A Conversation with Michelle Sager, Managing Director, Strategic Issues, U.S. Government Accountability Office
Michelle Sager is the Managing Director of the U.S. Government Accountability Office’s (GAO) Strategic Issues team. She oversees work on government-wide governance, strategy, performance, and resource issues—including the High-Risk program and the annual Duplication, Overlap and Fragmentation reports.
Recently, Michelle joined me on The Business of Government Hour to explore the portfolio of GAO’s Strategic Issues team, its High-Risk Series, and the fiscal management and performance challenges facing government executives today. The following is excerpt of our discussion.
What does the GAO do and how does it carry out its mission?
GAO is referred to as the federal watchdog. It is an independent nonpartisan professional services agency that advises Congress on ways to make government more efficient, more effective, equitable, and responsive. In brief, we are a Legislative Branch agency, and Congress is our client.
Our mission is to support Congress in meeting its constitutional responsibilities, helping to improve the performance and ensure the accountability of the federal government. We look at our work as oversight-, insight-, and foresight-related projects, which take the form of reports, testimony at congressional hearings, and briefings for congressional staff. All of that is conducted through evaluations of federal programs focusing on performance, financial and management audits, policy analyses, legal opinions, bid protest adjudications, and investigations.
We conduct analyses and then make recommendations to federal agencies to improve how government works. We then follow up on these recommendations to see what actions agencies take in response, as well as to measure the impact of our work. We continuously advise lawmakers and federal agencies on how they can make government work better. Our core values are accountability, integrity, and reliability. We are constantly checking to make sure that we are maintaining those core values.
How is GAO organized and where does its Strategic Issues portfolio fit into GAO?
GAO has 15 mission teams that support our strategic goals. Each of these 15 mission teams, including my team, manages a portfolio of projects to ensure that we meet congressional needs for independent and unbiased information and analysis.
The Strategic Issues team helps Congress address crosscutting national challenges; and that includes the nation’s fiscal health, census operations, tax policy and administration, regulatory issues, intergovernmental issues, and federal workforce planning. We lead GAO’s High-Risk program, which identifies agencies and programs that are vulnerable to waste fraud, abuse, or mismanagement, or need fundamental transformation. we also lead GAO’s work on opportunities to reduce fragmentation, overlap, and duplication, and achieve other financial benefits through either cost savings or revenue enhancements.
GAO issues the biannual update to its high-risk list report. What are some of the key high-risk areas identified in the latest report? What issues may have been removed or added?
This report has existed now for a couple of decades. It is a way we help Congress focus attention on some of the highest risks facing the entire federal government. We update this list at the beginning of every Congress. We’re currently in the process of pulling together and updating the list for 2023. We currently have 38 areas that are designated as high-risk. These areas are designated as high-risk due to vulnerabilities to fraud, waste, abuse, and mismanagement, efficiency, or effectiveness challenges, or are in need of fundamental transformation.
In 2022, we added two new issues to the list. The first issue focuses on HHS leadership and coordination of public health emergencies. The second issue is the unemployment insurance system. In March of 2022, we issued a special report outlining key practices that can help agencies address high-risk areas and eventually be removed from the list. We keep very close track of the financial benefits resulting from this focus on high-risk areas. In the last 17 years, financial benefits related to addressing high risk areas have totaled about $675 billion.
It is an urban legend that once a program gets on the list they stay on forever. I want to dispel this myth. For example, in 2021 after reducing its infrastructure footprint, realizing cost reduction, and more efficiently using leased space, the U.S. Department of Defense support infrastructure management area was removed from the list. Over time, there are many areas that have been removed from the list that are wide-ranging. Everything from mitigating gaps in weather satellite data to establishing effective mechanisms for sharing and managing terrorist-related information to protect the homeland to management of interagency contracting.
Since we began the list in 1990, we have added 66 areas to the high-risk list and have removed more than 40% of them after agencies have shown sufficient progress to address the problems identified. Even for those areas that remain on the list, many of them have made meaningful progress and have demonstrated significant financial and nonfinancial benefits.
We’re assessing agency progress against five dimensions: leadership commitment, capacity, plan of action, monitoring, and demonstrated progress. We also engage with agencies through very high-level meetings to talk about their strategies for addressing high-risk areas. We also work with Congress to talk about what they can do to help facilitate action and work closely with OMB.
One of the things that has been gaining momentum over the past couple of years is what we call tripartite meetings. These are high-level with OMB leaders, with top agency leaders, and then with the GAO teams who are working on the individual areas to talk about agencies’ progress and addressing individual high-risk areas. These meeting helped us maintain momentum and focus attention on areas that exist, on actions that are being taken, and what else needs to happen to continue to show progress.
In 2021, GAO issued its eleventh annual report on overlap, fragmentation, and duplication in federal programs. Are there any new areas identified and what recommendations have GAO offered that can help address the issues?
The Strategic Issues team leads this work at GAO. It requires the input and commitment from basically every other part of the organization. It cuts across the entire federal enterprise. We started this work in 2011. We’ve identified 1,299 duplications, overlap, and fragmentation actions. In our most recent report, we identified 94 new actions in 21 new areas, as well as 9 existing areas that could reduce fragmentation, overlap, and duplication or, importantly, provide other cost savings opportunities to enhance revenue across the federal government. As of March 2022, Congress and Executive Branch agencies had fully addressed 724 of these actions that has yielded more than $500 billion in financial benefits.
For example, the U.S Department of Energy could save tens of billions of dollars by adopting alternative ways to treat low-activity radioactive waste. The Internal Revenue Service could save $20 million or more annually and improve taxpayer services by establishing a means to identify, monitor, and mitigate issues that contribute to refund interest payments. A third example; the U.S. Department of Defense could save millions of dollars by better managing fragmentation in its food program, and also strengthen ongoing initiatives to reduce defense travel payments that are improper.
We continue to work with Congress as well as with federal agencies on areas that they can take action to address these fragmented overlapping or duplicative areas. It has saved literally tens of billions of dollars.
Central among the significant challenges we face is trying to place our national government on a more sustainable long term fiscal path. Would you elaborate on the challenges affecting the federal budget and give us an overview of the work GAO has done in this area?
GAO began producing the federal fiscal model in the early 1990s to be able to focus congressional attention on the long-term fiscal outlook. We continue to monitor the nation’s fiscal health as well as provide near-term options to improve the nation’s fiscal condition. The federal government faces an unsustainable fiscal future. At the end of fiscal year 2021, debt held by the public was about 100% of gross domestic product. That is a 33% increase from fiscal year 2019. Projections from OMB, U.S. Department of the Treasury, the Congressional Budget Office, and GAO, all show that the country’s current fiscal path is unsustainable long-term. The government is spending more money than it is collecting. Addressing this balance will require changes to both the spending and the revenue side of our fiscal policies.
Congress should develop a plan to place the government on a sustainable long-term fiscal path. There are many different views and opinions about what such a plan might be. The underlying conditions that are driving our current unsustainable fiscal path existed well before the pandemic. Every year since fiscal year 2002, the federal government has run a deficit: meaning that spending exceeds revenues thus increasing the national debt.
Going forward, spending is projected to continue outpacing revenue. In addition to that, higher interest rates could also combine with rising debt to increase deficit. Congress should develop a long-term plan to provide a cohesive picture of the government’s fiscal goals, and a roadmap to achieving them.
Would you tell us more about the fiscal, management, and performance challenges facing today’s government executive?
I would identify 3 key challenges facing government executives today. The first is continuing to manage in an environment of budget uncertainty and Continuing Resolutions (CRs). A continuing resolution is a temporary spending bill that allows the federal government to continue operations before final appropriations are approved by Congress and the president. CRs have become more of the rule rather than the exception of late. There have been 47 CRs between fiscal year 2010 and 2022. GAO released a report in July 2022 that looked at how federal departments are affected by CRs. It found the CRs result in administrative inefficiencies, and limits management options in areas such as hiring or travel for agencies. Leading in a time of continuous CRs and budget uncertainty remains a significant governmentwide challenge.
The second challenge involves gaps in mission critical skills both within federal agencies and across the federal workforce. These skills gaps pose a high-risk to the nation because they can impede the government from cost-effectively serving the public in achieving results. We’ve seen skills gaps in areas that include science, technology, engineering, math, cybersecurity, and acquisitions.
The third public management challenge concerns agencies efforts to implement different public laws that require agencies to demonstrate program performance. This is an important ongoing challenge that matters for all of us. In some respects, the work is never done. This challenge continues to evolve; it revolves around the need to demonstrate value for money through evidence and data as agencies implement federal programs and focus on results. We should expect and also welcome ongoing attention to this challenge of demonstrating results, assessing what works, and then deciding what needs to be improved.