Defense practices and interagency contracting labeled ‘high risk’ by GAO

The Government Accountability Office added two Defense Department management issues as well as interagency contracting and homeland security information-sharing mechanisms to its high-risk list of federal functions Tuesday, while noting overall improvements in government efficiency.

GAO removed student financial aid programs and financial management at FAA and the Forest Service from the list, which identifies areas susceptible to waste, fraud and abuse in the federal government. Student financial aid had been included since the list's inception in 1990. Since that time, the list has grown from 14 to 25 programs.

On Tuesday, FAA Administrator Marion Blakey said the fact that the agency's financial management has "turned the corner." In a written statement, she said, "This endorsement by the GAO is a clear indication that our new cost-accounting and financial tracking systems are doing the job."

Comptroller General David Walker said that while there's been progress, the degree of progress on each issue varied dramatically. The 2005 High-Risk List (GAO-05-207) aims to shine a light on problem areas because "with light comes heat, and with heat comes action," he said.

The Defense Department's Personnel Security Clearance Program and approach to business transformation were added to the list. More than 350,000 applications from federal employees and contractors for security clearances have been delayed, according to GAO. The two Defense additions make that department responsible for eight of the 25 problem areas.

Walker repeated his call for appointing a high-level executive to take charge of Defense's business transformation, which include overhauls of financial management and supply-chain management.

Interagency contracting, which has been increasingly used as a way for agencies to acquire goods and services, poses risks because of the scope of these contracts, according to GAO. Interagency contract sales through the General Services Administration have increased to $32.5 billion in 2004, up from $4 billion in 1992.

The report singled out "the rapid growth of dollars involved combined with the limited expertise of some agencies in using these contracts and recent problems related to their management."

Walker said improvement in contract management depends on implementing current laws, and not creating new ones.

He presented GAO's findings at a press conference Tuesday along with Sen. Susan Collins, R- Maine, chairwoman of the Senate Homeland Security and Governmental Affairs Committee, and Sen. Joseph Lieberman, D-Conn., ranking member of that committee, and several other lawmakers.

Collins and Lieberman focused on homeland security recommendations in their remarks. "We haven't achieved the homeland security that the law requires us to achieve," said Lieberman.

Collins said her committee will begin oversight hearings on homeland security Wednesday.

GAO said information-sharing to improve homeland security involves communication between the Office of Management and Budget, Homeland Security, Justice, State and Defense departments and the CIA.

Sen. George Voinovich, R-Ohio, pointed out that this year marks the 15th anniversary for six high-risk areas, which he plans to investigate. Medicare, enforcement of tax laws, the Energy Department and NASA contract management, Defense supply chain management and Defense weapons systems acquisition have been on the high-risk list since 1990.