DOD High-Risk Areas

GAO began reporting in 1990 on government programs at high risk for waste, fraud, abuse, and mismanagement. In February 1997, GAO issued a series of reports updating the status of these areas, six of which fall within the Defense Department (DOD). (See GAO/HR-97-3 through GAO/HR-97-7 and GAO/HR-97-9.) DOD's inability to overcome problems in these high-risk areas has resulted in billions of dollars being wasted and placed billions of dollars in future spending at risk. This testimony discusses the (1) high-risk areas of financial management, information technology, weapon systems acquisition, contract management, infrastructure, and inventory management; (2) underlying causes of these high-risk areas; and (3) overall strategy that GAO believes is needed to eliminate them.

GAO noted that: (1) to avoid the risk of waste, fraud, abuse, and mismanagement, GAO has made hundreds of recommendations to DOD over the last few years to help correct problems in high-risk areas, and the Congress has held oversight hearings and enacted specific legislative initiatives; (2) DOD has taken GAO's suggestions and congressional direction seriously and has initiated actions that resulted in some progress in each of the high-risk areas; (3) however, eliminating these problems requires that their underlying causes be addressed; (4) effectively attacking the underlying causes will require congressional support and a commitment by senior-level DOD managers to a multilevel strategy that: (a) implements GAO's recommendations to correct specific problems in each of the high-risk areas; and (b) develops and implements a strategic plan that addresses actions for eliminating the six high-risk areas; (5) this strategic plan should: (a) include goals, performance measures, and time frames for completing corrective actions; (b) identify organizations and individuals accountable for accomplishing specific goals; and (c) fully comply with legislative requirements of the Chief Financial Officers Act, Government Performance and Results Act, Paperwork Reduction Act, and the Clinger-Cohen Act; (6) to help ensure the success of the multilevel strategy, top level management within DOD needs to be held accountable and have the authority and flexibility to achieve the desired results; (7) if DOD is successful in attacking the underlying causes of the problems, the Congress should expect to see positive outcomes, including: (a) the successful completion of full-scale financial audits; (b) reductions in operation and support costs; and (c) the fielding of major weapon and computer systems that meet cost, schedule, and performance estimates; and (8) if DOD's multilevel strategy does not result in the elimination of high-risk areas, the Congress may wish to consider the need for incentives to reach that goal.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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