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GAO's 2013 High Risk List:

HIGH-RISK DESIGNATIONS REMOVED

In February 2011, GAO detailed 30 high-risk areas. Sufficient progress has been made to remove the high-risk designation from two areas.

Management of Interagency Contracting. Improvements include (1) continued progress made by agencies in addressing identified deficiencies, (2) establishment of additional management controls, (3) creation of a policy framework for establishing new interagency contracts, and (4) steps taken to address the need for better data on these contracts.

Internal Revenue Service Business Systems Modernization. The Internal Revenue Service (IRS) made progress in addressing significant weaknesses in information technology and financial management capabilities. IRS delivered the initial phase of its cornerstone tax processing project and began the daily processing and posting of individual taxpayer accounts in January 2012. This enhanced tax administration and improved service by enabling faster refunds for more taxpayers, allowing more timely account updates, and faster issuance of taxpayer notices. In addition, IRS has put in place close to 80 percent of the practices needed for an effective investment management process, including all of the processes needed for effective project oversight.

While these two areas have been removed from the High Risk List, GAO will continue to monitor them.

NEW HIGH-RISK AREAS

This year, GAO has added two areas.

Limiting the Federal Government's Fiscal Exposure by Better Managing Climate Change Risks. Climate change creates significant financial risks for the federal government, which owns extensive infrastructure, such as defense installations; insures property through the National Flood Insurance Program; and provides emergency aid in response to natural disasters. The federal government is not well positioned to address the fiscal exposure presented by climate change, and needs a government wide strategic approach with strong leadership to manage related risks.

Mitigating Gaps in Weather Satellite Data. Potential gaps in environmental satellite data beginning as early as 2014 and lasting as long as 53 months have led to concerns that future weather forecasts and warnings-including warnings of extreme events such as hurricanes, storm surges, and floods-will be less accurate and timely. A number of decisions are needed to ensure contingency and continuity plans can be implemented effectively.

In the past 2 years notable progress has been made in the vast majority of areas that remain on GAO's High Risk List. This progress is due to the combined efforts of the Congress through oversight and legislation, the Office of Management and Budget through its leadership and coordination, and the agencies through their efforts to take corrective actions to address longstanding problems and implement related GAO recommendations.

This website brings together GAO's research on issues that are of great national concern and highlights GAO's High Risk list, which calls attention to the agencies and program areas that are high risk due to their vulnerabilities to fraud, waste, abuse, and mismanagement or are most in need of broad reform.

HISTORY

In 1990, GAO began a program to report on government operations that it identified as "high risk." Since then, generally coinciding with the start of each new Congress, GAO has reported on the status of progress to address high-risk areas and updated the High Risk List. This year, GAO is removing the high-risk designation from two areas- Management of Interagency Contracting and IRS Business Systems Modernization-and designating two new high-risk areas-Limiting the Federal Government's Fiscal Exposure by Better Managing Climate Change Risks and Mitigating Gaps in Weather Satellite Data. These changes bring GAO's 2013 High Risk List to a total of 30 areas.

Overall, GAO's high risk program has served to identify and help resolve serious weaknesses in areas that involve substantial resources and provide critical services to the public. Since the high risk program began, the government has taken high-risk problems seriously and has made long-needed progress toward correcting them. In a number of cases, progress has been sufficient for GAO to remove the high-risk designation. A summary of changes to GAO's High Risk List over the past 23 years is shown in table below.

Source:GAO

CRITERIA

When legislative, administration, and agency actions, including those in response to our recommendations, result in significant progress toward resolving a high-risk area, GAO removes the high-risk designation. Key to determining if the high-risk designation can be removed are the following five elements (1) a demonstrated strong commitment to, and top leadership support for, addressing problems; (2) the capacity to address problems; (3) a corrective action plan; (4) a program to monitor corrective measures; and (5) demonstrated progress in implementing corrective measures.

To determine which federal government programs and functions should be designated high risk, GAO considers whether the program or function is of national significance or is key to performance and accountability. GAO also considers whether the risk is

• an inherent problem, such as may arise when the nature of a program creates susceptibility to fraud, waste, and abuse; or
• a systemic problem, such as may arise when the programmatic, management support, or financial systems, policies and procedures established by an agency to carry out a program are ineffective, creating a material weakness.

Further, GAO considers qualitative factors, such as whether the risk

• public health or safety, service delivery, national security, national defense, economic growth, or privacy or citizens' rights; or
• could result in significant impaired service, program failure, injury or loss of life, or significantly reduced economy, efficiency, or effectiveness.

In addition, GAO also considers the exposure to loss in monetary or other quantitative terms. At a minimum, $1 billion must be at risk in areas such as the value of major assets being impaired; revenue sources not being realized; major agency assets being lost, stolen, damaged, wasted, or underutilized; improper payments; and contingencies or potential liabilities.

Before making a high-risk designation, GAO also considers corrective measures planned or under way to resolve a material control weakness and the status and effectiveness of these actions.

To determine which federal government programs and functions should be designated high risk, GAO uses our guidance document Determining Performance and Accountability Challenges and High Risks.

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Previous High Risk Products

High Risk Series: An Update

GAO-11-278, Feb 2011

High Risk Series: An Update

GAO-09-271, Jan 2009

High Risk Series: An Update

GAO-07-310, Jan 2007

High Risk Series: An Update

GAO-05-207, Jan 2005

High Risk Series: An Update

GAO-03-119, Jan 2003

High Risk Series: An Update

GAO-01-263, Jan 2001

The Green Book: Determining Performance and Accountability Challenges and High Risks

GAO-01-159SP, Nov 2000

High Risk Series: An Update

HR-99-1, Nov 2000

High Risk Series: An Update

HR-97-1, Jan 1997

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