Government duplication wastes billions: GAO report

WASHINGTON (Reuters) - Duplicating, overlapping and fragmented government agencies are wasting tens of billions of federal dollars every year, according to a GAO study released on Tuesday.

In its first annual report to Congress, which was mandated by legislative action last year, the nonpartisan Government Accountability Office found 34 areas in which agencies, offices or initiatives have similar, overlapping or fragmented objectives serving the same population.

Another 47 areas were identified as opportunities to reduce operating costs or boost revenue collection via agency or Congressional action.

For example, billions in "improper federal payments" are laid out every year, while addressing the gap between taxes owed and paid could potentially bring billions more into federal coffers, according to the report.

Collectively, the savings and revenues "could result in tens of billions of dollars in annual savings," the report said.

In another case, GAO said it had identified 44 federal employment and training programs that overlap with at least one other program, providing at least one similar service to a similar population.

It noted however that "data limitations" for three of the largest such programs kept the agency from determining to what extent individuals were receiving the same services.

Broader restructuring of the military's health care system by the Department of Defense could yield annual savings of as much as $460 million.

GAO also outlined a range of options addressing potentially duplicative policies aimed at boosting domestic ethanol production that could save as much as $5.7 billion annually.

While the report touched on hundreds of federal programs, departments and agencies, it noted that the areas identified were not meant to represent "the full universe of duplication, overlap or fragmentation within the federal government."

It promised that future reports would identify additional issues.

In the end, GAO said, Congressional and White House action would determine the potential savings for a strapped federal government.

But "considering the amount of program dollars involved ... even limited adjustments could result in significant savings," it concluded.

(Reporting by Chris Michaud; Editing by Greg McCune)