From the U.S. Government Accountability Office, www.gao.gov Transcript for: Comptroller General Testifies to U.S. Senate on GAO's 2017 High Risk List Description: In his February 15, 2017, testimony to the U.S. Senate, Comptroller General Gene Dodaro provides an update of GAO's 2017 High Risk List. Related GAO Works: GAO-17-317: High-Risk Series: Progress On Many High-Risk Areas, While Substantial Efforts Needed On Others and GAO-17-407T: High-Risk Series: Progress On Many High-Risk Areas, While Substantial Efforts Needed On Others Released: February 2017 [First Screen] Senate Committeee on Homeland Security and Governmental Affairs [Second Screen] High Risk Series: Progress on Many High-Risk Areas, While Substantial Efforts Needed on Others [Third Screen] U.S. Comptroller General Gene L. Dodaro Opening Statement February 15, 2017 Thank you very much, Mr. Chairman. Good afternoon to you, Ranking Member Senator McCaskill. I'm very pleased to be here today to discuss the latest addition to GAO's high-risk program. I'm pleased to report that many of the areas of the 32 areas that were on the list in 2015 have shown improvement and are in a position now that they either meet or partially meet all five criteria for coming off the list. Now, the five criteria are leadership, you have to have the capacity, you have to have a good action plan, monitoring effort and you have to demonstrate some progress. This is the one that's the hardest to meet, to actually show you're reducing the risk or making progress in fixing the problems addressed. This progress is due to commitment by some of the agency leaders as well as the staff in the agencies, OMB and the Congress. I'm very pleased that the Congress, in the past 114th Congress, passed over 12 bills that addressed high-risk areas and were part of the reason why we're showing this progress. And Congress held over 250 hearings on areas discussed in GAO's high-risk program, so I'm very pleased this committee in particular was sponsoring a number of bills, holding a lot of hearings and I'm very appreciative of that. The Congress is key to making progress. If you look at almost every area that we identify as achieving progress, Congressional action has been instrumental in achieving that degree of progress. One area has met all the criteria, is coming off to list, that's managing the sharing of terrorism-related information. So it's a very important area to the safety of our country. And I could assure this committee while it's coming off the list that it doesn't mean it's out of sight so we're going to keep an eye on it to make sure that things stay on track in that area. Another area that I know this committee is very interested in is the Department of Homeland Security. They've continued to show steady progress. We've -- they've improved their ability to monitor their action plan that they have in place. They really need to focus on their acquisition programs, fixing their financial management systems and improving employee morale. Those are the key things they need to continue to do. There are a number of areas on the list, however, that need substantial attention and these I would particularly cite to this committee's attention. First is veterans' healthcare. I added that to the list in 2015 for a number of very important reasons that I can elaborate on in the Q&A. But I'm very concerned that they've only made limited progress. Defense Department Financial Management, we've talked about that several times before this committee, they're still the only major federal agency that hasn't been able to pass the test of an audit. Information technology and acquisitions and operations that Senator McCaskill mentioned, that's an area that while we've seen some progress needs significant more oversight and attention to make sure that it gets fixed. Cyber security, both cyber security as it relates to the federal government's own information systems, but also critical infrastructure like the electricity grid, financial markets, air traffic control system and others. You know, we added cyber security across the federal government as a high-risk area to the list in 1997, so this is the 20th year anniversary. We've been trying to get agencies to move on that area and despite even the breaches, we have a thousand recommendations that are still outstanding in the cyber security area. And then reforming the housing finance system, this is one area that was not addressed coming out of the global financial crisis. Fannie Mae and Freddie Mac are still in conservatorship that they've been in since 2008. A lot of the risk has moved to the federal government either directly or indirectly, directly through the Federal Housing Administration who had to get an infusion from Treasury of, you know, between $1 billion and $2 billion a few years ago. Seventy percent of all the mortgages right now are either for single family homes or either directly or indirectly supported by the federal government. We need to address Fannie and Freddie and get the private sector back into the financial market as well to reduce the risk on the federal government. We're adding three new areas this year. First is the federal efforts to oversee, provide oversight over programs to help Indian tribes and their members. We're very concerned. We look at the education programs, schools are in poor condition, not properly staffed. The healthcare area, there are no quality standards for healthcare, a lot of vacant positions. They're distributing funds to send people to private sector care if it's not available in Indian hospitals. They're still using a formula they used in 1930s. It needs attention. And also where the tribes want to exploit oil and gas on their lands, but they need federal permitting and licensing and it's just slow. It takes forever and they're not able to generate that revenue that could help them deal with a number of their issues. Secondly is growth in environmental liabilities for the federal government. This is both the disposal of waste through a nuclear weapons complex as well as from commercial power plants. The liability right now is approaching $0.5 trillion. I believe it to be understated because of problems that we've seen, for one example DOD and not properly estimating environmental liabilities for cleaning up after Defense Department operations and installations as well. Now, the federal government spends billions of dollars every year to clean up this waste, but the liability keeps growing. There's not enough risk-based decision-making made in those areas. We have a number of outstanding recommendations. The last area is the Census. As you mentioned, we've added that to the list because of the fact the last Census was over $12 billion, costliest ever. In order to contain cost, they've introduced a lot of novel concepts using the Internet developing address lists from spatial and other means rather than going door to door canvassing and also using administrative records and new information technology. All these things add to the risk and the final plans have not been put in place yet. So we look forward to working with this committee and I look forward to answering questions today at the appropriate time. Thank you very much.