs and other senior executives.  These salaries and benefits have increased by more than 300 percent since the law was enacted in the mid-1990s.  In 2011, when the cap reached $763,000, the President called on the Congress to establish a new, sensible limit that is on par with what the Government pays its own executives and employees.  The Administration was encouraged by the proposal in the last Congress to lower the cap to a more fiscally responsible level. 

  • Interagency Initiative to Align Grants. Building on collaborative efforts between the Departments of Education, Health and Human Services, and Justice on the Safe Schools/Healthy Students program, the President’s 2014 Budget supports an interagency initiative to align grants to create safe and positive school climates, prevent youth violence and drug use, and improve mental health services. The joint initiative will be implemented through an interagency agreement and a coordinated application process to reduce duplication and administrative burden for grantees.  While there is significant coordination of these programs led by the Office of National Drug Control Policy (ONDCP), the Administration is committed to further examining prevention and treatment programs to better leverage limited resources, increase efficiencies, and improve health outcomes.
  • Office of Recovery for Auto Communities and Workers.  The 2014 Budget eliminates funding for this Office, which played a valuable role helping communities affected by the downturn in automobile manufacturing.  The Administration will continue to help these communities as a part of its broader efforts to assist manufacturing communities across the nation.

The Administration is strongly committed to reducing fragmentation and eliminating unwanted duplication and overlap and taking aggressive actions to do so. It is also ready to work with Congress on the Administration’s proposals and GAO’s recommendations.

-###-