[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
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Answers to Post-Hearing Questions
Responses by Mr. Gregory H. Friedman
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Responses by Mr. Arthur A. Elkins, Jr.
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Responses by Ms. Mary L. Kendall
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