	Actions Needed to Address Growth in Improper Payments

Improper payments remain a significant and pervasive government-wide  issue. Since fiscal year 2003—when  certain agencies began reporting improper payments as required by the  Improper Payments Information Act of 2002 (IPIA)—cumulative reported  improper payment estimates have totaled over $1.2 trillion, as shown in  figure 1. Although primarily concentrated in three areas (Medicare, Medicaid, and  the Earned Income Tax Credit), the reported estimated improper  payments for fiscal year 2016 were attributable to 112 programs spread  among 22 agencies (see figure 4). Opportunities Exist to Improve the Acquisition and Operation of IT and to Address Cybersecurity Challenges

The federal government is projected to invest more than $89 billion on IT  in fiscal year 2017. Our work has found that federal IT investments have  too frequently failed or incurred cost overruns and schedule slippages  while contributing little to mission-related outcomes. Our ongoing work has shown that OMB  and agencies’ implementation of these recommendation will likely result  in billions of dollars in cost savings. Cybersecurity Presents an Ongoing Challenge

In addition to improving the acquisition and operation of IT, opportunities  also exist to better ensure the security of federal information systems and  cyber critical infrastructure and protect the privacy of personally  identifiable information (PII). Challenges Remain in Reducing Unneeded Federal Facilities and Managing the Federal Fleet of Vehicles

In 2003, we added Federal Real Property to our High-Risk List, in part  due to long-standing challenges federal agencies face in managing  federally owned real property, including disposal of excess and  underutilized property. Continuing to maintain these unneeded facilities  puts the government at risk for wasting resources due to ongoing  maintenance costs as well as lost revenue from failing to sell surplus  property. Challenges to Managing the Federal Vehicle Fleet

In fiscal year 2015, federal agencies spent about $4.3 billion on over  640,000 vehicles that agencies own or lease. In two reviews we conducted between 2015 and 2017, we  found that selected agencies were spending over $20 million annually on  vehicles that may not have been fully utilized. However,  given the decentralized nature of federal fleets and our analysis of a small  sample of agencies, it is likely that additional cost savings are possible  through enhanced agency practices. Ultimately, addressing the federal government’s long-term unsustainable  fiscal path will require broad fiscal policy changes to address the  imbalance between federal revenues and spending. However, by taking  immediate action on government-wide management challenges,  Congress and the executive branch can begin to address our fiscal  situation by preventing fraud, waste, and abuse and ensuring funds are  put to the best possible use. Related GAO Products

2017 Annual Report: Additional Opportunities to Reduce  Fragmentation, Overlap, and Duplication and Achieve Other Financial  Benefits. Information Technology

Information Technology: Opportunities for Improving Acquisitions and  Operations. Federal Software Licenses: Better Management Needed to Achieve  Significant Savings Government-Wide. Long-Term Fiscal Outlook

The Nation’s Fiscal Health: Action is Needed to Address the Federal  Government’s Fiscal Future. This is a work of the U.S. government and is not subject to copyright protection in the  United States.
Why GAO Did This Study

The federal government faces a long-term, unsustainable fiscal path based on an imbalance between federal revenues and spending. To put the government on a more sustainable long-term path, policymakers will need to have a broad fiscal plan that considers reducing spending, increasing revenue, or more likely, a combination of the two. While addressing this structural imbalance will require fiscal policy changes, in the near term, opportunities exist to act in a number of areas to improve this situation.
This statement highlights several areas in which the federal government is facing government-wide management challenges and the opportunities to act: improper payments; IT acquisitions, operations, and cybersecurity; and federal real property. This statement draws from GAO's 2017 High-Risk List, the 2017 annual report on fragmentation, overlap, and duplication, and other related work.
Properly managing government resources can help address the federal government's fiscal challenges by preventing fraud, waste, and abuse and ensuring funds are put to the best possible use. Although these actions alone cannot put the U.S. government on a sustainable fiscal path, they would improve both the fiscal situation and the federal government's operations.

What GAO Found

GAO's prior work has resulted in hundreds of billions of dollars in financial benefits over the last decade as agencies and Congress acted on its recommendations. However, there are significant opportunities for further action to address government-wide challenges by implementing GAO's recommendations that would result in billions of dollars in additional benefits.
Action Needed to Address Growth in Improper Payments. Reducing payments that should not have been made or that were made in an incorrect amount could yield significant savings. The reported government-wide improper payment estimate for fiscal year 2016 was over $144 billion. This estimate was attributable to 112 programs spread among 22 agencies. Since fiscal year 2003, cumulative estimates have totaled over $1.2 trillion.
Improvements Needed in Information Technology (IT) Acquisition and Operation and in Addressing Cybersecurity Challenges. The government is projected to invest more than $89 billion on IT in fiscal year 2017. However, historically, these investments have frequently failed, incurred cost overruns and schedule slippages, or contributed little to mission-related outcomes. Better managing IT could result in billions of dollars in savings and much more efficient and effective government. Opportunities also exist to better ensure the security of federal information systems and cyber critical infrastructure and protect the privacy of personally identifiable information.
Challenges Remain in Reducing Unneeded Federal Facilities and Managing the Federal Fleet of Vehicles. Continuing to maintain unneeded facilities puts the government at risk for wasting resources due to ongoing maintenance costs as well as lost revenue from failing to sell surplus property. In addition, in fiscal year 2015, federal agencies spent about $4.3 billion on over 640,000 vehicles that agencies own or lease. In prior work, GAO found that selected agencies were spending over $20 million annually on vehicles that may not have been fully utilized. It is likely that additional cost savings are possible through enhanced agency practices.