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GAO to Congress: "Hey, Oversee This" Part One

There's a lot of substantive overlap between my part-time job with Harvard's Nieman Watchdog Project and my day job here at POGO.  So I don't feel I'm overly self-promotional by linking to my latest Nieman Watchdog piece on the GAO's suggestions for Congressional Oversight.  It's the first in a series, which will include POGO's baker's dozen list of topics we'd like to see Congress dig into.  I've also reposted it here after the jump.

-- Nick Schwellenbach


GAO weighs in with suggestions for congressional oversight
ASK THIS | November 21, 2006

Areas of concern include taxes, government contracting, Defense spending, Homeland Security and intelligence. There�s a lot to be looked at, the question is how probing the Democrats will be.

By Nick Schwellenbach

On November 17, 2006, ten days after the 2006 midterm election, where Democrats took back control of both chambers of Congress, the Government Accountability Office (GAO) sent Congressional leaders its biannual suggestions for Congressional oversight. 

The Democrats have promised a return to renewed Congressional oversight as a check on the Executive branch, though it is not clear that they are united on how far or broad their investigations may go, if at all, into controversial Bush administration policies. Many government insiders and outside experts from across the political spectrum have lamented the demise of oversight and of Congress as a co-equal branch of government.

Moreover, many programs and policies, only some of which are Bush administration initiatives though they have been its responsibilities since 2001, are badly in need of Congressional attention, not to mention the media�s. Even with issues that seem to attract news coverage, there are likely still many more rocks to turn over and a need for constant attention to these evergreens. One example: A line in the GAO summary says �billions of dollars have been wasted annually� by the Defense Department.

GAO broke its oversight suggestions into three broad categories, only a portion of the first of which will be broached in this piece: 1) �Targets for Near-Term Oversight�; 2) �Policies and Programs That Are in Need of Fundamental Reform and Re-Engineering�; and 3) �Governance Issues� that ensure an accountable, effective government.

All these are of great public interest, with questions waiting to be asked by journalists whose work may spark or elucidate Congressional interest in specific areas. After each issue heading, I suggest some questions that could serve as starting points�and I emphasize that they are just that, starting points. I then follow with the GAO summary of the issue.

  1. Reduce the Tax Gap

Questions: What is the difference between what the government should be getting from taxpayers and what it does get? What are the consequences? Who gets away with not paying their fair share? How does it affect those who do pay? What are the loopholes and what are strong fixes to them?

GAO summary: �The tax gap�the difference between the amounts taxpayers pay voluntarily and on time and what they should pay under the law�has been a long-standing problem. Most recently, the Internal Revenue Service (IRS) estimated a gross tax gap for tax year 2001 of $345 billion and, after enforcement efforts and late payments, a net tax gap of $290 billion. When some taxpayers fail to comply, the burden of funding the nation�s commitments falls more heavily on compliant taxpayers. Reducing the tax gap would help improve the nation�s fiscal stability. Based on IRS�s estimate, each 1 percent reduction in the net tax gap would likely yield $3 billion annually. The gap can be reduced, though not eliminated, through a multiprong strategy of better service and enforcement of existing tax laws, plus legislative actions.�

  1. Address Government-wide Acquisition and Contracting Issues

Questions: How much does the government contract out? What are the pros and cons to contracting? How do the theoretical benefits of contracting compare to the reality of what those benefits actually cost? What kind of oversight exists for different kinds of contracts? Are taxpayers getting what they pay for? Are there considerations besides cost-effectiveness that should enter in the equation of whether to contract out or not? How extensively do government agencies rely on contractors?

GAO Summary: �The acquisition of products and services from contractors consumes about a quarter of the government�s discretionary spending. In fiscal year 2005, federal agencies spent over $388 billion on such contracts. The work of the government is increasingly being performed by contractors, including emergency and large-scale logistics operations such as hurricane response and recovery and the war in Iraq. Many agencies rely extensively on contractors to carry out their basic missions. At the same time, GAO�s list of government high-risk areas includes acquisition and contract management issues that collectively expose hundreds of billions of taxpayer dollars to potential waste and misuse. The Congress should continue to monitor agencies� efforts to address existing problems, while facilitating a re-examination of the rules and regulations that govern the government-contractor relationship in an increasingly blended workforce.�

  1. Transform the Business Operations of the Department of Defense

Questions: How big is the Defense Department budget? Where do our defense dollars go and what do we get? Can the Defense Department account for the hundreds of billions dollars appropriated for it by Congress every year? Who is responsible for spending�and for what�inside the Defense Department? Why do almost all major weapons systems face double-digit price increases and significant schedule delays? How transparent are Defense business decisions?

GAO summary: �Of the 26 areas on GAO�s 2005 high-risk list of federal programs or activities that are at risk for waste, fraud, abuse, or mismanagement, 8 are Department of Defense (DOD) programs or operations and 6 are government high-risk areas for which DOD shares some responsibility. These high-risk areas relate to DOD�s major business operations intended to support the warfighter, including DOD�s overall management approach to business transformation, business systems modernization, financial management, the personnel security clearance process, supply chain management, support infrastructure management, weapon systems acquisition, and contract management. Billions of dollars have been wasted annually because of the lack of adequate transparency and appropriate accountability across DOD�s business areas. We have consistently reported and testified on the need for DOD to develop an integrated, enterprisewide business transformation plan and establish a chief management official position to lead the department�s overall business transformation efforts. To its credit, DOD has established management structures such as the Defense Business Systems Management Committee (DBSMC)�intended by DOD to be its primary transformation leadership and oversight mechanism�and the Business Transformation Agency to support the DBSMC. DOD has also established and updated its Business Enterprise Architecture and Enterprise Transition Plan, as well as a Financial Improvement and Audit Readiness Plan. To date, however, DOD�s primary focus has been on business systems modernization.�

  1. Integration and Transformation of the Department of Homeland Security

Questions: Has the creation of the Homeland Security Department improved operations inside and between the 22 agencies that were cobbled together under its umbrella? Has homeland security improved, and if so, in which areas? And how much improvement has there been? Have other activities�not directly connected to homeland security but still the responsibility of agencies inside DHS (e.g. FEMA�s disaster response function)�been given enough attention? Did the rush to create and get DHS started lead to bad decisions or a lack of them and have lessons been learned and acted upon? Are there clear lines of accountability inside DHS? How does DHS prioritize its spending and its attention? Is it spending its time and attention on the �right� things? Are DHS and its agencies coordinating with other federal, state, local, tribal, foreign and private entities?

GAO summary: �After its creation in 2003, the Department of Homeland Security (DHS) had to transform 22 agencies�several with major management challenges�into one department. This is a high-risk endeavor because failure to effectively address its management challenges and program risks could have serious consequences for our national security. The areas GAO identified as at risk include planning and priority setting; accountability and oversight; and a broad array of management, programmatic, and partnering challenges.�

  1. Information Sharing, Transformation and Oversight of the Intelligence Community

Questions: Is more information shared within the intelligence community? Has the �need to know� culture given way to more of a �need to share� culture as recommended by the 9/11 Commission? Has increased classification and the proliferation of �sensitive but unclassified� information controls inhibited sharing? Is the Office of the Director of National Intelligence providing a marked improvement over the role of the now-defunct Director of Central Intelligence (who was the same person as CIA director) in coordinating the activities of the entire intelligence community? Are all covert actions�including possible ones by the Defense Department (traditionally the CIA has been the government agency to engage in covert actions, but the Defense Department has greatly increased its intelligence activities)�reported to Congress? Is the Executive branch properly disclosing its other intelligence programs to the full intelligence committees in accordance with National Security Act of 1947? Are the intelligence agencies equipped (e.g. enough foreign language speakers) to deal with the range of threats the United States faces and how well are they doing with what they have?

GAO summary: �Since September 11, 2001, the nation has made some progress in fixing a major vulnerability�intelligence and law enforcement agencies� failure to �connect the dots� and share information on the terrorists. Key legislation, presidential directives, and several commissions have focused on enhancing the management of the intelligence community�s budgets and activities and information sharing within the community and beyond. But progress has been slow in some key areas, including implementing the policies needed to govern information sharing. The December 2004 Intelligence Reform and Terrorism Prevention Act and several presidential directives established the Director of National Intelligence (DNI), which absorbed the functions of the previous Director of Central Intelligence. Following the March 2005 report of the President�s Commission on Weapons of Mass Destruction Intelligence Capabilities, the DNI further created numerous offices intended to enhance and transform the intelligence community�s functions and operations through a variety of initiatives throughout the intelligence community. These include improved central oversight of the National and Military Intelligence Program budgets, use of open sources, intelligence fusion centers, human capital policies and practices, and intelligence collection, analysis, and reporting. Moreover, the March 2005 report also recommended improvements in internal and external oversight to make sure reform occurs. Without continued congressional oversight of these issues, the progress and results of the many requirements and initiatives will remain unclear.�

To come in this series: Exploring other GAO near-term oversight suggestions; policies and programs in need of fundamental reform; long-term governance issues and the Project On Government Oversight�s baker�s dozen list of suggested oversight topics.

By: Nick Schwellenbach
Director of Investigations, POGO

Nick Schwellenbach At the time of publication, Nick Schwellenbach was Director of Investigations for the Project On Government Oversight.

Authors: Nick Schwellenbach

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