Secrets to Getting Off the GAO High-Risk List

There are jokes that getting put on GAO’s high risk list is like the 1977 Eagles’ hit, “Hotel California,” where “you can check out any time you like, but you can never leave.” But in fact, over one-third of agency programs on the list have gotten off. What’s the secret?

Lessons summarized in a new IBM Center report by Dr. Donald Kettl, one of the nation’s most insightful observers of government operations, suggests you can get off.  Kettl took a look back over the past 25 years of Government Accountability Office reports on programs it had placed on its High-Risk List to see if he could detect any patterns.  He explored how programs got onto GAO’s high-risk list in the first place, what they did over the years to get off the list, and, based on these lessons, he offers advice on how to stay off the list.

He writes: “Understanding what can go wrong, how it can matter, what steps can make things right, and how to minimize risk to being with can provide invaluable insights for improving government.”  This will be especially timely for agencies since later this month, the Office of Management and Budget is expected to release long-awaited guidance that updates its risk management policies.  Looking at the upcoming OMB guidance and Kettl’s advice may be worthwhile efforts in advance of the presidential transition, when agencies will be asked to give their new incoming leaders an assessment of what lays before them.

Background.  For more than a quarter century, GAO has been highlighting and tracking a handful of programs that it judges as being at high risk for waste, fraud, abuse, and mismanagement.  First launched in 1990, that list has grown from 14 programs in 1990 to 32 by 2015, when it was last updated.  Programs on the list range from Medicare insurance benefits, to food safety oversight, to managing the risks of climate change. In fact, six programs on the 2015 list were on the original list in 1990.  These perennial challenges — such as Defense supply chain management, NASA acquisition management, and uncollected taxes by the IRS – are huge and inherently problematic.

The Root Causes for Landing on the High Risk List. Based on his research and interviews, Kettl identifies a set of common root causes for why certain programs were placed on the high risk list.  The top issues are:

• Agencies’ inability to effectively work across organizational stovepipes.
• The inability to track performance and use information to make timely decisions.
• Inadequate and aging legacy information systems.

For example, 15 agencies share responsibility for coordinating national policy and administering 30 different laws to prevent food-borne illnesses.  In the case of national flood insurance, local governments have a large role in determining what can be built in flood plains, and state governments have important roles, as well, so the issues are not within the control of the federal government.

Kettl also notes that many agencies have “inadequate and aging information systems.” For example, GAO found that behind the Department of Veterans Affairs 2014 hospital patient scheduling scandal was “outdated systems, coupled with the inability of many information systems to talk with each other, vastly complicated” a patient scheduling system that was 30 years old and out-of-date.

However, Kettl also found that “High risk problems cannot be solved by a focused effort on a small number of issues, but rather it requires an integrated strategy aimed at a constellation of interrelated issues. . . . Some clusters of root causes are especially important” he notes, focusing on “The clustering of financial management, contract management, and information systems.”  These were common root causes for 12 of the 32 programs currently on GAO’s high risk areas.

“The typical high-risk area is risky,” he notes, “because it is the product of complex, interrelated problems, many of which are serious and all of which have to be tackled to produce improvement.”  In fact: “. . . high-risk problems cannot be solved by a focused effort on a small set of issues. Rather, they require agency leaders to create an integrated strategy aimed at the broad constellation of interrelated issues.”

The Root Solutions for Getting Off the High Risk List.  In addition to examining why programs were placed on the high-risk list, Kettl also looked at the 23 programs that were removed from GAO’s high-risk list and concludes “success is possible.”  He says that these represent 40 percent of the total number of programs placed on the high-risk list over the past 25 years.  He also notes that GAO has determined that progress is being made on 87 percent of the programs remaining on the list.

So what are agencies doing?  Kettl says the approaches used by agencies that got their programs off the high risk list used a mix of solutions – and that these differed from the root causes that landed them on the list in the first place.  The top three actions being taken are:

• Improvements to legacy information systems.  Aging legacy information technology systems, and ineffective efforts to modernize them, have been a stumbling block for many agencies.  Leaders that undertake fundamental management changes to bring together the technology, contracting, and program management skills needed to effectively orchestrate modernization efforts are more likely to see their programs removed from the high risk list. For example, the IRS’s Business Systems Modernization Program was removed from GAO’s high-risk list in 2013 in part because its new information system — Customer Account Data Engine 2 – was installed successfully.

• Strengthened financial management systems to control resources. At their core, most high-risk programs are on the list because of their financial implications for taxpayers.  Kettl says managers need to “know where the money is going and how to redirect it.” Better financial management of the Defense Department’s supply chain resulted in dollars being more closely tied to forecasts of needed spare parts, producing big cost savings, and in the case of the Department of the Interior’s oil and gas leasing programs, better financial management led to significant improvements in the collection of revenues from leases.

• Strengthened contract management to ensure contractors aligned with mission needs.  The federal government relies heavily on contractors but oftentimes falls down in the drafting and oversight of the contracts.  While the Medicare program has been on the GAO high-risk list since its inception in 1990, GAO has recognized that it has put in place stronger competitive bidding procedures for products, like durable medical equipment (e.g., wheelchairs), and has put in place stronger auditing and contract review processes.

In conclusion, Kettl notes: “The high-risk list is not a sentence to eternal criticism.” Rather, “When it is viewed through the lens of root solutions that got some of these program off the list, it is a catalog of what it takes to solve those challenges.”  As such, the root solutions can be seen as a guide to actions that good managers can take to stay off the list in the first place!