Federal agencies have a long way to go in deciding who should and shouldn't get security clearances, according to a new Government Accountability Office report.

The federal government, which has more than 5.1 million federal and contract employees, spent more than $1 billion in 2011 on background checks.

The Office of Personnel Management performs most of these investigations.

GAO criticized the director of national intelligence, James Clapper, for falling to give agencies clearly defined policies and procedures to determine whether a position requires a security clearance.

Since the late 1990s, GAO said, it has emphasized "the need to build and monitor quality throughout the personnel security clearance process."

Doing so, GAO said, will promote oversight and maximize the scrutinizing of security risks.

In order to prevent "the risk of damaging, unauthorized disclosures of classified information," a reform of the security clearance process is "imperative," GAO said.

Proper background checks would present cost savings opportunities, though GAO said it was unable to estimate the magnitude of such savings.

View the full report below.