2017 High Risk List – U.S. Government’s Environmental Liability (video)

GAO_Video_icon-largeThis year, we added the federal government’s environmental liability to our High Risk List—our biennial report highlighting areas particularly susceptible to fraud, waste, abuse, mismanagement, or needing a fundamental transformation.

When federal government activities contaminate the environment, the government’s on the hook for the cleaning bill. In 2016, this bill was estimated to be $447 billion, and the actual costs may be more.

Watch David Trimble, a director in our Natural Resources and Environment team, explain why we added the government’s environmental liability to our latest High Risk List.

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2017 High Risk List – Management of Programs that Serve Indian Tribes and Their Members (video)

GAO_Video_icon-largeThis year, we added management of programs that serve Indian tribes and their members to our High Risk List—our biennial report highlighting areas particularly susceptible to fraud, waste, abuse, mismanagement, or needing a fundamental transformation.

The United States has a unique responsibility to protect and support Indian tribes and their members. But for a decade, multiple oversight organizations—including GAO—have raised concerns that the federal government is ineffectively managing programs intended to serve them.

Watch Melissa Emrey-Arras, a director in our Education, Workforce, and Income Security team, explain why we added management of such programs that serve tribes and their members to our latest High Risk List.

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2017 High Risk List – 2020 Decennial Census (video)

GAO_Video_icon-largeThis year, we added the 2020 Decennial Census to our High Risk List—our biennial report highlighting areas particularly susceptible to fraud, waste, abuse, mismanagement, or needing a fundamental transformation.

In 2020 the government will once again conduct a census of the nation’s population, gathering critical demographic information to be used to, among other things, define legislative districts and allocate billions in financial assistance. The 2010 Census cost over $12 billion, and innovations planned for 2020—while aimed at saving money—may introduce new risks.

Watch Robert Goldenkoff, a director in our Strategic Issues team, explain why we added the 2020 Decennial Census to our latest High Risk List.

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GAO’s 2017 High Risk List Update

High Risk MedallionToday we released our updated High Risk List, which includes three new areas:

We also removed an area related to sharing and managing of information related to terrorism, after agencies made significant progress in addressing this area.

Every 2 years, at the beginning of a new Congress, we update our High Risk List— highlighting areas in government that are particularly vulnerable to waste, fraud, abuse, and mismanagement, or needing broad-based transformation. With the addition of the three new areas, today’s update discusses 34 high-risk areas, including for each:

  • Why it is high risk,
  • What we found, and
  • What remains to be done.

Listen to Chris Mihm, Managing Director of our Strategic Issues team, discuss some highlights from our latest update:

 

Today’s WatchBlog discusses further changes to high-risk areas, as well as how we measure progress towards getting off the list.

Expanded, Removed, and Narrowed Areas

Along with the addition of 3 new areas, our 2017 list expanded 2 areas, removed 1, and narrowed 2 others. Due to challenges that have emerged over the past several years, we expanded:

We also removed sharing and managing terrorism-related information from the list, because significant progress had been made to strengthen how intelligence on terrorism, homeland security, and law enforcement is shared among relevant partners at all levels of government.

Lastly, improvements in management and oversight enabled us to narrow:

Our Rating System, and Getting Off the List

We continue to use our 5-point star rating system to measure progress against our 5 criteria for removal from the High Risk List. This short, animated video from 2015 explains further:

Our goal is to eliminate the High Risk List, but it will take continued perseverance by the executive branch in implementing our recommended solutions and continued oversight and action by Congress to get there. Learn more in our full report or on our High Risk page.


  • Questions on the content of this post? Contact J. Christopher Mihm at mihmj@gao.gov.
  • Comments on GAO’s WatchBlog? Contact blog@gao.gov.
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Mining for Gold and Other Minerals on Federal Lands

A Hardrock Gold Mine on BLM-Managed Land in NevadaIt’s Valentine’s Day and while some people may shop for flowers and chocolate, others may be seeking a longer-lasting gift like gold jewelry. But it’s not just Valentine’s Day that can lead to a gold rush. Mine operators can submit plans for the right to dig for gold and other minerals on federal lands throughout the year. Today’s WatchBlog looks at these mining plans and the agencies that review and approve them.

Be mine

Two federal agencies, the Bureau of Land Management and the Forest Service, manage hardrock mining on federal lands. These two agencies manage about 450 million acres of federal land—which is about 38 percent of the combined land area of 12 western states.

If a mine operator (a person or company) wants to extract minerals from federal lands, they must stake a mining claim and submit a plan of operation to BLM or the Forest Service (depending on which agency  manages that land). The operators must also explain how they will reclaim the site once the desired minerals have been removed. Requirements for reclaiming the site vary, but generally involve re-sloping pit walls to minimize erosion, removing or stabilizing buildings to reduce safety risks, and removing mine roads, among other things.

Once the plan of operation is submitted, BLM or the Forest Service:

  • reviews the proposed plan,
  • conducts an environmental assessment,
  • approves (or rejects) the proposed plan,
  • establishes a reclamation bond, which covers estimated costs associated with reclaiming the mine site once operations have ceased and that the agency can use to reclaim the site if the operator fails to do so, and
  • authorizes mining operations.

Between fiscal years 2010 and 2014, BLM and the Forest Service approved 68 hardrock mining plans, totaling 35,945 acres of the western United States.

Figure 3: Number of Approved Plans and Acres, by State, Associated with the 68 Mine Plans of Operation that Bureau of Land Management (BLM) and Forest Service Approved from Fiscal Years 2010 through 2014(Excerpted from GAO-16-165)

Still a “gold rush”?

The Mining Law of 1872 opened up federal land to exploration and extraction of hardrock minerals such as gold, silver, and copper. According to the Department of the Interior, at least 2.5 million ounces of gold were extracted from federal lands in 2014—with an average price of $1,270 per ounce.

We found that it took BLM and the Forest Service anywhere from 1 month to over 11 years to approve mine plans, with an average time of 2 years.

Figure 4: Time Frames for Approving the 68 Mine Plans of Operations by the Bureau of Land Management (BLM) and the Forest Service from Fiscal Years 2010 through 2014(Excerpted from GAO-16-165)

We also found that BLM and the Forest Service faced 13 key challenges that slowed down mine plan approval. These agencies have taken actions to address 2 of these challenges—the low quality of information that operators provided in their mine plans, and the agencies’ limited allocation of resources for hardrock mining programs.

However, they could do more to alleviate these challenges. We made several recommendations, including suggesting that BLM and the Forest Service:

  • hold pre-plan-submittal meetings with operators to ensure that their applications include all the necessary information, and
  • establish a fee structure for mine plan processing activities.

Check out our report to learn more about hardrock mining on federal lands.


  • Questions on the content of this post? Contact Anne-Marie Fennell at fennella@gao.gov.
  • Comments on GAO’s WatchBlog? Contact blog@gao.gov.
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A Tax Reform State of Mind

photo of a tax formThe tax code is complex and can create burdens for people and companies. And change does not come often. The last time the tax code was overhauled was in 1986.

So what (if anything) should be done to reform it? Today’s WatchBlog takes a closer look at some of the key issues related to tax reform.

Essential questions

We reported back in 2005 on key questions to consider when it comes to taxpayers and tax reform, which still apply today.

  • What should we tax?  Do we continue with the current system, which taxes the income that individuals and companies earn, or move to something like a national sales tax (which just taxes income when it’s spent)?
  • Who should pay and how much? Should wealthier taxpayers pay more than those that are less well off, or should taxpayers pay based on the benefits they receive?
  • How much tax revenue should be collected? Taxes fund government services, and reforming the tax code could raise or lower taxes—creating a surplus or deficit of revenue collected. If the government collects less revenue than it spends, it will have to borrow the difference and pay interest on that amount.
  • How will taxes affect the decisions taxpayers make?  Will taxpayers save, work, or consume more or less because of the tax?
  • Finally, will taxpayers be able to understand and comply with the tax? Will there be more or fewer taxpayers? And, will the IRS be able to administer the tax?

What about corporate taxes?

When it comes to taxing companies, two further issues frequently come up:

  • What tax rate should corporations pay? The United States taxes the income of corporations using a graduated corporate income tax rate. These tax rates range from 15 percent for corporations that make less than $50,000 to 35 percent for those that make more than about $18 million. However, when you account for the various exemptions, tax credits, and other tax benefits large corporations receive, they (on average) paid a rate of about 25 percent of their pretax net income in taxes from 2008 to 2012.
  • How should the income U.S. corporations earn abroad be taxed (if at all)? The current system taxes all income made by U.S. corporations and their subsidiaries, including income they earn abroad. However, income earned abroad by U.S.-owned subsidiaries is only taxed when it’s brought back to the United States—generally when a foreign subsidiary sends back dividends to the U.S. corporation that owns it. This can distort corporate investment and location decisions—for example, a U.S. corporation may keep money abroad because it is in a country with low taxes instead of putting that money into more productive use in the U.S. (e.g., investing in research).

Figure 1: Example of Deferral under the U.S. Worldwide Corporate Income Tax System(Excerpted from GAO-13-789)

Paying for tax reform

Finally, what if Congress decides that it wants to reduce the tax rate for individuals and companies, while ensuring that tax reforms don’t cause a budget deficit? One way to achieve this would be to eliminate certain special tax provisions that reduce the taxes a person or company must pay. These provisions are known as tax expenditures and, because of them, the federal government forgoes more than $1 trillion in tax revenue each year.

To help evaluate tax expenditures, we issued a guide on how to assess their effectiveness. Also, check out our key issues page to learn more about tax reform.


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Overseas Contingency Operations (podcast)

GAO Podcast IconSince 2001, Congress has provided more than $1.6 trillion to fund the Department of Defense’s overseas contingency operations—including military operations, peacekeeping support, and major humanitarian assistance. Although these funds were initially meant to cover DOD’s incremental war-related costs in Iraq and Afghanistan, recent requests have also included activities elsewhere.

We sat down with John Pendleton, a director in our Defense Capabilities and Management team, to discuss his team’s recent review of how these funds are being used. Listen to what they found:

 

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Meet the Beetles

Figure 2: The American Burying Beetle, a Winged InsectLong before John, Paul, George, and Ringo hit our shores on this day, February 7, in 1964, the American Burying Beetle was already present in more than 30 states and parts of Canada. However, in 1989, these beetles were listed as an endangered species by the U.S. Fish and Wildlife Service (FWS).

Today’s Watchblog explores FWS’s efforts to protect these beetles. Continue reading

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Veterans Health Administration Management Challenges (podcast)

GAO Podcast IconThe Veterans Health Administration (VHA) provides health care to the nation’s veterans, including everything from treating post-traumatic stress disorder, to providing surgical care, to caring for an aging veteran population. But VHA’s human capital challenges—including skills gaps and inadequate training in its medical centers’ human resources offices—may hamper its ability to fulfill its mission.

Listen to Robert Goldenkoff, a director in our Strategic Issues team, to discuss his team’s recent review of VHA’s human capital processes.

 

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Stopping Thieves from Stealing Tax Refunds

photo of a tax formWant your refund right away? Well, fraudsters do too!

For Tax Identity Theft Awareness Week, today’s WatchBlog focuses on why identity theft refund fraud is a problem and what the IRS is doing to stop this fraud and help its victims.

How big of a problem is identity theft refund fraud?

Identity theft refund fraud occurs when fraudsters use stolen personal information (such as a Social Security number) to file for a tax refund. While the IRS estimated that it prevented at least $12.3 billion in calendar year 2015 tax refunds from going to fraudsters, the IRS also estimated that it paid at least at least $2.2 billion in fraudulent refunds.

Fihure 2: Example of a Successful Identity Theft Refund Fraud Attempt(Excerpted from GAO-16-508)

Why is it such a big problem?

It can be hard for the IRS to know that it is actually you when you file a tax return or call the IRS to talk to them. Sometimes, fraudsters have enough of your personal information to convince the IRS that they actually are you.

In fact, the IRS created a defense to address exactly this problem—the IRS Taxpayer Protection Program. The goal of this program is to sort out fraudsters from legitimate taxpayers. Yet, even for returns screened by this program, the IRS estimated it still paid more than 7,000 refunds totaling over $30 million  in 2015. And, after looking at the IRS’s data, we think that number could be even higher.

What is the IRS doing about it and how could it affect you?

Once the IRS separates the fraudster from the legitimate taxpayer, it can process the true taxpayer’s return and issue any refund due. But resolving these cases takes time. Recently, the IRS has improved in this area and now averages about 100 days to resolve a case.

The IRS may also provide the legitimate taxpayer a personal identification number to use when filing their next tax return. However, the IRS does not notify taxpayers when a dependent on their return may have been a victim of identity theft. We recommended that IRS let taxpayers know when this occurs.

This year, the IRS will receive W-2s earlier from employers, which should help the agency detect fraudulent returns and could potentially save the government billions of dollars. However, this may also affect when you receive your refund—it could be later than you expect. For more information on tax refunds that may be delayed, see the IRS’s website.

What else can the IRS do about it?

While it’s not likely that the IRS can solve the whole problem with one fix, strengthening its authentication tools could help the IRS verify interactions with legitimate taxpayers and prevent sending refunds to fraudsters.

The IRS should look at all of its authentication tools and decide which scenarios require stronger taxpayer authentication. For example, the IRS may need to make it more challenging for taxpayers to authenticate themselves in higher-risk situations, such as when issuing refunds.

Also, the IRS should make sure it is taking appropriate precautions to authenticate taxpayers when communicating online, on the phone, or in person. Such steps could help the IRS better identify fraudsters.

Interested in learning more?

Check out our podcast with Jessica Lucas-Judy, a director in our Strategic Issues team, on our recent filing season report’s findings on IRS customer service in general, including services to victims of ID theft refund fraud:

 

The Federal Trade Commission and the IRS also have information available on tax-related identity theft fraud.


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