From the U.S. Government Accountability Office, www.gao.gov

Transcript for: Comptroller General Testifies to U.S. Senate on GAO's
2015 Duplication Report

Description: In his April 14, 2015 testimony to the U.S. Senate,
Comptroller General Gene Dodaro introduces GAO's 2015 Duplication and
Cost Savings Report.

Related GAO Work: 

GAO-15-522T: Government Efficiency and Effectiveness: Opportunities to
Reduce Fragmentation, Overlap, and Duplication and Achieve Other
Financial Benefits
and 
GAO-15-404SP: 2015 Annual Report: Additional Opportunities to Reduce
Fragmentation, Overlap, and Duplication and Achieve Other Financial
Benefits

Released: April 2015

[First Screen] [Silence]

United States Senate
Homeland Security &
Governmental Affairs

[Second Screen] 

Duplication, Overlap and Fragmentation
Across the Federal Government

[Third Screen]

Comptroller General Gene Dodaro's
Opening Statement

April 14, 2015


[ Gene Dodaro: ] Good morning Mr. Chairman, ranking member Senator
Carper, Senator Sasse, Senator Ernst. I'm very pleased to be here to
talk about our 2015 report.

In this report as chairman you mentioned it's our fifth in the series.
We identify 24 new areas that have 66 recommendations for actions going
forward to either reduce elimination overlap and duplication
fragmentation in the federal government or achieve cost savings or
enhanced revenues. Just a few quick examples from the report. First, in
looking at oversight of consumer safety, we found a patchwork approach
has developed over the years where there are at least 20 different
agencies involved in some aspect of consumer protection. We found the
system to be fragmented and having overlapping jurisdictions. We're
recommending that the Congress take action to establish a formal
coordinating mechanism for oversight of consumer protection. We think
this will result in very much inefficiencies being dealt with and a more
efficient system and importantly a better protection for the American
public because it will eliminate regulatory gaps in consumer protection
issues. 

In the area of non-emergency medical transportation, these are for
people that because of their age disabled or their income constraints
that they may have they're not able to get the medical appointments so
agencies provide rides. We found 42 different programs at six different
agencies providing these services and not a lot of coordination going
on. Here, there is a coordinating council but it hasn't met since 2008.
Also, when we went to look at the local levels where there's
coordination going on at the state and local level two big federal
players aren't really playing that much as they should be and that's the
Medicaid program and the Veterans' Administration program so there's a
lot of opportunities for cost sharing, cost riding, achieving greater
efficiencies and this is very important because of our aging population
as it continues to grow. This is an area where the federal government
can achieve a lot more efficiencies and get people the needed medical
treatment that they need. 

Also we found in looking at the defense health system area really a
small system within the larger system. It was set up in the 1980's when
some of the public health organizations were transferred and they were
given responsibility for providing health care to defense families and
retired annuitants, and they were given special status in the
legislation. Well in the 90's TRICARE came around. We now have a TRICARE
managed care system throughout the United States and all coverage and
really this system is called the DOD Family Health System is providing
the same services to the same people who are getting TRICARE services in
the same areas of the country so we think with a carefully crafted
transition to protect the beneficiaries, millions of dollars can be
saved in administrative costs and savings to DOD. 

Another area we point out is the strategic petroleum reserve. This was
set up following the oil embargos in the 1970's so that we have an
emergency supply of oil should we need it given disruptions that might
occur in the provision of oil from abroad, but as U.S. productions
increase, we're now at record levels of production, there's plenty of
reserves not only in the strategic petroleum reserve but in private
sector reserves, and we're far in excess of international requirements
for the reserves. We think DOE should re-examine the need for the size
of this reserve and we think if it comes out the way we think it would
be there may be the potential to reap billions of dollars in savings
from what's in the reserve, reduce dramatically the administrative costs
to keep the reserve operating and also its infrastructures in need of
repair and replacement so that they may have to do it at a less level if
you don't have the same size of reserve. 

Also, in cancer hospitals that were set up in the 1980's when most
cancer treatments were provided in the hospital versus outpatient care,
a special system was set up to pay these hospitals at their cost as
opposed to the prospective payment system of negotiated costs on a fee
for service. Given cancer treatments have evolved over the years and
most people receiving it in outpatient services we compared this old
system to the new system that's been modernized and feel if these
hospitals were treated the same as other teaching hospitals that provide
cancer treatments recognizing--, we compared the cancer status of the
patients, the federal government could reduce cost by $500 million a
year in putting them on a more equitable basis. 

Now with regard to areas that we've identified in the past as you
mentioned Mr. Chairman there were 440 areas, 39 percent  were partially
addressed, 20 percent haven't been addressed at all and 37percent  have
been fully addressed and both of you have cited the savings that's
resulted, $20 billion so far and about another $80 billion in the works
that will be saved as a result of actions taken, but there's plenty of
money still left on the table to be addressed in these areas. 

A couple of government-wide issues that I've talked with this committee
before about I'd reiterate again, one is strategic sourcing across the
federal government. Most of the private sector entities that we studied
have most of their spending, about 90 percent  of it, under strategic
sourcing where they examine whether they can consolidate providers, use
their buying power to leverage better costs at the local level. The
federal government the last time we looked at it only had about 5
percent  of its procurement spending under strategic sourcing. We think
this has enormous potential, even 1 percent  reduction would result in
$4 billion savings. OMB's taken some actions in this regard but not yet
set metrics or goals to achieve so we think that Congress' intervention
in this area would be helpful. Information technology acquisitions I was
here before this committee in February talking about the adding to our
high risk list of IT acquisitions and operations. 

Senator Carper you mentioned the Federal Information Technology Reform
Act. That holds a lot of promise if effectively implemented for billions
of dollars in savings and so I would continue to urge this committee to
have active oversight over IT spending. Many savings can occur and
reduction in wasteful spendings in this area can occur over time. Also
at DOD we point out continued activities that could result in reducing
their overhead costs, reducing some of their health care costs and
reducing the cost of acquiring weapon systems through implementation of
our recommendations. 

We also have a number of recommendations in the Medicare and Medicaid
areas and health care spending where there's an opportunity to revamp
some of the payment policies that would save billions of dollars and to
provide greater oversight over activities particularly at the state
level in the Medicaid program where tens of billions of dollars are
being approved in demonstration projects that really don't have
Congressional oversight and in our view are not budget neutral and
really cost the government more money, and of course I've talked about
the problem with improper payments and the Medicare and Medicaid
programs. We reiterate in our report the number of recommendations we
have to reduce those improper payments. Last year in Medicare was $60
billion, Medicaid $17 billion. We also have recommendations for a number
of areas for benefit offsets that would be more appropriate in
accordance with the law. For example, we found where there is an area
where certain beneficiaries are receiving unemployment and disability
insurance at the same time and so the federal government’s replacing
lost revenue twice and this could be rectified through change in law and
also in tax collections. We have recommendations where we found a lot of
people who have passports, 1 percent  of the people who had passports
when we looked at it have $5.8 billion in delinquent taxes and if we
decided that you can't have a passport unless you pay your taxes, CBO
estimates we could save $500 million a year over a five year period of
time, and we have other areas where we think delinquent taxes could be
collected. So the bottom line is some good progress has been made.

Where there has been big progress though it's taken the Congress to pass
a legislation and most of these areas where we site savings it took
Congressional action to really achieve those savings even though the
agencies were moving in the right direction, so I would encourage this
committee and the Congress as a whole to continue to focus on these
areas and I think we'll be a more efficient and effective government as
a result. 

So thank you very much Mr. Chairman and the committee. I appreciate
being here today.


[Last Screen] [Silence]

GAO logo
www.gao.gov/duplication