High Risk: Agencies Need to Continue Efforts to Address Management Weaknesses of Federal Programs Serving Indian Tribes

GAO's High Risk List identifies federal program areas that are high risk due to their vulnerability to mismanagement, among other things. GAO added the federal management of programs that serve Indian tribes and their members to its February 2017 biennial update of high-risk areas in response to management weaknesses at Interior and HHS.

This testimony provides examples of actions taken and progress made by these agencies to address the five criteria GAO uses for determining whether to remove a high-risk designation (leadership commitment, capacity, action plan, monitoring, and demonstrated progress).

To conduct this work, GAO drew on findings from GAO reports issued from September 2011 through September 2017 and updated that work by reviewing agency documentation and interviewing agency officials.

GAO designated the federal management of programs that serve tribes and their members as high risk, and officials from the Department of the Interior's Office of the Assistant Secretary-Indian Affairs (Indian Affairs), the Bureau of Indian Education (BIE), the Bureau of Indian Affairs (BIA), and the Department of Health and Human Services' (HHS) Indian Health Service (IHS) expressed their commitment to addressing the issues that led to the designation. Since GAO last testified before this committee on September 13, 2017, Indian Affairs, BIE, BIA, and IHS have demonstrated varying levels of progress to partially meet most or all of the criteria for removing a high-risk designation. However, additional progress is needed to fully address management weaknesses, particularly in the areas of leadership commitment and capacity.

Leadership commitment . To meet the leadership commitment criterion for removal of a high-risk designation, the agency needs to have demonstrated strong commitment and top leadership support to address management weaknesses. Indian Affairs, BIE, BIA, and IHS each took some actions to partially meet the leadership criterion. For example, the BIE Director formed an internal working group, convened meetings with other senior leaders within Indian Affairs, and publicly stated that his agency is committed to ensuring the implementation of prior GAO recommendations on Indian education. In addition, BIA officials demonstrated leadership commitment by, for example, issuing a memorandum requiring the use of a centralized data management system to track requests for land ownership records. To fully meet the leadership commitment criterion, all the agencies need, among other things, stable, permanent leadership that has assigned the tasks needed to address weaknesses and that holds those assigned accountable for progress.

Capacity . To meet the capacity criterion, an agency needs to demonstrate that it has the capacity (i.e., people and other resources) to resolve its management weaknesses. Indian Affairs, BIE, BIA, and IHS each made progress identifying capacity and resources to partially meet the capacity criterion. For example, BIE hired school safety officers and personnel in offices supporting the oversight of school spending. BIA conducted a survey to identify workforce needs related to energy development to support staffing decisions for the recently created Indian Energy Service Center. IHS officials told us that the agency is expanding the role of internal audit staff within its enterprise risk management program to augment internal audits and complement audits by the HHS Inspector General and GAO. However, all the agencies have vacancies in key offices. For example, BIA officials said the agency does not have the staff or resources to implement a comprehensive workforce planning system to ensure it has staff in place at its agency offices to meet its organizational needs concerning numerous activities, including energy resources. To fully meet the capacity criterion, all the agencies need to assess tradeoffs between these and other administration priorities in terms of people and resources, and should provide key information to decision makers on resources needed to address the criteria and related management weaknesses.

GAO has made 52 recommendations to improve management weaknesses at some Interior and HHS agencies, of which 34 are still open. Some of these weaknesses led to the agencies' placement on the High Risk List. GAO sees varying levels of progress at the agencies in understanding what they need to do to be removed from the list and will continue to closely monitor their progress.

I am pleased to be here today to discuss the status of actions by the  Departments of the Interior (Interior) and Health and Human Services  (HHS) to address issues that led to the high-risk designation we made  related to the federal management of programs that serve tribes and their  members. We added this area to our High Risk List in February 2017  because of our concern about the ability of agencies within these  departments to manage (1) education and health care programs that  serve tribes and their members and (2) Indian energy resources. In  particular, we found numerous weaknesses in how Interior’s Bureau of  Indian Education (BIE) and Bureau of Indian Affairs (BIA)—under the  office of the Assistant Secretary-Indian Affairs (Indian Affairs)—managed  education programs and energy resources and how HHS’s Indian Health  Service (IHS) managed health care services. We reported that these  management weaknesses jeopardized the health and safety of American  Indians served by these programs and limited opportunities for tribes and  their members to use energy resources to create economic benefits and  improve the well-being of their communities. This testimony provides  examples of actions taken and progress made by these agencies to  address the five criteria we use for determining whether to remove a high- risk designation (leadership commitment, capacity, action plan,  monitoring, and demonstrated progress).

In 2016, Congress found in the Indian Trust Asset Reform Act that  “through treaties, statutes, and historical relations with Indian tribes, the  United States has undertaken a unique trust responsibility to protect and  support Indian tribes and Indians.” As further stated in that act, the  fiduciary responsibilities of the United States to Indians arise in part from  commitments made in treaties and agreements, in exchange for which  Indians surrendered claims to vast tracts of land. The act notes that this  history of federal-tribal relations and understandings has benefitted the  people of the United States and established “enduring and enforceable  ederal obligations to which the national honor has been committed.”  Through improvements to federal management of programs that serve  tribes and their members, agencies can improve the efficiency of federal  programs under which services are provided to tribes and their members.

Such improvements would be consistent with the expressed view of  Congress as to the federal government’s trust responsibilities and would  strengthen confidence in the performance and accountability of the  federal government. In light of this unique trust responsibility and  concerns about the federal government’s management of Indian  education and health care programs and Indian energy resources, and  because these issues uniquely affect tribal nations and their members,  we added the federal management of programs serving tribes and their  members as a high-risk area in February 2017.

The focus of this high-risk area is on management weaknesses within  federal agencies that administer programs that serve tribes and their  members. However, not all federal programs are administered by federal  agencies. In accordance with federal Indian policy that recognizes the  right of Indian tribes to self-government and that supports tribal self- determination, a number of tribes have elected to take over the  administration of certain federal programs and services from BIA, BIE,  and IHS. Our recommendations identified in the high-risk area are neither  reflective of the performance of programs administered by tribes nor  directed at any tribally operated programs and activities.

We have ongoing work reviewing tribes’ use of selected legal  mechanisms to take over the administration of federal programs from BIA  and assume control and decision-making authority over surface leasing of  their lands. In addition, we have ongoing work related to health care  programs that serve tribes and their members. Specifically, we are  reviewing: (1) provider vacancies in IHS; (2) the use of advance  appropriation authority for federal health programs and any applications  to IHS; (3) how IHS compares with the Veterans Health Administration,  Medicare, and Medicaid in terms of overall structure, user characteristics  and service utilization, and funding levels; and (4) access to care for  American Indian veterans. The results of these reviews will help inform  future updates to the High Risk List.

For this statement, we drew on findings from our reports issued from  September 2011 through September 2017 and updated that work by  reviewing agency documentation and interviewing agency officials. To  conduct our previously issued work, on which this testimony draws, we  reviewed relevant federal laws, regulations, and policies; reviewed  agency documentation; and interviewed tribal, federal, and industry  officials, among others. More detailed information on the scope and  methodology of our work can be found in each of the reports cited in our  High-Risk Series report. We conducted the work on which this statement  is based in accordance with generally accepted government auditing  standards. Those standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives. We believe  that the evidence obtained provides a reasonable basis for our findings  and conclusions based on our audit objectives.

Since 1990, generally every 2 years at the start of a new Congress, we  call attention to agencies and program areas that are high risk due to their  vulnerability to mismanagement or that are most in need of  transformation. Our high-risk program is intended to help inform the  congressional oversight agenda and to improve government  performance. Since 1990, a total of 61 different areas have appeared on  the High-Risk List. Of these, 24 areas have been removed, and 2 areas  have been consolidated. On average, the high-risk areas that were  removed from the list had been on it for 9 years.

Our experience with the High-Risk List over the past 25 years has shown  that the key elements needed to make progress in high-risk areas are  top-level attention by the administration and agency leaders grounded in  the five criteria for removing high-risk designations, which we reported on  in November 2000. When legislative and agency actions, including those  in response to our recommendations, result in significant progress toward  resolving a high-risk problem, we will remove the high-risk designation.  However, implementing our recommendations alone will not result in the  removal of the designation, because the condition that led to the  recommendations is symptomatic of systemic management weaknesses.  In cases in which we remove the high-risk designation, we continue to  closely monitor the areas. If significant problems again arise, we will  consider reapplying the high-risk designation. The five criteria for  removing high-risk designations are:

Leadership commitment. Demonstrated strong commitment and top  leadership support to address the risks.

Capacity. Agency has the capacity (i.e., people and other resources)  to resolve the risk(s).

Action plan. A corrective action plan that defines the root causes,  identifies effective solutions, and provides for substantially completing  corrective measures in the near term, including steps necessary to  implement solutions we recommended.

Monitoring. A program has been instituted to monitor and  independently validate the effectiveness and sustainability of  corrective measures.

Demonstrated progress. Ability to demonstrate progress in  implementing corrective measures and in resolving the high-risk area.

These five criteria form a road map for efforts to improve and ultimately  address high-risk issues. Addressing some of the criteria leads to  progress, and satisfying all of the criteria is central to removal from the  list. Figure 1 shows the five criteria for removal for a designated high-risk  area and examples of agency actions leading to progress toward  removal.

Importantly, the actions listed are not “stand alone” efforts taken in  isolation of other actions to address high-risk issues. That is, actions  taken under one criterion may be important to meeting other criteria as  well. For example, top leadership can demonstrate its commitment by  establishing a corrective action plan, including long-term priorities and  goals to address the high-risk issue and by using data to gauge  progress—actions that are also vital to addressing the action plan and  monitoring criteria. When an agency meets all five of these criteria, we  can remove the agency from the High Risk List. We rate agency progress  on the criteria using the following definitions:

Met. Actions have been taken that meet the criterion. There are no  significant actions that need to be taken to further address this  criterion.

Partially Met. Some, but not all, actions necessary to meet the  criterion have been taken.

Not Met. Few, if any, actions toward meeting the criterion have been  taken.

Agencies Made Some Progress Addressing the Management Weaknesses That Led to the 2017 High Risk Designation

Officials from Indian Affairs, BIE, BIA, and IHS expressed their  commitment to addressing the issues that led to the high-risk designation  for federal management of programs that serve tribes and their members.  Since we last testified before this committee on September 13, 2017, we  met with agency leaders and worked with each agency to identify actions  the agencies took or plan to take to address the concerns that contributed  to the designation. We determined that Indian Affairs, BIE, BIA, and IHS  demonstrated varying levels of progress to partially meet most or all of  the criteria for removing a high-risk designation. However, additional  progress is needed for the agencies to fully address the criteria and  related management weaknesses, particularly in the areas of leadership  commitment and capacity.

To meet the leadership commitment criterion for removal of a high-risk  designation, an agency needs to have demonstrated strong commitment  and top leadership support to address management weaknesses. The  following examples show actions Indian Affairs, BIE, BIA, and IHS took to  partially meet the leadership commitment criterion.

Education. Indian Affairs’ leaders have demonstrated commitment to  addressing key weaknesses in the management of BIE schools in  several ways. For example, the BIE Director formed an internal  working group, convened meetings with other senior leaders within  Indian Affairs, and publicly stated that his agency is committed to  ensuring implementation of our recommendations on Indian  education. In addition, the BIE Director and other Indian Affairs  leaders and senior managers have met with us frequently to discuss  outstanding recommendations, actions they have taken to address  these recommendations, and additional actions they could take. In  particular, the BIE Director met with us on nine occasions over the  past year to discuss our recommendations and instructed his staff to  provide us draft policies and procedures related to our  recommendations. However, it is important that Indian Affairs leaders  be able to sustain this level of commitment to solving problems in  Indian education. Since 2012, there have been six Assistant- Secretaries of Indian Affairs and five BIE Directors. There has also  been leadership turnover in other key offices responsible for  implementing our recommendations on Indian education. We have  previously reported that leadership turnover hampered Indian Affairs’  efforts to make improvements to Indian education. We believe that  ensuring stable leadership and a sustained focus on needed changes  is vital to the successful management of BIE schools.

Energy. BIA officials demonstrated leadership commitment by, for  example, issuing a memorandum requiring all regions and their  agency offices to use a centralized data management system to track  requests for land title status reports. Using this type of centralized  approach for tracking such requests may improve BIA’s ability to  provide needed oversight of federal actions associated with energy  development and ensure documents needed for the development of  energy resources are provided in a timely manner. In addition, BIA  officials frequently met with us over the last 9 months to discuss the  bureau’s progress in addressing recommendations related to Indian  energy. However, Indian Affairs does not have a permanent Assistant  Secretary. BIA does not have a permanent Director, and BIA’s Office  of Trust Services—which has significant responsibility over Indian  energy activities—does not have a permanent Director or Deputy  Director. We have seen turnover in these leadership positions as  officials have been brought in to temporarily fill these roles. As officials  are brought in temporarily, previously identified plans and time frames  for completing some activities have changed, and BIA has found itself  starting over to identify or implement corrective actions.

Health Care. IHS officials demonstrated leadership commitment by  regularly meeting with us to discuss the agency’s progress in  addressing our recommendations. IHS has continued to implement its  Quality Framework by acquiring a software system to centralize the  credentialing of clinical providers, developing a patient experience of  care survey, and developing standards for limiting patient wait time.  However, IHS still does not have permanent leadership—including a  Director of IHS—which is necessary for the agency to demonstrate its  commitment to improvement. Since 2012, there have been five IHS  Acting Directors, and there has been leadership turnover in other key  positions, such as area directors. For example, in January 2017 we  reported that officials from four of the nine area offices in our review  reported that they had at least three area directors over the prior 5  years. We also reported that inconsistent area office and health care  facility leadership is detrimental to the oversight of facility operations  and the supervision of personnel.

To fully meet the leadership commitment criterion, all agencies will need,  among other things, stable, permanent leadership that has assigned the  tasks needed to address weaknesses and that holds those assigned  accountable for progress. For a timeline of senior leadership turnover in  Indian Affairs, BIE, BIA, and IHS from 2012 through 2018, see Figure 2.

To meet the capacity criterion, an agency needs to demonstrate that it  has the capacity (i.e., people and other resources) to resolve its  management weaknesses. Indian Affairs, BIE, BIA, and IHS each made  some progress in identifying capacity and resources to implement some  of our recommendations, but BIA officials reported to us that the agency  does not have the people and resources needed to fully implement other  recommendations. The following examples show actions Indian Affairs,  BIE, BIA, and IHS took to partially meet the capacity criterion.

Education. BIE and other Indian Affairs offices that support BIE  schools have made some progress in demonstrating capacity to  address risks to Indian education. For example, BIE hired a full-time  program analyst to coordinate its working group and help oversee the  implementation of our recommendations on Indian education. This  official has played a key role in coordinating the agency’s  implementation efforts and has provided us with regular updates on  the status of these efforts. BIE has also conducted hiring in various  offices in recent years as part of a 2014 Secretarial Order to  reorganize the bureau. For example, it has hired school safety  officers and personnel in offices supporting the oversight of school  spending. However, about 50 percent of all BIE positions have not  been filled, including new positions that have been added as a result  of the agency’s restructuring, according to a BIE official. Moreover,  agency officials told us that vacancies remain in several key positions,  including the Chief Academic Officer and the Associate Deputy  Director for Bureau Operated Schools. Furthermore, BIE and other  Indian Affairs offices that support BIE schools have not developed a  workforce plan to address staffing and training gaps with key staff,  which we previously recommended. Such a plan is important to allow  BIE and other Indian Affairs offices to better understand workforce  needs and leverage resources to meet them. BIE officials told us they  have held workforce planning sessions and anticipate completing  work on our recommendation to develop a workforce plan at the end  of 2018.

Energy. In November 2016, we recommended that BIA establish a  documented process for assessing the workforce at its agency  offices. BIA has taken a number of actions, such as conducting an  internal survey to identify general workforce needs related to oil and  gas development. This survey information supported staffing  decisions for the recently created Indian Energy Service Center.  However, BIA officials told us the bureau does not have the staff or  resources to implement a comprehensive workforce planning system  that would be needed to ensure it has staff in place to meet its  organizational needs.

Health Care. IHS has made some progress in demonstrating it has  the capacity and resources necessary to address the program risks  we identified in our reports. For example, IHS officials stated that the  agency is expanding the role of internal audit staff within its enterprise  risk management program to augment internal audits and  complement audits by the HHS Inspector General and GAO.  However, according to IHS, there are still vacancies in several key  positions, including the Director of the Office of Resource Access and  Partnerships, and the Office of Finance and Accounting.

To fully meet the capacity criterion, all of the agencies need to assess  tradeoffs between these and other administration priorities in terms of  people and resources, and the agencies should provide to decision  makers with key information on resources needed to address  management weaknesses.

To meet the action plan criterion, an agency needs to have a corrective  action plan that defines the root causes, identifies effective solutions, and  provides for substantially completing corrective measures in the near  term, including steps necessary to implement the solutions we  recommended. Indian Affairs, BIE, BIA, and IHS have shown progress in  identifying actions to address many of our recommendations—leading us  to believe they can partially meet the action plan criterion before our next  update of the High Risk List. For example:

Education. BIE has taken several steps to develop action plans to  address management weaknesses. For example, BIE implemented a  new policy for overseeing BIE school spending, including developing  written procedures and risk criteria for monitoring school  expenditures. BIE also developed a strategic plan, which we  recommended in September 2013. The plan provides the agency  with goals and strategies for improving its management and oversight  of Indian education, and establishes detailed actions and milestones  for the implementation. BIE notified us that it has completed the plan  and expects to publish it on June 11, 2018, and will begin  implementation starting in July 2018. We will review the strategic plan  once it has been published. In addition, Indian Affairs’ Office of  Facilities, Property & Safety Management has developed and  implemented revised comprehensive guidelines that addressed  several of our findings on weaknesses with BIE school safety  identified in our March 2016 report. However, Indian Affairs has not  provided us with evidence that it has developed and put in place  action plans on other important issues, such as a comprehensive,  long-term capital asset plan to inform its allocation of school  construction funds, which we recommended in May 2017.

Energy. BIA officials met with us several times over the past few  months to discuss planned actions for addressing management  weaknesses related to Indian energy resources, and they identified  actions they have taken to help implement some of our  recommendations. For instance, BIA officials told us they have  proposed several modifications to the bureau’s land records data  management system that will enable increased tracking and  monitoring of key documents that BIA must review prior to the  development of Indian energy resources. BIA officials we met with  have demonstrated an understanding that addressing long-standing  management weaknesses is not accomplished through a single action  but through comprehensive planning and continued movement toward  a goal. However, the agency does not have a comprehensive plan to  address the root causes of all identified management shortcomings.

Health Care. Senior leaders in IHS have prioritized addressing our  recommendations by implementing four recommendations we  highlighted in our February 2017 update to the High Risk List. IHS  incorporated our recommendations into its risk management work  plan starting in 2017, and according to IHS officials, they will annually  review the effectiveness of the agency’s internal controls, and where  controls are deemed insufficient, take actions to strengthen them. IHS  officials we met with have demonstrated an understanding that  addressing long-standing management weaknesses requires that they  develop a corrective action plan that defines root causes, identifies  solutions, and provides for substantially completing corrective  measures. However, agency officials have not yet developed a  corrective action plan.

To fully meet the action plan criterion, a comprehensive plan that  identifies actions to address the root causes of its management  shortcomings would have to come from top leadership with a commitment  to provide sufficient capacity and resources to take the necessary actions  to address management shortcomings and risks.

To meet the monitoring criterion, an agency needs to demonstrate that a  program has been instituted to monitor and independently validate the  effectiveness and sustainability of corrective measures. For example,  agencies can demonstrate that they have a systematic way to track  performance measures and progress against goals identified in their  action plans. We have been working with the agencies to help clarify the  need to establish a framework for monitoring progress that includes goals  and performance measures to track their efforts and ultimately verify the  effectiveness of their efforts. BIA and IHS made progress in holding  frequent review meetings to assess the status of implementing our  recommendations but have not yet taken needed steps to monitor their  progress in addressing the root causes of their management  weaknesses. In addition, Indian Affairs has made some progress in  meeting the monitoring criterion on Indian education. For example, the  agency has implemented a plan to monitor the effectiveness of corrective  measures to address school safety program weaknesses. However, the  agency has not yet demonstrated that it is monitoring other areas, such  as showing that it is using safety program outcomes to evaluate and  manage the performance of regional safety inspectors. To fully meet the  monitoring criterion, the agencies need to set up goals and performance  measures as they develop action plans and take further actions to  monitor the effectiveness of actions to address root causes of identified  management shortcomings.

To meet the demonstrated progress criterion, an agency needs to  demonstrate progress in implementing corrective measures and in  resolving the high-risk area. We made 52 recommendations to improve  management weaknesses at Indian Affairs, BIE, BIA, and IHS, of which  34 are still open. Since our testimony in September 2017, we found that  Indian Affairs has made significant progress in implementing corrective  actions in education as demonstrated by our closure of nearly a third of  our recommendations directed to Indian Affairs related to education  programs. We found that BIA and IHS also made some progress in  implementing corrective actions related to the management of energy  resources and healthcare programs. Specifically, since our testimony in  September 2017, BIA took actions resulting in the implementation of 2 of  14 recommendations, and IHS took actions that resulted in the  implementation of four recommendations. The following examples show  actions Indian Affairs, BIA, and IHS took to partially meet the  demonstrated progress criterion.

Education. As of early June 2018, Indian Affairs had fully addressed  8 of the 23 outstanding education recommendations we identified in  our September 2017 testimony, and we have closed them. BIE  implemented half of the closed recommendations, including 2 on  oversight of BIE school spending identified as high priority in a March  2018 letter from the Comptroller General to the Secretary of the  Interior. The rest of the recommendations we closed were  implemented by personnel in Indian Affairs’ Office of Facilities,  Property & Safety Management and related to oversight of school  safety and construction. Overall, Indian Affairs’ efforts since we issued  our High Risk List update in February 2017 represent a significant  increase in activity implementing our recommendations.  Substantial  work, however, remains to address our outstanding recommendations  in several key areas, such as in accountability for BIE school safety  and school construction projects. For example, BIA has reported  taking some actions to address recommendations in our May 2017  report on improving accountability of its safety employees who inspect  BIE schools. However, it has not provided us with documentation of  these actions.

Energy. In June 2015, we recommended that BIA take steps to  improve its geographic information system (GIS) capabilities to ensure  it can verify ownership in a timely manner. Since our last update in  September 2017, BIA has made significant progress in enhancing its  GIS capabilities by integrating map-viewing technology and  capabilities into its land management data system. In addition, we  recommended that BIA take steps to identify cadastral survey  needs. BIA’s enhanced map-viewing technology also allows the  bureau to identify land boundary discrepancies, which can then be  researched and corrected. Further, BIA identified unmet survey needs  that were contained within the defunct cadastral request system and  developed a new mechanism for its regions and agency offices to  make survey requests. We believe these actions show significant  progress in addressing management weaknesses associated with  data limitations and outdated technology.

Health Care. In April 2013, we recommended that IHS monitor patient  access to physician and other nonhospital care to assess how capped  payment rates may benefit or impede the availability of care. In  response to our recommendation, IHS developed an online tracking  tool that enables the agency to document providers that refuse to  contract for lower rates. In October 2017, IHS officials met in person  with us and provided a demonstration of the tracking tool.

To fully meet the demonstrating progress criterion, agencies need to  continue taking actions to ensure sustained progress and show that  management shortcomings are being effectively managed and root  causes are being addressed.

In conclusion, we see some progress in all of the criteria, including  leadership commitment, at all agencies, especially related to education  programs. However, permanent leadership that provides continuing  oversight and accountability is needed. We also see varying levels of  progress at all of the agencies in understanding what they need to do to  be removed from the High Risk List by identifying steps that can be  incorporated into corrective action plans to address most  recommendations. We look forward to working with the agencies to track  their progress in implementing a framework for monitoring and validating  the effectiveness of planned corrective actions. In addition, all the  agencies have made progress in implementing some key  recommendations. Perhaps the biggest challenge for the agencies will be  achieving the capacity and identifying the resources required to address  the deficiencies in their programs and activities. This challenge cannot be  overcome by the agencies without a commitment from the administration  to prioritize fixing management weaknesses in programs and activities  that serve tribes and their members.

Chairman Hoeven, Vice Chairman Udall, and Members of the Committee,  this completes my prepared statement. I would be pleased to respond to  any questions that you may have.

If you or your staff have any questions about education issues in this  testimony or the related reports, please contact Melissa Emrey-Arras at  (617) 788-0534 or emreyarrasm@gao.gov. For questions about energy  resource development, please contact Frank Rusco at (202) 512-3841 or  ruscof@gao.gov. For questions about health care, please contact Jessica  Farb at (202) 512-7114 or farbj@gao.gov. Contact points for our Offices  of Congressional Relations and Public Affairs may be found on the last  page of this statement. Key contributors to this statement include  Christine Kehr (Assistant Director), Jay Spaan (Analyst-in-Charge),  Edward Bodine, Kelly DeMots, William Gerard, Greg Marchand, Elizabeth  Sirois, and Kiki Theodoropoulos.

This is a work of the U.S. government and is not subject to copyright protection in the  United States. The published product may be reproduced and distributed in its entirety  without further permission from GAO. However, because this work may contain  copyrighted images or other material, permission from the copyright holder may be  necessary if you wish to reproduce this material separately.

We added the federal management of programs that serve Indian tribes and their members to our High Risk List in February 2017. We found numerous weaknesses in how the Interior Department's Bureaus of Indian Education and Indian Affairs managed education, how the Bureau of Indian Affairs managed energy resources, and how the Department of Health and Human Services' Indian Health Services managed health care.

We testified that, since being added to the High Risk List, Interior and HHS have partially met most or all criteria for coming off our List. However, more progress is needed for the agencies to fully address their management weaknesses.


SSA's Compassionate Allowance Initiative: Actions Needed to Improve the Accuracy and Consistency of Expedited Processing of Disability Claims

SSA in October 2008 implemented CAL to fast track individuals with certain conditions through the disability determination process by prioritizing their disability benefit claims. Since then, SSA has expanded its list of CAL conditions from 50 to 225.

This testimony summarizes the information contained in GAO's August 2017 report entitled SSA's Compassionate Allowance Initiative: Improvements Needed to Make Expedited Processing of Disability Claims More Consistent and Accurate , GAO-17-625 . It examines the extent to which SSA has procedures for (1) identifying conditions for the CAL list; (2) identifying claims for CAL processing; and (3) ensuring the accuracy and consistency of CAL decisions.

For its August 2017 report, GAO reviewed relevant federal laws, regulations, and guidance; analyzed SSA data on disability decisions for CAL claims from fiscal years 2009 through 2016 and on CAL claims with manual actions in fiscal year 2016; reviewed a nongeneralizable sample of 74 claim files with fiscal year 2016 initial determinations; and interviewed medical experts, representatives from patient advocacy groups, and SSA officials in headquarters and six DDS offices selected for geographic dispersion and varied CAL caseloads.

The Social Security Administration (SSA) does not have a formal or systematic approach for designating certain medical conditions for the Compassionate Allowance initiative (CAL). CAL was established in 2008 to fast-track through the disability determination process claimants who are likely to be approved because they have certain eligible medical conditions. SSA has in recent years relied on advocates for individuals with certain diseases and disorders to bring conditions to its attention for potential inclusion in CAL. However, by relying on advocates, SSA may overlook disabling conditions that have no advocates, potentially resulting in individuals with these conditions not receiving expedited processing. Further, SSA does not have clear, consistent criteria for designating conditions for potential CAL inclusion, which is inconsistent with federal internal control standards. As a result, external stakeholders lack key information about how to recommend conditions for inclusion on the CAL list.

To identify disability claims for expedited CAL processing, SSA primarily relies on software that searches for key words in claims. However, if claimants include incorrect or misspelled information in their claims the software is hindered in its ability to flag all claimants with CAL conditions or may flag claimants for CAL processing that should not be flagged. SSA has guidance for disability determination services (DDS) staff on how to manually correct errors made by the software, but the guidance does not address when such corrections should occur. Without clear guidance on when to make manual changes, DDS examiners may not take timely actions and may hinder expedited processing for appropriate claims.

SSA has taken some steps to ensure the accuracy and consistency of decisions on CAL claims, including developing detailed descriptions of CAL conditions, known as impairment summaries. These summaries help examiners make decisions about whether to allow or deny a claim. However, nearly one-third of the summaries are 5 or more years old. Experts and advocates that GAO spoke to suggested that summaries should be updated every 1 to 3 years to reduce the risk of SSA making disability determinations using medically outdated information. In addition, GAO found that SSA does not leverage data it collects to identify potential challenges to accurate and consistent decision-making on CAL claims. Without regular analyses of available data, SSA is missing an opportunity to ensure the accuracy and consistency of CAL decision-making.

In its August 2017 report, GAO made eight recommendations, including that SSA develop a process to systematically gather information on potential CAL conditions, communicate criteria for designating CAL conditions, clarify guidance for manual corrections on CAL claims, update CAL impairment summaries, and use available data to ensure accurate, consistent decision-making. SSA agreed with all of GAO's recommendations.

I am pleased to be here today to discuss the Social Security  Administration’s (SSA) Compassionate Allowance initiative (CAL). SSA  oversees two key federal programs for individuals with disabilities— Disability Insurance (DI) and Supplemental Security Income (SSI). In  December 2016, these programs provided about $15.7 billion in disability  benefits to nearly 17.4 million individuals. In order to be eligible for these  programs on the basis of a disability, applicants must be determined to  have a qualifying disability through a complex, multi-step process. As we  have noted in our prior work, SSA has historically faced challenges with  processing applications for benefits in a timely manner, resulting in  significant backlogs and long waits for applicants to learn whether they  qualify to obtain disability benefits.

In light of these challenges, SSA in October 2008 implemented CAL,  which fast-tracks through the disability determination process those  applicants who are likely to be approved because they have certain  medical conditions, such as specific cancers, Amyotrophic Lateral  Sclerosis (ALS), or early-onset Alzheimer’s disease. Since 2008, SSA  has expanded its list of CAL conditions from 50 to 225, resulting in  increasing numbers of individuals qualifying for disability benefits through  CAL. From the initiative’s inception through the end of fiscal year 2016,  SSA had approved more than 500,000 applications, or claims, for  disability benefits through CAL. However, a few years after CAL began,  concerns were raised that SSA had not identified all cases that qualified  for CAL processing and processed some cases through CAL that did not  qualify. More recently, concerns have been raised that SSA does not  have a transparent process for identifying conditions for inclusion on the  CAL list and its descriptions of certain CAL conditions may be medically  out of date.

To apply for disability benefits through either of SSA’s disability programs,  individuals submit a claim, which includes the claimant’s description of his  or her impairment (or impairments), among other relevant information.  SSA assesses the claimant’s non-medical eligibility for benefits and  sends the claim to a state disability determination services (DDS) office  for a review of the claimant’s medical eligibility and initial determination of  disability. Although SSA is responsible for the programs, the law  generally calls for initial determinations of disability to be made by state  agencies. DDS examiners assess the applicant’s medical condition  against SSA’s Listings of Impairments (medical listings), which contain  medical conditions that have been determined by the agency to be severe  enough to qualify an applicant for disability benefits. Based on this  assessment, a DDS examiner decides whether to medically allow or deny  a claim for DI or SSI benefits.

CAL claims may be processed more quickly than other claims, in part  because they are given priority status. When a claimant submits a claim  for disability benefits, it is flagged as CAL if the claimant’s description of  his or her impairment includes certain key words or phrases indicating the  claimant has a CAL condition. These claims are given priority in disability  examiners’ and medical consultants’ queues of incoming claims, and SSA  guidance directs DDS offices to initiate development of CAL claims within  one work day of receipt. Examiners may only require a minimal amount of  medical evidence, for example, a biopsy report, to confirm the claimant’s  diagnosis of a CAL condition.

My testimony today summarizes findings from our August 2017 report on  CAL that is being released today. This statement addresses the extent to  which SSA has procedures for (1) identifying conditions for the CAL list;  (2) identifying claims for CAL processing; and (3) ensuring the accuracy  and consistency of CAL decisions. To address these objectives, we  reviewed relevant federal laws, regulations, and guidance; analyzed SSA  data on disability decisions for CAL claims from fiscal years 2009 through  2016 and on CAL claims flagged by staff for manual addition or removal  of the CAL designation in fiscal year 2016; reviewed a nongeneralizable  sample of 74 claim files with fiscal year 2016 initial determinations; and  interviewed medical experts, representatives from patient advocacy  groups, and SSA officials in headquarters and six DDS offices selected  for geographic dispersion and varied CAL caseloads. Our work was  performed in accordance with generally accepted government auditing  standards. More details on our scope and methodology can be found in  the issued report.

In brief, although CAL appears to be effectively expediting benefit  processing for disability claims receiving this designation, we found  several weaknesses in SSA’s procedures for identifying conditions for the  CAL list and claims for CAL processing. We also found weakness in the  agency’s procedures for ensuring the accuracy and consistency of CAL  decisions. My statement will highlight eight recommendations that SSA  can implement to make the expedited processing of disability claims  through CAL more consistent and accurate.

SSA Lacks a Formal and Systematic Approach for Identifying CAL Conditions

SSA has in recent years relied on advocates for individuals with certain  diseases and disorders to bring potential CAL conditions to its attention.  However, SSA has not clearly communicated this or provided guidance  on how to make suggestions through its CAL webpage, which  communicates information to the public. Without more explicit  instructions, we noted that advocates may not present information that is  relevant for SSA’s decision-making or that most strongly makes the case  for these conditions to be included on the CAL list. One representative  from an advocacy organization, for example, described meeting with  agency officials and being surprised by SSA’s focus on cancer grades— an indicator of how quickly cancer is likely to grow and spread—as she  was not accustomed to discussing the condition she represents in these  terms. Federal internal control standards state that agencies should use  quality information to achieve their objectives. We concluded that  absent clear guidance to advocates on how to make suggestions through  its CAL webpage, SSA is missing an opportunity to gather quality  information to inform its selection of CAL conditions.

In addition, we found that relying on advocates to bring conditions to  SSA’s attention also introduces potential bias toward certain conditions  and the possibility of missing others. Some conditions that are potentially  deserving of CAL consideration may not have advocacy organizations  affiliated with them, and some advocates may be unaware of CAL. As a  result, some conditions may have a better chance of being considered  than other, equally deserving ones that are not proposed, and individuals  with those conditions may have to wait longer to receive approval for  disability benefits. Federal internal control standards state that agencies  should collect complete and unbiased information and consider the  reliability of their information sources. According to some external  researchers who work with SSA, an approach leveraging SSA’s  administrative data may help address the bias that is introduced by only  using advocates. SSA has contracted with the National Institutes of  Health and the National Academies of Sciences, Engineering, and  Medicine for research using SSA administrative data, which has led to the  identification of potential CAL conditions. However, we noted that to date,  the research SSA has contracted has not been sufficiently targeted to  generate more than a small number of additions to the CAL list. In our  August 2017 report, we recommended that SSA develop a formal and  systematic approach to gathering information to identify potential  conditions for the CAL list, including sharing information through SSA’s  website on how to propose conditions for the list and using research that  is directly applicable to identifying CAL conditions. SSA agreed with this  recommendation and has begun to make revisions to its website.

We also found that SSA has also not consistently communicated with  advocates who have suggested conditions to add to the CAL list about  the status of their recommendations, leading to uncertainty for some. SSA  officials told us that they provide a written or oral response to advocacy  organizations that have suggested a condition for inclusion on the CAL  list to inform them whether the condition is approved. However, some of  the advocates we spoke to had not received such a response from SSA  and found it challenging to connect with SSA officials to obtain  information about the status of their suggestions. For example, one  representative from an advocacy organization told us that she was unable  to reach SSA officials to obtain any information on the status of her  suggestion despite repeated attempts. In the absence of a response from  SSA, she had resubmitted her condition and supporting documents to  SSA every six months for three years since her initial submission in 2014.  Federal internal control standards state that agencies should  communicate quality information externally so that external parties can  help the agency achieve its objectives. We concluded that without two- way communication between SSA and advocates, advocates are unclear  on the status of their proposed CAL conditions and SSA may be missing  an opportunity to improve the quality of the information it obtains from  advocates. In our August 2017 report, we recommended that SSA  develop formal procedures for consistently notifying those who propose  conditions for the CAL list of the status of their proposals. SSA agreed  with this recommendation.

Our review also found that SSA has not developed or communicated  clear, consistent criteria for deciding which potential conditions will be  included on the CAL list. Officials told us that they have informally  considered criteria such as allowance rates—the percentage of claimants  asserting a certain condition who are approved for benefits—when  identifying potential CAL conditions. However, we reviewed 31  assessments of potential CAL conditions prepared by SSA medical  consultants and found that they did not cite consistent criteria. There was  no standard format used for these reports, and SSA does not have a  template, checklist, or guidance—other than the medical listings—that its  staff consult when preparing them. Further, SSA officials have cited  different reasons for not designating conditions as CAL in  communications with those who proposed conditions, which led to  confusion regarding CAL condition criteria for staff from some advocacy  organizations we interviewed. Federal internal control standards state that  agencies should define objectives in specific and measurable terms so  that they are understood at all levels of the agency and performance  toward achieving these objectives can be assessed. To help achieve  these objectives, the standards state that agencies should also  communicate key information to their internal and external stakeholders.  We concluded that absent clear criteria for designating CAL conditions,  advocates and other stakeholders may be confused as to why some  conditions are not included on the CAL list and SSA may miss conditions  that could qualify for CAL. In our August 2017 report, we recommended  that SSA develop and communicate internally and externally criteria for  selecting conditions for the CAL list. SSA agreed with this  recommendation.

SSA’s Procedures Do Not Ensure All Claims are Accurately Identified for Expedited CAL Processing

To identify disability claims for expedited CAL processing, SSA primarily  relies on software that searches for key words in claims. However,  because text provided by claimants may be ambiguous, incomplete,  inaccurate, or misspelled, the software is hindered in its ability to flag all  claimants with CAL conditions and may also flag claimants for CAL  processing that should not be flagged. For example, officials we  interviewed at 5 of the 6 selected DDS offices said that they have seen  claims inaccurately flagged for CAL when the claim text included words  like “family history of ” though the CAL condition was not  asserted by the claimant. In addition, in our claim file review, we found a  claimant asserting a leiomyosarcoma, a soft tissue cancerous tumor that  may be found in organs including the liver, lungs, and uterus, who  misspelled the term as “leiomysarcoma” on the disability claim, which  resulted in the software not flagging the claim as CAL, although liver and  lung cancers are CAL conditions.

SSA officials told us that they have not established a feedback loop to  capture observations from DDS officials on weaknesses in the software.  However, DDS officials we spoke with have observed weaknesses in the  software that, if shared, could assist SSA in improving its accuracy in  identifying CAL claims. For example, an official at one DDS office noted  that the software appears to identify CAL conditions using words from the  claim text out of order or without regard to specific phrases. Specifically,  the official stated that some claims with “pancreatitis” or “pancreatic pain”  have been incorrectly flagged for the CAL condition “pancreatic cancer.”  According to federal internal control standards, quality information about  the agency’s operational processes should flow up the reporting lines  from personnel to management to help management achieve the  agency’s objectives. We concluded that absent a mechanism to gather  feedback from DDS offices nationwide, the agency may be missing an  opportunity to obtain important information that could help improve the  software. In our August 2017 report, we recommended that SSA take  steps to obtain information that can help refine the selection software for  CAL claims, for example by using management data, research, or DDS  office feedback. SSA agreed with this recommendation.

We also found that DDS offices play an important role in helping to  ensure that claims are accurately flagged for CAL by manually correcting  flagging errors made by the software, but SSA’s guidance on how to  make such corrections does not address when they should occur. For  example, instructions on the mechanical process for removing the flag  based on the DDS examiner’s review of the medical evidence in the  claimant’s file does not indicate how quickly this should be done after  CAL status is clarified. Based on our discussions with officials in the 6  selected DDS offices, we found that some examiners did not understand  the importance of making timely changes to a CAL flag designation to  ensure faster claim processing and accurate tracking of CAL claims. For  example, examiners at one DDS office said that they do not always add  or remove a CAL flag when they determine a claim is erroneously  designated because it adds another step to claim processing and the step  seems unnecessary. Ensuring claims are correctly flagged for or not  flagged for CAL is important because the CAL flag reduces DDS  processing time by about 10 weeks on average compared to the  processing time for all claims, according to SSA data. According to  federal internal control standards, agencies should record transactions in  an accurate and timely fashion, and communicate quality information  throughout the agency. We concluded that without clear guidance on  when to make manual changes, DDS examiners may continue to take  actions that are not timely and may hinder expedited processing and  accurate tracking of CAL claims. In our August 2017 report, we  recommended that SSA clarify written policies and procedures regarding  when manual addition and removal of CAL flags should occur on  individual claims. SSA agreed with this recommendation.

In addition, our analysis of SSA’s data shows that DDS offices varied in  their use of manual actions to add the CAL flag to claims that were not  initially flagged for CAL by the software. Specifically, we found that over  half of DDS offices nationwide that processed disability claims in fiscal  year 2016 had one or zero claims with a manually added CAL designation  in that year. In comparison, 5 DDS offices together accounted for over  50 percent of all claims with a manual addition. Such variance could  result in some claimants who assert a CAL condition not receiving  expedited processing because their claims were not flagged for CAL by  the selection software or DDS examiners. We found that because SSA  had not undertaken a study of its manual action procedures on such  claims, it was unclear why this variance existed among DDS offices.  Federal internal control standards state that agencies should establish  and operate monitoring activities to monitor operations and evaluate  results. In our August 2017 report, we recommended that SSA assess  the reasons why the uses of manual actions vary across DDS offices.  SSA agreed with this recommendation.

SSA Takes Some Steps to Ensure Accurate and Consistent CAL Decisions But Does Not Regularly Update Condition Descriptions or Leverage Data

In our August 2017 report, we found that SSA has taken some steps to  ensure the accuracy and consistency of decisions on CAL claims,  including developing detailed descriptions of CAL conditions, known as  impairment summaries, but has not regularly updated the summaries.  These summaries suggest specific medical evidence for the DDS  examiner to obtain to verify the claimant’s asserted CAL condition and  help examiners make decisions about whether to allow or deny a claim.  However, we found that because SSA has not regularly updated the  impairment summaries, nearly one-third are 5 or more years old. Several  advocates (4 of 6) and medical experts (2 of 3) we interviewed suggested  that the impairment summaries should be updated every 1 to 3 years  because medical research and advancements may have implications for  disability determinations. In addition, federal internal control standards  state that as changes in the agency’s environment occur, management  should make necessary changes to the information requirements to  address the modified risks. We concluded that given the pace of  medical research for certain CAL conditions, in the absence of a  systematic and regular mechanism to update CAL impairment  summaries, SSA potentially faces the risk of making inaccurate and  inconsistent disability determinations based on outdated information. In  our August 2017 report, we recommended that SSA develop a schedule  and a plan for updates to the CAL impairment summaries to ensure that  information is medically up to date. SSA agreed with this  recommendation.

We also found that SSA does not leverage data it collects to identify  potential challenges to accurate and consistent decision-making on CAL  claims. SSA and DDS officials review some data to monitor CAL claims  processing, such as the total number of CAL claims and claims flagged  for CAL by the selection software, but these efforts do not address the  accuracy and consistency of decisions on CAL claims. In contrast, our  analysis of SSA’s data on outcomes for claims with asserted CAL  conditions suggested that a review of data on allowance and denial rates  for these claims may help identify conditions that are challenging to  accurately and consistently adjudicate. For example, while the vast  majority of claims asserting CAL conditions are allowed—about 92  percent were approved in fiscal year 2016—data we reviewed showed  that there was a lower percentage of claims allowed for certain asserted  CAL conditions. Specifically, SSA denied more than 30 percent of claims  asserting 37 CAL conditions, and 17 of these conditions had denial rates  that were greater than 50 percent. Advocates we spoke to who  represent some of these conditions explained why challenges  adjudicating these claims may exist. For example, officials from one of  these advocacy groups told us that the CAL condition they represent is  frequently confused with a much more common and non-life threatening  condition that is less likely to be allowed. According to federal internal  control standards, management should obtain relevant data based on  identified information requirements, process these data into quality  information that can be used to make informed decisions, and evaluate  the agency’s performance in achieving key objectives and addressing  risks. We concluded that without regular analyses of available data,  SSA is missing an opportunity to ensure the accuracy and consistency of  CAL decision-making. In our August 2017 report, we recommended that  SSA develop a plan to regularly review and use available data to assess  the accuracy and consistency of CAL decision-making. SSA agreed with  this recommendation.

Chairman Johnson, Ranking Member Larson, and Members of the  Subcommittee, this concludes my prepared statement. I would be  pleased to respond to any questions you may have at this time.

For questions about this statement, please contact Kathryn A. Larin at  (202) 512-7215 or larink@gao.gov. Contact points for our Offices of  Congressional Relations and Public Affairs may be found on the last page  of this statement. Individuals making key contributions to this testimony  include Rachel Frisk, Assistant Director; Kristen Jones, Analyst-in- Charge; and Michelle Loutoo Wilson.

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