From the U.S. Government Accountability Office, www.gao.gov Transcript for: 2019 High Risk Update Description: Hear what's changed with GAO's High Risk List since it was last updated in 2017. Related GAO Work: GAO-19-157SP: High-Risk Series: Substantial Efforts Needed to Achieve Greater Progress on High-Risk Areas Released: March 2019 [ Background Music ] [ Chris Mihm: ] Persistent action to address high-risk issues pays off. [ Matt Oldham: ] Welcome to GAO's Watchdog Report, your source for news and information from the U.S. Government Accountability Office. I'm Matt Oldham. There is a new Congress every two years, and every two years GAO issues updates to its High-Risk List, highlighting those areas in government that are at a particularly high risk for waste, fraud, abuse, or mismanagement, and those areas in need of broad-based transformation. I'm with Chris Mihm, the Managing Director for GAO's Strategic Issues team, and he led this year's high-risk update. Thank you for joining me, Chris. [ Chris Mihm: ] Well, thank you. It's a pleasure to be here. [[ Matt Oldham: ] So, what's new in 2019's High-Risk List? [ Chris Mihm: ] Well, the big news is, is that, as you mentioned, we've been doing this every two years since the early 1990s. There are now 35 items on the High-Risk List. About half of those made progress over the last two years, which is kind of the good news. The less good news is that the other half are not as advanced in the progress and they really need to accelerate their efforts. You know that, over time, the High-Risk List has yielded incredible financial benefits. Just in the last 13 years alone, $350 billion in financial benefits has accrued from action to address high-risk issues, so that's about $27 billion a year, and last year, 2018 was the peak year for that, about $47 billion in financial benefits through action on high-risk areas. Congress has been instrumental in passing laws. The administration has been working these things, so progress can be made, but there's ample opportunities for additional efforts by the administration. [ Matt Oldham: ] And there are two new additions to the list this year. Can we start talking about those with the VA acquisition management? [ Chris Mihm: ] Sure. The VA acquisition is a huge part of the mission over at the Department of Veterans Affairs. They do about $26 billion in procurements each year, and tens of thousands of procurement actions. Since 2015, we've had over 31 recommendations that we've done there, and unfortunately, 21 of those remain open, and so the high-risk designation centers on a couple of longstanding weaknesses that they've had in the acquisition area. First is that they don't have a consistent and coordinated set of policies and regulations across the department. Second is that there is the importance of just a human capital, to make sure that their people are trained, to make sure that their workloads are being appropriately managed. Third, there's problems that we've seen in terms of data and transparency over the acquisition process. And then fourth, that we're very concerned about the absence of a strategic approach to procurement at the department. [ Matt Oldham: ] Moving on to the other new area on the list, that's security clearances. It's new to this update, but it was actually added to the list last year, wasn't it? [ Chris Mihm: ] Yeah, and in fact, security clearances is actually returning. They were on the list from 2005 to 2011, and because of the concerted action of the administration at that point, and certainly the Congress was very, very involved, they made sufficient progress that they came off. This shows the attention, though, to really keeping your eye on the prize and making sure that you don't backslide. Unfortunately, they've had some real problems recently in areas such as the timeliness of security clearances, having good quality performance measures in place, and then IT security remains a major concern on this. We have 19 open recommendations to various agencies that are responsible for the security clearance process. We think action on those could go an awful long way to addressing the high-risk areas. [ Background Music ] [ Matt Oldham: ] So, it sounds like, along with some of the areas that have carried over from the 2017 update to the High-Risk List, there have been two new areas to the update. Chris, have areas been removed from this list and, if so, how does that happen? [ Chris Mihm: ] Yeah, there's two areas that came off, and it's good news, to the credit of the Congress and the agencies that worked hard to make this happen. The first is DOD Supply Chain Management, and actually that had been on the original High-Risk List back in the early 1990s, so it's been on there an awful long time, and I'm delighted to see some of the, one of the originals ones kind of graduate off the list, there. Just in the last couple of years alone, we were talking earlier about financial benefits, over a billion dollars in financial benefits from actions that have been taken to address supply chain issues. In 2017, we identified just a couple of additional areas where DOD really needed to take concerted action, that was on asset visibility and material distribution. They took those actions. Does it mean all the risk is gone? Absolutely not, and certainly DOD understands that. It's just that it's being effectively managed. Likewise, and the other area was mitigating gaps in weather satellite data. Obviously, with climate change, this becomes even more hugely important than it was just in recent years. NOAA launched, in November 2017, successfully launched one of its major weather satellites. It's now providing needed data on that. DOD is on track to launch its next big satellite in 2022. Again, does this mean all the risk is gone? Absolutely not, but in both cases, supply chain management and weather satellites, that risk is being effectively managed. That allows us to take it off the High-Risk List. [ Matt Oldham: ] Well, I think all that's left is the last question, and that is, what you think is the bottom line of this update to the High-Risk List? [ Chris Mihm: ] Well, the bottom line is that persistent action to address high-risk issues pays off. That's the story that happened with, earlier, on personnel security clearances, that's what happened, certainly, with DOD supply chain management and weather satellites. On the other hand, without that persistent leadership, without looking at making sure that you have capacity and an action plan and that you're monitoring the implementation of that action plan, you can backslide. There are tens of billions of dollars at risk here, as well as the health and the safety and the operations of the federal government. Agencies need to work harder to take action on these plans. Congress has stepped up and given an awful lot of legislative authority and legislative tools to agencies. They now need to use those tools to be effective and address their high-risk areas. [ Matt Oldham: ] Chris Mihm is the Managing Director of the Strategic Issues team at GAO, and he was talking about the 2019 update to GAO's High-Risk List. Thank you for your time, Chris. [ Chris Mihm: ] Thank you. [ Background Music ] [ Matt Oldham: ] And thank you for listening to the Watchdog Report. To hear more podcasts, subscribe to us on Apple Podcasts. [ Background Music ] [ Matt Oldham: ] For more from the congressional watchdog, the U.S. Government Accountability Office, visit us at gao.gov.