Government Accountability Office Identifies High Risks in Federal Spending

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BY TAXPAYERS FOR COMMON SENSE – When asked why he robbed banks, Willie Sutton supposedly observed “because that’s where the money is.” Not a bad maxim, and for a Congress hungrily seeking cuts they should go where the waste is. Or at least where it will likely occur.

Cue the Government Accountability Office (GAO), the investigative arm of Congress, which released its biennial “High Risk” report that highlights “problems impeding effective government and costing billions of dollars each year.”


The usual suspects made the list: Medicare and Medicaid waste, poor enforcement of tax laws by the IRS, the Department of Defense’s questionable weapons procurement process.  But the GAO added a new player to the list that has long been in our waste sights: The Department of the Interior’s management of revenue from gas and oil leases.

The GAO has made it no secret that our nation’s oil and gas royalties are not measuring up.  In 2008, they reported revenues from oil and gas production had gone down for 93 of the 104 total resource owners. Examining the program  further, the GAO found that over the last two years the Department of the Interior (DOI) – the agency charged with assuring the public’s revenues are collected – has made continual blunders with the collection of company-reported data and offers unreliable sales data that doesn’t reflect market prices for oil and gas.  Furthermore, DOI is restructuring its oil and gas programs under a severely constrained resources environment. All of this led GAO to slap a “high risk for waste” tag on the program.

We’re not surprised with the tag. A few years ago regulators from the agency were found to be in bed with industry – figuratively and literally. The GAO doesn’t go as far to estimate the public’s loss of revenue, but one thing is clear: Our policy makers must hold the Department of the Interior more accountable to ensure taxpayers are getting their fair share of money from oil and gas  production. This is the least we could ask for since the federal government is already giving an estimated $40 billion in subsidies to the oil and gas industry over the next ten years.

In the other, usual areas of fraud, mismanagement, and waste of our money, GAO also examined the high risk of Medicare and Medicaid payments and the government’s management of excess federal property.

Although the GAO finds significant progress has been made over the last decade, a 2011 report found 45,190 underutilized excess buildings remained in federal hands, and the number is increasing. Furthermore, these buildings account for $1.66 billion annually in operating and maintenance costs. The GAO reports that attempts to rid the federal government’s involvement with  these properties has been stymied by poor corrective actions from the General Services Administration (GSA) and Office of Management and Budget, financial limitations, and competing stakeholder interests.  We’re happy to see that the FY11 spending bill currently being debated in the House of Representatives cuts the GSA facilities budget by $1.7 billion (sound familiar?) to get their attention.

As potentially the biggest elephant in the room, the GAO estimates billions in Medicare and Medicaid funds are lost to improper payments. In 2010, the Department of Health and Human Services estimated improper payments accounted for more than $70 billion in taxpayer dollars. Although the Center for Medicare and Medicaid services has made progress to target improper payment rates, more must be done to profile fraud, streamline payment systems, and better manage payment for services. Eliminating these improper payments would cut the budget by more than House Republicans are targeting in the FY11 spending bill.

TCS lauds GAO’s continual update of its High Risk list. As Congress and the Administration proceed in their efforts to reduce federal spending, this report offers a great starting point to rightfully collect the public’s fair share, and reduce our trillion-dollar deficit.





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