Mismanagement of Funds a Money Pit at Agencies: GAO Links Loss of Billions to Waste, Fraud

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Waste, fraud, abuse and mismanagement gobble up billions in taxpayers' dollars and inflict other incalculable damages, according to studies by the General Accounting Office (GAO) and inspectors general of 23 federal agencies.

The recently released governmentwide assessments identified widespread problems, including:

* The Federal Aviation Administration "wasted" an estimated $1.5 billion modernizing its computer operations.

* Veterans' health care has become "uncertain"; some patients have strangled in soft restraints in Veterans Affairs hospitals and others have wandered away and died.

* Defense Department employees "inadvertently sold surplus parts with military technology intact."

* The Social Security Administration's Supplemental Security Income program overpaid recipients $3.3 billion, including $1.2 billion during the last fiscal year.

If agencies fail to come up with viable plans to cut the waste and fraud, they risk losing funding when Congress fine-tunes their individual appropriations bills.

Republican Reps. Dick Armey of Texas, House majority leader, and C.W. Bill Young of Florida, chairman of the House Appropriations Committee, delivered that warning to each agency head in a letter last month. Mr. Armey's spokesman, Jim Wilkinson, said his office is now "grading" their plans "with a fine-tooth comb."

The 1993 Government Performance and Results Act requires agencies to create performance plans.

The agencies' inspectors general also reported their top 10 management problems to Mr. Armey and Rep. Dan Burton, Indiana Republican and chairman of the Committee on Government Reform and Oversight.

While GAO's chief acknowledges that agencies overall are making progress, his most recent report says much remains to be done and "sustained attention by the Congress in overseeing agency efforts is needed" to produce lasting solutions.

"In many cases, agencies have agreed with GAO recommendations but have not yet fully implemented them," wrote Comptroller General of the United States David M. Walker. "It will take time to fully resolve most high-risk areas because they are deep-rooted, difficult problems in very large programs and organizations."

Congress began zeroing in on "high-risk" government operations most vulnerable to waste and mismanagement in 1990. In January, the GAO, Congress' investigative arm, released its update highlighting 26 problem areas that affect "almost all of the government's annual $1.7 trillion in revenue." GAO's high-risk reports and the IG reports on their agencies' top 10 management problems total more than 1,000 pages.

For years, GAO has hammered the Defense Department, which is accountable for roughly half the government's discretionary spending.

Its most recent report cites Defense for not having "receipts for about 60 percent of its 21 million shipments to end users in fiscal year 1997" and the Navy specifically for writing off "as lost over $3 billion in in-transit inventory."

A report by Defense's inspector general shows that the department also needs to address "significant levels of fraud, mostly by providers" in the department's $16 billion-a-year health care program.

Defense is working to improve its procurement process, according to Rep. Pete Sessions, who oversees the department as chairman of the "Results Caucus," a bipartisan group begun by the House Committee on Government Reform.

"It's too cumbersome. It's a bureaucratic nightmare," the Texas Republican said.

At the Department of Veterans Affairs, fraud and mismanagement is wasting tens of millions of dollars each year. …