Question:
Why GAO Did This Study

Multiemployer plans are collectively bargained pension agreements often between labor unions and two or more employers. CSPF is one of the nation's largest multiemployer defined benefit pension plans, covering about 385,000 participants. Since 1982, the plan has operated under a court-enforceable consent decree which, among other things, requires that the plan's assets be managed by independent parties. Within 7 years, CSPF estimates that the plan's financial condition will require severe benefit cuts. GAO was asked to review the events and factors that led to the plan's critical financial status and how its investment outcomes compare to similar plans.
GAO describes (1) what is known about the factors that contributed to CSPF's critical financial condition; (2) what has been CSPF's investment policy, and the process for setting and executing it, since the consent decree was established; and (3) how CSPF's investments have performed over time, particularly compared to similar pension plans.
GAO reviewed relevant federal laws and regulations; interviewed CSPF representatives, International Brotherhood of Teamsters officials and members, federal officials, and knowledgeable industry stakeholders; reviewed CSPF documentation including investment policy statements and board of trustee meeting minutes; and analyzed investment returns and fees from required, annual pension plan filings and from consultant benchmarking reports.

What GAO Found

The Central States, Southeast and Southwest Areas Pension Fund (CSPF) was established in 1955 to provide pension benefits to trucking industry workers, and is one of the largest multiemployer plans. According to its regulatory filings, CSPF had less than half the estimated funds needed to cover plan liabilities in 1982 at the time it entered into a court-enforceable consent decree that provides for oversight of certain plan activities. Since then, CSPF has made some progress toward achieving its targeted level of funding; however, CSPF has never been more than 75 percent funded and its funding level has weakened since 2002, as shown in the figure below.
Stakeholders GAO interviewed identified numerous factors that contributed to CSPF's financial condition. For example, stakeholders stated that changes within the trucking industry as well as a decline in union membership contributed to CSPF's inability to maintain a healthy contribution base. CSPF's active participants made up about 69 percent of all participants in 1982, but accounted for only 16 percent in 2016. The most dramatic change in active participants occurred in 2007 when the United Parcel Service, Inc. (UPS) withdrew from the plan. At that time, UPS accounted for about 30 percent of the plan's active participants (i.e. workers). In addition, the market declines of 2001 to 2002 and 2008 had a significant negative impact on the plan's long-term investment performance. Stakeholders noted that while each individual factor contributed to CSPF's critical financial condition, the interrelated nature of the factors also had a cumulative effect on the plan's financial condition.
Both CSPF's investment policy and the process for setting and executing it have changed several times since the consent decree was established in 1982. The original consent decree gave an independent asset manager—called a named fiduciary—exclusive authority to set and change the plan's investment policies and manage plan assets, and prohibited CSPF trustees from managing assets or making investment decisions. Initially, the named fiduciaries sold the troubled real estate assets acquired during the pre-consent decree era. Subsequent changes include the following:
In 1993, the named fiduciaries started to increase investment in equities, and their policies continued to direct that asset allocations be weighted toward equities until early 2017.
Between 2003 and 2010, the court approved three plan decisions to move a total of 50 percent of CSPF's assets into passively-managed accounts (passive management typically seeks to match the performance of a specific market index and reduce investment fees).
An early-2017 investment policy change precipitated by CSPF's deteriorating financial condition will continue to move plan assets into fixed income investments ahead of projected insolvency, or the date when CSPF is expected to have insufficient assets to pay promised benefits when due. As a result, assets will be gradually transitioned from “return-seeking assets”—such as equities and emerging markets debt—to high-quality investment grade debt and U.S. Treasury securities with intermediate and short-term maturities. The plan is projected to become insolvent on January 1, 2025. CSPF officials and named fiduciary representatives said these changes are intended to reduce the plan's exposure to market risk and volatility, and provide participants greater certainty prior to projected insolvency.
GAO found that CSPF's investment returns and expenses were generally in line with similarly sized institutional investors and with demographically similar multiemployer pension plans. For example, GAO's analysis of returns using the peer group measure used by CSPF known as the Wilshire Associates' Trust Universe Comparison Service (TUCS), showed that CSPF's annual investment returns since 1995 were above the median about as many times as they were below. Similarly, comparing CSPF's returns to a peer group of similar multiemployer defined benefit plans using federally required annual reports found that CSPF's annual investment returns were in line with those of its peers. Specifically, CSPF's annual returns were above the median nine times and below it six times—and CSPF's overall (dollar-weighted) average annual return from 2000 through 2014 was close to that of the peer median average return of 4.8 percent.
In addition, GAO found that CSPF's investment fees and other administrative expenses have also been in line with other large multiemployer plans. For example:
CSPF's investment fees as a percentage of assets were about 9 percent lower than the median of large defined benefit multiemployer plans over the 2000 through 2014 period—though much of that difference is accounted for by a relative reduction in investment fees since 2007. CSPF's investment fees as a percentage of assets were, on average, about 34 basis points (or 0.34 percent).
CSPF's administrative expenses related to the day-to-day operations of the plan have also been in line with other large multiemployer plans. CSPF's administrative expenses per participant were below the median for large defined benefit multiemployer plans for 12 of the 15 years over the 2000 through 2014 period. As of 2014, CSPF's administrative expense was $98 per participant, which is about 16 percent less than the median for large defined benefit multiemployer plans.

What GAO Recommends

GAO is not making recommendations in this report.


Question:
Why GAO Did This Study

Broadband furthers economic development, educational attainment, and public health and safety; however, residents of tribal lands have lower levels of broadband access relative to the U.S. population. Congress has prioritized identifying and targeting funds to unserved areas. FCC uses data from broadband providers to develop maps and reports depicting broadband availability in the United States, with specific information on tribal lands. GAO was asked to review FCC's efforts to collect broadband data for tribal lands.
This report examines the extent to which: (1) FCC's approach to collecting broadband data accurately captures broadband access on tribal lands and (2) FCC obtains tribal input on the data. GAO interviewed stakeholders from 25 tribal governments or tribally owned providers, and visited nine tribal lands. The selected tribes varied geographically and in levels of broadband availability, among other characteristics. GAO also reviewed FCC's rulemakings on broadband data and interviewed other tribal stakeholders, FCC officials, and 13 non-tribal broadband providers selected to include a diversity of technologies. Provider and tribal interviews were based on non-generalizable samples.

What GAO Found

The Federal Communications Commission (FCC) collects data on broadband availability from providers, but these data do not accurately or completely capture broadband access on tribal lands. Specifically, FCC collects data on broadband availability; these data capture where providers may have broadband infrastructure. However, FCC considers broadband to be “available” for an entire census block if the provider could serve at least one location in the census block. This leads to overstatements of service for specific locations like tribal lands (see figure). FCC, tribal stakeholders, and providers have noted that this approach leads to overstatements of broadband availability. Because FCC uses these data to measure broadband access, it also overstates broadband access—the ability to obtain service—on tribal lands.
Additionally, FCC does not collect information on several factors—such as affordability, quality, and denials of service—that FCC and tribal stakeholders stated can affect the extent to which Americans living on tribal lands can access broadband services. FCC provides broadband funding for unserved areas based on its broadband data. Overstatements of access limit FCC's and tribal stakeholders' abilities to target broadband funding to such areas. For example, some tribal officials stated that inaccurate data have affected their ability to plan their own broadband networks and obtain funding to address broadband gaps on their lands. By developing and implementing methods for collecting and reporting accurate and complete data on broadband access specific to tribal lands, FCC would be better able to target federal broadband funding to tribal areas that need it the most and to more accurately assess FCC's progress toward its goal of increasing all Americans' access to affordable broadband.
FCC does not have a formal process to obtain tribal input on the accuracy of provider-submitted broadband data. In the National Broadband Plan , FCC highlighted the need for a targeted approach to improve broadband availability data for tribal lands. As outlined in the plan, such an approach would include working with tribes to ensure that information is accurate and useful. About half of the tribal stakeholders GAO interviewed raised concerns that FCC relies solely on data from providers, and most stated FCC should work with tribes to improve the accuracy of FCC's data. Establishing a formal process to obtain input from tribal governments on the accuracy of provider-submitted broadband data could help improve the accuracy of FCC's broadband data for tribal lands.

What GAO Recommends

GAO is making three recommendations to FCC, including that it collect and report data that accurately measure tribal broadband access as well as develop a process to obtain tribal input on the accuracy of the data. FCC agreed with the recommendations.


Question:
Why GAO Did This Study

Poverty can have a profound effect on academic outcomes and college readiness and students from low-income families are less likely to go to college. The low rates of degree attainment for low-income students raises questions about whether the students who wish to pursue higher education have access to courses that support their readiness for college. GAO was asked to review college preparatory course offerings in U.S. high schools.
This report (1) examines the extent to which high schools of different poverty levels offer courses to prepare students academically for college, and (2) describes the challenges students in high-poverty schools face being prepared to attend college. GAO analyzed 2015-16 Education data on course offerings by school poverty level, type, and size, and developed a generalized linear regression model to explore whether certain school-level characteristics may be associated with course offerings; reviewed a generalizable sample of public 4-year college websites for course requirements for admission; and interviewed officials from Education and the Department of Justice. GAO also conducted site visits to 12 high-poverty high schools in 3 states selected to provide variation in course offerings, among other things. In this review, GAO focused on public 4-year colleges because they offer a bachelor's degree and are generally a more affordable 4-year option.

What GAO Found

Students in relatively poor and small schools had less access to high school courses that help prepare them for college, according to GAO's analysis of Department of Education (Education) data for school year 2015-16 (the most recent available). While most public high schools, regardless of poverty level, offered courses like algebra and biology, disparities in access were associated with school poverty level for more advanced courses like calculus, physics, and those that may allow students to earn college credit, like Advanced Placement (AP) courses (see figure). High-poverty schools were less likely to offer the math and science courses that most public 4-year colleges expect students to take in high school, according to GAO's analysis of college websites. GAO's regression analysis also showed that smaller schools and certain types of schools, like charter schools, are less likely to offer the college preparatory math or science courses that many colleges look for during the admissions process.
Officials GAO interviewed in selected high-poverty high schools said their students can face a number of complex challenges in preparing for college. For instance, officials said that many students are academically behind when they enter high school and are unable to progress to more advanced courses. Further, high-poverty schools may not offer rigorous courses, such as AP courses, due to lack of resources or teaching staff. Students in high-poverty schools also face other stressors that can make going to college challenging. Officials at 9 of the 12 schools GAO visited cited the effects of poverty on their students, such as homelessness, hunger, and trauma, that make preparing for college difficult. School officials also said the steps involved in applying to and enrolling in college can be difficult to navigate for many students in high-poverty schools. Officials in selected schools reported efforts to address these challenges, such as offering free college courses and obtaining outside supports to assist with college advising.


Question:
Why GAO Did This Study

HHS-OIG has the authority to exclude providers and other entities that have committed certain acts, such as submitting false or fraudulent claims, from participation in federal health care programs. However, HHS-OIG can enter into agreements—CIAs and IAs—with providers and other entities as an alternative to exclusion. HHS-OIG is responsible for negotiating such agreements—which it typically does at the same time the Department of Justice (DOJ) is negotiating a legal settlement to resolve related allegations—and then monitoring the entities' compliance with them.
GAO was asked to review HHS-OIG's use of these agreements. This report describes (1) the number of agreements and their general characteristics; (2) the circumstances that may lead to an agreement and the standard provisions of agreements; and (3) monitoring efforts and actions taken, if any, in response to noncompliance with the agreements.
GAO examined agreements entered into from July 2005 (when HHS-OIG created its database) through July 2017 (most current at the time of GAO's analyses) and used HHS-OIG data to describe agreements' characteristics and actions to address noncompliance. GAO reviewed HHS-OIG documentation, including agreement templates and a selection of agreements to identify standard provisions. GAO also interviewed HHS-OIG and DOJ officials.
GAO provided a draft of this report to HHS and DOJ. The agencies provided technical comments, which were incorporated as appropriate.

What GAO Found

To help improve adherence to federal health care program requirements by entities that have allegedly engaged in certain acts, such as submitting false or fraudulent claims, the Department of Health and Human Services' Office of Inspector General (HHS-OIG) entered into 652 agreements with those entities from July 2005 to July 2017. Since 2010, two types of agreements have been used: Corporate Integrity Agreements (CIA) and Integrity Agreements (IA). The more commonly used CIAs apply to larger entities, compared to IAs, which apply to individual practitioners or small businesses. From July 2005 through July 2017, about half of all agreements were with 3 types of entities—individual or small group practices, hospitals, and skilled nursing facilities.
For new agreements since July 2005, the most common initial allegations that led to an entity entering into an agreement included billing for services not provided and providing medically unnecessary services. When negotiating agreements, HHS-OIG uses one of six templates that address the different types of entities or conduct involved. Across agreements the provisions are generally similar—for example, requirements to provide training on specified topics or to hire a compliance officer.
HHS-OIG uses multiple strategies to oversee agreements, such as requiring periodic reports from the entities that demonstrate compliance and assigning a monitor to review these reports and conduct site visits. HHS-OIG can also take certain actions to address noncompliance. For example, for new agreements from July 2005 through July 2017, HHS-OIG imposed monetary penalties 41 times, ranging from $1,000 to more than $3 million (median of $18,000), and excluded 4 entities from participation in federal health care programs.


Question:
Why GAO Did This Study

Pub. L. No. 110-229, enacted in 2008, amended the U.S.-CNMI covenant to apply federal immigration law to the CNMI after a transition period. The law required the Department of Homeland Security (DHS) to establish a temporary work permit program for foreign workers. DHS is required to decrease the number of permits issued annually, reducing them to zero by the end of the transition period, scheduled for December 31, 2019.
To implement the law, DHS established a new work permit program in 2011. Under the program, foreign workers can obtain, through their employers, nonimmigrant CW-1 status that allows them to work in the CNMI. The law was amended in August 2017 to, among other things, restrict future permits for workers in construction and extraction occupations.
Proposed legislation—Senate bill S. 2325—would, among other things, extend the transition period through December 31, 2029; increase the number of available permits from the 2018 level; and set required decreases in the annual numerical limit for the permits. (See figure for past numerical limits established by DHS and future limits proposed by S. 2325.)
This testimony discusses (1) recent trends in the CNMI economy and (2) preliminary observations about the number of approved CW-1 permits and characteristics of permit holders, drawn from GAO's ongoing work. GAO updated information about the CNMI's economy that it reported in May 2017 (see GAO-17-437 ). GAO also analyzed data and documents from U.S. agencies and the CNMI government.

What GAO Found

The Commonwealth of the Northern Mariana Islands' (CNMI) inflation-adjusted gross domestic product (GDP) has grown each year since 2012, according to the Bureau of Economic Analysis. In 2016, the CNMI's GDP rose by 29 percent, partly as a result of construction investment. While tourism has fluctuated in recent years, visitor arrivals in the CNMI rose by nearly a third from 2016 to 2017. After nearly a decade of annual decline, the total number of workers employed in the CNMI increased from 2013 through 2016, according to the most recent available CNMI tax data. Foreign workers made up 53 percent of those employed in 2016, compared with roughly 75 percent in 2002.
GAO's preliminary analysis indicates that the number of approved CNMI-Only Transitional Worker (CW-1) permits for foreign workers in the CNMI grew from over 7,100 for fiscal year 2012 to nearly 13,000 for fiscal year 2017. In addition, GAO identified trends in the country of birth, occupation, and employment duration of foreign workers with CW-1 permits approved for fiscal years 2012 through 2018. Workers born in the Philippines received the highest number of CW-1 permits each year. As of January 2018, 750 CW-1 permits had been granted to construction workers for fiscal year 2018—a 75 percent decline from the prior fiscal year. GAO estimated that approximately 2,350 foreign workers with approved CW-1 permits maintained continuous employment in the CNMI from fiscal year 2014 through January 2018. About 80 percent of these workers were born in the Philippines.


Question:
Why GAO Did This Study

IoT generally refers to devices (or “things”), such as vehicles and appliances, that use a network to communicate and share data with each other. The increasing popularity of wireless IoT devices that use spectrum has created questions about spectrum needs. GAO was asked to examine issues related to spectrum and IoT. This report discusses, among other things, (1) spectrum challenges related to IoT, (2) how the federal government plans for IoT’s spectrum needs, and (3) how selected leading countries prepare for IoT’s spectrum needs.
GAO reviewed documents and interviewed officials from FCC and the National Telecommunications and Information Administration as well as 24 officials from a variety of sectors, including government, commercial, and manufacturing. Stakeholders were selected based on a literature review, among other factors. GAO interviewed government and commercial representatives from four leading countries regarding IoT planning and development and reviewed associated documents. These countries were selected based on criteria that included level of economic development among other criteria.

What GAO Found

The stakeholders GAO spoke with identified two primary spectrum-related challenges for the internet of things (IoT)—the availability of spectrum and managing interference. Although not considered an immediate concern, Federal Communications Commission (FCC) staff and some stakeholders noted that rapid increases in IoT devices that use large amounts of spectrum—called high-bandwidth devices—could quickly overwhelm networks, as happened with smart phones. Stakeholders and FCC staff also indicated that managing interference is becoming more challenging as the number of IoT and other wireless devices grows, particularly in bands that do not require a spectrum license. The figure below illustrates the uses of radio frequency spectrum, including unlicensed use.
FCC plans for IoT’s spectrum needs by broadly tracking spectrum demand and making additional spectrum available as needed. Ensuring sufficient spectrum to support commercial demand is one way FCC pursues its strategic goal of promoting economic growth. FCC has made additional spectrum publicly available at least four times since 2015 by repurposing over 11 gigahertz of spectrum. However, FCC does not track the growth of IoT devices in two areas that pose the greatest risk to IoT’s growth—high bandwidth and unlicensed-spectrum devices. In 2014, FCC’s Technical Advisory Council (TAC) recommended that FCC monitor high-bandwidth IoT devices and make sufficient unlicensed spectrum available. FCC officials said that FCC monitors spectrum use broadly and makes spectrum available as needed. However, since the process of reallocating spectrum is lengthy, FCC may not have adequate time to take actions to avoid a shortage, possibly hindering IoT’s growth and associated economic growth.
Spectrum planners in four leading countries—France, Germany, the Netherlands, and South Korea—have taken steps similar to those taken by the United States in preparation for IoT’s expansion, including taking a technology-neutral approach that stakeholders believe encourages innovation. Unlike the United States, officials from two leading countries said they are concerned about spectrum congestion from the growth of IoT devices, but only one is actively monitoring congestion. In addition, three leading countries have developed nationwide low power wide-area networks that use unlicensed spectrum with potential benefits including low costs and low barriers to entry.

What GAO Recommends

FCC should track the growth in (1) high-bandwidth IoT devices and (2) IoT devices that rely on unlicensed spectrum. FCC did not believe these actions are necessary but noted that it would ask its TAC to periodically review and report on IoT’s growth. GAO continues to believe the recommendations are valid.


Question:
Why GAO Did This Study

FirstNet is charged with establishing a nationwide public-safety broadband network that is reliable, secure, and interoperable. To inform this work, FirstNet is consulting with a variety of stakeholders. In March 2017, FirstNet awarded a 25-year contract to AT&T to build, operate, and maintain the network. FirstNet's oversight of AT&T's performance is important given the scope of the network and the duration of the contract.
This testimony provides information on (1) FirstNet's efforts to establish the network; (2) stakeholder views on network reliability, security, and interoperability challenges FirstNet faces and its efforts to address them; and (3) FirstNet's plans to oversee its network contractor. This statement is based on GAO's June 2017 report ( GAO-17-569 ). For this report, GAO reviewed FirstNet documentation, key contract oversight practices identified in federal regulations and other sources, tribal communication practices identified by federal agencies, and assessed FirstNet's efforts and plans against these practices. GAO also interviewed FirstNet officials and a nongeneralizable selection of public safety, tribal, and other stakeholders selected to obtain a variety of viewpoints.

What GAO Found

In June 2017, GAO reported that the First Responder Network Authority (FirstNet) had conducted key efforts to establish the network, namely releasing the request for proposal (RFP) for the network and awarding the network contract to AT&T. As the contractor, AT&T will be responsible for the overall design, development, production, operation, and evolution of the network. Additionally, FirstNet consulted with state and local, federal, and tribal stakeholders. State officials GAO contacted were generally satisfied with FirstNet's efforts to engage them. However, tribal stakeholders GAO contacted expressed concern that FirstNet has not fully engaged in effective communication with tribes. FirstNet engaged tribes through a variety of mechanisms, such as through state points of contact and a working group, but tribes noted that individuals with first-hand knowledge of tribes' experiences are unable to represent tribal views directly among FirstNet's key decision makers. Although FirstNet is required to consult with tribes through state points of contact, a key principle of effective tribal communication is to seek full understanding of tribal concerns and reach consensus where possible. By fully exploring and proposing actions to address tribal stakeholders' concerns, FirstNet could help improve its relations with tribes and better meet stakeholders' needs.
According to stakeholders GAO contacted, FirstNet faces various challenges to ensure the network's reliability, security, and interoperability. For example, stakeholders raised concerns related to:
providing coverage to rural areas, in buildings, or underground;
ensuring the network's overall resiliency and cybersecurity; and
managing frameworks for user identity, credentialing of users, access management, and prioritization of users on the network.
FirstNet has taken action to address these challenges, such as by opening a test lab to test public safety devices and applications before deploying them on the network. The majority of stakeholders GAO contacted were satisfied with FirstNet's efforts but many noted that much uncertainty remains about how the network will be implemented.
FirstNet established offices to oversee its network contractor, developed policies and procedures to guide contract administration—including management and oversight—and is receiving assistance from another federal agency with contract administration experience, although FirstNet plans to assume full responsibility in the future. For example, FirstNet established the Network Program Office to oversee the contractor's performance and facilitate quality assurance of contract deliverables, among other things. Although this office will perform essential contract-administration functions, FirstNet had not conducted long-term projections of staffing needs for the office as of April 2017. As a result, FirstNet lacks reasonable assurance that it will have sufficient resources to handle increases in its responsibilities over time. Planning for and assigning adequate resources, including people, and assessing resource needs is a key practice for planning and executing effective contract oversight. By performing a long-term staffing assessment for the Network Program Office, FirstNet would be in a better position to fully understand its staffing needs and respond to staffing changes and risks as it assumes full responsibility of contract administration in the future.

What GAO Recommends

In June 2017, GAO recommended that FirstNet fully explore tribal stakeholders' concerns and assess its long-term staffing needs. FirstNet agreed with GAO's recommendations and described actions to address them.


Question:
Why GAO Did This Study

Questions have been raised about the lack of timeliness of TPAs' payments to community providers under the Choice Program and how this may affect the willingness of providers to participate in the program as well as in the forthcoming Veterans Community Care Program. You asked GAO to review issues related to the timeliness of TPAs' payments to community providers under the Choice Program.
This report examines, among other things, (1) the length of time TPAs have taken to pay community providers' claims and factors affecting timeliness of payments, and (2) actions taken by VA and the TPAs to reduce the length of time TPAs take to pay community providers for Choice Program claims.
GAO reviewed TPA data on the length of time taken to pay community provider claims from November 2014 through June 2018, the most recent data available at the time of GAO's review. GAO also reviewed documentation, such as the contracts between VA and its TPAs, and interviewed VA and TPA officials. In addition, GAO interviewed a non-generalizable sample of 15 community providers, selected based on their large Choice Program claims volume, to learn about their experiences with payment timeliness.

What GAO Found

The Department of Veterans Affairs' (VA) Veterans Choice Program (Choice Program) was created in 2014 to address problems with veterans' timely access to care at VA medical facilities. The Choice Program allows eligible veterans to obtain health care services from providers not directly employed by VA (community providers), who are then reimbursed for their services through one of the program's two third-party administrators (TPA). GAO's analysis of TPA data available for November 2014 through June 2018 shows that the length of time the TPAs took to pay community providers' clean claims each month varied widely—from 7 days to 68 days. VA and its TPAs identified several key factors affecting timeliness of payments to community providers under the Choice Program, including VA's untimely payments to TPAs, which in turn extended the length of time TPAs took to pay community providers' claims; and inadequate provider education on filing claims.
VA has taken actions to address key factors that have contributed to the length of time TPAs have taken to pay community providers. For example, VA updated its payment system and related processes to pay TPAs more quickly. According to VA data, as of July 2018, VA was paying at least 90 percent of the TPAs' invoices within 7 days. In addition, VA and the TPAs have taken steps to improve provider education to help providers resolve claims processing issues. However, 9 of the 15 providers GAO interviewed said they continue to experience lengthy telephone hold times. According to VA and TPA officials, steps have been taken to improve the customer service offered to community providers. However, VA officials do not collect data on or monitor TPA compliance with customer service requirements—such as calls being answered within 30 seconds or less—for provider calls because they said they are not enforcing the requirements and are allowing TPAs to prioritize calls from veterans. Without collecting data and monitoring compliance, VA does not have information on challenges providers may face when contacting TPAs to resolve payment issues.

What GAO Recommends

GAO is making two recommendations, including that VA should collect data on and monitor compliance with its requirements pertaining to customer service for community providers. VA concurred with GAO's recommendations and described steps it will take to implement them.


Question:
Why GAO Did This Study

The tax gap—the difference between tax amounts that taxpayers should have paid and what they actually paid—has been a persistent problem for decades. The tax gap estimate is an aggregate estimate of the five types of taxes that IRS administers—individual income, corporation income, employment, estate, and excise taxes. For each tax type, IRS attempts to estimate the tax gap based on three types of noncompliance: (1) underreporting of tax liabilities on timely filed tax returns; (2) underpayment of taxes due from timely filed returns; and (3) nonfiling, when a taxpayer fails to file a required tax return altogether or on time.
GAO was asked to review IRS's tax gap estimate for tax years 2008 to 2010. This report provides information on (1) the main drivers of the tax gap; (2) IRS's confidence in the tax gap estimates; (3) IRS's goals, if any, for reducing the tax gap; and (4) the extent to which IRS uses tax gap estimates and underlying data to develop strategies to reduce the tax gap. GAO reviewed IRS tax gap data and reports and interviewed IRS officials.

What GAO Found

The Internal Revenue Service's (IRS) latest tax gap estimate found that taxpayers voluntarily and timely paid about 81.7 percent of the taxes they should have paid for tax years 2008-2010.
As with past estimates, underreporting of individual income taxes accounted for the largest portion of the 2008-2010 tax gap. IRS believes the tax gap estimates are sufficiently reliable to provide a snapshot of tax compliance as a whole because much of the estimates are based on the most current data available, such as from IRS's National Research Program (NRP).
IRS previously set or acknowledged goals to improve voluntary compliance. However, IRS has since moved away from that approach. IRS officials now believe there are limited benefits to establishing goals because IRS cannot control all aspects of compliance and updated methodologies may cause fluctuations in the estimates. IRS does, however, have an impact on taxpayers' compliance through its service and enforcement programs. Without long-term, quantitative goals for improving voluntary compliance, it will be difficult for IRS to determine the success of its compliance efforts and adjust its approaches.
The Internal Revenue Manual states IRS needs to measure taxpayer compliance and other factors so compliance information and tools can be improved. IRS uses tax gap data to study compliance behaviors and update computer formulas designed to identify tax returns with a high likelihood of noncompliance. Yet IRS has not documented a comprehensive strategy that shows how it intends to use NRP data to update compliance strategies. Officials said the uses of NRP are widely known from general documentation about NRP. Without developing and documenting a strategy for using the NRP data to update compliance strategies, IRS may not fully leverage the compliance data or allocate enforcement resources in the most cost-effective manner, and it may be difficult for Congress and others to understand the merits of what they are being asked to fund.

What GAO Recommends

GAO recommends that IRS re-establish goals for improving voluntary compliance and develop and document a strategy that outlines how it will use its data to update compliance strategies to address the tax gap. IRS disagreed with GAO's recommendation on establishing goals and agreed with the recommendation on compliance strategies. GAO continues to believe that goals are essential for results-oriented management.


Question:
Why GAO Did This Study

The federal government provides billions of dollars in grant funding to organizations offering social services, including FBOs. In carrying out their mission, some FBOs prefer to hire individuals who share their religious beliefs. Although the 1964 Civil Rights Act prohibits employment discrimination based on religion, section 702(a) of the Act exempts FBOs from this prohibition, thereby allowing them to hire based on religion. However, some federal grant programs contain statutory restrictions prohibiting this practice. Since a 2007 DOJ legal opinion, federal agencies allow faith-based grantees to use RFRA as a basis for seeking an exemption to allow religious-based hiring.
GAO was asked to review the extent to which faith-based grantees have sought RFRA exemptions from statutory restrictions on religious-based hiring. This report describes (1) what is known about faith-based grantees that have certified exemption from statutory restrictions on religious-based hiring, per RFRA, since 2007; and (2) how agencies inform grantees of statutory restrictions on religious-based hiring and requirements for demonstrating their eligibility for an exemption.
GAO reviewed information from DOJ, HHS, and DOL grantees from fiscal years 2007 to 2015 that were subject to statutory restrictions on religious-based hiring. GAO interviewed faith-based grantees that certified as exempt and a selection of those that did not. GAO also reviewed agency grant documentation and guidance provided to grantees and interviewed cognizant officials to understand the processes FBOs must follow to certify as exempt.

What GAO Found

From fiscal years 2007 through 2015, few faith-based grantees sought an exemption based on the Religious Freedom Restoration Act of 1993 (RFRA) from nondiscrimination laws related to religious-based hiring. Specifically, GAO found that the Department of Justice (DOJ), Department of Health and Human Services (HHS), and Department of Labor (DOL) awarded funding to at least 2,586 grantees through at least 53 grant programs containing nondiscrimination hiring restrictions during this time. The number of relevant grant programs could be higher, because GAO could not identify all such programs due to data limitations. Across the 3 agencies, GAO identified 117 grantees that were potential Faith-Based Organizations (FBOs). Of the 117 potential FBOs, 9 DOJ grantees were FBOs that certified as being exempt from statutory restrictions on religious-based hiring. GAO interviewed 6 of these FBOs, all of which stated that hiring individuals who share their religious beliefs was critical to their mission, and that had the RFRA exemption not been available to them, they likely would not have sought the grant.
DOJ, DOL, and HHS inform grant applicants and recipients of statutory restrictions on religious-based hiring and processes for obtaining an exemption from such restrictions generally through grant materials. DOJ and DOL also provide relevant information on their web sites. All three agencies require grantees that seek to make employment decisions based on religion to self-certify that they meet requirements to be eligible for an exemption, but vary in how they review and approve requests for exemptions. For example, DOJ, DOL, and HHS have policies requiring grantees to submit their exemption self-certification, but only DOL reviews exemption requests and either approves them or provides a reason for denial.


Question:
Why GAO Did This Study

Superfund is EPA's principal program to address sites with hazardous substances, and some of the most seriously contaminated of these sites are listed on the NPL. Many of these sites can affect Indian tribes or their land. EPA has a policy to consult with tribes when EPA actions or decisions may affect tribal interests, including on cleanup of NPL sites that are on tribal property or that affect tribes.
GAO was asked to analyze NPL sites that are on tribal property or that affect tribes and EPA's consultation with tribes at these sites. This report: (1) examines the extent to which EPA has reliable data identifying NPL sites that are located on tribal property or that affect tribes, (2) examines the extent to which EPA has reliable data on the agency's consultation with tribes regarding NPL sites, and (3) describes the actions EPA has taken to address the unique needs of tribes when making decisions about cleanup actions at Superfund sites. GAO reviewed laws and policies, assessed EPA data on NPL sites, and interviewed EPA and tribal officials about cleanup actions and consultations at six non-generalizable NPL sites selected in part for their geographic diversity.

What GAO Found

The Environmental Protection Agency (EPA) does not have reliable data identifying National Priorities List (NPL) sites that are located on tribal property or that affect tribes. Specifically, EPA collects data on whether sites are on tribal property or have Native American Interest (a data variable indicating sites where tribal members or tribal land would be directly affected by the release of hazardous substances), as well as which tribes are associated with NPL sites. However, EPA's data are not always accurate or complete for a number of reasons. For example, EPA can have difficulty identifying some tribal property boundaries, and NPL site boundaries may evolve as the site is investigated and remediated. EPA does not have a regular review process for its data on whether an NPL site is on tribal property. In addition, EPA's guidance for determining whether a site has Native American Interest is unclear, and regions may not interpret it consistently. Without improving its review process and clarifying its guidance, EPA will not have reasonable assurance that its data on tribes that are affected by NPL sites are accurate or complete.
EPA consults with tribes when actions at an NPL site may affect tribal interests, but the agency does not have reliable data on its consultations with tribes. Data from EPA's system for tracking consultation did not include documentation of some consultations that GAO confirmed had occurred. One possible reason that EPA data are incomplete is that the agency's policy is unclear on which interactions are considered consultation and are therefore to be documented in EPA's system of record, which is not consistent with federal standards for internal control. EPA's policy provides a broad definition of consultation and specifies which staff are responsible for determining when consultation may be appropriate. However, the policy does not provide further guidance on the circumstances under which consultation should be considered. For example, it does not specify any specific points in the hazardous substance cleanup process at which consultation should be considered or provide further detail on which tribal interests should be considered when determining if tribal interests on NPL sites are affected. Without clarifying guidance to clearly define circumstances under which consultation with tribes should be considered, EPA cannot have reasonable assurance that it is applying its consultation policy consistently.
EPA has taken various actions to address the unique needs of tribes when making decisions about cleanup actions. These actions include minimizing tribal members' exposure to contaminants because of tribal lifestyle (e.g., greater consumption of local fish and game) and limiting potential damage to culturally important sites. For example, EPA officials said that at one site, they altered the design and route of the roads used to remove contaminated materials to minimize the impact of cleanup activities' on cultural resources. EPA also published a memorandum in 2017 with recommendations on considering tribes' traditional ecological knowledge in the cleanup process if tribes offer it.

What GAO Recommends

GAO is making four recommendations to EPA, including that it take actions to improve the data it collects and to clearly define circumstances under which consultation with tribes should be considered. EPA generally agreed with GAO's recommendations.


Question:
Why GAO Did This Study

Modernization of the nation's nuclear stockpile depends on timely procurement and production of nonnuclear parts and components. Such parts and components make up over 80 percent of the items in a nuclear weapon. The Kansas City site procures or produces most of these parts, under NNSA oversight. In fiscal year 2012, the site completed construction of a modern production facility. The new facility was expected to accommodate rising future workload demands, based on the forecasts that were current in 2012, according to Kansas City site contractor representatives.
The Senate committee report accompanying a bill for the National Defense Authorization Act for Fiscal Year 2018 included a provision for GAO to review the Kansas City site's staffing plans and capabilities to meet national security requirements. This report examines (1) workload forecasts for the site since 2012, and (2) management challenges the site has identified for achieving the forecasted workload, and actions the site has taken to mitigate these challenges.
GAO reviewed NNSA and contractor documents from 2012 through 2018 relevant to workload changes, and associated workload capacity, including information on infrastructure, equipment, and business processes—as well as personnel data. GAO also interviewed NNSA program and field officials and contractor representatives.

What GAO Found

Workload forecasts have significantly changed at the National Nuclear Security Administration's (NNSA) primary site for procuring or producing nonnuclear parts and components of nuclear weapons since the site's modern production facility was built in 2012. Specifically, workload projections made by the contractor operating the site, known as the Kansas City National Security Campus (Kansas City site), has increased significantly from forecasts used in planning the site's new production facility. More recent forecasts show that to meet workload requirements, production and administrative staff will need to almost double by 2020 compared to 2014 levels. For example, workload to modernize the B61-12 and W88 weapons systems will double during fiscal years 2020 through 2022.
According to NNSA officials and contractor staff, the site has identified and begun to mitigate management challenges to meeting future workload, including:
Ensuring sufficient production and office space. Because the current space is not sufficient for the increase in projected workload, the site is leasing additional space until long-term solutions, currently in planning, can be implemented.
Updating production equipment. To update aging production equipment, the site is developing a 10-year equipment strategy, among other things.
Retaining and recruiting a sufficient workforce. The site has offered rewards and benefits to retain existing staff, about a third of whom are eligible to retire. It is also recruiting skilled new staff in tight labor markets and seeking to expedite security clearances for them.
Ensuring adequate external supplier capacity. The site procures about 65 percent of its nonnuclear components from external suppliers. The site is assessing capacity and risk of existing suppliers and developing new ones.
Current mitigation efforts should help the site meet currently planned increased workload and capacity demands, according to contractor and NNSA analyses. However, the February 2018 Nuclear Posture Review—conducted by the Department of Defense under the direction of the President to determine the role of nuclear weapons in the nation's security strategy—may change requirements and add to the site's workload in ways not yet fully known because studies and plans in response to the review are not fully complete.


Question:
Why GAO Did This Study

During open enrollment, eligible returning consumers may re-enroll in their existing health insurance exchange plan or choose a different plan. Those who do not actively enroll in a plan may be automatically reenrolled into a plan. According to the Department of Health and Human Services, automatic re-enrollment is intended to help ensure consumers' continuity in coverage. However, some have questioned whether automatic reenrollment could have unintended financial consequences for consumers.
GAO was asked to review automatic reenrollment and benchmark plans. GAO examined 1) the extent to which plans identified as benchmark plans remained the same plans from year to year, and how premiums for benchmark plans changed; 2) the proportion of exchange consumers who were automatically re-enrolled into the same or similar plans, and how these proportions compared to those for consumers who actively re-enrolled, and 3) the extent to which consumers' financial responsibility for premiums changed for those who were automatically re-enrolled compared to those who actively re-enrolled.
GAO reviewed relevant guidance and analyzed county-based data from the Centers for Medicare & Medicaid Services (CMS) for the 37 states that used the federal information platform, healthcare.gov, from 2015 through 2017. GAO also interviewed CMS and ASPE officials and analyzed information from ASPE on reenrollment from 2015 to 2016.

What GAO Found

Through the exchanges established under the Patient Protection and Affordable Care Act, consumers can directly compare and select among health plans based on a variety of factors, including premiums. Most consumers who purchase health plans through the exchanges receive tax credits to help them pay for their premiums. The value of a consumer's premium tax credit is based, in part, on the premium for the benchmark plan, which is the second lowest cost option available in the consumer's local area within the exchange's silver metal tier (one of four metal tiers that indicate the value of plans). Because plan premiums and plan availability can change over time, the benchmark plan in each local market can also change over time. GAO analyzed changes in benchmark plans and premiums from 2015 through 2017 and found:
In most of the nearly 2,600 counties included in the analysis, the plans identified as benchmark plans, and the premiums for these plans, changed from year to year. For example, in 85 percent of counties, the 2015 benchmark plans were not benchmark plans in either 2016 or 2017.
Gross benchmark premiums (exclusive of tax credits) increased from year to year, and increases were higher from 2016 to 2017 than they were from 2015 to 2016.
Premium tax credits would limit the costs of increasing premiums for most consumers, though some consumers, including those not eligible for premium tax credits, would have incurred more or all of the higher premium costs.
During the annual open enrollment period, consumers who do not make an active plan selection are automatically reenrolled into their existing plan or, if that plan is no longer available, they are generally re-enrolled into a similar plan if one has been identified. GAO analyzed information from the Office of the Assistant Secretary for Planning and Evaluation (ASPE) for consumers enrolled in both 2015 and 2016 and found:
About 30 percent of consumers were automatically re-enrolled in 2016, while the remaining 70 percent chose to actively re-enroll.
Median net monthly premiums—what consumers paid after premium tax credits—increased less from 2015 to 2016 for those who actively enrolled ($5) than for those who were automatically reenrolled ($22), although there was variation. Our findings are consistent with other work by ASPE that suggests that consumers consider possible cost savings when deciding to switch plans.
The Department of Health and Human Services provided technical comments on a draft of this report, which GAO incorporated as appropriate.


Question:
Why GAO Did This Study

This testimony summarizes the information contained in GAO's September 2017 report, entitled Low-Dose Radiation: Interagency Collaboration on Planning Research Could Improve Information on Health Effects ( GAO-17-546 ).

What GAO Found

The Department of Energy (DOE), Nuclear Regulatory Commission (NRC), Environmental Protection Agency (EPA), and Food and Drug Administration generally used the advice of scientific advisory bodies to develop and apply radiation protection requirements and guidance for workers and the public in the radiation exposure settings that GAO reviewed. These settings were: (1) the operation and decommissioning of nuclear power plants; (2) the cleanup of sites with radiological contamination; (3) the use of medical equipment that produces radiation; and (4) accidental or terrorism-related exposure to radiation. Specifically, the agencies relied on the advice of three scientific advisory bodies that supported the use of a model that assumes the risk of cancer increases with every incremental radiation exposure. Accordingly, the agencies have set regulatory dose limits and issued guidance to confine exposure to levels that reduce the risk of cancer, while recognizing that scientific uncertainties occur in estimating cancer risks from low-dose radiation. For example, NRC requires nuclear power plants to consider measures for limiting workers' exposure below NRC's regulatory dose limit, such as by using robots for maintenance work in radiation areas.
GAO identified seven federal agencies that funded research on low-dose radiation's health effects. In fiscal years 2012 to 2016, DOE, NRC, EPA, and four other federal agencies obligated about $210 million for such research . Although the agencies have collaborated on individual projects on radiation's health effects, they have not established a collaborative mechanism to set research priorities. GAO's previous work has shown that federal agencies can use such mechanisms to implement interagency collaboration to develop and coordinate sound science policies. In the past, DOE took a leading role in this area because DOE provided stable funding and advocated for greater coordination on research on low-dose radiation's health effects. However, since fiscal year 2012, DOE has phased out funding for one of its main research programs in this area. This has created a void in coordination efforts among federal agencies, and no other agency has stepped forward to fill this void. Because of DOE's prior experience as a leader in this area of research and its research responsibility under the Atomic Energy Act of 1954, it could play an important role in helping federal agencies establish a coordinating mechanism for low-dose radiation research.
Dollars are in millions and have not been adjusted for inflation
Source: GAO analysis of agency data. | GAO-17-546


Question:
Why GAO Did This Study

The HUBZone program is intended to stimulate economic development in economically distressed areas. Certified HUBZone firms are eligible for federal contracting benefits, including limited competition awards such as set-aside contracts, and are required to be recertified every 3 years. The Puerto Rico Oversight, Management, and Economic Stability Act of 2016 required SBA to develop criteria and guidance for a risk-based approach to verify firm eligibility for the program and included a provision for GAO to review SBA's development and implementation of the required criteria and guidance. This report examines, among other objectives, (1) SBA's development of criteria and guidance on using a risk-based approach for certifying and recertifying HUBZone firms, and (2) SBA's implementation of the revised policies and procedures for firms located in Puerto Rico.
GAO analyzed SBA documents and reviewed files of a non-generalizable sample of 12 firms located in Puerto Rico that received certification between March 2017 and March 2018. GAO also interviewed SBA officials, representatives from HUBZone-certified firms in Puerto Rico, and local economic development agencies in Puerto Rico.

What GAO Found

The Small Business Administration (SBA) adopted criteria and guidance for a risk-based approach to certifying and recertifying firms for the Historically Underutilized Business Zone (HUBZone) program in March 2017, but the extent to which it conducted a risk assessment to inform its approach is unclear. In 2009, in response to GAO's prior recommendations to address weaknesses in the HUBZone certification process, SBA increased documentation requirements for certification, but not recertification (which every 3 years determines continued program eligibility).
In March 2017, SBA changed its recertification criteria and guidance to require firms with $1 million or more in HUBZone contract awards to provide documentation to support continuing eligibility.
SBA officials stated they completed a risk assessment of the HUBZone recertification process, but as of July 2018, had not provided GAO with documentation on when they performed the risk assessment, which risks were identified and considered, or what analysis established the $1 million threshold.
GAO previously found SBA lacked key controls for its recertification process and recommended in 2015 that SBA assess the process.
GAO continues to believe that an assessment of the recertification process would help inform a risk-based approach to reviewing and verifying information from firms that appear to pose the most risk to the program.
Based on GAO's review of case files for a non-generalizable sample of 12 firms in Puerto Rico that received HUBZone certification in March 2017–March 2018, SBA did not consistently document or follow its policies and procedures for certification reviews.
SBA did not have complete documentation in 9 of 12 cases. SBA officials described alternative procedures they used to determine firms' eligibility, but SBA has not updated its internal policy manuals to reflect these procedures and analysts did not document use of such procedures in the files GAO reviewed.
In 4 of 12 cases, SBA did not follow its policy to conduct three levels of review (by an analyst, a senior analyst, and the program director or deputy) when determining to approve or deny a firm.
It is not known to what extent SBA reviewed staff compliance with certification and recertification review procedures. SBA provided an assurance letter stating it evaluated the Office of HUBZone's internal controls and concluded the controls were effective, but the letter did not specify what steps SBA took for the evaluation.
Standards for internal control state management should document its control policies and conduct periodic reviews to ensure controls are effective. Because SBA has not updated its internal policy manuals or conducted a documented review of staff compliance with its quality review procedures, it lacks reasonable assurance that firms are eligible or its review process is effective. In turn, this increases the risk of ineligible firms participating in the HUBZone program and receiving contracting preferences to which they are not entitled.

What GAO Recommends

GAO recommends that SBA (1) update internal policy manuals to reflect current policies and procedures, and (2) review and document staff compliance with procedures for certification and recertification reviews of firms. SBA generally agreed with GAO's recommendations.


Question:
Why GAO Did This Study

Since 2002, MDA has been developing a Ballistic Missile Defense System that can identify and intercept enemy threats. MDA has received approximately $132 billion and is planning to spend an additional $47.8 billion through fiscal year 2022 to continue its efforts.
The National Defense Authorization Act for Fiscal Year 2012 included a provision that GAO annually assess and report on the extent to which MDA has achieved its acquisition goals and objectives. This report addresses (1) the progress MDA made in achieving fiscal year 2017 goals; (2) the extent to which MDA uses contracting vehicles known as undefinitized contract actions; and (3) the extent to which models provide credible information about the system's operational performance. To do this work, GAO reviewed planned fiscal year 2017 baselines and other documentation and assessed them against baseline reviews and GAO's acquisition best practices guides. In addition, GAO interviewed relevant officials.

What GAO Found

In fiscal year 2017, the Missile Defense Agency (MDA) made mixed progress in achieving its delivery and testing goals.
MDA continued to deliver assets to the military services. However, system-level integrated capabilities, such as some discrimination and integrated cyber defense improvements, were delayed and delivered with performance limitations.
Several programs achieved notable firsts, including the first intercept of an Intercontinental Ballistic Missile. However, one program experienced a failure, and other tests were delayed or deleted.
Moreover, GAO found challenges in MDA's processes for communicating the extent and limitations of integrated capabilities when they are delivered. As a result, warfighters do not have full insight into the capabilities MDA delivers.
GAO found that the average length of the undefinitized period and the not-to-exceed price of MDA's undefinitized contract actions, which authorize contractors to begin work before an agreement on terms, specifications, or price have been agreed upon, have increased over the past 5 years. While MDA policy permits use of undefinitized contracts on a limited basis, GAO and others have found that they can place unnecessary cost risks on the government.
MDA does not completely assess BMDS performance using traditional flight tests. Instead, MDA relies on models, some of which produce data with limited credibility. According to Department of Defense and MDA policy, models used to operationally assess weapons systems must be accredited to ensure they reflect the real-world system. In addition, using unaccredited models increases the risk that test results could be distorted, and leaves decision makers without key information on how the system will perform. While MDA has taken steps to improve its models, it has used many models in system operational ground tests that were not certified for that use (see figure). Additionally, MDA does not communicate model limitations to some decision makers.
Percentage of Accredited Models Used in Operational Assessments of Ballistic Missile Defense System Capability Deliveries, 2015 through 2017

What GAO Recommends

GAO is making six recommendations to, among other things, improve the way MDA communicates capability deliveries; better report information about MDA's use of undefinitized contract actions; and address the challenges MDA has encountered with certifying its test models and communicating limitations of those models. DOD partially concurred with the first recommendation and concurred with the other five. GAO continues to believe the recommendations are valid as discussed in the report.


Question:
Why GAO Did This Study

Industrial security addresses the information systems, personnel, and physical security of facilities and their cleared employees who have access to or handle classified information. The National Industrial Security Program was established in 1993 to safeguard federal government classified information that may be or has been released to contractors, among others. GAO last reported on this program in 2005 and the Department of Defense has since implemented 13 of the 16 related recommendations.
GAO was asked to examine how DSS administers the program. This report assesses to what extent DSS: 1) changed how it administers the program since GAO's last report; and 2) addressed challenges as it pilots a new approach to monitoring contractors with access to classified information.
GAO reviewed guidance and regulations since 2005, including the program's operating manual. GAO analyzed data from DSS's electronic databases and also selected a non-generalizable sample of contractor facilities based on clearance level, geographic location, and type of agreement to address foreign influence. We also reviewed documents and interviewed relevant government and contractor officials.

What GAO Found

The Defense Security Service (DSS) has upgraded its capabilities but also faces challenges in administering the National Industrial Security Program, which applies to all executive branch departments and agencies, and was established to safeguard federal government classified information that current or prospective contractors may access. Since we last reported on this program in 2005, DSS has:
streamlined facility clearance and monitoring processes, and
strengthened the process for identifying contractors with potential foreign influence.
However, under its current approach, DSS officials indicated that they face resource constraints, such as an inability to manage workloads and complete training necessary to stay informed on current threats and technologies. In its most recent report to Congress, DSS stated that it was unable to conduct security reviews at about 60 percent of cleared facilities in fiscal year 2016. Further, DSS recently declared that the United States is facing the most significant foreign intelligence threat it has ever encountered. As a result, in 2017, DSS announced plans to transition to a new monitoring approach to address emerging threats at facilities in the program. For a comparison of the current and new approaches, see below.
DSS has not addressed immediate challenges that are critical to piloting this new approach. For example, GAO found it is unclear how DSS will determine what resources it needs as it has not identified roles and responsibilities. Moreover, DSS has not established how it will collaborate with stakeholders—government contracting activities, the government intelligence community, other government agencies, and contractors—under the new approach. Federal Internal Control Standards establish the importance of coordinating with stakeholders, including clearly defining roles and responsibilities. In addition, GAO's leading practices for interagency collaboration state that it is important for organizations to identify the resources necessary to accomplish objectives. Until DSS identifies roles and responsibilities and determines how it will collaborate with stakeholders for the piloting effort, it will be difficult to assess whether the new approach is effective in protecting classified information.

What GAO Recommends

GAO recommends DSS determine how it will collaborate with stakeholders, including identifying roles and responsibilities and related resources, as it pilots a new approach. DSS concurred with the recommendation.


Question:
Why GAO Did This Study

GAO's High-Risk Series identifies federal program areas needing attention from Congress and the executive branch. GAO added federal management of programs that serve Indian tribes and their members to its February 2017 biennial update of high-risk areas in response to serious problems with management and oversight by Interior and HHS.
This testimony identifies GAO's recommendations to Interior and HHS from prior GAO reports on the federal management and oversight of Indian education, energy resources, and health care that remain unimplemented. It also examines agencies' recent actions to address the recommendations and the extent to which these actions address GAO's recommendations. To conduct this work, GAO reviewed and analyzed agency documentation on actions taken to implement the recommendations and conducted interviews with agency officials.

What GAO Found

As discussed in the 2017 High Risk report, GAO has identified numerous weaknesses in how the Department of the Interior (Interior) and the Department of Health and Human Services (HHS) manage programs serving Indian tribes. Specifically, these weaknesses were related to Interior's Bureau of Indian Education (BIE) and Bureau of Indian Affairs (BIA)—under the Office of the Assistant Secretary-Indian Affairs (Indian Affairs)—in overseeing education services and managing Indian energy resources, and HHS's Indian Health Service (IHS) in administering health care services. GAO cited nearly 40 recommendations in its 2017 High Risk report that were not implemented, and has since made an additional 12 recommendations in two new reports on BIE school safety and construction published in late May of this year. Interior and HHS have taken some steps to address these recommendations but only one has been fully implemented.
Education. GAO has found serious weaknesses in Indian Affairs' oversight of Indian education. For example, in 2016, GAO found that the agency's lack of oversight of BIE school safety contributed to deteriorating facilities and equipment in school facilities. At one school, GAO found seven boilers that failed inspection because of safety hazards, such as elevated levels of carbon monoxide and a natural gas leak. In 2017, GAO found key weaknesses in the way Indian Affairs oversees personnel responsible for inspecting BIE school facilities for safety and manages BIE school construction projects. Of GAO's 23 recommendations on Indian education—including recommendations cited in GAO's 2017 High Risk report and in two late May reports—none have been fully implemented.
Energy resource management. In three prior reports on Indian energy, GAO found that BIA inefficiently managed Indian energy resources and the development process, thereby limiting opportunities for tribes and their members to use those resources to create economic benefits and improve the well-being of their communities. GAO categorized concerns associated with BIA management of energy resources and the development process into four broad areas, including oversight of BIA activities, collaboration, and BIA workforce planning. GAO made 14 recommendations to BIA to address its management weaknesses, which were cited in the 2017 High Risk report. However, none have been fully implemented.
Health care. GAO has found that IHS provides inadequate oversight of its federally operated health care facilities and of its Purchased/Referred Care program. For example, in 2016 and 2017, GAO found that IHS provided limited and inconsistent oversight of the timeliness and quality of care provided in its facilities and that inconsistencies in quality oversight were exacerbated by significant turnover in area leadership. GAO also found that IHS did not equitably allocate funds to meet the health care needs of Indians. Of GAO's 13 recommendations on Indian health care cited in GAO's 2017 High Risk report, one has been fully implemented.

What GAO Recommends

GAO cited nearly 40 unimplemented recommendations in its February 2017 High Risk report on federal programs for Indian tribes in education, energy development, and health care, and added 12 recommendations in two new reports on BIE school safety and construction in late May of this year. Sustained focus by Interior and HHS in fully implementing these recommendations and continued oversight by Congress are essential to achieving progress in these areas.


Question:
Why GAO Did This Study

This testimony summarizes the information contained in GAO's June 2018 report, entitled Drug Discount Program: Federal Oversight of Compliance at 340B Contract Pharmacies Needs Improvement ( GAO-18-480 ).

What GAO Found

The 340B Drug Pricing Program (340B Program), which is administered by the U.S. Department of Health and Human Services' (HHS) Health Resources and Services Administration (HRSA), requires drug manufacturers to sell outpatient drugs at a discount to covered entities so that their drugs can be covered by Medicaid. Covered entities include certain hospitals and federal grantees (such as federally qualified health centers). About one-third of the more than 12,000 covered entities contract with outside pharmacies--contract pharmacies--to dispense drugs on their behalf. GAO's review of 30 contracts found that all but one contract included provisions for the covered entity to pay the contract pharmacy a flat fee for each eligible prescription. The flat fees generally ranged from $6 to $15 per prescription, but varied by several factors, including the type of drug or patient's insurance status. Some covered entities also agreed to pay pharmacies a percentage of revenue generated by each prescription.
Thirty of the 55 covered entities GAO reviewed reported providing low-income, uninsured patients discounts on 340B drugs at some or all of their contract pharmacies. Of the 30 covered entities that provided discounts, 23 indicated that they pass on the full 340B discount to patients, resulting in patients paying the 340B price or less for drugs. Additionally, 14 of the 30 covered entities said they determined patients' eligibility for discounts based on whether their income was below a specified level, 11 reported providing discounts to all patients, and 5 determined eligibility for discounts on a case-by-case basis.
GAO found weaknesses in HRSA's oversight that impede its ability to ensure compliance with 340B Program requirements at contract pharmacies, such as:
HRSA audits do not fully assess compliance with the 340B Program prohibition on duplicate discounts for drugs prescribed to Medicaid beneficiaries. Specifically, manufacturers cannot be required to provide both the 340B discount and a rebate through the Medicaid Drug Rebate Program. However, HRSA only assesses the potential for duplicate discounts in Medicaid fee-for-service and not Medicaid managed care. As a result, it cannot ensure compliance with this requirement for the majority of Medicaid prescriptions, which occur under managed care.
HRSA requires covered entities that have noncompliance issues identified during an audit to assess the full extent of noncompliance. However, because HRSA does not require all the covered entities to explain the methodology they used for determining the extent of the noncompliance, it does not know the scope of the assessments and whether they are effective at identifying the full extent of noncompliance.
HRSA does not require all covered entities to provide evidence that they have taken corrective action and are in compliance with program requirements prior to closing the audit. Instead, HRSA generally relies on each covered entity to self-attest that all audit findings have been addressed and that the entity came into compliance with 340B Program requirements.
Given these weaknesses, HRSA does not have a reasonable assurance that covered entities have adequately identified and addressed noncompliance with 340B Program requirements.


Question:
Why GAO Did This Study

This testimony summarizes the information contained in GAO's November 2017 report, entitled VA Health Care: Improved Policies and Oversight Needed for Reviewing and Reporting Providers for Quality and Safety Concerns ( GAO-18-63 ).

What GAO Found

Department of Veterans Affairs (VA) medical center (VAMC) officials are responsible for reviewing the clinical care delivered by their privileged providers—physicians and dentists who are approved to independently perform specific services—after concerns are raised. The five VAMCs GAO selected for review collectively required review of 148 providers from October 2013 through March 2017 after concerns were raised about their clinical care. GAO found that these reviews were not always documented or conducted in a timely manner. GAO identified these providers by reviewing meeting minutes from the committee responsible for requiring these types of reviews at the respective VAMCs, and through interviews with VAMC officials. The selected VAMCs were unable to provide documentation of these reviews for almost half of the 148 providers. Additionally, the VAMCs did not start the reviews of 16 providers for 3 months to multiple years after the concerns were identified. GAO found that VHA policies do not require documentation of all types of clinical care reviews and do not establish timeliness requirements. GAO also found that the Veterans Health Administration (VHA) does not adequately oversee these reviews at VAMCs through its Veterans Integrated Service Networks (VISN), which are responsible for overseeing the VAMCs. Without documentation and timely reviews of providers' clinical care, VAMC officials may lack information needed to reasonably ensure that VA providers are competent to provide safe, high quality care to veterans and to make appropriate decisions about these providers' privileges.
GAO also found that from October 2013 through March 2017, the five selected VAMCs did not report most of the providers who should have been reported to the National Practitioner Data Bank (NPDB) or state licensing boards (SLB) in accordance with VHA policy. The NPDB is an electronic repository for critical information about the professional conduct and competence of providers. GAO found that
selected VAMCs did not report to the NPDB eight of nine providers who had adverse privileging actions taken against them or who resigned during an investigation related to professional competence or conduct, as required by VHA policy, and
none of these nine providers had been reported to SLBs.
GAO found that officials at the selected VAMCs misinterpreted or were not aware of VHA policies and guidance related to NPDB and SLB reporting processes resulting in providers not being reported. GAO also found that VHA and the VISNs do not conduct adequate oversight of NPDB and SLB reporting practices and cannot reasonably ensure appropriate reporting of providers. As a result, VHA's ability to provide safe, high quality care to veterans is hindered because other VAMCs, as well as non-VA health care entities, will be unaware of serious concerns raised about a provider's care. For example, GAO found that after one VAMC failed to report to the NPDB or SLBs a provider who resigned to avoid an adverse privileging action, a non-VA hospital in the same city took an adverse privileging action against that same provider for the same reason 2 years later.


Question:
Why GAO Did This Study

DOD has taken steps to modernize its Military Health System to ensure that it operates efficiently. For example, in September 2013, the Defense Health Agency was created, in part, to implement common clinical and business processes across the services. Essential to this effort are the services' ability to effectively staff their medical facilities, including the processes used for staffing dental clinics and the services' ability to recruit and retain military dentists.
Senate Report 115-125 included a provision for GAO to review the services' processes for determining requirements for dentists and its programs for recruiting and retaining military dentists, among other things. GAO assessed the extent to which the services (1) use validated dental clinic staffing models that also incorporate cross-service staffing standards, and (2) have recruited and retained military dentists and measured the effectiveness of their recruitment and retention programs. GAO assessed service dental clinic models, analyzed recruitment and retention data from fiscal year 2012 through 2016, and interviewed DOD and service officials.

What GAO Found

The Army and the Air Force use validated staffing models for their respective dental clinics, and the Navy has developed a model that is under review. The Army and the Air Force's models are based on service-specific staffing standards. For example, the Army's model generally projects dental clinic staffing based on historical facility data and, according to officials, the Air Force model is largely a population-based model that requires one dentist for every 650 servicemembers. In contrast, in the absence of a validated model, officials stated that, the Navy uses a general ratio of one dentist for every 1,000 servicemembers to staff its dental clinics. The Navy has developed a model that is under review, and if approved, according to officials, will be subject to the Navy's validation processes.
While the services have developed and implemented cross-service staffing standards for 42 medical specialties, according to a key official involved in developing these standards, they currently do not plan to develop a similar set of standards for dental care. Cross-service staffing standards help the services standardize clinic staffing to address the common day-to-day health needs of patients. Service officials maintain that they must operate their respective dental clinics autonomously and in a manner that best supports their service-specific needs and unique command structures. However, as oral health requirements for servicemembers are standardized across the Department of Defense (DOD), it is unclear why dental care has been excluded from the staffing standardization effort—especially because the services have implemented cross-service staffing standards for 42 other medical specialties.
The Army, the Navy, and the Air Force meet their needs for military dentists by recruiting both dental students and fully qualified dentists. The services generally met their recruitment goals for dental students between fiscal years 2012 and 2016, but faced challenges recruiting and retaining fully qualified dentists during that period. For example, the Army missed its recruitment goals for fully qualified dentists in all 5 years, the Navy missed its goals in 2 out of 5 years, and the Air Force missed its goals in 3 out of 5 years. These challenges are most pronounced for certain specialties. For example, service data indicate that the Army and the Navy were unable to recruit any oral surgeons, while the Air Force recruited 50 percent of the oral surgeons it needed. Service officials cited various reasons for not meeting recruitment goals, including the availability of more lucrative careers in the private sector and quality of life concerns associated with military service.
The services rely on various programs, including scholarships and special pay and incentives, to attract and retain military dentists, and service officials stated that they monitor their programs by reviewing their goals, among other actions. However, GAO found that some services continue to provide incentive bonuses for positions that are overstaffed and have met or exceeded recruitment goals, but they do not know whether this is necessary because they have not evaluated the effectiveness of their programs. Without evaluating their programs, the services lack the information necessary to ensure that they are using recruitment and retention incentives effectively and efficiently for attracting and retaining dentists.

What GAO Recommends

GAO recommends that each of the services develop cross-service staffing standards to be incorporated into their staffing models, and evaluate the effectiveness of their recruitment and retention programs. DOD did not provide comments on a draft of this report.


Question:
Why GAO Did This Study

The Coast Guard, within the Department of Homeland Security (DHS), owns or leases more than 20,000 shore facilities, such as piers, docks, boat stations, air stations, and housing units, at more than 2,700 locations. In June 2017, the Coast Guard testified to Congress that it had a $1.6 billion recapitalization backlog for its shore infrastructure, which had a replacement value of about $20 billion.
GAO was asked to review the Coast Guard's management of its shore infrastructure. This report examines: (1) what is known about the condition and costs of managing the Coast Guard's shore infrastructure, and (2) the extent to which the Coast Guard's process for managing its shore infrastructure meets leading practices.
To answer these questions, GAO reviewed relevant laws and Coast Guard annual reports on its shore infrastructure, analyzed Coast Guard data, and interviewed Coast Guard officials. GAO also compared Coast Guard policies and procedures, and actions taken during fiscal years 2012 through 2018 to manage its shore infrastructure, against the leading practices that GAO previously identified for managing public sector maintenance backlogs.

What GAO Found

About 45 percent of the Coast Guard's shore infrastructure is beyond its service life, and its current backlogs of maintenance and recapitalization projects, as of 2018, will cost at least $2.6 billion to address, according to Coast Guard information. The deferred maintenance backlog included more than 5,600 projects, with an estimated cost of $900 million. The recapitalization and new construction backlog had 125 projects, with an estimated cost of at least $1.77 billion as of 2018 (see figure). GAO's analysis of Coast Guard data found that as of November 2018 there were hundreds of recapitalization projects without cost estimates—the majority of recapitalization projects. Coast Guard officials told GAO that these projects are in the preliminary stages of development.
The Coast Guard's process for managing its shore infrastructure did not fully meet 6 of 9 leading practices that GAO previously identified. Of the nine leading practices, the Coast Guard met three, partially met three, and did not meet three. For example, the Coast Guard generally has not employed models for predicting the outcome of maintenance investments and optimizing among competing investments, as called for in leading practices. In one instance, the Coast Guard used a model to optimize maintenance for its aviation pavement and, according to Coast Guard officials, found that it could save nearly $14 million by accelerating investment in this area (e.g., paving runways) sooner rather than deferring such maintenance. Coast Guard officials told us that such modeling could be applied within and across all of its shore infrastructure asset types, but the Coast Guard did not implement the results of this model and does not require their use. Without requiring the use of such models, the Coast Guard could be missing opportunities to achieve cost savings and better manage its maintenance backlogs.

What GAO Recommends

GAO is making six recommendations, which DHS agreed to implement, including that the Coast Guard align its management of its shore infrastructure backlogs with leading practices by requiring the use of models for predicting the outcome of, and optimizing among, competing investments for maintenance projects.


Question:
Why GAO Did This Study

During emergencies, reliable communications are critical. Disasters, such as 2017's hurricanes, continue to test the nation's emergency communications capabilities. As disasters can cross jurisdictional boundaries, collaboration within and across regions is very important.
GAO was asked to review implementation of the Post-Katrina Act's provisions related to disaster preparedness, response, and recovery. This report examines: (1) challenges related to emergency communications that selected stakeholders have experienced; (2) their views on DHS's emergency communications assistance; and (3) the regional working groups established by the Post-Katrina Act and their effect on emergency communications capabilities. GAO reviewed DHS's reports and grant data for fiscal years 2011–2016 and conducted case studies of three cities—Houston, Los Angeles, and Boston—selected based on the number of declared disasters, DHS grant funding, and geographic diversity. GAO interviewed DHS officials; leaders of all 10 regional working groups and other stakeholders, including public safety officials in the case study cities; and others chosen for their expertise.

What GAO Found

Selected first responders and public safety officials identified various challenges related to emergency communications. These challenges include attaining the interoperability of communication systems, obtaining funding, ensuring ongoing training, and increasing the emphasis on communications during emergency response exercises. For example, some stakeholders told GAO about challenges related to equipment that is not interoperable, and others said first responders need training after investments are made in new interoperable communications equipment.
To help address these challenges and as required by the Post-Katrina Emergency Management Reform Act of 2006 (Post-Katrina Act), the Department of Homeland Security (DHS) has provided technical assistance, such as training, and Federal Emergency Management Agency (FEMA) grants. It has also established regional emergency communications coordination working groups, which bring together stakeholders from different levels of government and the private sector within FEMA's 10 regions.
While emergency communications challenges persist, stakeholders told GAO that DHS's technical assistance generally meets their needs and that FEMA grants have helped them enhance emergency communications capabilities. In particular, stakeholders found training for specific communications positions was useful. Houston-area officials said this training was critical in preparing first responders for Hurricane Harvey. Some stakeholders told GAO that FEMA grants helped them address needs that would otherwise go unfunded, including interoperable communications networks and equipment.
GAO found that the regional working groups have enhanced emergency communications capabilities through building relationships and sharing information. Within the respective regions, group members have:
assisted each other during disasters and emergencies,
developed technical solutions to enhance interoperability, and
addressed policy concerns, such as the use of interoperable radio channels during emergencies.
However, most regional group leaders told GAO that more collaboration across the groups was needed. GAO's prior work has also found that including all relevant participants can enhance collaborative efforts. Further, DHS's strategic plan for emergency communications established a vision of collaboration among stakeholders across the nation. While FEMA has encouraged collaboration among regional working-group leaders, cross-regional efforts have been limited and do not involve all group members. Developing and implementing an appropriate ongoing mechanism for collaboration could enhance emergency communications capabilities, such as by helping group members address common challenges. Without ways for all members of these groups to collaborate across regions, members may be missing opportunities to share information and leverage the knowledge and experiences of their counterparts throughout the nation.

What GAO Recommends

FEMA should work with regional working-group members to reach consensus and implement an ongoing mechanism, such as a national-level working group, to encourage nationwide collaboration across regions. DHS concurred with this recommendation.


Question:
Why GAO Did This Study

One of the goals of federal criminal restitution is to restore victims of federal crimes to the position they occupied before the crime was committed by providing compensation. Various entities within the federal government are involved in the process of requesting, ordering, and collecting restitution for crime victims, including DOJ and the judiciary.
The Justice for All Reauthorization Act of 2016 includes a provision for GAO to review the federal criminal restitution process for fiscal years 2014 through 2016. This report addresses, among other things: (1) the extent to which information is available on restitution requested by DOJ and ordered by courts; (2) the amount of restitution debt DOJ collected and the amount that remains outstanding; and, (3) the extent to which DOJ has conducted oversight on the collection of restitution. GAO analyzed laws, policies and procedures as well as USSC data on restitution orders and DOJ data on restitution collected from fiscal years 2014 through 2016. GAO also selected a non-generalizable sample of six federal judicial districts based on restitution collections and spoke with USAO officials and federal probation officers.

What GAO Found

Officials from selected U.S. Attorney's Offices (USAO) stated that they document requests for restitution in case files and employ other internal controls, such as the use of templates and forms, throughout the prosecution process to ensure that prosecutors request restitution as appropriate. GAO's analysis of U.S. Sentencing Commission (USSC) data—an agency within the judiciary—showed that information on restitution orders was available for 95 percent of all offenders sentenced from fiscal years 2014 through 2016. Specifically, 214,578 federal offenders were sentenced during this time period and restitution was ordered for 33,158, or 15 percent, of those offenders. Collectively, courts ordered these offenders to pay $33.9 billion in restitution. Most federal offenders sentenced during these years were sentenced for immigration or drug-related offenses. In interviews, USAO officials stated that these offenses do not typically have victims requiring restitution. GAO found that data on reasons why restitution was not ordered were incomplete for 5 percent of all offenders sentenced from fiscal years 2014 through 2016. Determining why data on restitution orders are incomplete may inform the judiciary of the cause of the incomplete data and any efforts needed to improve USSC data.
GAO's analysis of Department of Justice (DOJ) data showed that USAOs collected $2.95 billion in restitution debt in fiscal years 2014 through 2016, see figure below. However, at the end of fiscal year 2016, $110 billion in previously ordered restitution remained outstanding, and USAOs identified $100 billion of that outstanding debt as uncollectible due to offenders' inability to pay.
DOJ identified improving debt collection—including restitution—as a major management initiative in its 2014-2018 Strategic Plan. While DOJ is developing analytical tools to monitor the collection of restitution, it has not established performance measures or goals. Performance measures and goals would allow DOJ to gauge USAOs' success in collecting restitution and, by extension, the department's success in achieving a major management initiative.

What GAO Recommends

GAO is making three recommendations. GAO is making one to the judiciary to determine why data on restitution orders are incomplete. GAO is making two recommendations to DOJ, including one to implement performance measures and goals for the collection of restitution. The judiciary and DOJ concurred with the recommendations.