GAO: Worst of the worst federal programs

Introduction

The Internal Revenue Service and the U.S. Postal Service, already the butt of many bad jokes, are among the poster children on the GAO’s list of federal agencies at “high risk” of waste, fraud, abuse and mismanagement.

The Government Accountability Office on Wednesday released its biennial list of programs especially vulnerable to waste or in need of broad reform. The list, updated every two years with the start of the new Congress, is a mix of old complaints and new areas to target at a time when the Obama administration and Congressional Republicans are looking for ways to cut government spending.

Among the report’s highlights: Ways that the IRS could improve its collection standards, resulting in “billions” of dollars flowing into the Treasury that are currently lost, and the restructuring of the U.S. Postal Service, which faces a “deteriorating” financial situation.

An overarching theme through many of the reports is the use of “human capital” in government programs — 18 of the 31 areas highlighted in the report have struggled with personnel. The report calls for government agencies to focus on recruiting and retaining top talent and for the implementation of a “results-oriented” culture, with the end result of the federal government becoming “an employer of choice.” (President Obama is seeking a two-year wage freeze for federal employees.)

The GAO list lays out a series of problems which have been ongoing for many years — and seem likely to stay that way.

Included on the list are a number of topics related to Center investigations:

• The Medicare program has been considered a “high risk” program since 1990, due to its size and complexity. The GAO acknowledged that Medicare has “taken steps to strengthen its program safeguards” but warns that there is still massive potential for fraud and abuse. The Center’s Manipulating Medicare series has cataloged a series of abuses that has cost taxpayers millions.
• The failure of financial regulation is on the GAO’s list for the second time in a row. The office warns that no one is “currently tasked with assessing the risks posed across the entire financial system” and that the “regulatory system has lagged behind the development of new and more complex investment products.” The Center has written extensively on the failure of financial regulation through its Financial Reform Watch series.
• The failure to adequately fund the nations’ transportation systems, including passenger and freight rail, returned to the list at a time when Obama laid out a goal of expanded high-speed rail in his State of the Union speech. The Center’s Transportation Lobby project focused on the issues facing our nation’s infrastructure and transit needs.