High-Risk Areas

Drawing on GAO's high-risk series (GAO/HR-97-1 through GAO/HR-97-14, Feb. 1997), the first testimony discusses major government programs prone to waste, fraud, abuse, and mismanagement. GAO focuses on high-risk areas within the Internal Revenue Service, Medicare, and the Supplemental Security Income Program. GAO also discusses such other vulnerable areas as financial management at the Customs Service, information security weaknesses, and the "Year 2000" problem. The second testimony addresses solutions to these serious management problems, which cost taxpayers billions of dollars and undermine the quality of government services. GAO outlines the steps that need to be taken to fix these problems.

GAO noted that: (1) its mission is helping the Congress in its efforts to improve management of our national government; (2) one approach has entailed identifying critical management problems before they become uncontrollable crises; (3) since 1990, GAO has produced a list for the Congress of areas that GAO identified, based on its work, as highly vulnerable to waste, fraud, abuse and mismanagement; (4) to help solve high risk problems, GAO has made hundreds of recommendations to get at the heart of these problems, which have at their core a fundamental lack of accountability; (5) this list helps focus attention by the administration and the Congress on critical management problems; (6) the high risk designation has prompted agencies to take action in many areas, and progress in addressing management problems has ensued; (7) the need to address fundamental management problems also was a factor in prompting the Congress to to enact important reforms such as the 1995 Paperwork Reduction Act and the 1996 Clinger-Cohen Act to better manage investments in information technology (IT), the Government Management and Reform Act of 1994, which expanded the 1990 Chief Financial Officers (CFO) Act's requirement for financial statements and controls that can pass the test of an independent audit, and the 1993 Government Performance and Results Act (GPRA) to better measure performance and focus on results; (8) this legislation forms an integrated framework that will help agencies identify and monitor high risk areas and operate programs more efficiently and will assist the Congress in overseeing agencies' efforts to achieve these results; (9) through the set of reforms embodied in the CFO Act, GRPA, and the IT initiatives, the Congress has laid the groundwork for the federal government to use proven best management practices that have been successfully applied in the private sector and state and local governments; and (10) these reforms will not produce lasting improvements, however, without successful implementation by agencies and relentless Congressional involvement.