Waste, fraud, and abuse in the Federal government have become a cliché. The tremendous growth in the amount of money the Federal government wastes each year is too predictable. Stories in the press have numbed the American public to the fact that billions of dollars are squandered as the result of mismanagement or malfeasance.

Last year, I released a report by the General Accounting Office chronicling a disturbing trend in many Federal programs – improper payments. The report tallied improper payments in Federal programs at $19 billion for fiscal year 1998 alone. This year, such overpayments were estimated at almost $21 billion. And because only 14 programs actually estimate the amount of improper payments they make, the number is likely higher – much, much higher. But because there was scarcely a mention of the report in the press, commentator Paul Light mused in Government Executive magazine, "Perhaps Americans simply believe the war on waste cannot be won."

Other problems plaguing government operations are equally systemic. In 1990, the GAO began to compile a "high-risk list" of Federal programs and activities that were most vulnerable to waste, fraud, and abuse. This high-risk list started with 14 problem areas and has been expanded with every update issued by the GAO, listing problems like poor financial management, weak information security, and shoddy oversight of government contractors. The current list, released in 1999, includes 26 Federal agency problem areas. Although new areas are added regularly, few qualify for removal. In fact, only one high-risk area has been removed since 1995. Ten of the 14 original high-risk areas in 1990 remain on the list, despite the pressure to solve the problems.

A similar pattern is found in the reports of agency Inspectors General. In each of the past three years, the IGs of major Federal agencies reported to Congress the most serious performance problems their agencies faced. The problems identified by the IGs--like poor management of personnel, disastrous handling of major information technology projects, and ineffective controls over grant programs--remain much the same year after year.

The effect of this waste and mismanagement year after year is not inconsequential. Opinion polls consistently show low levels of public trust and confidence in the Federal government. These low expectations of Federal performance are the result of the constant barrage of information showing that Washington is wasting a significant proportion of the tax dollars Americans pay each year. In 1998, a survey conducted by the Washington-based Pew Research Center found that 64 percent of Americans view the government--with a burgeoning budget of over $2 trillion--as "inefficient and wasteful."

The key component lacking in Federal government management is accountability. The Federal government is so large and its policies are so cumbersome that no one is held accountable for the ineptitude with which its resources are managed. Until someone is held accountable for the mess the current government is in and until Congress stops throwing good money after bad, the problems will go on.

To its credit, Congress in 1993 enacted a law that attempts to make Federal agencies more accountable to the American people about how their resources are managed. The Government Performance and Results Act – the Results Act – tells agencies to define their mission, set goals, and report on the extent to which they are achieving them. I saw this as a chance to make agencies set goals to solve their major management problems and report on their progress to the Governmental Affairs Committee, which has responsibility for the efficiency of government operations.

In August 1999, I wrote to each major agency head and listed in detail the major management problems that have plagued their department or agency and asked them what they were doing about them. In my letter, I wrote that "it is essential that agency heads and other managers commit themselves to tangible steps that will eventually lead to solutions and that they accept accountability for following through on these commitments." The letter continued, "Without specific and measurable performance goals, it is difficult if not impossible to assess progress in addressing major management problems and to hold agencies accountable." After receiving agency responses, Committee staff met with representatives from each agency, their respective IGs, and GAO. This report recounts the experience of the Committee in gauging the progress of agencies in solving their major management problems.

It is clear to me from this process that there are pockets of progress throughout the Federal government. Generally, where such progress is occurring it is the result of dedicated civil servants and political appointees working diligently to instill performance based management in their agency. That is what it will take to solve many of these problems.

Unfortunately, in many agencies there is insufficient attention to the problems that are stifling effectiveness and draining precious resources. In those cases, agency leaders either don’t realize the severity of the problems or don’t think such "management minutiae" deserves their attention.

This report recounts the process by which we interviewed agency officials and provides some conclusions about the current state of management in the Federal government. Sound management policies are critical to the future success of this government in the new economy. We have a long way to go.

Fred Thompson

Chairman