GAO to Release Report on Wasteful Government Spending

The Government Accountability Office is due to produce its biannual report on the areas of the government that present the highest risk for squandering tax payer dollars in the next couple weeks.

Though the GAO does not preview this list ahead of time, here's a look at what might be targeted:

Medicare and Medicaid

Marc Goldwein, senior policy analyst for the Center for Responsible Federal Budget, suggested this is one topic that is likely to make the list.The government's health care entitlement programs come up in nearly every discussion of how to cut federal spending.

In the 2011 report, the GAO recommended the Centers for Medicare and Medicaid Services develop a plan to tackle improper payments, program mismanagement and lack of oversight for patient care and safety.

These issues have continued to come up in national discussions of budget cutting, especially leading up to the 2012 election. In December, Project HOPE, a U.S.-based charity whose stated goal is to provide health care and education internationally, released a report identifying some of the same problems. They noted accidents in the delivery of care to Medicare recipients and lack of coordination and communication between Medicare care providers as two of the drivers of an accumulation of wasted health care spending in the U.S.

Lawmakers on both sides of the aisle have proposed reforms to cut spending in these areas including raising the age of eligibility for Medicare, creating a voucher system to offer options to recipients that would require them to pay for some plans out of pocket, and instituting a board to review payments to health care facilitators.

Energy Policy

The GAO recognized the Department of Energy as the largest contracting agency in the federal government, outside of Department of Defense. With such a big institution, the GAO report said in 2011, there were many opportunities for waste.

With President Obama pledging in his inaugural address to forge ahead on "the path towards sustainable energy sources," it's unlikely that DOE will be shrinking in comparison to other agencies over the next four years. With that in mind, the department is likely to find a spot on the list again this year, unless it has resolved its problems from two years ago.

In 2011, GAO said DOE had taken care of three of the five issues they identified in the past, but two problem areas remained. DOE needed to devote more people and resources to filling in the gaps in management of its contractors, and it needed to come up with a way to measure the effectiveness of those steps.

The FY2012 budget did not address the GAO's concerns, but it did provide $29.5 billion in funding for the DOE and assert that it put the U.S. on track "to lead in the clean energy economy."

Department of Defense

With the Iraq War finished and President Obama winding down the war in Afghanistan, the Pentagon was an easy target for those looking to cut spending during the past election cycle. The 2011 report listed a slew of problems inside that department: problems with their approach to modernization, financial management and creating stores of weapons, just to name a few.

Some of those recommendations had been on the list for 16 years.

But that same report praised DOD for improvements it made following the last report in speeding up the security check process. And with sequestration looming, DOD has already taken cost-cutting steps in recent months. Could this be the year the DOD gets off the list?

More of the Same

From year to year, the GAO notes individual improvements that have been made and recommendations that have dropped off the list. But of the 53 items that made the list between when it was established in 1990 and the last report in 2011, less than half were checked off.

Goldwein predicted not much about this year's report will have changed from 2011.

"There's obviously a lot of waste and fraud throughout government," the policy analyst said. "Things move slowly."