[House Hearing, 113 Congress] [From the U.S. Government Publishing Office] TOP CHALLENGES FOR SCIENCE AGENCIES: REPORTS FROM THE INSPECTORS GENERAL (PART I AND PART II) ======================================================================= HEARING BEFORE THE SUBCOMMITTEE ON OVERSIGHT COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY HOUSE OF REPRESENTATIVES ONE HUNDRED THIRTEENTH CONGRESS FIRST SESSION __________ THURSDAY, FEBRUARY 28, 2013 and THURSDAY, MARCH 14, 2013 __________ Serial No. 113-9 and Serial No. 113-13 __________ Printed for the use of the Committee on Science, Space, and Technology Available via the World Wide Web: http://science.house.gov ---------- U.S. GOVERNMENT PRINTING OFFICE 79-928 PDF WASHINGTON : 2013 COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY HON. LAMAR S. SMITH, Texas, Chair DANA ROHRABACHER, California EDDIE BERNICE JOHNSON, Texas RALPH M. HALL, Texas LYNN C. WOOLSEY, California F. JAMES SENSENBRENNER, JR., ZOE LOFGREN, California Wisconsin DANIEL LIPINSKI, Illinois FRANK D. LUCAS, Oklahoma DONNA F. EDWARDS, Maryland RANDY NEUGEBAUER, Texas FREDERICA S. WILSON, Florida MICHAEL T. McCAUL, Texas SUZANNE BONAMICI, Oregon PAUL C. BROUN, Georgia ERIC SWALWELL, California STEVEN M. PALAZZO, Mississippi DAN MAFFEI, New York MO BROOKS, Alabama ALAN GRAYSON, Florida ANDY HARRIS, Maryland JOSEPH KENNEDY III, Massachusetts RANDY HULTGREN, Illinois SCOTT PETERS, California LARRY BUCSHON, Indiana DEREK KILMER, Washington STEVE STOCKMAN, Texas AMI BERA, California BILL POSEY, Florida ELIZABETH ESTY, Connecticut CYNTHIA LUMMIS, Wyoming MARC VEASEY, Texas DAVID SCHWEIKERT, Arizona JULIA BROWNLEY, California THOMAS MASSIE, Kentucky MARK TAKANO, California KEVIN CRAMER, North Dakota VACANCY JIM BRIDENSTINE, Oklahoma RANDY WEBER, Texas CHRIS STEWART, Utah ------ Subcommittee on Energy HON. PAUL C. BROUN, Georgia, Chair F. JAMES SENSENBRENNER, JR., DAN MAFFEI, New York Wisconsin ERIC SWALWELL, California BILL POSEY, Florida SCOTT PETERS, California DAVID SCHWEIKERT, Arizona EDDIE BERNICE JOHNSON, Texas KEVIN CRAMER, North Dakota LAMAR S. SMITH, Texas C O N T E N T S Thursday, February 28, 2013 Page Witness List..................................................... 2 Hearing Charter.................................................. 3 Opening Statements Statement by Representative Paul C. Broun, Chairman, Subcommittee on Oversight, Committee on Science, Space, and Technology, U.S. House of Representatives....................................... 6 Written Statement............................................ 7 Statement by Representative Dan Maffei, Ranking Minority Member, Subcommittee on Oversight, Committee on Science, Space, and Technology, U.S. House of Representatives...................... 8 Written Statement............................................ 10 Witnesses: Mr. Paul K. Martin, Inspector General, National Aeronautics and Space Administration (NASA), Office of Inspector General Oral Statement............................................... 13 Written Statement............................................ 16 Ms. Allison C. Lerner, Inspector General, National Science Foundation (NSF), Office of Inspector General Oral Statement............................................... 22 Written Statement............................................ 24 Mr. David Smith, Deputy Inspector General, U.S. Department of Commerce (DOC), Office of Inspector General Oral Statement............................................... 32 Written Statement............................................ 34 Discussion....................................................... 39 Appendix I: Answers to Post-Hearing Questions Mr. Paul K. Martin, Inspector General, National Aeronautics and Space Administration (NASA), Office of Inspector General....... 54 Ms. Allison C. Lerner, Inspector General, National Science Foundation (NSF), Office of Inspector General.................. 60 Mr. David Smith, Deputy Inspector General, U.S. Department of Commerce (DOC), Office of Inspector General.................... 68 Appendix II: Additional Material for the Record Letter submitted by Representative Dan Maffei, Ranking Minority Member, Subcommittee on Oversight, Committee on Science, Space, and Technology, U.S. House of Representatives.................. 86 Washington Post article, submitted by Representative Dan Maffei, Ranking Minority Member, Subcommittee on Oversight, Committee on Science, Space, and Technology, U.S. House of Representatives................................................ 92 Office of Personnel Management's 2012 Federal Employee Viewpoint Survey Results, submitted by Representative Dan Maffei, Ranking Minority Member, Subcommittee on Oversight, Committee on Science, Space, and Technology, U.S. House of Representatives.. 94 C O N T E N T S Thursday, March 14, 2013 Page Witness List..................................................... 128 Hearing Charter.................................................. 129 Opening Statements Statement by Representative Paul C. Broun, Chairman, Subcommittee on Oversight, Committee on Science, Space, and Technology, U.S. House of Representatives....................................... 132 Written Statement............................................ 133 Statement by Representative Dan Maffei, Ranking Minority Member, Subcommittee on Oversight, Committee on Science, Space, and Technology, U.S. House of Representatives...................... 134 Written Statement............................................ 135 Witnesses: Mr. Gregory H. Friedman, Inspector General, U.S. Department of Energy, Office of Inspector General Oral Statement............................................... 137 Written Statement............................................ 139 Mr. Arthur A. Elkins, Jr., Inspector General, U.S. Environmental Protection Agency, Office of Inspector General Oral Statement............................................... 150 Written Statement............................................ 152 Ms. Mary L. Kendall, Deputy Inspector General, U.S. Department of the Interior, Office of Inspector General Oral Statement............................................... 161 Written Statement............................................ 163 Discussion....................................................... 168 Appendix I: Answers to Post-Hearing Questions Mr. Gregory H. Friedman, Inspector General, U.S. Department of Energy, Office of Inspector General............................ 184 Mr. Arthur A. Elkins, Jr., Inspector General, U.S. Environmental Protection Agency, Office of Inspector General................. 190 Ms. Mary L. Kendall, Deputy Inspector General, U.S. Department of the Interior, Office of Inspector General...................... 196 TOP CHALLENGES FOR SCIENCE AGENCIES: REPORTS FROM THE INSPECTORS GENERAL (PART I) ---------- THURSDAY, FEBRUARY 28, 2013 House of Representatives, Subcommittee on Oversight Committee on Science, Space, and Technology, Washington, D.C. The Subcommittee met, pursuant to call, at 10:01 a.m., in Room 2318 of the Rayburn House Office Building, Hon. Paul Broun [Chairman of the Subcommittee] presiding. [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Chairman Broun. The Subcommittee on Oversight will come to order. Good morning, everyone. I am glad Ms. Lerner finally got through security and got here. I was worried about you, but welcome. In front of you are the packets containing the written testimony, the biographies, and Truth in Testimony disclosures for today's witness panels. I will recognize myself for an opening statement for five minutes. Good morning, everyone. The title of today's hearing is: ``Top Challenges for Science Agencies: Reports from the Inspectors General, Part 1,'' Part 2 to follow. This is the first of two hearings where we will hear from witnesses from the Offices of Inspectors General representing the agencies within this Committee's jurisdiction. The object of the hearing is to learn about the major performance and management challenges facing each agency from the perspective of each of the Offices of Inspector General. Today we will hear from the IG offices with jurisdiction over the National Aeronautics and Space Administration, the National Science Foundation and the U.S. Department of Commerce. It is my hope that this information will help inform our colleagues--on both sides of the aisle--about the issues at the agencies over which we have the responsibility to conduct thorough and appropriate oversight. With the President's budget expected shortly, this hearing will help us as an authorizing Committee, to coordinate with the Appropriations Committee, by identifying for that Committee programs, projects and activities that work as opposed to those that need to be modified or perhaps eliminated. There is no shortage of issues. This Committee has a history of probing NASA, especially in the area of information technology security where last year we held a hearing on that topic. Unfortunately, some of the issues that I raised back then are still outstanding today. In addition to the revelation that NASA needs to do more to protect sensitive information from going out the back door through cyber intrusions and lax protocols, I am increasingly concerned about the possibility of sensitive information going out the front door, possibly with tacit approval from research centers. The National Aeronautics and Space Act has the dual responsibility of providing ``the widest practical dissemination of information concerning its activities and results'' as well as establishing ``such security requirements, restrictions and safeguards as the Administrator deems necessary in the interest of national security.'' Similarly, the Act also gave NASA broad authority to enter into agreements outside of the normal federal acquisition process. Originally meant to support smaller-scale projects, it is increasingly being used for larger, multimillion-dollar procurements. NASA is not the only agency that has this authority. The NSF has roughly $11 billion tied up in other transaction authorities such as Cooperative Agreements which, like NASA's Space Act Agreements, do not carry the same oversight and transparency requirements as contracts. The Department of Commerce, which includes bureaus such as NOAA, which in turn houses the National Weather Service, has been the focus of this Committee since over a year ago when we started hearing claims about financial mismanagement and Anti- deficiency Act violations. That culminated in a September 12, 2012, hearing for which we still have not received agency responses to questions that we submitted for the record, and I hope they will be forthcoming very soon but we still haven't heard back from them. And I can't talk about NOAA without mentioning its satellite programs, which are of great concern to this Committee, particularly in light of potential gaps in future coverage. These are symptoms of what I perceive to be larger management challenges within NOAA. This exercise of deliberating over a program's performance and challenges is a particularly timely one because as you all know, starting tomorrow, federal agencies will do the exact opposite and implement across-the-board, indiscriminate funding cuts as a result of the sequester. The House of Representatives on more than one occasion has tried to offer a solution to prevent these cuts from taking place but we have hit a wall with the Senate and with the Administration. And I know I don't always see eye to eye with my friends on the other side of the aisle, but I respect them and believe that we share the same goal regardless of which side of the room we sit in, and that is to serve our respective constituencies in the best manner possible. To that end, I urge my colleagues, Republicans and Democrats alike, to take advantage of the opportunity this hearing presents and question the witnesses about the agencies within their jurisdiction. [The prepared statement of Mr. Broun follows:] Prepared Statement of Chairman Paul C. Broun Good morning. The title of today's hearing is ``Top Challenges for Science Agencies: Reports from the Inspectors General - Part 1.'' This is the first of two hearings where we will hear from witnesses from the Offices of Inspectors General representing agencies within this Committee's jurisdiction. The object of the hearing is to learn about the major performance and management challenges facing each agency from the perspective of each Office of the Inspector General. Today we will hear from the IG offices with jurisdiction over the National Aeronautics and Space Administration, the National Science Foundation, and the U.S. Department of Commerce. It is my hope is that this information will help inform my colleagues--on both sides of the aisle--about the issues at the agencies over which we have a responsibility to conduct thorough, but appropriate, oversight. With the President's budget expected shortly, this hearing will help us, as an authorizing Committee, to coordinate with the Appropriations Committee, by identifying for that Committee programs, projects and activities that work, as opposed to those that need to be modified or perhaps eliminated. There is no shortage of issues. This Committee has a history of probing NASA, especially in the area of information technology security, where last year, we held a hearing on the topic. Unfortunately, some of the issues I raised back then are still outstanding today. In addition to the revelation that NASA needs to do more to protect sensitive information from going out the back door through cyber intrusions and lax protocols, I am increasingly concerned about the possibility of sensitive information going out the front door--possibly with tacit approval from research centers. The National Aeronautics and Space Act has the dual responsibility of providing ``the widest practical dissemination of information concerning its activities and results'' as well as, establishing ``such security requirements, restrictions, and safeguards as the Administrator deems necessary in the interest of the national security.'' Similarly, the Act also gave NASA broad authority to enter into agreements outside of the normal federal acquisitions process. Originally meant to support smaller-scale projects, it has increasingly been used for larger, multi-million dollar procurements. NASA is not the only agency that has this authority. The NSF has roughly $11 billion tied up in other transaction authorities such as Cooperative Agreements, which, like NASA's Space Act Agreements, also do not carry the same oversight and transparency requirements as contracts. The Department of Commerce, which includes bureaus such as NOAA, which in turn houses the National Weather Service, has been the focus of this Committee since over a year ago when we started hearing claims about financial mismanagement and Anti-deficiency Act violations. That culminated in a September 2012 hearing, for which we still have not received agency responses to questions we submitted for the record. And I can't talk about NOAA without mentioning its satellite programs, which are of great concern to this Committee, particularly in light of potential gaps in future coverage. These are symptoms of what I perceive to be larger management challenges at NOAA. This exercise of deliberating over a program's performance and challenges is a particularly timely one because as you all know starting tomorrow, federal agencies will do the exact opposite, and implement across-the-board indiscriminate funding cuts as a result of the sequester. The House of Representatives, on more than one occasion, has tried to offer a solution to prevent these cuts from taking place, but we've hit a wall with the Senate and the Administration. Now I know I don't always see eye-to-eye with my friends on the other side of the aisle, but I respect them, and believe we share the same goal regardless of which side of the room we sit in, and that is to serve our respective constituents in the best manner possible. To that end, I urge my colleagues - Republicans and Democrats alike--to take advantage of the opportunity this hearing presents, and question the witnesses about the agencies within their jurisdiction. Chairman Broun. Now I recognize the Ranking Member, the gentleman from New York, for an opening statement for five minutes. You are recognized. Mr. Maffei. Mr. Chairman, I thank you very much. I too share your concerns about NOAA's response to the Committee, but on this, I want to welcome the three witnesses. Inspector Generals, sometimes called IGs, carry an unusual mandate and a heavy burden, Inspector Generals stand on the front line of accountability and work to improve government and protect taxpayer interests. As the kind of the cop on the beat in agencies, they function not just as another executive office but also as Congress's eyes and ears in those agencies. This is why IGs have a statutory responsibility to quickly inform Congress of any significant wrongdoing at their agencies. While some IGs have tried to morph their role into that of a management consultant to agency leadership, and that is fine, it is still extremely important, though, and Congress expects Inspector Generals to view themselves as watchdogs first and foremost. IGs have enormous discretion to go with their great responsibility. Within the limits of the law, they can decide what they will and will not pursue, how they will structure their offices, who they will hire and fire, and how they will spend their budgets. The agencies they overlook are in no position to second-guess their actions as that would undermine the IG's necessary independence. However, this independence combined with large budgets outside the control of any other office leaves open the possibility that a bad Inspector General may abuse that position. Inspector Generals are a classic example of the old question, who will watch the watchmen. With no authority over them in their agencies, serving at the pleasure of the President, but a President who stands in great distance, and often keeping information about their activities secret from the public and even Congress, the job of ensuring that an IG who is not doing their job would be identified and removed can fall through the cracks. The Chairman's purpose in holding this hearing, it is my understanding, is to explore what three IGs from NASA, NSF and Commerce have accomplished in the last year and hopes to take on next, and I applaud the Chairman for holding this hearing. I have no reason to doubt that the two Inspector Generals before us have been doing good work and are raising important questions, and I welcome your testimony. The Subcommittee staff, however, and Members of the news media have reported serious and pressing concerns in the Office of Department of Commerce Inspector General, and yet, Mr. Chairman, Mr. Zinser, the Commerce Inspector General, has decided not to appear before us or in staff briefings before the hearing. Now, Mr. Smith, I do sincerely appreciate your time and attention. I hope you can understand why the Committee Members might be disappointed that we don't have direct access to the Department of Commerce IG. It is nothing about your work, you are a fine public servant, but we want to make sure we have direct access to an IG. So Mr. Chairman, the Committee was first alerted to one serious concern when staff discovered that the Inspector General, Mr. Zinser, let NOAA investigate itself regarding criminal financial misconduct. The explanations he offered to the staff back in August to Members in September and then written responses to questions for the record are contradictory and his office has refused to provide records Members requested to better understand what happened. Then in December, the Washington Post reported that Mr. Zinser, along with his Principal Assistant for Investigations and his General Counsel, compelled senior employees to resign and sign nondisclosure agreements that would bar them from disclosing information about the operation of his office to either the Office of the Special Counsel, which is the whistleblower protection office in the Federal Government, or even to Congress itself. Now, why would the IG compel senior officials to relinquish their statutory and, in fact, constitutional right of redress? The conduct reported in the Post should be shocking to conduct for any federal official, let alone an Inspector General. And if we find an Inspector General who we would hope would listen to whistleblowers, not silence them, is engaged in gag orders, that is not acceptable conduct. The recent Federal Best Places to Work survey brings up other concerns that show that the Department of Commerce IG Office was ranking 291 out of 292 places polled, making it among the worst places to work, according to the survey. In this survey, 50 percent of the staff said they were going to look for another job in the next year, and almost half were unsure or felt unsafe in telling senior leadership if they find violations of the law, regulation or policy. So according to this survey, the Inspector General staff are afraid to report violations of law. I should add that our staff has begun to receive information from former employees at Commerce Department of Inspector General, and some of the allegations are very serious. So for all these reasons, Mr. Chairman, Ms. Johnson, Ms. Wilson, Ms. Bonamici and I have sent a letter to GAO. We have asked that they open an investigation into the management and conduct of the IG at the Department of Commerce. At a time when we face the possibility of large-scale, arbitrary cuts to both domestic and military programs, I believe that any charges of wasting taxpayer dollars or using them to run an ineffective office must be investigated. Congress has the responsibility and authority to hold IGs accountable, and we have to ensure money has not been wasted or ineffectively protected, and that laws have not been broken in the name of enforcement. If indeed Mr. Zinser or any Inspector General has allowed his office to be abused or become ineffective, then we in Congress have the responsibility to bring that to light. And Mr. Chairman, I would like to ask if the article in the Post, the letter from Mrs. Johnson, Ms. Wilson, Ms. Bonamici and I and the other supporting materials be included after this statement in the record. [The prepared statement of Mr. Maffei follows:] Prepared Statement of Ranking Minority Member Dan Maffei Mr. Chairman, I thank you very much. I too share your concerns about NOAA's response to the Committee. But on this I want to welcome the three witnesses. Inspector Generals, sometimes called ``IGs,'' carry an unusual mandate and heavy burden. Inspector Generals stand on the front line of accountability, and work to improve government and protect taxpayer interests. As the "kind of cop" on the beat in agencies, they function not just as another executive office, but also as Congress's eyes and ears in those agencies. This is why IGs have a statutory responsibility to quickly inform Congress of any significant wrongdoing at their agencies. While some IGs have tried to morph their role into that of a management consultant to agency leadership, and that's fine, it is still extremely important though, and congress expects, Inspector Generals to view themselves as watchdogs first and foremost. IGs have enormous discretion to go with their great responsibility. Within the limits of the law, they can decide what they will and will not pursue, how they will structure their offices, who they will hire and fire, and how they will spend their budgets. The agencies they overlook are in no position to second guess their actions, as that would undermine the IG's necessary independence. However, this independence combined with large budgets outside the control of any other office leaves open the possibility that a bad Inspector General may abuse that position. Inspector Generals are a classic example of the old question, "who will watch the watchman?" With no authority over them in their agencies, serving at the pleasure of the President, but the President who stands at great distance, and often keeping information about their activities secret from the public and even Congress, the job of insuring that a IG who is not doing their job would be identified and removed can fall through the cracks. The Chairman's purpose in holding this hearing, it is my understanding, is to explore what the three IGs from NASA, NSF and Commerce have accomplished in the last year and hope to take on next, and I applaud the Chairman for holding this hearing. I have no reason to doubt that the two Inspector Generals before us have been doing good work, and are raising important questions, and I welcome your testimony. The subcommittee staff however and members of the news media have reported serious and pressing concerns in the office of the Department of Commerce Inspector General. And yet, Mr. Chairman, Mr. Zinser, the Commerce Inspector General, has decided not to appear before us, or in staff briefings before the hearing. Now, Mr. Smith, I do sincerely appreciate your time and attention. I hope you can understand why the Committee Members might be disappointed that we don't have direct access to the Department of Commerce IG. It is nothing about your work, you are a fine public servant, but we want to make sure that we have direct access to an IG. Mr. Chairman, the committee was first alerted to one serious concern when staff discovered that the Inspector General Mr. Zinser let NOAA investigate itself regarding criminal financial misconduct. The explanations he offered to the staff back in August to members in September and then written responses to questions for the record are contradictory, and his office has refused to provide records members requested to better understand what happened. Then, in December, the Washington Post reported that Mr. Zinser, along with his principal Assistant for Investigations and his General Counsel, compelled senior employees to resign and sign non-disclosure agreements that would bar them from disclosing information about the operation of his office to either the Office of Special Counsel, which is the whistleblower protection office in the federal government, or even to Congress itself. Now, why would the IG compel senior officials to relinquish their statutory and in fact, constitutional, right of redress? The conduct reported in the Post should be shocking conduct for any federal official, let alone an Inspector General. And if we find an Inspector General, who we would hope would listen to whistleblowers, not silence them, has engaged in gag orders, that is not acceptable conduct. The recent Federal Best Places to Work survey brings up other concerns, that show that the Department of Commerce IG office is ranking 291 out of 292 places polled, making it among the worst places to work according to the survey. In this survey, 50% of the staff said they were going to look for another job in the next year, and almost half were unsure or felt unsafe in telling senior leadership if they find violations of the law, regulation or policy. So according to the survey, the Inspector General staff are afraid to report violations of law. I should add that our staff has begun to receive information from former employees at Commerce Department of Inspector General, and some of the allegations are very serious. So for all these reasons Mr. Chairman, Ms. Johnson, Ms. Wilson, Ms. Bonamici and I have sent a letter to GAO, we have asked that they open an investigation into the management and conduct of the IG at the Department of Commerce. At a time when we face the possibility of large scale arbitrary cuts, to both domestic and military programs, I believe that any charges of wasting taxpayer dollars, or using them to run an ineffective office, must be investigated. Congress has the responsibility and authority to hold IGs accountable, and we have to ensure money has not been wasted or ineffectively protected, and that laws have not been broken in the name of enforcement. If indeed Mr. Zinser or any Inspector General has allowed his office to be abused, or become ineffective, then we in Congress have the responsibility to bring that to light. Now Mr. Chairman, I would like to ask if the article of the Post, the letter from Ms. Johnson Ms. Wilson Ms. Bonamici and I and other supporting materials be included after this statement in the record. Thank you Mr. Chairman. Chairman Broun. Hearing no objection, so ordered. [Submitted materials appear in Appendix II:] Mr. Maffei. Thank you, Mr. Chairman. Chairman Broun. Thank you, Mr. Maffei. Part 2 of this hearing, this series that we are doing, will feature the IGs from DOE, EPA and DOI. At that hearing, the EPA IG also had a conflicting schedule, so this is not unique for a Deputy to come and testify, and I appreciate the Deputy from the Department of Commerce coming. The Committee is working with all the IGs within our jurisdiction. We are trying to get everybody here that we possibly can, and I assure you that this is not unique. We have made compromises like this previously and we will have to in the future as we go forward, Mr. Maffei. I know you haven't been on this Committee very long but we welcome you and are glad to have you here, and I know that you and I are going to continue to work very strongly together through this process, but I am as interested as you are in getting to the bottom of all this, because nobody wants to see fraud, waste and abuse, and we have to count upon the IGs to make sure that that doesn't happen, so that is what this is, my objective in doing these hearings and trying to find out what is going on in these agencies and I want to have a strong IG system. Mr. Maffei. That is my concern too, Mr. Chairman. Chairman Broun. Thank you, and I know we both have that same desire so just understand that this is not a unique situation today, and I thank you, Mr. Smith for being here. If there are Members who wish to submit additional opening statements, your statements will be added to the record at this point. At this time I would like to introduce our first panel of witnesses. Our first witness is Mr. Paul Martin, who has been before us before---- Mr. Maffei. Mr. Chairman? Chairman Broun. Yes, sir. Mr. Maffei. I haven't been on this Subcommittee, this Committee very long or the Subcommittee very long but my understanding is, it is the usual to swear in the witnesses, is it not? Chairman Broun. We have done so in the past, and we can do that. Mr. Maffei. I would ask that we do, if it a usual thing, given that we are an oversight---- Chairman Broun. It is my plan to do so, and we--just sit tight. Mr. Maffei. Absolutely. Sorry. Chairman Broun. Just sit tight. Mr. Maffei. As you say, I am new. Chairman Smith of Texas. Will the chairman yield just for a second? Chairman Broun. Absolutely. The Committee Full Chair, Mr. Smith. Chairman Smith of Texas. I just want to kind of explain what our overall policy is. It was my feeling that we didn't need to do so for two reasons. One, under House rules, all witnesses are assumed to be under oath, and two, in the letters to the witnesses, I believe they are--I want to get the gentleman's attention just to make those points. Chairman Broun. If the minority Counsel will listen, please as you all talk? Chairman Smith of Texas. That is all right. He is not listening. Chairman Broun. He is listening. Chairman Smith of Texas. Let me make my two points. One, under House rules, witnesses are assumed to be under oath, so I thought it was a little bit redundant to have to swear them in. Second of all, I believe that the letters that the witnesses get inviting them to testify remind them of that fact as well, so we feel like we have got it covered. If the gentleman wants to make an exception to that general rule, that is fine with me, but I just want to reassure him that the witnesses are reminded that they are under oath, one way or the other, whether it is verbally or in writing. Chairman Broun. Thank you, Mr. Chairman. Chairman Smith of Texas. Sure. Chairman Broun. We will---- Mr. Maffei. Mr. Chairman, if you would yield? Chairman Broun. Mr. Maffei. Mr. Maffei. My understanding, and this could be mistaken, but my understanding is that in the past years, the Committee did--this Subcommittee did administer an oath, whether to remind or whether to reaffirm, for whatever reason, and my concern is if we don't do it, and I admit that I didn't know these rules when we did our first Subcommittee hearing, but if we don't do it now and consistently, we don't want to imply that it is necessary at any particular time for the witnesses. So whatever we normally do, we should decide that and just normally follow the same rules. And I want to thank the distinguished Chairman of the Full Committee for his comment. Chairman Broun. I am entertaining a unanimous consent request from Mr. Maffei that witnesses take an oath. Hearing no objection, so ordered. Mr. Maffei. Thank you. Chairman Broun. Our first witness today is Inspector General of the National Aeronautics and Space Administration, as I already mentioned, is Mr. Paul Martin, who has been here before this Committee before, and I appreciate your coming, Mr. Martin. Our second witness is Ms. Allison Lerner, the Inspector General of the National Science Foundation. Our third witness will be Mr. David Smith, Deputy Inspector General of the U.S. Department of Commerce. As our witnesses should know, spoken testimony is limited to five minutes each, and please, because we have votes shortly coming, so if you would, try to maintain within that 5-minute window, and then each Member will have five minutes to ask questions. Your written testimony will be included in the record of this hearing. It is the practice of this Subcommittee on Investigations and Oversight to receive testimony under oath. If you now would all please stand and raise your right hand, unless you have an objection to taking an oath. Do you solemnly swear to affirm to tell the whole truth and nothing but the truth, so help you God? Thank you. You may be seated. Let the record reflect that all the witnesses participating have taken the oath, and Mr. Maffei, I like that too, and I wanted to do this myself. We now recognize our first witness, Mr. Martin, to present your testimony. Sir, you have five minutes. TESTIMONY OF MR. PAUL K. MARTIN, INSPECTOR GENERAL, NATIONAL AERONAUTICS AND SPACE ADMINISTRATION (NASA), OFFICE OF INSPECTOR GENERAL Mr. Martin. Thank you, Mr. Chairman, Ranking Member Maffei, Chairman Smith and Members of the Subcommittee. The successful landing of the Curiosity over on the surface of Mars in August energized the public about NASA's activities in a way not seen since the final Space Shuttle flight. Another highlight this past year was the first commercial resupply mission to the International Space Station by SpaceX in October. However, NASA also faced significant challenges including the need to reprogram funds to address cost overruns in the James Webb Space Telescope. This shift contributed to delays in several ongoing projects and cancellation of several others including one with the European Space Agency for planned science missions to Mars. At the same time, NASA is busy developing a new rocket, capsule, and related launch infrastructure to enable crewed missions to an asteroid or Mars--expensive and technically complex undertakings in an increasingly austere budget environment. Along with the rest of the Federal Government, NASA is poised to tumble over the ``fiscal cliff'' tomorrow with $894 million in sequestration cuts. Indeed, from our perspective, declining budgets and fiscal uncertainties present the most significant external challenge to NASA. My written statement discusses our complete list of management and performance challenges. This morning, I plan to briefly highlight three. First, project management. Over its 50-year history, NASA has been at the forefront of science and space exploration. However, in addition to their achievements, many NASA projects share another less positive trait--they cost significantly more to complete and take much longer to launch than originally planned. Last September, the OIG issued a report that identified four primary challenges facing NASA as it seeks to achieve project cost, schedule and performance goals: the Agency's culture of optimism, underestimating technical complexity, funding instability and limited opportunities for project managers' development. Second, NASA's aging infrastructure. Eighty percent of NASA's 4,900 buildings are more than 40 years old and beyond their design life. However, NASA has not been able to fully fund required upkeep costs and estimates its deferred maintenance expenses at $2.3 billion. One way NASA could reduce these costs is to reduce the amount of unneeded infrastructure in its inventory. To be successful, NASA must move beyond its historic ``keep it in case we need it'' mindset. In an audit we issued earlier this month, the OIG identified 33 facilities including wind tunnels, test stands, airfields, and launch- related infrastructure that NASA was neither fully utilizing nor had a future mission need. These facilities cost the agency more than $43 million to maintain in fiscal 2011 alone. And finally, information technology security. One year ago, I sat behind this same table and testified alongside NASA's Chief Information Officer about the state of IT security at NASA. Among other things, I mentioned that at the time only one percent of NASA's laptop computers were fully encrypted compared to a government-wide rate of 54 percent. Eight months later, an unencrypted NASA laptop computer containing personally identifiable information on more than 40,000 individuals was stolen from the vehicle of a NASA employee. Agency officials estimate that credit monitoring and other expenses related to the theft could cost NASA up to $850,000. Following that incident, the NASA Administrator accelerated the timetable for encrypting the hard drives on all Agency laptops, and as of two weeks ago the Agency reported an encryption rate for its laptops of 99 percent. Our audits and investigations continue to identify recurring weaknesses in NASA's IT security program, and we anticipate making additional recommendations as we complete an audit examining the Agency's IT governance structure. Reexamination of NASA's overall approach to IT is particularly timely given that the Agency is currently seeking a new CIO. In closing, the National Research Council recently concluded that there is, and I quote, ``a significant mismatch between the programs to which NASA is committed and the budgets that have been provided or anticipated.'' In other words, too many programs are chasing too few dollars. I hope that the NRC's, report together with the ongoing work of the OIG and GAO, will contribute to a dialogue about NASA's future priorities and lead to enactment of a realistic budget that will enable the Agency to accomplish its multifaceted mission. Thank you. [The prepared statement of Mr. Martin follows:] [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Chairman Broun. Thank you, Mr. Martin. Now, Ms. Lerner, you are recognized for five minutes. TESTIMONY OF MS. ALLISON C. LERNER, INSPECTOR GENERAL, NATIONAL SCIENCE FOUNDATION (NSF), OFFICE OF INSPECTOR GENERAL Ms. Lerner. Thank you. Mr. Chairman and Members of the Subcommittee, I appreciate this opportunity to discuss the work of the National Science Foundation Office of Inspector General to safeguard federal tax dollars awarded by the Foundation and to protect the integrity of NSF programs and operations. My statement will focus on accountability of cooperative agreements for NSF's large facility construction projects, grants management and contract monitoring, three management challenges that have a direct impact on NSF's ability to carry out its mission of advancing scientific research by funding external awardees. I will also address NSF's efforts to encourage the ethical conduct of research, another top management challenge. Over the past two years, my office has issued several audits that have raised serious questions about NSF's accountability over cooperative agreements for high-risk, high- dollar projects. NSF currently has 685 open cooperative agreements totaling nearly $11 billion. Thirty-eight of these are valued at over $50 million each and comprise $5-1/2 billion of the total amount of such agreements. In September of 2012, we issued an alert memorandum to NSF management outlining serious weaknesses in the Foundation's cost surveillance measures for awarding and managing high-risk, high-dollar cooperative agreements. At the pre-award phase of such projects, appropriate controls should include conducting audits of awardees' proposed budgets and accounting systems to ensure that awardees cost estimates are fair and reasonable and that their accounting systems are adequate to bill the government properly and to manage funds in accordance with federal requirements. While such audits are not required by law or regulation for cooperative agreements, obtaining such information at the pre-award stage of high-risk, high-dollar cooperative agreements is especially important as the proposed budget once approved by NSF creates the basis upon which awardees can draw down advanced funds over the course of the award. NSF does not regularly obtain such audits. Post-award controls for high-risk, high-dollar projects should include incurred costs of submissions and audits to ensure that costs claimed are allowable. As with pre-award audits, incurred cost submissions and audits are not required for cooperative agreements by law or regulation, and we are not recommending that NSF obtain them for every agreement. However, such submissions and audits are critical tools for ensuring accountability in high-risk, high-dollar cooperative agreements. Simply stated, these are reasonable and prudent steps to protect taxpayer funds. In December 2012, the NSF Director charged the senior advisor in his office with conducting a major assessment of policies and procedures governing NSF-supported large facilities to address these and other matters. We are optimistic that this process will yield more robust oversight and monitoring for NSF's large cooperative agreements. With respect to grants management, oversight and management of awards that is sufficient to safeguard federal funds invested in scientific research has been an ongoing challenge for NSF as grants recipients request payments as an aggregate amount and are not required to present supporting documentation such as invoices and receipts to receive payments. In the face of these oversight challenges, my office is using automated techniques to supplement traditional audit tools and help us improve our ability to identify high-risk awardees, expand our audit coverage to examine more transactions, and better focus our limited resources on questionable expenditures. In the area of contract monitoring, we continue to recommend that NSF obtain incurred cost audits for cost- reimbursable contracts and that it obtain cost accounting disclosure statements from contractors and ensure that they are audited and an approved in a timely manner. Incurred cost audits enable management to assess a contractor's compliance with the financial terms and conditions of a contract and approved disclosure statement is essential to establish how the contractor classifies and bills costs to the government. With respect to the responsible conduct of research, pursuing allegations of research misconduct by NSF-funded researchers continues to be a focus of our investigative work. In recent years, we have seen a significant rise in the number of substantive allegations of such misconduct associated with NSF proposals and awards. It is imperative to the integrity of research funded with taxpayer dollars that we ensure that NSF principal investigators carry out their projects with the highest ethical standards. Finally, we are continuing our efforts with the IG community to combat fraud in the Small Business Innovation Research and Small Business Technology Transfer programs. We will continue to target our work on areas that pose the highest risk of misuse of taxpayer dollars and to do our utmost to ensure that misused funds are returned to the government. This concludes my statement, and I will be happy to answer questions. [The prepared statement of Ms. Lerner follows:] [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Chairman Broun. Thank you, Ms. Lerner. And now, Mr. Smith, you are recognized for five minutes. Thank you. TESTIMONY OF MR. DAVID SMITH, DEPUTY INSPECTOR GENERAL, U.S. DEPARTMENT OF COMMERCE (DOC), OFFICE OF INSPECTOR GENERAL Mr. Smith. Thank you. Chairman Broun, Ranking Member Maffei, Committee Chairman Smith, and Members of the Subcommittee, I appreciate the opportunity to testify today about the Department of Commerce's top management challenges in fiscal year 2013. The Department plays a pivotal role in implementing the President's initiatives for economic recovery and job creation. Like other federal agencies, Commerce faces significant financial uncertainty this year. I will describe five top management challenges which we have identified from our oversight perspective to be the most significant management and performance challenges facing the Department of Commerce. First, stimulate economic growth in key industries, increase exports and enhance stewardship of marine fisheries. The Department has many government-wide initiatives to implement the President's priorities. Successful implementation could have a profound impact on the Nation's economy. However, it requires focused attention by senior management, close coordination with the private sector and other federal agencies, and sustained Congressional support. Second, increase oversight of resources entrusted by the public and invest for long-term benefits. In this era of constrained budgets, there is a greater risk that management will take shortcuts, loosen internal controls and deemphasize oversight to devote resources to other requirements. Therefore, attention to internal controls is critical. Third, strengthen security and investments in information technology. Our recent audits of bureau IT systems confirmed the urgency of fixing the Department's security weaknesses. While we support senior management's recent actions to strengthen the Chief Information Officer's authority, it is too early to judge their effectiveness. Fourth, implement a framework for acquisition project management and improved contract oversight. In fiscal year 2011, the Department obligated approximately $2.4 billion on contracts for goods and services. To maximize these funds, Commerce needs to strengthen its acquisition and contract management practices. While it has made some progress, we continue to find weaknesses in how the Department plans, administers, and oversees its contracts. For example, our recent audit of contract award fees and award terms found more than $100 million in questioned costs and funds that could have been put to better use. Fifth, reduce the risks of cost overruns, schedule delays, and coverage gaps for NOAA's satellite programs. Satellite programs remain the Department's largest investment. They encompass almost 20 percent of Commerce's budget. Top-level management attention will continue to be needed to prevent cost overruns and minimize the impact of satellite coverage gaps. We recently issued a report on the Joint Polar Satellite System program and are completing work on an audit of the Geostationary Operational Environmental Satellite-R Series program. Over the past several years, the Department has experienced many challenges in the areas I have discussed here. To its credit, top-level management is working diligently to address its management challenges. Commerce leadership must continue to show the way forward to establish a culture of accountability-- this is perhaps their greatest challenge of all. Again, we appreciate the opportunities to appear before the Subcommittee today, and I will be pleased to respond to any questions you may have. Thank you. [The prepared statement of Mr. Smith follows:] [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Chairman Broun. Thank you, Mr. Smith. Excellent job by all our witnesses staying within your time constraints, and I trust that all Members on both sides are very pleased with our witnesses' testimony, and I appreciate you all's testimony, you all being available for questioning today. Reminding Members that Committee rules limit questioning to five minutes, the Chair at this point will open the round of questions. The Chair recognizes himself for five minutes. ``Other Transaction Authority,'' may sound like a mundane term, but agencies are increasingly relying on this obscure acquisition tool. Normally, agencies must comply with federal contracting law but oftentimes Congress gives agencies other mechanisms in which to enter agreements outside of the law. In the instance of NASA, they were provided the Space Act Agreement, which is authority given in 1958 when the agency was created in order to advance NASA's mission and programs by cooperating with outside entities. The NSF authority was granted by 31 U.S.C. Section 3605. Initially designed to only fund small projects, this is a serious concern for this Committee. NASA used Space Act Agreements to fund $750 million development of the Commercial Orbital Transportation System, and NSF has over 685 Open Cooperative Agreements totaling nearly $11 billion to fund the construction of its major research facilities. The NASA IG just initiated an audit of the NASA Space Act Agreements on Monday. I appreciate you all doing that. But it was initiated on Monday and the NSF IG issued an alert memo on Cooperative Agreements last September, and thank you also. Mr. Martin and Ms. Lerner, to the best of your knowledge, how has this Other Transactional Authority implemented--how is this Other Transactional Authority implemented by the agency that you oversee? Ms. Lerner will start first. Ladies first. Ms. Lerner. NSF, as we noted, has 685 Cooperative Agreements. Thirty-eight of those are over $50 million, so the area of greatest concern to my office obviously is the high- dollar, high-risk Cooperative Agreements, and the concern that we have based on the work that we have done is that there aren't adequate oversight controls in place to ensure that the funds that are directed to those types of awards are properly stewarded and subject to the same sort of accountability that you would expect in these lean budget times. We have conducted several audits and provided a great deal of feedback to the agency in that area. Chairman Broun. Thank you very much. If you will please let this Committee know what we need to do to try to rectify that. Mr. Martin? Mr. Martin. NASA has three types of Space Act Agreements it has entered into. There are over 700 reimbursable Space Act Agreements, approximately 500 non-reimbursable Space Act Agreements, and three or four what they call funded Space Act Agreements. As you indicated in the preface to your question, earlier this week we initiated an audit looking at all three of these types of Space Act Agreements focusing in particular on reimbursable Space Act Agreements to ensure that NASA is getting and the taxpayer is getting its appropriate funding. Chairman Broun. Okay. I am going to ask a series of questions, both of you all, if you would answer this. Is the agency required to provide advance notice of solicitation? How do the agencies ensure fair competition? Are they required to make a public list of all agreements and amounts in a transparent manner? And are there sufficient controls to prevent waste, fraud and abuse as well as mismanagement? Mr. Martin? Mr. Martin. You have raised a lot of the questions that are the focus of our ongoing audit now. The GAO looked at the issue of Space Act Agreements in the last 2 or three years, did some high-level work of checking on sort of broad internal controls. The IG's office at NASA is going to do a deep dive and get into the details of these agreements. Chairman Broun. Very good. Ms. Lerner? Ms. Lerner. I do believe that NSF requires advance notice of solicitation or competition for all of its large cooperative agreements, and certainly, as I noted earlier, our office does have real concerns about whether there are sufficient controls in place to prevent fraud, waste and abuse. Chairman Broun. Well, please make sure that this Committee is notified because we want to be sure that there is transparency as well as to prevent waste, fraud and abuse. Mr. Martin, this Committee is reviewing allegations related to ITAR violations at the Ames Research Center, and there seem to be very grave allegations there as far as mismanagement there. It is our understanding that your office has already reviewed these allegations. In order to assist our oversight, please provide the Committee with all records relating to your office's review of these allegations. I appreciate your doing so. Thank you. Is that an assurance that we can get those? Mr. Martin. Yes, we are actually having a conversation tomorrow with a staffer from your Committee as well as Mr. Wolf's committee to go over some of these issues related to the concerns about export control matters at Ames Research Center. Chairman Broun. Well, there are just tremendous allegations there of tremendous waste, fraud and abuse in that instance, so I hope that you all will look into them very strongly and look at those allegations. My time is up. Now I recognize Mr. Maffei for five minutes. Mr. Maffei. Thank you very much, Mr. Chairman. Mr. Smith, are you aware of any investigations of suspected Anti-Deficiency Act violations happening in the Commerce Inspector General's Office during Mr. Zinser's tenure? Mr. Smith. Yes, sir. Mr. Maffei. You are aware? Can you enlighten us as to any details about that suspected violation and how it was investigated? Mr. Smith. I want to make sure I understand your question. Are you referring to investigations---- Mr. Maffei. I am referring to an investigation of a suspected Anti-Deficiency Act violation within the IG's Office itself. In other words, the IG's Office may or may not have but there is an allegation that it violated the Act. Mr. Smith. No, sir, I am not. Mr. Maffei. Okay. You are not. Okay. Given that you have been about eight weeks at your job? Mr. Smith. I think I am into my third month--my first trimester. Yes, sir. Mr. Maffei. So am I. So anyway, I respect that, but also I want to point out to the Committee that Mr. Smith wouldn't necessarily know even if there was. At this point he hasn't been there very long. The law does require that an Anti-Deficiency Act violation can only be declared as having happened officially through a decision in the agency's general counsel office. Do you know if Mr. Zinser's office has ever had to refer a suspected Anti- Deficiency Act violation on his own office to the Department of Commerce General Counsel? Mr. Smith. No, sir. Mr. Maffei. Of course. No, you don't know? Mr. Smith. I don't know. Mr. Maffei. Okay. Just trying to figure out how this would all work. I want to ask Mr. Martin and Ms. Lerner, what would happen if there was a suspected Anti-Deficiency Act violation within an IG office? In other words, if the IG's office spends money improperly, who would investigate that? Would the IG himself or herself? Mr. Martin. If it is an allegation against the Inspector General him or herself, there is an overarching organization called CIGIE made up of Inspectors General. There is an integrity committee as part of CIGIE and the allegation of misconduct would go to that committee. Mr. Maffei. Ms. Lerner, you agree with that? [Nonverbal response] Mr. Maffei. Okay. Thank you very much. Mr. Smith, I just ask if you could look into it just to see if there was any suspected Anti-Deficiency Act violation. These things could represent real waste. They could also just be a technical issue, so if you wouldn't mind checking and providing that information for this Committee? Mr. Smith. Yes, sir. I would ask to get together with your staff to find out any further details, so I could better do that. Mr. Maffei. That would be very good for us. Mr. Smith. Thank you. Mr. Maffei. Now, we have gotten a report the Inspector General specifically advertised for investigative staff in the State of Arizona and hired an investigator based in Arizona and now pays for that employee to spend up to three weeks every month in the DC. area. Now, if that is true, it would represent real waste of taxpayer money as you have to pay the base pay, of course, but as well as temporary duty pay for the time they spend in Washington, and this could be several thousand dollars each month. Do you know how many employees at the Commerce IG's Office, employees who are put on regular TDY status for more than a week a month? Mr. Smith. I know of one investigator we currently have on staff who is working out of our Denver office on investigations he is conducting out in that area. Mr. Maffei. Do you know how much time he spends in Washington every month? Mr. Smith. No, sir, I don't have that information available. Mr. Maffei. Could you find out, and also whether there are any other employees that are on this TDY status for more than a week a month---- Mr. Smith. Yes, sir. Mr. Maffei. --on a regular or semiregular basis? Do you have any idea how much--well, let us leave it at that. Obviously, Mr. Chairman, I am worried that these issues with this office could extend to waste in management of the taxpayer funds by the IG himself. These are things that the Committee staff here has had multiple sources on. So I would like to at least see if we can't get the Commerce IG's Office to sort of address them. Some of them are obvious. If there is an employee that lives in Arizona and spends lots of time in Washington, D.C., those are facts. We can find that out. So I would like to make sure that the IG's office is willing to provide us with that information. We do rely on the Inspector Generals to be the watchdog on everyone else, so it is one of those things that we want to make sure that they are careful stewards of taxpayer money themselves for their own operation, and then we will also look into the--what is it called? CIGIE? We will also look into CIGIE. So thank you very much, Mr. Chairman. I yield back the remaining three seconds of my time. Chairman Broun. Thank you, Mr. Maffei. What is CIGIE? What is that an acronym for? Mr. Martin. This is one of the worst acronyms in government. Council of the Inspectors General on Integrity and Efficiency. Chairman Broun. Okay. Thank you very much. I just wanted that for edification. I now recognize the Chairman of the full Committee, Mr. Smith from Texas, for five minutes. Chairman Smith of Texas. Thank you, Mr. Chairman. Mr. Martin, thank you for your testimony. We appreciate the good job you have been doing over the years as well. You mentioned James Webb in your testimony a few minutes ago having been behind schedule and over cost. Has that generally been corrected, to your knowledge? I happen to have spoken to the Administrator of NASA yesterday, and he seemed to think that James Webb was going to be fully funded and on schedule--get back on schedule. Do you see it that way too? Mr. Martin. I do. And in fact, I was at the Johnson Space Center on Tuesday of this week, and they have a thermal vacuum chamber they are retrofitting, built in the 1960s, and they are going to put James Webb Space Telescope in there and ice it down. Chairman Smith of Texas. I expect to be there in March, and I will double-check, so that is good news. Ms. Lerner, you referred to questionable expenditures. We have heard about grant problems--you mentioned those as well-- research misconduct and so forth. I don't know that you have got much into the way of solutions, if you want to mention a couple of solutions, but I would also ask you just for a rough estimate as to how many colleges or universities sort of had been suspected of--I am not going to find them guilty right now--but have been allegedly engaged in some of these questionable practices. So two questions. How many universities, colleges do you think need a second look at their expenditures, and two, do you have some solutions? Ms. Lerner. In terms of the first question, the large facilities that we are interested in are often run not by colleges and universities but by consortiums of nonprofits. Chairman Smith of Texas. I know. I was asking about a subset because they have been getting some attention. Ms. Lerner. Exactly. So I don't have precise numbers on that. We can certainly try and get back to you on that. Chairman Smith of Texas. Great. And I would actually like the names as well. Ms. Lerner. Okay. Chairman Smith of Texas. Okay. Ms. Lerner. We will do what we can there. On the issue of research misconduct, and that is defined as fabrication, falsification and plagiarism at the federal level, over the last ten years, we had approximately 850 allegations of plagiarism and 150 approximately allegations of fabrication or falsification of data. Those are allegations. We have had 120 findings of research misconduct. Chairman Smith of Texas. Which represents an increase, I understand, over the past few years. Ms. Lerner. Exactly. We are seeing a particular increase in the area of data manipulation. In the last two years, we have gotten 24 allegations of data manipulation, and that is the same amount as we got in the previous seven years. Chairman Smith of Texas. Now, what do you do when you see evidence, of this getting to the idea of solutions, do you call it to their attention? Do you have oversight? Do you threaten? What do you do? Ms. Lerner. We absolutely call it to their attention. NSF, as with other science funding agencies, has a regulation for how you investigate research misconduct, and we play an integral part in that process at NSF. All allegations of research misconduct are supposed to be brought to the IG's attention. We do an initial inquiry to try and see if it looks like there is substance to the allegation. If there is, then we refer the matter to the university for investigation. When we send the matter to the university for investigation, we examine the procedures that they have in place for conducting those investigations. We look at the people who are going to participate in the panel that does the investigation to see if---- Chairman Smith of Texas. Now, are you generally satisfied with the subsequent actions taken by university officials? Ms. Lerner. For the most part, yes. Chairman Smith of Texas. Being corrected and so forth? Ms. Lerner. Exactly, and if they don't do it right, then we fix it when it comes to us. Chairman Smith of Texas. Okay. Thank you. Mr. Smith, is it true that Inspector General staff was prohibited by NOAA from attending some of the program management council meetings? Mr. Smith. Yes, sir. Chairman Smith of Texas. And why is it important for Inspector General staff to attend those meetings? Mr. Smith. To give you one example, we received the notes and minutes from a meeting, which said a decision had been made based on discussions that had occurred during the meeting. We were not privy to those discussions so we do not know what management's thought process was. Therefore, we cannot opine on that nor can we provide any information that may benefit them. Chairman Smith of Texas. Would you object if I sent a letter today to NOAA insisting that they allow Inspector General staff to attend such meetings? Mr. Smith. I would thank you very much, sir. Chairman Smith of Texas. Okay. Consider it done. Thank you, Mr. Chairman. Yield back. Mr. Posey. [Presiding] Thank you. Mr. Peters, you are recognized for questions. Mr. Peters. Thank you, Mr. Chairman. I have a question for Mr. Smith. On December 3, 2012, the Washington Post published a story about how the Commerce Inspector General, Mr. Todd Zinser, forced departing senior investigative staff into signing nondisclosure agreements, which barred those four members of his staff from approaching either the Office of Special Counsel, which exists to protect whistleblowers, or Congress to discuss what they had witnessed in Mr. Zinser's office, and Mr. Smith, I assume you saw that story. Mr. Smith. Yes, sir. Mr. Peters. Have you asked for an explanation about what would be the reason to do that either from Mr. Zinser or Mr. Beitel, who is the Principal Assistant Inspector General for Investigations and whistleblower protections, or Wade Green, the General Counsel? Mr. Smith. In answer to your question, sir, I would say that I am aware of the circumstances behind that, and we, as the Office of Inspector General, disagree with the characterization that appeared in the press. Mr. Peters. Okay. In what respect? Mr. Smith. We do not believe that the interpretation that was provided--that those were gag orders--is correct. We actually used the definition of disparage within the EEOC website, which is the ``telling of falsehoods and lies with reckless regard to the truth.'' That is the connotation that was used. In addition, we have been working with OSC and through the Merit Systems Protection Board, and they have requested through the arbitrator that we submit a joint motion to dismiss the stay as well the protective order. The last we heard from OSC, was that they consider through the additional language that we submitted on those nondisclosure agreements as well as the Whistleblower Enhancement Act that was passed, that the concern about enforcing the separation agreements the stay and protective order were meant to prevent is no longer an issue. Mr. Peters. Has the Committee been provided copies of those agreements? Mr. Smith. I believe they have, sir. Mr. Peters. I am sorry. I haven't seen those. I guess I would express to you a concern that there be any kind of inhibition placed on what people might say because even if--I guess what you are saying is that the limitation was confined to what would be considered disparaging remarks? Mr. Smith. Yes, sir, lies, falsehoods. Mr. Peters. Okay. I guess I would like to see for my own purpose, and I will look at those agreements. In the context of open government, which is particularly important in California and we think works pretty well, that when people make statements, whether they are lies or not, are the kinds of things that can shake out in the sunshine and that we don't want to ever intimidate people from making statements about what is going on because they are afraid that they are going to be in some sort of litigation or be accused of lying or telling a falsehood. That in itself can be intimidating. So I must say that I will wait to see the result of what OSC says but it raises a great concern that anyone would be asked to sign anything that inhibits their ability to talk in the context of the whistleblower law that has been provided for our protection and for the protection of taxpayers. And I realize you are new and that this preceded you. I guess you and Mr. Maffei and I are kind of all on the same timeline. But I found that--and I understand we are in politics. We know that everything you read in the press isn't necessarily always 100 percent accurate but I will say that this is extremely--was something of great concern when I heard about it, and I look forward to following up on it in the future. Mr. Smith. Yes, sir. If I may, I actually understand that kind of intimidation and fear if employees disclose things. I myself had to sign a nondisclosure agreement when I left the employment of the House and was warned on numerous occasions not to discuss any of the work that I had done here. Mr. Peters. Well, unless it is classified material, I think that that is inappropriate, and so I would say the notion that we would do that, I think, is equally inappropriate unless it is classified, so I guess I would take that not as justification but something we ought to look into ourselves. Maybe I will ask Ms. Lerner or Mr. Martin, are you aware of any instances in which your agencies, your IGs might have asked people to sign these kinds of nondisclosure agreements? [Nonverbal response] Mr. Peters. Mr. Martin is giving me a no, and Ms. Lerner. I can see that even without their microphones on, so I would ask the record to reflect that, and again I express my deep concern about this kind of behavior. I hope it does not remain the norm. Thank you, Mr. Chairman. I yield back. Mr. Posey. Thank you. The Chair will now recognize the Chair for five minutes. Mr. Martin, you issued a report a couple weeks ago on NASA's management and infrastructure standards, and in that report, you use the term ``political intervention'', and I want to ask you about three examples of political intervention. Number one, the Arc Jet facility at Johnson, the platform for the A3 test stand at Stennis, and of course, the Constellation. On your report, page 21, you mention a letter signed by 30 Members of Congress, most of them from Texas, opposed to the closing of the Arc Jet facility at Johnson. I am informed that the Arc Jet facility was needed to test Orion's Constellation crew capsule, still going to be used by the way, their heat shield, so I can understand why Members of Congress oppose closing down the Arc Jet facility because it could jeopardize the upcoming SLS. That is number one. Number two, the A3 test stand at Stennis. Your report on page 22 also flagged the A3 test stand as political intervention. The test stand was intended to test the J-2X engines for Constellation. As you know, Congress included language in the 2010 NASA Authorization Act instructing NASA to complete the test stand, which NASA wanted to mothball. You note that the stand was already 65 percent complete and taxpayers had spent $292 million but your report fails to mention that the test stand was canceled because the Administration canceled Constellation. I think that is correct. Both Democrat and Republican Congresses had endorsed Constellation as a replacement for the space shuttle or the successor program. Why do you interpret actions by Members of Congress, including a law passed by Congress and signed by the President, as political interference, but don't consider the cancellation of Constellation as political interference? Mr. Martin. I think that what we were attempting to do in that report, and I thought we were effective in doing so, was pointing out the many obstacles that stand in NASA's way to reducing its aged infrastructure, but one of the things we pointed out was the interest of Members of Congress to retain certain infrastructure and capabilities at centers within their States or within their districts. A lot of the other problem that NASA has with handling its infrastructure is the fact that it is sort of changing programs or changing directions, and as you pointed out the cancellation of the Constellation was a major shift in the approach for manned space flight. Mr. Posey. I don't mean to interrupt you but we are on a very tight time schedule here. Did the Administration have a right to cancel the program put into law by Congress? Mr. Martin. I don't believe that is a question that an Inspector General at an agency is appropriate to answer. Did they have a legal right to do so? Mr. Posey. Yeah. Is that appropriate? I think you are supposed to tell us if we are operating according to good standards, and I think that is a significant question that demands an answer, which nobody has really been willing to step up and talk about. You have a Congressional program in place and an Administration that unilaterally cancels the program. Nine billion dollars flushed down the toilet, and you don't think that ought to be on the radar screen? Mr. Martin. It certainly is on Congress's radar screen and the Administration's. In the NASA Authorization Act of 2010, Congress worked with the Administration and came up with a new direction for moving forward. You mentioned the SLS and the MPCV. It is not an Inspector General's role to say whether that is good policy or bad policy. It is the Inspector General's role to follow the money. Mr. Posey. Well, these instances that you mentioned in your report I think were directly linked to and inextricably entwined with those decisions, and like I said, I am new on this Committee. Mr. Martin. Right. Mr. Posey. And I don't have all the background, but during the review that I have done, I hadn't seen that issue addressed, and I think it would be significant and I think maybe some other Members of the Committee would have an interest in knowing that too. Mr. Martin. Again, we were pointing out those significant pressures on NASA of multiple kinds including political pressures, when it is attempting to address an issue of how to handle its aging infrastructure. Mr. Posey. I see my time is expired. Mr. Schweikert, you are recognized. Mr. Schweikert. Thank you, Mr. Chairman. Ms. Lerner, you actually had a couple things in your testimony that I found interesting. First one. You were saying you were starting to do some--forgive me for paraphrasing--data mining to find bad acts. Can you share with me first what you are doing within that modeling and how effective you are finding it? Ms. Lerner. What we are doing is augmenting our traditional approach to auditing by using data analytics, and data analytics enable us to better target. If we do 20 or 30 audits in a year, that is all that we can do, so we have to, when NSF makes thousands of awards a year, be very careful of where we go and do our audit work. Data analytics enables us to better target our limited resources to the right places where risk looks to be high, and when we get to the institution, then we are able to instead of looking at two or three awards that have NSF money and 20 to 30 transactions in each, we can look at all of the awards and all of the transactions under them and identify anomalies that warrant further review. It is a starting point, not an endpoint, but it greatly enhances what we can see and how we can do our work. Mr. Schweikert. And Mr. Chairman and Ms. Lerner, I am actually a big fan of that. I am actually married to someone who one of her specialties was accounting models and-- accounting data in the statistical models and trying to find those anomalies, and it gives you a chance to be able to look at huge data sets and find the center, and I hope actually from up and down the auditing world out there that we are seeing more of this. I am going to commit one of my sins here, and you also touched on that you have found some fraud and some bad acts. Real quickly, would you tell me anecdotal--of something you consider outrageous and how it was conducted? Ms. Lerner. You mean using the new data---- Mr. Schweikert. No, no, just anything that was found. Ms. Lerner. We certainly see situations with NSF awards, where the work is completed but funding remains and then, long after the award is done, costs from other projects are transferred to it to use up the awards, that don't have anything to do with the reason that the award was provided in the first place. Mr. Schweikert. Mr. Chairman, Ms. Lerner, so what you are saying is, where a university or institution may have multiple---- Ms. Lerner. Awards. Mr. Schweikert. --awards, they run their fund dry and they start to do transfer of costs? Ms. Lerner. Yes. We can see that now with these new techniques. Mr. Schweikert. And the data mining also will--is to get enough to look for all those types of silos? Ms. Lerner. Absolutely. It is amazing what we can see, and it enables us to have a much stronger set of evidence when we go to the agency with better support for the costs that we are questioning. Mr. Schweikert. Mr. Chairman, Ms. Lerner, not that I don't love the rest of you but this one interests me. Do you also end up finding--using the data auditing mechanics on also how awards are given out, not only how they are performing? Because over the years we have had, even on a personal basis, lots of noise on how National Science Foundation ultimately does their awards and sometimes how certain personalities of people with great writing skills. Is there a data metric to sort of audit why and where those awards are going? Ms. Lerner. We haven't established metrics in that area but certainly if the data exists, it is something that could be done. The question is coming up with the right business rules to put into the system to surface the anomalies. Mr. Schweikert. I think there was some chart going around last year showing how certain institutions seem to dominate in collection--obtaining the awards where a lot of--so if you look sort of the bell curve, it is sort of going to just sort of a handful of institutions. Am I off base on that? Ms. Lerner. I sincerely doubt that you are. Mr. Schweikert. In my last couple seconds to our other gentlemen, data mining being used in your areas of specialty? Mr. Smith. Sir, the data mining is not necessarily being used at the Department of Commerce but when I did work at the Defense Finance and Accounting Service, we used it extensively. In fact, the gentleman behind me, Mr. Brett Baker, was in charge of that whole project and we found discrepancies within the purchase card program within the charges billed by transportation companies for military household moves as well as many, many other things. Mr. Schweikert. And I am over time, but Mr. Martin? Mr. Martin. The same thing. We have done audits of credit cards, purchase cards, also SBIR audits, Small Business Innovation Research grants that NASA awards. Mr. Schweikert. I am over time, but Mr. Chairman, thank you for your patience, but when we ask multibillion-dollar programs to be, you know, if we were private sector, there would be hundreds and hundreds of auditors for things that big. Maybe data is actually part of the future of how we find bad acts. Chairman Broun. Thank you. All of us, Mr. Schweikert, are very interested in doing this, and people have to be held responsible and accountable. We are going to have votes in about somewhere between 10 and 15 minutes from now, so we are going to go to a second round of questions for two minutes each, so if you could, just make sure that your answers are real tight and short if you could so that we can get as much done here before we have to go for votes. Conducting oversight on NOAA took up a disproportionate amount of this Subcommittee's time last year, or in the last Congress, actually. One of the recurring weaknesses that we encountered was the poor financial management of the agency. We have seen numerous Anti-deficiency Act violations: the solicitation of a magician for training purposes, an independent review team's description of CFO's oversight of the JPSS program as ``dysfunctional'', a fisheries enforcement accounting system that incentivized corruption and a budget development process that is no longer tied to requirements. Mr. Smith, given the gross negligence that we uncovered in Congress last year, what work are you planning for the coming year tied to NOAA financial oversight? And before you answer, let me just tell you, Mr. Martin, Ms. Lerner, I hope you all are looking in these same sorts of things, but I am focused on Mr. Smith and NOAA at this point. Mr. Smith? Mr. Smith. We currently continue to receive hotline complaints concerning the NOAA reprogramming. We are very glad that NOAA has brought on Grant Thornton to review their budget books. We are continuing to talk to NOAA officials. We are very glad to see that they brought on a permanent CFO to review this matter. In addition, we just finished an audit of the JPSS program and are currently doing an audit of the GOES-R program, so we are still actively involved in the high-risk areas and the known problems within NOAA. Chairman Broun. Is it appropriate for Grant Thornton to be overlooking this since it reports to the person who is involved in all this? Mr. Smith. Yes, sir, I believe it is because they are an independent entity that may not be tainted by the culture that we found there said, the reason reprogrammings were done was to succeed with the mission. Chairman Broun. To use a trite phrase, the fox watching the henhouse is not appropriate and I hope you all look into that. My two minutes is up. Now Mr. Maffei for two minutes. Mr. Maffei. Thank you very much, Mr. Chairman. I was interested in this Office of Personnel Management- sponsored employee viewpoint survey. In 2012, it showed, Deputy Inspector General Smith, the office that you work in was next to last as the worst place to work in federal offices, 291 out of 292 offices, and over half of the staff in the Commerce IG's Office said they would try to leave the office in the next year. Did you know about this before you took your position? Mr. Smith. No, sir. The results did not come out until late December. Mr. Maffei. Well, I thank you for your service. The bottom line is, the survey suggests that the staff is almost evenly split between those who feel safe reporting violations of laws, rules, regulations to the Inspector General and those who are uncertain or expect retaliation for such reporting. That sounds like a highly dysfunctional environment, at least according to this survey. I am going to assume you don't find that acceptable. Are there any programs that are going to put in place to kind of improve that workplace atmosphere? Mr. Smith. Yes, sir, there is. In fact, I have been designated to be in charge of that. I have already initiated several employee working groups and they have met. We are trying to get to the reasons behind the survey results. I also would like to point out the fact that even though the difference between the positive and the neutral and negative may not be where we want it to be, it is encouraging to see that the number of negative responses from last year's survey has actually decreased for almost every question, and I do consider that progress. Mr. Maffei. Okay. Well, I am going to remain very, very interested in that, and also just to echo what Congressman Peters said earlier, obviously there might be reasons for nondisclosure in the case of a lawyer-client privilege, privacy of a particular person or national security or other kind of sensitive information, but otherwise the appearance of some sort of a problem is certainly there whenever these sort of nondisclosure agreements are signed, so I would hope that in the future the Commerce IG's Office would recognize that. Thank you. My time is up. Mr. Smith. Sir, if I may just respond to that one, we have discontinued the use of those nondisclosure agreements. Mr. Maffei. I am glad to hear it, Mr. Smith. Thank you. Chairman Broun. The gentleman's time is expired. Now Mr. Posey, you are recognized for two minutes. Mr. Posey. Thank you, Mr. Chairman. Back to Mr. Martin. I want to be sure we show him some love too. Hopefully this will just be yes or no. The NASA IG report from August 9, 2012, highlights that NASA acknowledges the need to clarify the criteria centers should use to determine if underutilized property has a current or future mission-related use. That is under roman numeral page six of the report. Would it be fair to say that in regards to undeveloped land, not structures in the ground or infrastructure in the ground, but undeveloped land at a center that has never been designated for future use in any plan is a potential candidate for excess property, i.e., leasing, conveying, enhanced use agreements? Is that fair to say? Mr. Martin. Based on your question, I would think so, yes. Mr. Posey. Thank you very much, Mr. Chairman. Chairman Broun. Thank you, Mr. Posey. I don't think we have time to go into another round of questioning. I want to thank the witnesses for you all's valuable testimony today. The Members of the Committee may have additional questions for you, and we will ask you to respond to those in writing. Please do that very expeditiously. As I mentioned in my opening statement, we have asked for some reports or answers to questions that have not been produced thus far, and I am very disappointed in the Administration for not providing those answers to the questions from this whole Committee from both sides, but I hope, and I trust, that you all will answer those very expeditiously. The record will remain open for two weeks for additional comments and written questions from Members. The witnesses are excused. Thank you all so much. We are now adjourned. [Whereupon, at 11:12 a.m., the Subcommittee was adjourned.] Appendix I ---------- Answers to Post-Hearing Questions Responses by Mr. Paul K. Martin [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Appendix II ---------- Additional Material for the Record Letter submitted by Ranking Minority Member Maffei [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Washington Post article submitted by Ranking Minority Member Maffei [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Office of Personnel Management's 2012 Federal Employee Viewpoint Survey Results submitted by Ranking Minority Member Maffei [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] TOP CHALLENGES FOR SCIENCE AGENCIES: REPORTS FROM THE INSPECTORS GENERAL (PART II) ---------- THURSDAY, MARCH 14, 2013 House of Representatives, Subcommittee on Oversight Committee on Science, Space, and Technology, Washington, D.C. The Subcommittee met, pursuant to call, at 12:37 p.m., in Room 2318 of the Rayburn House Office Building, Hon. Paul Broun [Chairman of the Subcommittee] presiding. [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Chairman Broun. The Subcommittee on Oversight will come to order. Good afternoon. In front of you are packets containing the written testimony, the biographies, and truth-in-testimony and the disclosures for today's witness panel. I recognize myself for five minutes for an opening statement. Let me begin first by thanking our witnesses for you all's patience and flexibility, and you all have been very patient and very flexible and I greatly appreciate that. We have had several exchanges over the last couple weeks as we have had to change the hearing start time not once but twice. I appreciate you all's willingness to work with us on this. The title of today's hearing is ``Top Challenges for Science Agencies: Reports from the Inspectors General--Part 2.'' Part 1 was a couple of weeks ago. This is the second of two hearings we scheduled to hear from the Offices of Inspectors General representing the agencies within this committee's jurisdiction. The object of these hearings is to learn about the major performance and management challenges facing each agency from the perspective of each Inspector General. The DOE IG's office is a regular guest at the hearings before this Committee. We follow your work very closely and pay attention to your thorough analysis. For example, during testimony provided at the Subcommittee hearing last year, your colleague explained that the Department ``awarded grants of nearly $300 million for Clean Cities projects and about $400 million for Transportation and Electrification efforts.'' And while both programs required fund recipients to comply with Federal regulations governing financial assistance awards, as noted in testimony provided by your office back then, you identified ``needed improvements in financial management for both programs.'' Since then, the Department does not seem to have improved its management abilities, as further highlighted in the report by your office issued last month about LG Chem. This Michigan company received nearly $150 million in Recovery Act funds. Yet, not only did the company fail to meet basic project goals, its employees actually got paid for watching movies and playing board games. These are serious concerns about serious amounts of taxpayer money that require this Committee's attention. As for the EPA, we always have questions about their actions and decisions. The Integrated Risk Information System, or IRIS, is a perennial topic of discussion even when we were in the Minority. IRIS is on the GAO's high-risk series and continues to be on the IG's management challenges list for the Agency. Another issue that this committee has been involved with for several months is EPA's draft Bristol Bay Watershed Assessment. EPA has not provided clear answers about the purpose, cost, or relevance of an assessment that is based on a hypothetical mining plan. Hypothetical mining plan, mind you. Concerns have been raised about this assessment, prompting one peer reviewer to describe it as ``hogwash.'' We have also heard concerns about the integrity and usefulness of EPA's second peer review of the assessment. These concerns, along with other potential problems regarding conflict of interest and proper process at other advisory and peer-reviewed bodies at the Agency, will require the IG's diligent attention as they ultimately impact important regulatory decisions at EPA. The Department of Interior also faces many challenges in the future, not the least of which is how it conducts science and incorporates that science into Department decisions. The Department is embroiled in scientific integrity cases involving: polar bear research; the Klamath River dam removal decision; the Delta Smelt issue regarding California's Central Valley Water; the evacuation of peer reviewers' comments to justify an offshore drilling moratorium; and the treatment of science in deciding to extend the operating agreement for an oyster company on a national seashore, just to name a few. Because of the Department's track record, an uncertain process for handling allegations between the IG and the Agency, and questions about the IG's independence, I see scientific integrity as a fundamental challenge facing the Agency moving forward. This challenge affects the use of Federal lands, Endangered Species Act listings that influence property owners, and countless other important national interests tied to resources and wildlife. As Inspectors General, you all have the important responsibility of conducting and supervising audits and investigations; providing leadership; recommending policies; and preventing and detecting waste, fraud, and abuse and mismanagement at the agencies. We rely on your diligence and independence to assist in our oversight responsibilities. That is why I look forward to receiving your testimonies and hearing your answers to my questions later this hour. I thank you. Now, I recognize the Ranking Member, my friend from New York, the gentleman, Mr. Maffei, for an opening statement. [The prepared statement of Mr. Broun follows:] Prepared Statement of Chairman Paul C. Broun Good afternoon. Let me begin first by thanking our witnesses for their patience and flexibility. We've had several exchanges over the last couple of weeks as we had to change the hearing start time not once, but twice. I appreciate our witnesses' willingness to work with us. The title of today's hearing is ``Top Challenges for Science Agencies: Reports from the Inspectors General - Part 2.'' This is the second of two hearings we scheduled to hear from the Offices of Inspectors General representing agencies within this Committee's jurisdiction. The object of these hearings is to learn about the major performance and management challenges facing each agency from the perspective of each Inspector General. The DOE IG's office is a regular guest at hearings before this Committee. We follow your work closely, and pay attention to your thorough analysis. For example, during testimony provided at a Subcommittee hearing last year, your colleague explained that the Department ``awarded grants of nearly $300 million for Clean Cities projects and about $400 million for Transportation Electrification efforts.'' And while both programs required fund recipients to comply with federal regulations governing financial assistance awards, as noted in testimony provided by your office back then, you identified ``needed improvements in financial management for both programs.'' Since then, the Department does not seem to have improved its management abilities, as further highlighted in a report your office issued last month about LG Chem. This Michigan company received nearly $150 million dollars in Recovery Act funds. Yet, not only did the company fail to meet basic project goals, its employees actually got paid for watching movies and playing board games. These are serious concerns about serious amounts of taxpayer money that require this Committee's attention. As for the EPA, we always have questions about their actions and decisions. The Integrated Risk Information System, or IRIS, is a perennial topic of discussion, even when we were in the Minority. IRIS is on the GAO's high-risk series, and continues to be on the IG's management challenges list for the agency. Another issue that this Committee has been involved with for several months is EPA's draft Bristol Bay Watershed Assessment. EPA has not provided clear answers about the purpose, cost, or relevance of an assessment that is based on a hypothetical mining plan. Concerns have been raised about this assessment, prompting one peer reviewer to describe it as ``hogwash.'' We've also heard concerns about the integrity and usefulness of EPA's second peer review of the assessment. These concerns, along with other potential problems regarding conflict of interest and proper process at other advisory and peer review bodies at the Agency, will require the IG's diligent attention as they ultimately impact important regulatory decisions at EPA. The Department of Interior also faces many challenges in the future, not least of which is how it conducts science and incorporates that science into Department decisions. The Department is embroiled in scientific integrity cases involving: polar bear research; the Klamath River dam removal decision; the Delta Smelt issue regarding California's central valley water; the manipulation of peer reviewers' comments to justify an offshore drilling moratorium; and the treatment of science in deciding to extend the operating agreement for an oyster company on a National Seashore, just to name a few. Because of the Department's track record, an uncertain process for handling allegations between the IG and the Agency, and questions about the IG's independence, I see scientific integrity as a fundamental challenge facing the Agency moving forward. This challenge affects the use of federal lands, Endangered Species Act listings that influence property owners, and countless other important national interests tied to resources and wildlife. As Inspectors General, you all have the important responsibility of conducting and supervising audits and investigations; providing leadership, recommending policies, and preventing and detecting waste, fraud, abuse and mismanagement at agencies. We rely on your diligence and independence to assist our oversight responsibilities. That's why I look forward to receiving your testimonies, and hearing your answers to my questions later this hour. Thank you. Mr. Maffei. Thank you, Mr. Chairman, my friend from Georgia. And I want to join you in welcoming our witnesses today. We have a tight schedule this afternoon and I promise that I won't take too much time, but I really do want--because I really do want to hear from these witnesses. As was said by the former Chairman of the Recovery Accountability and Transparency Board, Earl Devaney, who pointed out that history shows approximately seven percent of any large expenditure is likely to be subject to fraud. Now, while I am sure there is a lot of people that believe it is far, far more than that in today's Federal Government, even seven percent is too much. And I think we can do better. And that is precisely why we have Inspectors General, to help us locate waste, fraud, abuse and provide accountability to the American people that we are good stewards of their tax dollars. They are expected to be the watchdogs first and foremost. And in that, Inspectors General have a tough job. They have to watch what the Agency follows--does in terms of making sure they follow the law. They have to guard the taxpayers' precious dollars. They have to offer advice and direction to management without getting so close to their agency heads that they lose their independence. On the one hand, they answer to the President, and on the other hand, they have to answer to Congress. I think in both cases you always answer to the American people. All three of our witnesses have had experience standing up to those pressures and all demonstrate somewhat different choices on how to navigate through them. But even if we do not always agree with their conclusions or like the implications of what they find, I want to recognize that all three of the offices work hard to produce meaningful audits, carry forward criminal investigations when necessary, and produce thoughtful reports that provide perspective on management challenges. I particularly want to point out that the Department of Energy's IG is an office that provides a good model for others on how to balance the work. Mr. Chairman, I am particularly looking forward to--looking to these witnesses to tell us about the impact of the current sequestration on the work of their offices and to offer insights into how their agencies might adapt to sequestration in the most cost-effective fashion. And in view of the conversation in the full Committee earlier, I just want to make it clear, Mr. Chairman, that I do not solely hold the Congressional leadership or the President responsible for this. I certainly don't hold the Chairman responsible, who, as noted, had voted against it. I was not in Congress then, and--but I do think that whoever is to blame--and there are many--we need to look at how to move forward. And so these across-the-board cuts done mid-year, they may be producing potential waste and unanticipated costs, and at the very least, I think it would be useful for this Committee to gather whatever information we can on this matter to inform our actions and that of the full Committee and the Congress moving forward. And with that, I yield back the balance of my time and I thank the Chairman. [The prepared statement of Mr. Maffei follows:] Prepared Statement of Ranking Minority Member Dan Maffei Thank you, Chairman Bucshon, and thank you to all of the witnesses for being here today. One of the reasons I joined this Committee is because of my strong interest in working to improve STEM education. I have also served as co-chair of the House STEM Education Caucus for the past four years, so I'm glad we're having this hearing and that we are doing it early in the new Congress. As a former engineer, I can personally vouch for the importance of educating our students at all levels in STEM fields. We're all familiar with the statistics by now. According to the 2011 TIMSS study, U.S. students in 4th grade rank behind students in 10 other countries in science aptitude and 15 other countries in math, and students fall further behind as they proceed to high school. This has serious consequences for individuals and for our nation's economy. For example, while we still face unacceptably high unemployment, many employers are unable to find qualified workers. I have heard from many manufacturers that they are having a difficult time finding workers who have basic STEM knowledge. And students who aren't learning the necessary skills by the time they graduate high school are much less likely to pursue STEM fields if they go to college, constraining our workforce even further. And with fewer Americans in STEM fields, especially fewer PhDs, American innovation is suffering, further hurting economic development. We know that improving STEM education is a complex problem with no easy or one-size-fits-all solution. Therefore, we all must work together--the private sector, nonprofits, colleges and universities, school districts, and local, state, and federal governments--to find solutions that fit specific needs. If the U.S. wants to remain the global leader in innovation and technology, we have to tackle these challenges with an ``all hands on deck'' approach. Today's hearing focuses on corporate and nonprofit organization STEM initiatives. U.S. companies are realizing more and more how critical it is to their long-term success that we have a robust high- tech workforce. Meanwhile, foundations and other nonprofits are increasingly leveraging their resources and expertise in this area as the problems grow. I'm very excited to see how much the private sector has stepped up on these issues in the last few years, and I look forward to hearing about the efforts of the companies and organizations represented here today. But I also want to talk about the federal role in this partnership and in particular, the role of the National Science Foundation. NSF is one of the most important sources of funding for education research. Industry rightly wants to put their money into proven programs. For that to happen, somebody has to provide the funding to develop and prove out those programs. NSF grants allow education researchers and organizations to test out and evaluate new ideas, and to improve our understanding of how people learn and what effective pedagogy really means. Much of what we know and use in STEM education today started out with NSF funding. Unfortunately, our Federal investments in STEM education, including at NSF, have stagnated and are even being questioned. This is not a good strategy for educating and training our next generation of STEM workers and strengthening American competitiveness. We must continue to address this challenge, so I hope this first hearing on STEM education is one of many during this Congress, and that future hearings will look at the role of other stakeholders, including the Federal Government. U.S. researchers and universities--which attract top-notch students from many nations--remain the best in the world. However, we can't take this leadership for granted. As other countries take bold steps to match and surpass our progress, we must all work together so that the U.S. remains the most innovative country in the world. I look forward to working with all my colleagues to ensure that we are doing our part. I want to thank Chairman Bucshon again for calling this hearing, and the witnesses as well for taking the time to offer their insights today. And with that, I yield back. Chairman Broun. Thank you, Mr. Maffei. I know you weren't here when we had that bill before us. It was proposed by the President and Members of Congress voted on it on both sides, so it was something that I thought was terrible policy and that is the reason I voted against it. And I don't believe generally in across-the-board cuts. I think we need to make some targeted cuts. And I appreciate the cooperation that I have from you and I love working with you. Mr. Maffei. And if---- Chairman Broun. We have got a good partnership in this Committee. And so we will go forward. Mr. Maffei. Wonderful. Thank you, Mr. Chairman. Chairman Broun. If there are Members who wish to submit additional opening statements, your statements will be added to the record at this point. Chairman Broun. Now, at this time, I would like to introduce our panel of witnesses. Our first witness is Mr. Gregory Friedman, Inspector General of the U.S. Department of Energy, a position he has held since 1998. I know he has been before this Committee and the full Committee before, so we appreciate your being here, Mr. Friedman, as many a time participant in these hearings. Our second witness is Mr. Arthur Elkins, Jr., Inspector General, U.S. Environmental Protection Agency, a position he has held since 2010. And our third witness is Ms. Mary Kendall, Deputy Inspector General, U.S. Department of Interior, a position she has held since 1999, and includes a brief stint as acting Inspector General when the former IG left. As our witnesses should know, spoken testimony is limited to five minutes each, and we are kind of pressed for time today, so if you would try to keep your spoken testimony within a five minute window, after which the Committee Members will have five minutes each to ask questions. Your written testimony will be included in the record of the hearing. It is the practice of this Subcommittee on Oversight to receive testimony under oath. If you would please rise and raise your right hand unless you have an objection to taking an oath. Do either of you have an objection--any of you have an objection to taking an oath? Okay. Let the record reflect all indicated they have no objection doing so. Do you solemnly swear or affirm to tell the whole truth and nothing but the truth, so help you God? You may be seated. Let the record reflect that all witnesses participating have taken the oath and said that they did swear to that oath. I now recognize our first witness, Mr. Friedman, to present your testimony. And sir, you have five minutes. STATEMENT OF MR. GREGORY H. FRIEDMAN, INSPECTOR GENERAL, U.S. DEPARTMENT OF ENERGY, OFFICE OF INSPECTOR GENERAL Mr. Friedman. Thank you, Mr. Chairman. Mr. Chairman, Ranking Member Maffei, and Members of the Subcommittee, I appreciate the opportunity to testify today on the major challenges facing the Department of Energy and the associated work of the Office of Inspector General. The Department of Energy is a multifaceted agency responsible for some of the Nation's most complex and technologically advanced missions. These include vital work in basic and applied research, clean energy innovation, environmental cleanup, medical applications, nuclear weapons stewardship, and efforts to enhance national security. To advance these efforts, the Department receives an annual appropriation of nearly $30 billion, employs 115,000 or so Federal and contractor personnel, and manages assets valued in excess of $180 billion. We provide in the Office of Inspector General independent oversight of the Department's programs, and of course our objective is to promote economy and efficiency and to prevent and detect fraud, waste, and abuse. Based on this body of work, on an annual basis, my office identifies what we consider to be the most significant management challenges facing the Department. For Fiscal Year 2013, our list of challenges includes the following: operational efficiency and cost savings, which I will discuss a little bit more in depth later on; contract and financial assistance award management; cybersecurity; energy supply; environmental cleanup; human capital management; nuclear waste disposal; safeguards and security; and stockpile stewardship. We also developed a watch list of emerging issues and other items that warrant special attention by department officials. These include infrastructure modernization, the Department's Loan Guarantee Program, and worker and community safety. These challenges are integral to the Department's mission. They are not amenable to immediate resolution, and they can only be addressed through a concerted effort over time. I would like to focus, as I indicated earlier, on what may be the most current challenge. That is sustaining departmental operations in a period of constrained resources. In our Fiscal Year 2012 and 2013 Management Challenge Reports, we provided the Department with a series of suggested actions for major operational improvements and cost-reduction initiatives. They include the following: First, applying the Quadrennial Technology Review's strategic planning concept to the Department's entire multibillion dollar science portfolio. This would put the Department in a better position from our perspective to develop metrics to evaluate its science efforts and to determine whether the science initiatives are aligned with current national priorities. Second, we proposed eliminating costly duplicative functions associated with the National Nuclear Security Administration. The NNSA contains a set of distinctly separate overhead operations that are often redundant to existing departmental functions. Third, we suggested the Department use a BRAC-style commission--Department of Defense BRAC-style commission to evaluate the current alignment of its laboratory and technology complexes and proposed revisions, including laboratory rightsizing and laboratory consolidation wherever possible. We noted that of the $10 billion spent annually on operating, the Department's 16 federally funded Research and Development Centers, administrative overhead, and indirect costs account for about $3.5 billion of this amount. This burden may not be sustainable in the current budget environment. Fourth, reprioritizing the Department's $268 billion environmental remediation liability with the objective of ensuring that high-risk initiatives and activities are funded first. This would require an analytically-based remediation strategy which addresses environmental concerns on a national complex-wide basis, essentially a form of remediation triage. Lastly, we propose evaluating the current structure of the Department's $1 billion per year physical security apparatus, nearly 700 million of which is spent on acquiring nearly 4,000 protective force guards from contractors around the country. We think other options need to be examined, including the possibility of federalizing those individuals. The Department of Energy has an extraordinary mission and it truly is extraordinary. Yet, like most Federal agencies, it faces significant management challenges. Current budget trends and realities complicate the job of resolving the challenges that we have identified and the other issues facing the Department. The operative question going forward from our perspective may well be what can the Department afford in this environment? We look forward to working with program officials, agency management, and the Congress in our common effort to advance the interest of U.S. taxpayers. Mr. Chairman, this concludes my statement and I am pleased to answer any questions that you might have. [The prepared statement of Mr. Friedman follows:] [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Chairman Broun. Thank you, Mr. Friedman. Thank you for staying within the five minutes. Now, Mr. Elkins, you are recognized for five minutes for your testimony. STATEMENT OF MR. ARTHUR A. ELKINS, JR., INSPECTOR GENERAL, U.S. ENVIRONMENTAL PROTECTION AGENCY, OFFICE OF INSPECTOR GENERAL Mr. Elkins. Thank you very much. Good afternoon, Chairman Broun, Ranking Member Maffei, and Members of the Subcommittee. I am Arthur Elkins, Inspector General of the U.S. Environmental Protection Agency, and I am pleased to appear before you today to discuss the significant management challenges facing the EPA that the OIG has identified in Fiscal Year 2012. Thank you for allowing me the opportunity to share with you our work and recommendations on how to improve EPA's programs and operations. Before I begin, I would like to commend the expertise, dedication, and professionalism of the OIG staff whose exceptional work serves as the foundation of my testimony this afternoon. I also would like to mention that last year the OIG was a recipient of the Alexander Hamilton Award for its work related to the Deepwater Horizon oil spill. This is the highest award bestowed by the IG community. Although we are part of the EPA, senior EPA leaders can neither prevent nor prohibit us from conducting our work. In accordance with the IG Act of 1978, as amended, the OIG's mission is to: conduct independent and objective audits, investigations, and inspections; prevent and detect fraud, waste, and abuse; promote economy, effectiveness, and efficiency; review pending legislation and regulation; and keep the agency head and Congress fully and currently informed. We identified five challenges which are detailed in my statement for the record. I will focus on two of these challenges: Oversight of Delegation to States and Limited Capability to Respond to Cybersecurity Attacks. To accomplish its mission to protect human health and the environment, EPA develops regulations and establishes programs to implement environmental laws. The Agency relies heavily on authorized state and tribal agencies to implement environmental programs, and the performance of state and tribal governments is critical to assuring protection of human health and the environment. Since 2008, we have designated oversight of delegations to states as a management challenge. For example, we reported that despite EPA efforts to improve state enforcement performance, state enforcement programs frequently do not meet national goals and States do not always take necessary enforcement actions. If these issues are not addressed, state performance will remain inconsistent across the country providing unequal environmental benefits to the public and an unlevel playing field for regulated industries. We reported that Georgia's Concentrated Animal Feeding Operations program was operating without proper permits, inspection reports were missing required components, and the State was not assessing compliance with permits. As a result of inadequate oversight and reporting, Georgia's waters were vulnerable to discharges of animal waste from these facilities, which are associated with a range of human health and ecological impacts and contribute to the degradation of the Nation's surface waters. As technology continues to advance and the Agency increases its use of automated systems, having a strong IT infrastructure that addresses security at the enterprise architecture level is critical to protecting the Agency against cyber attacks. It is imperative that EPA continue efforts to strengthen practices to guard against advanced persistent threats. While EPA has committed to making significant progress, this challenge persists. For example, we found limited assurance that data in the Automated System Security Evaluation and Remediation Tracking tool are reliable for decision-making. This tool is used to track the remediation of weaknesses in EPA's information security program, as well as informs management about the adequacy of controls implemented to protect Agency systems. We reported that EPA neither developed a comprehensive deployment strategy for its Security Information and Event Management tool to incorporate all of the Agency's offices, nor developed a formal training program to train employees on how to use the tool. This computerized tool is used to centralize the storage and review of computer logs or events to monitor or investigate unusual network activity. While the EPA's senior leadership is taking the management challenges seriously and is making progress on resolving them, the Agency must remain focused on these challenges, especially in light of the difficult budgetary climate facing all Federal agencies today. The OIG will continue to provide oversight and track the EPA's actions on these challenges while looking to identify any emerging issues warranting attention. In conclusion, I would like to reaffirm the OIG's commitment to vigorously work with the Administrator and Congress to ensure that the Agency's programs and operations work efficiently and effectively for the benefit of the American taxpayer. Mr. Chairman, this concludes my prepared statement and I will be pleased to answer any questions you or the Members may have. Thank you. [The prepared statement of Mr. Elkins follows:] [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Chairman Broun. Thank you, Mr. Elkins. Now, I recognize Ms. Kendall for five minutes. STATEMENT OF MS. MARY L. KENDALL, DEPUTY INSPECTOR GENERAL, U.S. DEPARTMENT OF THE INTERIOR, OFFICE OF INSPECTOR GENERAL Ms. Kendall. Thank you, Mr. Chairman, Ranking Member Maffei, and Members of the Subcommittee. Thank you for the opportunity to testify about the major management and performance challenges facing the Department of the Interior and the approach the Office of Inspector General takes for providing oversight in these program areas. As you know, the OIG makes an annual determination as to what the most significant management and performance challenges are facing Interior. Historically, the OIG made this determination by looking at our recent past audit and investigative work to identify the major challenges. In the past two years, however, we chose to take a more prospective outlook. Utilizing a number of resources, the OIG identified the top challenges we see facing the Department. We then met with the department officials to gain their perspective on the challenges we identified and the areas we would report upon. In those areas that the OIG had not done significant--or in some cases any--audit or investigative work, we asked the Department to help us identify one or two program areas that present the most challenge or concern. Prior to issuing our report, we have done some limited analysis to better identify the scope of these issues involved in the greater challenges. We then used the major management and performance challenges to inform and guide our audit--and to the extent possible, investigative--work in the coming year. Last year, the OIG identified the top management performance challenges as: energy management, climate change, water programs, responsibility to Indians and insular areas, Cobell and Indian land consolidation, and operation efficiencies. Therefore, in planning our audit and evaluation work for Fiscal Year 2013 and determining the scope for this work, we were guided by these top challenge categories into developing our targeted categories. In energy, some of the program areas subject to review are mineral material sales, underground injection controls, offshore renewable energy, onshore oil and gas permitting, and pipeline management. In climate change, we were reviewing the various climate change requirements placed on the Department. In water, we are conducting a series of evaluations of the Coastal Impact Assistance Program and we will be looking at the Bureau of Reclamation Wastewater and Groundwater Programs. In Indians and insular areas, we have looked at the election system and Public Finance Authority of the Virgin Islands and are reviewing the Guam Memorial Hospital Authority. In addition to these top challenge categories, we have maintained additional targeted categories for audits and evaluations, as they are so integral to the mission of DOI and have been areas of concern historically. They are: asset protection and preservation; and health, safety, security, and maintenance. For investigations, we are necessarily more reactive. We cannot plan our investigative activities like we do our audits and evaluations. We are, however, guided by five investigative priorities: contract and grant fraud, energy, scientific misconduct, ethical violations, and public safety and security. Clearly, our investigative priorities overlap to a certain degree with our audit and evaluation priorities. This is a natural overlap, not necessarily intentional. But as an OIG of less than 300 employees that oversees a department with over 75,000 employees, we must focus our oversight activities on those areas of greatest concern and challenge. Although there may be many other ways in which to fine-tune this focus, using targeted categories and investigative priorities help us deploy our resources to the areas in greatest need of oversight in the Department of the Interior. Mr. Chairman and Members of the Subcommittee, this concludes my formal testimony. I appreciate the opportunity to be here today and would be happy to answer any questions. [The prepared statement of Ms. Kendall follows:] [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Chairman Broun. Thank you, Ms. Kendall. I congratulate all three witnesses for staying within five minutes. I greatly appreciate it. And I thank you all for being available for questioning today. Reminding Members that Committee rules limit questioning to five minutes, the Chair at this point will open the first round of questions. And the Chair recognizes himself for five minutes. Ms. Kendall, you have refused to comply with a Congressional subpoena and obstructed at least two Congressional committees' inquiries into the Deepwater Horizon Offshore Drilling Moratorium Report. You have also adopted a policy to work more collaboratively with the Department. One of the most important qualities of an IG is their independence. How can this Committee trust your work, particularly when even your testimony today states that you collaborated with the Department and to quote you, ``together, agreed upon the challenge areas we would report on?'' Ms. Kendall? Ms. Kendall. Yes, sir. We did take a collaborative approach with the Department primarily because the--I am going to say the Association of Government Auditors made a recommendation to the Department of the Interior that the way that the top management challenges had been reported in the past did not give a good sense of sort of where the Department was and the position the IG took. It was more a sort of debate between the---- Chairman Broun. Ms. Kendall, I am sorry to interrupt you because I--my time is very limited. The point is when you collaborate with the Department, that is not your job. Your job is to be a watchdog, to oversee them, to report things that they are doing that are wasteful or abuse, fraud, other types of oversight that you are supposed to be doing. That is what we have in this Committee's responsibility is being an oversight Committee. And if you are working in collaboration with the Agency, I don't know that we can trust your independence. I don't know that we can trust what you tell us. The IGs have to be independent. It is absolutely a critical part of what you guys do. Mr. Friedman, the Administration's attempt, which I think was very misdirected--the attempt to permanently shutter the Yucca Mountain project is still in the process of being litigated. In spite of the possibility that the courts might require DOE to continue pursuing the license, which hopefully that will happen, DOE has eliminated all semblance of a Nuclear Waste Management Program, and that affects every single nuclear facility in this country, including the Georgia Power Company in my own State, including the legislatively created Office of Civilian Radioactive Waste Management. Has the DOE IG examined DOE's ability to reconstitute the Yucca Mountain project? Should the court--should the--well, let me ask that question. Have you all looked at reinstituting the Yucca Mountain project? Mr. Friedman. We have not. First of all, Mr. Chairman, nuclear waste disposal and the termination of the Yucca Mountain project is one of our management challenges, which I referred to earlier. Chairman Broun. Yes. Mr. Friedman. This is a $15 billion tunnel to nowhere in the middle of Nevada. So it is one of the worst cases of how not--or the best cases actually of how not to make public policy from my perspective. And we have been outspoken on that. In terms of reconstituting the office, the expertise--this is by observation; we have not done a report--by observation, the expertise--large parts of the expertise have left the office and I am not sure--could it be reconstituted? I am sure it could. Would it be extremely difficult? The answer is yes. Chairman Broun. Well, obviously, you think the courts should not require them to reconstitute that, is that correct? Mr. Friedman. No, I have no position on the courts' position with regard to reconstitution at all. Chairman Broun. Okay. Has the DOE IG examined the CRWM's data retention plans to preserve the relevant records and documentation? Mr. Friedman. Well, it is interesting you asked that question because when the Administration made the decision that it made not to fund the Yucca Mountain project and the office, we did do a review and we indicated that we were concerned that after the expenditures of nearly $15 billion, that there would be no appropriate means to maintain that information so that it could be used as a planning tool if nothing else for nuclear waste disposal decisions in the future. Chairman Broun. So were you maintaining those records? Mr. Friedman. There is a system. We determined that there was a system to maintain those records. We have not looked at it in the last two, two and a half years. Chairman Broun. Well, my time is just about up, but this is a huge issue for us in Georgia and South Carolina and the Southeast and all over the country. And it is something I have been very interested in. This Yucca Mountain project has been studied at great length. We had hearings here and the general-- and the full Committee about the safety of it, and it has been shown that this is the best repository--it is not a disposal; it is a repository, in my opinion, of this nuclear waste. My time is expired. I now recognize Mr. Maffei for five minutes. Mr. Maffei. Thank you, Mr. Chairman. I am just wondering if each of the Inspectors General could very briefly tell us if--how the sequester is affecting their own offices, so not the Department but your own office. We will start with Mr. Friedman. Mr. Friedman. Well, Mr. Maffei, we have canceled a very important training meeting that we had. It is not really a conference; it is a meeting. We were required to meet certain professional standards and training our auditors specifically. We had to cancel that and we are looking at alternatives. We are limiting travel, we are limiting training, and we are going to institute a hiring freeze in the not-too-distant future. So at this point, we have the resources to continue. We have--we are anticipating a reduction, but we have planned carefully and we think we will be okay in terms of furloughs and other job actions. Mr. Maffei. Mr. Elkins? Thank you, Mr. Friedman. Mr. Elkins? Mr. Elkins. Yeah, thank you. I will echo Mr. Friedman's comments. Generally speaking, we are pretty much in the same boat. We have to take a look at training and travel. Over 80 percent of our appropriations are in FTEs. In order to do the IG's work, you have to have people, and the people need to get out and travel to do their investigations and audits. I would like to say that there is also an opportunity cost that is missing here as well. The IG community is probably one of the few organizations that actually produce a return on investment. We pay for ourselves. And at the end of the day when we have to cut our resources to do the work that we need to do, that has an impact on the bottom line, because we are not out looking at fraud, waste, and abuse. So yeah, it is going to have a big impact on our ability to do our mission. Mr. Maffei. So if I understand you correctly, you are saying that cutting the resources at the oversight level may lead to more waste and therefore, overall, may end up costing the taxpayer more money than if we had the appropriate resources at the IG? Mr. Elkins. Absolutely. If we don't do it, who will do it? Mr. Maffei. I agree. Ms. Kendall? Ms. Kendall. Yes, sir. I would echo what Mr. Friedman and Mr. Elkins have both said. We are also operating right now at about 90 percent of our full FTE and we have slashed training, we have slashed travel. We are trying to limit travel to as close to our office locations as possible for the work that we are doing. Like Mr. Elkins said, about 80 percent is in salaries and benefits and the rest is really in support of our mission. So it is quite a significant effect. Mr. Maffei. Thank you. And then very briefly, Mr. Friedman--and the Chairman may be surprised that I am going to ask a question on this, but I am very interested in the LG Chem case in Michigan and what you were able to find there. I do believe that these are important programs, and when they are abused, it is an extremely detrimental effort to our attempts to green the economy and make sure that we can sustain the planet. So I would like an update on where you are with that. And I would note that these need to be competitive programs. I have a battery company in my district that applied and was not granted these grants, and we are actually making batteries at my plant. So could you just give me an update as to where that investigation is and what you have found? Mr. Friedman. Do you want me to synopsize what our report said, Mr. Maffei? Mr. Maffei. Sure. Nothing---- Mr. Friedman. Oh---- Mr. Maffei. --since the report? Mr. Friedman. I am sorry. Essentially, it was a grant to build a plant in Holland, Michigan, designed to produce lithium ion batteries primarily for the Volt. It went to LG--it went to a predecessor of LG. LG purchased the predecessor. We found that the--there were allegations that employees, because there was no demand for the product, that employees were in fact playing board games and volunteering for Habitat for Humanity, as important as that may be, certainly on the government payroll. We found that--we confirmed that's the case. We identified at least 1.6 million in inappropriate payments of which the Department recovered from LG Chem $840,000. But more importantly, actually, is the fact that the--that this 650,000 square-foot plant is idled because there is no demand for the product at this point. One of the important--one of the conditions precedent to granting the grant was that the LG production of lithium ion batteries in South Korea would be transferred to this plant. Mr. Maffei. Yes. Mr. Friedman. That component was never--although it was conceived--it was part of the conception of the grant, it never made its way into the written product. As a consequence, the Department had no leverage, so they told us to force LG to meet that term, which is--was extremely unfortunate. Mr. Maffei. Realizing I am out of time, Mr. Chairman, but Mr. Friedman, is there any update--have you concluded the investigation? Are you continuing to look at how this so-called competitive decision was made? Mr. Friedman. We have completed the audit component of the investigation. There are other aspects of it that are currently under review. Mr. Maffei. Okay. We will be very interested in those. Thank you, Mr. Chairman. I apologize for going over. Chairman Broun. Mr. Maffei, I will always give you some leeway here on that. Okay. Thank you, Mr. Maffei. Let us go to Mr. Schweikert, my friend from Arizona. You are recognized for five minutes. Mr. Schweikert. Thank you, Mr. Chairman. And to--is it--and forgive me for asking. It is properly pronounced Mr. Maffei? Mr. Maffei. It rhymes with buffet so---- Mr. Schweikert. Buffet? Mr. Maffei. --yeah. Think of everything you want---- Mr. Schweikert. Now, you will have just made me hungry. Mr. Maffei. --to eat for 12.95 except with an M, of course. Mr. Schweikert. Yeah, and that is in New York? Mr. Maffei. Yes. Mr. Schweikert. All right. Mr. Maffei. Yes. Mr. Schweikert. Hey, but Mr. Friedman, actually, my friend from New York here, who is my brand-new friend obviously, was basically going down a path that I know it is not your job is ultimately to audit, analyze policies that we make here in Congress and where we are going to have maybe some differences is was this actually a place that we should have been putting capital or instead of designing, you know, sort of tax and mechanical codes and those things that--with--maybe the benefits should have gone to the battery factory in his district because they were producing and working. But when you are looking at this LG example in Michigan, your department or the department that you oversee has dozens and dozens of these grants, assistance, loan guarantees. What methodology do you reach out to? How do you grab data sets? How do you stay on top of it to know that you don't have bad actors out there? Mr. Friedman. Well, understand, Mr. Schweikert, that I give--I am giving you an answer from the IG prism. The Department has a fairly extensive mechanism for managing the grants process and the contract process and other financial awards process, for making priority decisions, for evaluating what proposals make sense and what proposals don't make sense. Our role, as I see it, is to probe those processes to make sure that in fact they are using the structure that exists in the Federal acquisition regulations and good logic and good common sense. Mr. Schweikert. But my concern is how do you catch them quickly? I mean have you embraced enough technology or the agencies you oversee so they are getting monthlies? You are actually seeing purchase orders that are attached to the grants, that you actually can see production? I mean this drives me insane because it is close to planned economy and that, we know, doesn't work. But if we are handing out the money, how are you--how does it ultimately get overseen and mechanically, how do you do quickly? Mr. Friedman. Okay. Are you asking from--again---- Mr. Schweikert. You are the IG. Purely from the guy that is auditing---- Mr. Friedman. From an IG perspective---- Mr. Schweikert. In many ways you are auditing the auditors. Mr. Friedman. Well, we are auditing those who are responsible for managing these contracts---- Mr. Schweikert. Yes. Mr. Friedman. --and instruments. And the answer is we try our best, Mr. Schweikert, to be proactive and preventative in nature rather than reactive and come in after the fact. And we have done that in a number of cases where we are getting essentially--looking at the--looking--invoicing on a real-time basis to try and--to try to prevent unallowable costs before they occur---- Mr. Schweikert. Okay. Mr. Friedman. --rather than after the fact. I don't know how--I hope I am answering your question, but I am more than happy to go beyond---- Mr. Schweikert. This is classic design controls setup, you know, we had in our Accounting 101 and 301 classes. Ms. Kendall--and this one may be tainted because of some personal experiences when I was Maricopa County Treasurer. Is there a mechanism--does it hit your audit standards, your review standards, litigation settlements where Department of Interior is being sued because of a certain quarter, certain flood, certain this, certain that, and the mechanics within the decisions to either settle--do those hit your desk? Ms. Kendall. We have not had any issues really with the litigation in the Department that I can think of right now. It just hasn't been something that has come to us. Mr. Schweikert. Okay. It is one of our folklores out West is sue the Department of Interior, sue the Forest Service, sue them, because that is how you get what you want. Because you basically sue them and they will agree and that way you actually get the court order that sort of circumvents much of the rule-writing mechanics. Ms. Kendall. Interesting. It is not something that I was familiar with. I am glad you brought it to my attention. Thank you. Mr. Schweikert. Okay. Mr. Chairman, with that, I yield back. Chairman Broun. Thank you, Mr. Schweikert. Now, Mr. Peters, you are recognized for five minutes. Mr. Peters. Thank you. It is much easier to pronounce, too, I suppose. Thank you, Mr. Chairman. Mr. Elkins, I had some questions for you. Last month, your office released a report calling for EPA to improve its air emissions data for oil and gas production, and it said that the sector had various pollution processes emit large amounts of harmful pollutants that affect air quality at local, regional, and global levels. States and the EPA rely on this air emissions data to guide this decision. And putting aside for the fact how we even know what the amounts are, how would we-- how could EPA improve its directly measured air emissions data, and is there anything that Congress can do to help that process? Mr. Elkins. Well, as I recall, the import of that report really addressed the fact that EPA didn't have the--enough data to be able to make decisions as to whether or not it was problematic or not. I am not quite sure just exactly what the recommendation in terms of what Congress could do to assist. This is more of a data quality issue that EPA has, an investment that the Agency needs to make in order to strengthen, bolster its ability to make decisions with the data that it has. But that was the issue related to that report. Mr. Peters. But does EPA have the sufficient authority to be able to get that data if it wanted to get it? Mr. Elkins. I would have to say that they do. It is a matter of just being--you know, they need to accumulate the data. They clearly have the expertise to be able to do that so, yes, the data is available; they just need to collect it. Mr. Peters. So there is no need for Congressional authorization to EPA to get them to collect the data that we would all need to evaluate whether this is a problem as far as you know? Mr. Elkins. As far as I know. I don't see that that would be necessary, but of course, the Agency may have some constraints that I am not aware of. Mr. Peters. Do you know whether the drilling companies keep this data themselves or whether they are required to? Mr. Elkins. I do not know. I don't recall that that was brought out in our report. Mr. Peters. So is it possible that drillers--I have to concede we don't know whether it is worse than we think or better than we think because we don't have the data, but it is possible, I suppose, that a driller at a particular site would be emitting exceptionally high levels of methane but not know it? Or what they--would you expect that they would know that? Mr. Elkins. Well, you don't know what you don't know. So that is kind of hard to say. I really wouldn't have an opinion on that. I mean if you are not looking for it, if you don't have any mechanisms or tools to identify it, I am not quite sure you would know it. I would think the science would suggest that based on the type of reduction and the type of work that you are doing that it is going to produce certain byproducts. And if methane is based on the science, it is one of those byproducts; I would suspect that you would know that. Mr. Peters. So I would just observe from the answer a lot of the use of the words ``I don't know'' and the use of the word ``guess.'' It strikes me that we would be better off in terms of evaluating the need for environmental regulation, and I start from there because I don't necessarily assume it if we knew what was going on. And if they have the power under existing law to collect that data, it would seem to me that that would be kind of something that you would want to encourage them to do. Otherwise, they can't very effectively be regulating air emissions, could they? We don't know? Mr. Elkins. I wouldn't want to go there. I mean in terms of what their statutory authority to do, in terms of regulation, I mean that is again totally up to the Agency to make that interpretation. That is an Agency call. Mr. Peters. Okay. So we should talk to the Agency about that, I guess. Mr. Elkins. That would be a good idea, I think. Mr. Peters. All right. Well, I appreciate your time, Mr. Chairman. Thank you. I yield back. Chairman Broun. Thank you, Mr. Peters. I hope I did pronounce that correctly. Now, Mr. Posey, you are recognized for five minutes. Mr. Posey. Thank you very much, Mr. Chairman. Mr. Friedman, in your written testimony you indicate that the Department of Energy ``contract management remains a significant management challenge.'' You also highlighted the fact in your testimony that the Department of Energy is the ``most contractor-dependent agency on the civilian side of the Federal Government.'' Ironically, you know that numerous Department of Energy Inspector General reports have documented missteps I think they call them associated with successfully managing the Department's contracting process. Just a couple of examples: a February 2013 report from your office confirmed that LG Chem employees at the Michigan facility had little work to do and were spending time volunteering at local nonprofit organizations, playing games, and watching movies at the expense of the Federal Government and taxpayers; also, number two, a review of the July 2012 security breach at NS--NNSA's 2002--or Y-12 National Security Complex, a site which processes and stores uranium identified ``troubling displays of ineptitude'' that were chalked up to a lack of contractor governance and Federal oversight which failed to identify and correct early indicators of multiple system breakdowns. And number three that grabbed me, your October 2012 report on foreign travel highlighted the fact that Department of Energy contractors, for some reason, are not bound by travel restrictions that DOE government employees have to adhere to. And so this suggests, of course, that the Department of Energy does not just have an isolated issue with some of its contracts but rather suffers from a systemic problem in the Agency's procurement system and what actions you would take I think we would all like to hear or would you recommend that DOE take to ensure effective contractor oversight to address those issues and similar issues, which could conceivably be wasting billions of billions of taxpayer dollars every year? Mr. Friedman. Well, Mr. Posey, we had almost a whole inventory of recommendations to address the contracting, granting, cooperative agreement, financial assistant awards, management in the Department of Energy. It is a--the weak underbelly, from my point of view, of the Department. We do a huge amount of contracting. Virtually everything we do actually, with obviously some exceptions, is done by contract, including work with regard to the nuclear weapons, the management of our national laboratories system, and I could go on and on and on. What needs to be done, it seems to me, we need to seriously revisit the question of finding the right balance between oversight of the contractors and, at the same time, encouraging the contractors, incentivizing the contractors to do the right thing. And it is a balance. It is an issue which has not been resolved in the many years that I have spent looking at the Department of Energy's system. That is, to me, the prime recommendation. Mr. Posey. Well, this is my first year on this Committee, and so this is kind of shocking to me. And I get the feeling from what else I have read and from hearing you that this is not a new problem at DOE. And apparently, there have been proposed solutions before. Can you give me a little bit of insight as to how they were received or taken? Mr. Friedman. Well, this is not a new problem. It has been going on for years. The fundamental structure of the way the Department of Energy manages really goes back to the Manhattan Project. It has many of the same elements that existed in the late 1940s, early 1950s and 1960s. So it is a long-standing issue. And finding--as I say, finding that right balance is extremely difficult. A number of Administrations have tried and made valiant efforts. The contractors frequently pushed back. Sometimes their interests and the Department's interests--of course, when it comes to national security, I am not quarreling with that, but their interests--it is not always exactly parallel to that of the Department. So, as I say, finding the right balance is tricky but it seems to me that is the avenue we need to pursue. Mr. Posey. Well, but besides the obvious waste of billions of dollars of taxpayers' money, my next point was the threat to our national security to have such ineptitude, such incompetence, such belligerence, obviously that they seem to be refusing to comply with the Inspector General's recommendations to remedy this situation. Mr. Friedman. Well, in fairness, Mr. Posey, the senior leadership of the Department and the senior leadership with regards to the Y-12 matter, which is extremely--which is fresh and raw and very troubling. And you are absolutely correct. The Department's leadership--and I am not here to support them; I am not here speaking for them--they have gone to great lengths to make sure that the issues that we identified at Y-12 have been addressed. And at some point in the future, in the not- too-distant future, we will be going back in there to see if in fact the remedies are as effective as they have been portrayed. So you have my commitment with regard to that, but you have struck a chord on the issue that is extremely important. And national security is of the highest priority, of course, and Y- 12, presumably, prior to the intrusion last summer was thought to be the Fort Knox of the weapons complex. Mr. Posey. Yes. Thank you. Chairman Broun. The gentleman's time is expired. And now, we will start our second round of questions. Mr. Elkins, one challenge facing the EPA is its transparency. In fact, to me, it seems like that is a huge issue for this whole Administration. We were promised by the President that he would have the most transparent Administration in history, and it seems that he has redefined transparency to be obscurity. EPA's use of alias emails appears to corrupt the Agency's records by not tying an individual's name to an email account. This Committee sought your help in reviewing whether EPA followed relevant Federal records laws, regulations, and policies, and for that I thank you. Understanding that EPA could hypothetically follow all relevant requirements and still frustrate records transparency, will your review address whether the current policies are sufficient to maintain the integrity of agency records and allow public transparency? Mr. Elkins. Yes, Chairman Broun. The focus of our review-- and as you know, we are still in the process of doing that review--is going to take a look at whether or not the Agency's policies, regulations, and guidance was followed. Based on that review and based on the findings, we will be making recommendations if we find that the Agency has not followed its policy regulations and reviews and make recommendations how they can do so. But yes, we will be definitely addressing any issues that arise and we will keep you informed. Chairman Broun. Well, I would appreciate that. The public deserves to know and use of alias email accounts is obviously a way of trying to get away from Freedom of Information Act and other ways of holding people accountable and responsible, and I think it is absolutely critical that--and I understand that this is not the only Administration that has utilized that type of activity, and I think it is deplorable that Administrator Jackson did do so and I hope that you will follow very closely and give this Committee some input. But before you were confirmed as EPA IG, you worked for the EPA's Counsel's office under Administrator Jackson. Were you aware of Administrator Jackson's use of email aliases? Mr. Elkins. No, you are absolutely right. I did work in the Office of General Counsel, and no, I was not aware. This issue only surfaced as far as my awareness level is when it was raised as a result of the issues that we have had discussion on here at this hearing. Chairman Broun. Well, I think there is a potential appearance of a conflict of interest here, and what are you going to do to protect against a potential conflict of interest related to this review in view of the fact that you were in the counsel's office? Mr. Elkins. Yes. I mean that is a good question and it is something that when we embarked on doing this review, I raised the issue quite frankly, as to whether or not there was any conflicts. And I had a detailed discussion with my staff to determine whether or not I should recuse myself. But after going through that discussion, you know, a) it was determined that I had absolutely no knowledge about any of the issues that we were going to take a look at; 2) the focus of our review is again going to take a look at whether or not the Agency followed the law, and if that is the case, that it either did or did not, and so, you know, it didn't seem based on that sort of review, it didn't seem that I should recuse myself from that because---- Chairman Broun. When can we expect the report of that review? Mr. Elkins. I am sorry, sir? Chairman Broun. When can we expect a report of that review? Mr. Elkins. I would say probably within the next couple of months at least---- Chairman Broun. Well, please get it to---- Mr. Elkins. --we are in the early phases of it---- Chairman Broun. --us as quickly as you can. My time is just---- Mr. Elkins. Absolutely. Chairman Broun. --about up. Mr. Friedman, after receiving anonymous complaints alleging improprieties in the Department's Loan Programs Office, you initiated a special inquiry and issued a report that identified weaknesses in the administration of loan programs at DOE. These findings parallel similar conclusions to a March 2011 report from your office on DOE's Loan Guarantee Program for clean energy technologies, as well as findings in a GAO report on DOE Loan Guarantees. Your testimony states that the Loan Guarantee Program is on your watch list as you termed it. I recently received a letter from DOE's Loan Programs Office that seems to indicate that everything was just fine. Can you explain why you listed the Loan Guarantee Program? Mr. Friedman. Mr. Chairman, there are aspects of our work in loan guarantee that I can talk about. There are aspects that I cannot talk about in public session that there are law- enforcement-sensitive. The cumulative body of work that we have done and that we have seen indicates to us in the obvious number of problems within the program that are in the public domain in and of themselves are sufficient to cause us to raise concerns about the program, its management, the selection process, the documentation that is maintained, and those sorts of issues. So that is our basis. I hope that is a satisfactory answer. Chairman Broun. Well, the American hard-working taxpayers need all you guys to be very diligent. The Loan Programs Office has certainly come into a lot of criticisms, and I hope you will continue that process. I now recognize Mr. Peters for five minutes. Mr. Peters. Thank you again, Mr. Chairman. I just had one more question for Mr. Friedman. I think you had indicated that the Department might establish a process to look at whether they could save money by consolidating their labs. This may even lead to closing some facilities. So I just wanted to see if you can explain for us maybe kind of what you thought the magnitude of the savings we might realize might be without undermining the missions of the Department's labs. And I also understand it is something like a $3.5 billion ticket. And then adopting any process, do you have principles that you believe should guide the Department's review for sort of a lab BRAC kind of process? Thank you. Mr. Friedman. Yes. Thank you for the question. Excuse me. Just to make sure we are clear, this is our recommendation as part of the management challenge process. The Department has not adopted it. Mr. Peters. No, I understand. Mr. Friedman. It is--in fact, if--we are realists, Mr. Peters, and we are talking about jobs here and people and states that--in which these laboratories play a very important economic development role and they are extremely important. The basic framework of the laboratory system as it is currently established--and there has been some tinkering at the margins-- is a remnant of the 1950/1960s model. It has not changed. There are 16 FFRDCs spending about $11 billion a year, and of that amount, 35 to 40 percent is for administrative costs. Our view is that, given the current economic times, there ought to be a thoughtful approach--taking politics out of the mix if that is at all humanly possible--to determine whether all of those labs makes sense, whether there are ways of consolidating so that more of the--what is currently devoted to administrative costs could be devoted to direct science would be possible. That--our recommendation has not been adopted, and I might say, there are a number of Members of Congress who said it was dead on arrival. Mr. Peters. Um-hum. Mr. Friedman. So we we made the recommendation because we thought it was the right thing to do, and the time has come for a reevaluation, but it was not received with a great deal of acceptance. Mr. Peters. Just to follow up---- Mr. Friedman. No white smoke, you might say. Mr. Peters. No, just to follow up, did you suggest a process by which that might be--might take place? Mr. Friedman. Well, we believe that the BRAC--something patterned after the Department of Defense BRAC style is exactly--BRAC Commission is exactly what we would recommend. Mr. Peters. Okay. Thank you, Mr. Friedman. And Mr. Chairman, I yield back. Thank you. Chairman Broun. Thank you, Mr. Peters. And now, Mr. Posey, you are recognized for five minutes. Mr. Posey. Thank you, Mr. Chairman. And thank you for asking about Yucca Mountain earlier. I was really concerned about that. And you kind of got some of that air cleared for me. Mr. Friedman, I appreciate your comments that it is not the top leadership at DOE, but clearly, some of the contractor oversight personnel need to have better accountability or need to be more accountable. What tools do you, the IG, need, do you believe, to help that be more effective? Mr. Friedman. Well, I hope this doesn't disappoint you, Mr. Posey, but I actually think we have a bag of tools available to us currently that allow us to do what needs to be done. Mr. Posey. Okay. Mr. Friedman. So I am comfortable with the status quo. Mr. Posey. What would you think Congress needs to do to make them a little bit more accountable? Mr. Friedman. Well, I am--having been in this position for a long time and participated in a number of hearings, the sunlight that a--hearings and Congressional oversight forces is, to me, the most--single most important thing that Congress can do. So having hearings, having those involved in actual oversight and administration of these contracts appear before you it seems to me is the way of clearing the air, making it transparent, and holding people--maximum--achieving maximum accountability. Mr. Posey. Okay. That didn't work in Financial Services with the Securities and Exchange Commission after they let Madoff steal $70 billion. Nobody lost their job, and the answer to that was supposed to make us feel good is that, well, at least half the investigators and half the examiners who dropped the ball don't work here anymore. So maybe they are at DOE. I don't know. But Mr. Elkins, one of the challenges facing EPA is that of public trust. I am sure you know that. The American people deserve to know that the regulations created by the EPA are informed by science and not special interest or activism. Your office received a request to conduct a review of the Clean Air Act Advisory Committees in August 2011. Can you tell me where that stands now? Mr. Elkins. I don't have that information right off the top of my head. I can get back to you on that, though. One second. Okay. My subject matter expert tells me that you can expect it in late summer. Mr. Posey. Okay. Please keep the Committee appraised. Mr. Elkins. I will do so. Mr. Posey. Thank you. That is all, Mr. Chairman. I yield back. Chairman Broun. Thank you, Mr. Posey. I have got a few more questions that I would like to ask. And I want to go back to the Loan Guarantee Program. Mr. Friedman, you all oversee over--the--that program oversees over $38 billion for 40 loan projects. Does your office plan on conducting any reviews on the loan selection process? Mr. Friedman. Well, we have looked at the documentation. We have already published a report on the documentation that was maintained on the decision-making associated with the loan- granting process, Mr. Chairman. I admit to you that I am not as up to speed on the current status of the program as perhaps I should be, but my impression is that the vast majority of the loans have already been effectuated, if not all of the loans have been effectuated. But if there are loans to be granted in the future, we will be looking at that process. Chairman Broun. I hope you will be a very strong watchdog on that. Mr. Elkins, I will come back to a question that Mr. Posey was asking you. The President has stated that if he cannot get his radical environmental agenda pushed through Congress that he is going to go around Congress. What is the IG office doing to try to maintain that we follow the Constitution and follow what should be done where the President is saying he is going to take Congress out of the decision-making process? He is going to do whatever he wants to do. He is going to push his agenda and he doesn't care whatsoever what Congress does or doesn't do. What is the IG's office going to be doing to keep us in Congress and the American public aware of what is going on and make sure that the EPA does not promulgate regulations that are not authorized through Congressional action? Mr. Elkins. Well, Mr. Broun, our responsibility and mission, as you know, for the Office of Inspector General is to provide oversight and to make sure that the Agency follows its laws, the regulations, and guidance. We will continue to do that. We will continue to provide that oversight, and in areas where we determined that the Agency is not following the law, we will shed light on it and we will make it aware through our work products. So you can be assured of that. Chairman Broun. Well, we are counting on you. And the American people--the hard-working taxpayers of America are counting on you to do so. And I just trust that you will do so and look forward to your report in this Committee. Ms. Kendall, as I said in my opening statement, I am concerned with how the DOI and the DOI IG handle allegations of scientific integrity and scientific misconduct. And I believe that this is a serious challenge facing the Agency as it moves forward, as we move forward. Given the allegations facing not only the Department but also the IG, I am not sure we can trust the Department's decisions. While some scientific integrity and misconduct cases seem to have been handled appropriately by the IG, it appears as though allegations from a scientific integrity officer have gone ignored. How do you decide when to pursue an allegation of scientific integrity or misconduct? Ms. Kendall. Well, we will look at any allegation of scientific misconduct. We are not, however, in a position to make a determination really on scientific integrity. The Office of Inspector General does not have any kind of scientific expertise in it. So we have to draw a fairly clean line between integrity of science and misconduct. When there are allegations of misconduct, we can investigate those factually. We cannot make a determination about the science, however. Chairman Broun. Well, I am real concerned. As I mentioned already, when you are working in collaboration with the folks that you are supposed to be overseeing, I am not sure that that is going to occur. Mr. Elkins, in response to my earlier question, you said you would review whether EPA followed current policies regarding the integrity of maintaining agency records. I want to clarify my question. Will your review also address whether EPA's policies are sufficient? Mr. Elkins. We will make--if we find that the EPA's policies are not sufficient and that additional internal controls need to be implemented in order to make them sufficient, we will make that recommendation. Yes, we will be looking at that and--yes, we will be looking at that. Chairman Broun. Okay, Mr. Elkins. My time is expired. Mr. Posey--I think he is gone. And I appreciate Members being here and I appreciate you all's testimony. And I appreciate all the--your forbearance with us and flexibility also. Again, I want to thank you. Members of the Committee may have additional questions, and I ask you to respond to those in writing. Please do so very expeditiously. The record will remain open for two weeks for additional comments and written questions from Members. The witnesses are excused and the hearing is now adjourned. [Whereupon, at 1:45 p.m., the Subcommittee was adjourned.] Appendix I ---------- Answers to Post-Hearing Questions Responses by Mr. Gregory H. Friedman [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Responses by Mr. Arthur A. Elkins, Jr. [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Responses by Ms. Mary L. Kendall [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]