GAO Identifies Tens of Billions in Savings to Be Had Through De-Duplication
Published: May 03, 2018
Last week GAO released its annual report on "Opportunities to Reduce Fragmentation, Overlap, and Duplication and Achieve Other Financial Benefits" which estimates that the federal government could save tens of billions in additional dollars by addressing 365 open GAO recommendations.
Since 2011, GAO has annually studied federal agencies and programs to identify potential savings through reducing, eliminating, or better managing fragmentation, overlap, or duplication. In that time period, GAO offered 724 actions of which 551(76%) have been partially or fully addressed resulting in $178B in financial benefits. $125B have been realized and $53B are anticipated due to actions taken.
GAO’s most recent analysis identified 68 new actions for improving efficiency and effectiveness across 23 federal programs, to include:
- DoD could potentially save approximately $527M over 5 years by minimizing unnecessary overlap and duplication in its U.S. distribution centers for troop support goods.
- Energy may be able to reduce risks and save tens of billions of dollars by adopting alternative approaches to treat a portion of its low-activity radioactive waste at its Hanford Site.
- VA could potentially save tens of millions of dollars when acquiring medical and surgical supplies by better adhering to supply chain practices of leading hospitals.
- The Coast Guard should close its boat stations that provide unnecessarily duplicative search and rescue coverage to improve operations and potentially save millions of dollars.
Agencies and Congress have addressed 52% (376) of GAO’s recommended actions from 2011 through 2017. Examples include:
- Farm Program Payments (from 2011) - The Agricultural Act of 2014 eliminated direct payments to farmers resulting in savings of approximately $44.5B FY 2015 – FY 2023.
- Weapon Systems Acquisition Programs (from 2011) - The Weapon Systems Acquisition Reform Act of 2009 implemented several of GAO’s recommendations for how DoD develops and acquires weapon systems resulting in savings of approximately $36B from FY 2011 – FY 2015.
- Strategic Petroleum Reserve (from 2015) - Energy completed a long-term strategic review of the Strategic Petroleum Reserve in August 2016, which resulted in savings of $1.2B from selling crude oil from the reserve in FY 2017 and FY 2018, with potential for over $8.4B in total sales through FY 2025.
- Federal Payments for Hospital Uncompensated Care (from 2017) - HHS began to align Medicare Uncompensated Care payments with hospitals’ actual uncompensated care costs starting in FY 2018 instead of basing these payments on hospitals’ Medicaid workload, which will result in financial benefits of about $752M in FY 2018 from better use of Medicare funds.
However according to GAO’s report, 17% (122) of their recommendations have not been addressed and another 24% (175) have only been partially addressed, leaving substantial opportunity for more efficiency gains and cost savings.
Actions remaining open from prior reports that would reap significant cost savings include:
- Congress could prevent people from collecting both full Disability Insurance benefits and Unemployment Insurance benefits for the same time period which could save up to $2.5B over 10 years.
- Medicare could save $1-$2B annually if Congress equalized the rates Medicare pays for certain health care services (payment rates currently vary by location).
- Limiting or reducing the subsidy that farmers receive to purchase crop insurance could save up to $1.4B a year.
- IRS could save billions of dollars by improving its efforts to prevent identity theft refund fraud.
- Better oversight of federal IT investments could save billions of dollars.