[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
OPM'S REVOLVING FUND: A CYCLE OF GOVERNMENT WASTE
=======================================================================
HEARING
before the
SUBCOMMITTEE ON FEDERAL WORKFORCE,
US POSTAL SERVICE AND THE CENSUS
of the
COMMITTEE ON OVERSIGHT
AND GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
FIRST SESSION
__________
JUNE 5, 2013
__________
Serial No. 113-29
__________
Printed for the use of the Committee on Oversight and Government Reform
Available via the World Wide Web: http://www.fdsys.gov
http://www.house.gov/reform
U.S. GOVERNMENT PRINTING OFFICE
81-524 WASHINGTON : 2013
-----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing
Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; DC
area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC, Washington, DC
20402-0001
COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM
DARRELL E. ISSA, California, Chairman
JOHN L. MICA, Florida ELIJAH E. CUMMINGS, Maryland,
MICHAEL R. TURNER, Ohio Ranking Minority Member
JOHN J. DUNCAN, JR., Tennessee CAROLYN B. MALONEY, New York
PATRICK T. McHENRY, North Carolina ELEANOR HOLMES NORTON, District of
JIM JORDAN, Ohio Columbia
JASON CHAFFETZ, Utah JOHN F. TIERNEY, Massachusetts
TIM WALBERG, Michigan WM. LACY CLAY, Missouri
JAMES LANKFORD, Oklahoma STEPHEN F. LYNCH, Massachusetts
JUSTIN AMASH, Michigan JIM COOPER, Tennessee
PAUL A. GOSAR, Arizona GERALD E. CONNOLLY, Virginia
PATRICK MEEHAN, Pennsylvania JACKIE SPEIER, California
SCOTT DesJARLAIS, Tennessee MATTHEW A. CARTWRIGHT,
TREY GOWDY, South Carolina Pennsylvania
BLAKE FARENTHOLD, Texas MARK POCAN, Wisconsin
DOC HASTINGS, Washington TAMMY DUCKWORTH, Illinois
CYNTHIA M. LUMMIS, Wyoming ROBIN L. KELLY, Illinois
ROB WOODALL, Georgia DANNY K. DAVIS, Illinois
THOMAS MASSIE, Kentucky TONY CARDENAS, California
DOUG COLLINS, Georgia STEVEN A. HORSFORD, Nevada
MARK MEADOWS, North Carolina MICHELLE LUJAN GRISHAM, New Mexico
KERRY L. BENTIVOLIO, Michigan
RON DeSANTIS, Florida
Lawrence J. Brady, Staff Director
John D. Cuaderes, Deputy Staff Director
Stephen Castor, General Counsel
Linda A. Good, Chief Clerk
David Rapallo, Minority Staff Director
Subcommittee on Federal Workforce, U.S. Postal Service and the Census
BLAKE FARENTHOLD, Texas, Chairman
TIM WALBERG, Michigan STEPHEN F. LYNCH, Massachusetts,
TREY GOWDY, South Carolina Ranking Minority Member
DOUG COLLINS, Georgia ELEANOR HOLMES NORTON, District of
RON DeSANTIS, Florida Columbia
WM. LACY CLAY, Missouri
C O N T E N T S
----------
Page
Hearing held on June 5, 2013..................................... 1
WITNESSES
The Honorable Patrick E. McFarland, Inspector General, U.S.
Office of Personnel Management
Oral Statement............................................... 3
Written Statement............................................ 5
Mr. Charles D. Grimes, III, Chief Operating Officer, U.S. Office
of Personnel Management
Oral Statement............................................... 17
Written Statement............................................ 19
Mr. Linda E. Brooks Rix, Co-Chief Executive Officer, Avue
Technologies Corporation
Oral Statement............................................... 28
Written Statement............................................ 30
APPENDIX
The Honorable Blake Farenthold, a Member of Congress from the
State of Texas, Written Statement.............................. 61
OPM'S REVOLVING FUND: A CYCLE OF GOVERNMENT WASTE?
----------
Wednesday, June 5, 2013,
House of Representatives,
Subcommittee on Federal Workforce, Postal Service
and the Census,
Committee on Oversight and Government Reform,
Washington, D.C.
The subcommittee met, pursuant to call, at 9:30 a.m., in
Room 2247, Rayburn House Office Building, Hon. Blake Farenthold
[chairman of the subcommittee], presiding.
Present: Representatives Farenthold, Norton, Clay and
Lynch.
Staff Present: Alexia Ardolina, Majority Assistant Clerk;
Jennifer Hemingway, Majority Deputy Policy Director; Scott
Schmidt, Majority Deputy Director of Digital Strategy; Peter
Warren, Majority Legislative Policy Director; Jaron Bourke,
Minority Director of Administration; Lena Chang, Minority
Counsel; Elisa LaNier, Minority Deputy Clerk; Safiya Simmons,
Minority Press Secretary; Mark Stephenson, Minority Director of
Legislation.
Mr. Farenthold. And the subcommittee will come to order.
I would like to begin this hearing, as we do all within the
Oversight Committee, by reading the Oversight Committee's
mission statement. We exist to secure two fundamental
principles. First, Americans have a right to know that the
money Washington takes from them is well spent; and second,
Americans deserve an efficient and effective government that
works for them. Our duty on the Oversight and Government Reform
Committee is to protect these rights.
Our solemn responsibility is to hold the government
accountable to taxpayers, because taxpayers have a right to
know what they get from their government. We will work
tirelessly in partnership with citizen watchdogs to deliver the
facts to the American people and bring genuine reform to the
Federal bureaucracy.
This is the mission of the Oversight and Government Reform
Committee.
We will start with my opening statement. Today's hearing
focuses on the Federal Government's human resource bureaucracy
and whether or not it is serving its agency customers and the
American taxpayers efficiently and effectively. The Office of
Personnel Management operates a $2 billion business selling
products and services in the very same agencies it oversees. As
OPMs workload has increased, so too has the number of
investigative cases, referrals and requests for audits. This
has amplified concerns about OPM's revolving fund business
model.
Last year, Inspector General McFarland told the committee
his office had been flooded with requests from OPM to audit or
investigate various aspects of the revolving fund. In April,
the IG found senior OPM officials had used their position to
give preferential treatment to revolving fund vendors and
failed to comply with Federal contracting rules. In May,
Inspector General McFarland informed the committee of an
ongoing investigation in which a revolving fund contractor used
deceptive practices to avoid fulfilling certain requirements
under its contract with OPM in order to maximize profits.
The IG has requested legislative language to provide access
to additional resources for revolving fund oversight. The
authority seems to be an investment that can be accomplished at
a relatively low cost, using existing funds. At a time when
agencies are furloughing workers to meet payroll, questionable
business practices affect the entire Federal Government. Each
month seems to bring another confirmation of the waste within
the revolving fund.
I look forward to hearing from today's witnesses as we
examine whether OPM should be the regulator and the business
service provider, and seek to better understand the business
practices that have led the IG to request additional funds for
critical audit needs.
And I will now give Mr. Lynch a chance for his opening
statement. We will recognize the gentleman from Massachusetts.
Mr. Lynch. Thank you, Mr. Chairman.
I want to thank the witnesses for coming before the
committee, helping us with our work, which is to examine the
pricing and quality of services provided through the Office of
Personnel Management's Revolving Fund program and the
Administration's legislative proposal to increase its
oversight.
OPMs revolving fund provides background investigations,
training and other HR products, answers to Federal agencies on
a reimbursable basis. These services are essential for
effective government. OPMs revolving fund budget has gone from
$191 million in fiscal year 1998 to over $2 billion today.
The revolving fund activities comprise about 90 percent of
OPMs total budget, with about two-thirds of the agency's staff
devoted to this fee for service component of OPMs operations.
However, private contractors perform most of the work.
The Government Accountability Office and OPM Inspector
General have expressed concerns in recent years about the
pricing and the quality of those background investigations and
other products and services. OPMs Inspector General also
identified certain programs as vulnerable to high risk of
waste, fraud and abuse. GAO also recommended that OPM look to
increasing efficiencies in its background investigation
processes. OPMs significant reliance on a vast contractor
network to conduct background investigations and to provide HR
solutions appears to present additional challenges to effective
contract management and oversight.
This hearing is important to strengthening oversight of
OPMs revolving fund. OPMs Inspector General has indicated that
he is currently hamstrung by the limited resources he has to
conduct audits and investigations of OPMs revolving fund
programs. Under current law, the Inspector General's budget
provides only $3 million to finance its oversight of a $2
billion operation, along with OPMs other non-trust fund
programs, such as the Combined Federal Campaign and the Dental,
Vision and Long-Term Care Insurance programs. I am sympathetic
to the Inspector General's dilemma and I look forward to
evaluating the Administration's legislative proposal to remedy
that.
Thank you, Mr. Chairman, and I thank the witnesses for
their appearance here today. I yield back.
Mr. Farenthold. Thank you, Mr. Lynch.
Members will have seven days to submit opening statements
for the record. We will now recognize our panel.
Mr. Chuck Grimes is the Chief Operating Officer of the
Office of Personnel Management. Ms. Linda Rix is Co-Chief
Executive Officer for Avue Technologies Corporation. And Mr.
McFarland, of course, is Inspector General from the OPM.
Pursuant to committee rules, all witnesses will be sworn in
before they testify. If you will please rise and raise your
right hand.
Do you solemnly swear that the testimony you are about to
give will be the truth, the whole truth and nothing but the
truth?
[Witnesses respond in the affirmative.]
Mr. Farenthold. Let the record reflect that all witnesses
have answered in the affirmative, and you may be seated.
In order to allow time for questioning, we ask that you
limit your verbal testimony to five minutes. We have received
and reviewed your written testimony and of course, your entire
written statement will be made part of the record.
We will go left to right and start with Mr. McFarland. You
are recognized for five minutes.
WITNESS STATEMENTS
STATEMENT OF THE HONORABLE PATRICK E. McFARLAND
Mr. McFarland. Good morning, Chairman Farenthold, Ranking
Member Lynch and members of the subcommittee. My name is
Patrick McFarland, I am the Inspector General of the U.S.
Office of Personnel Management.
Thank you for inviting me to testify in today's hearing
about the Administration and oversight of OPMs revolving fund.
Once again, I am seeking the committee's help.
In 1978, the U.S. Congress took a bold step in creating the
Inspector General Act, bold in that it was an experiment borne
out of a multitude of government-wide mistakes, serious
problems and just plain wrongdoing. In the face of much
opposition from entrenched government bureaucracy, it was, I
believe, Congress' pledge to the American citizens that their
expectations of good government would be met, and as a result,
their tax money would be protected.
The inspector general concept has transparency at its core
functionality. It must be transparency without any shades of
gray. Indeed, it is with this understanding that each inspector
general's organization honors the independence required of
them, free of any political influence which Congress mandated.
We realized as early as 2006 that OPMs revolving fund
operations lacked adequate transparency and thus required
additional oversight, oversight that our budget could not
support. Since that time, the OPM revolving fund has developed
into a $2 billion behemoth business structure that should
attract more stakeholders' attention, but instead seems to
exist and operate in a vacuum. The OPM revolving fund requires
immediate scrutiny.
To this end, the President's fiscal year 2014 budget
includes our legislative proposal, which former director John
Berry fully supported. This proposal will require Office of
Inspector General oversight of the revolving fund to be paid
for by the revolving fund. Please be assured that our Office of
Inspector General is at the ready to jump deep into all of the
programs financed by OPMs revolving fund. Based on evidence and
intuition, we know there extremely serious problems. We already
have several projects in high risk areas that we are eager to
begin, such as an initiative to closely examine the Federal
Investigative Service Program office, and determine whether
there are deficiencies that may be affecting national security,
as well as an audit of the pricing methodology used by human
resources solutions.
Let me be clear: it is not my intention to grow government,
but simply to perform the tasks entrusted to me by you and by
the taxpayer. I cannot stress enough that problems within OPMs
revolving fund do not affect only OPM. Every major Federal
agency purchases goods and/or services from OPM through
revolving fund programs. Consequently, any fraud, waste or
abuse that occurs in these programs has a government-wide
ripple effect and thus impacts the use of the appropriations of
all of its customers.
They say that sunshine is the best disinfectant. OPMs
revolving fund programs have been operating in the shadows for
far too long. You have already taken significant action by
holding a hearing, the first, to my knowledge, on the revolving
fund. I ask the subcommittee now, take one more step and assist
us by amending the revolving fund statute so that together we
can bring OPMs revolving fund program into the light with full
transparency where all government operations are meant to
function.
The committee's involvement will ensure that this issue
will not slip back into the shadows. Thank you, and I am happy
to answer any questions.
[The prepared statement of Mr. McFarland follows:]
[GRAPHIC] [TIFF OMITTED] 81524.001
[GRAPHIC] [TIFF OMITTED] 81524.002
[GRAPHIC] [TIFF OMITTED] 81524.003
[GRAPHIC] [TIFF OMITTED] 81524.004
[GRAPHIC] [TIFF OMITTED] 81524.005
[GRAPHIC] [TIFF OMITTED] 81524.006
[GRAPHIC] [TIFF OMITTED] 81524.007
[GRAPHIC] [TIFF OMITTED] 81524.008
[GRAPHIC] [TIFF OMITTED] 81524.009
[GRAPHIC] [TIFF OMITTED] 81524.010
[GRAPHIC] [TIFF OMITTED] 81524.011
[GRAPHIC] [TIFF OMITTED] 81524.012
Mr. Farenthold. Thank you, Mr. McFarland. We will get to
questions when we have finished with all of our witnesses.
Mr. Grimes, you are up for five minutes, sir.
STATEMENT OF CHARLES D. GRIMES, III
Mr. Grimes. Thank you, Chairman Farenthold, Ranking Member
Lynch, members of the subcommittee.
Thank you for this opportunity to discuss the OPMs
revolving fund and the government-wide services it supports.
The fund was established by Congress in 1952 to allow OPMs
predecessor, the U.S. Civil Service Commission, to recover the
costs of conducting background investigations for other Federal
agencies. It has subsequently been expanded to authorize OPM to
provide assistance and personnel management functions at the
request of agencies on a reimbursable basis.
OPM provides a wide range of human resources management
services to other Federal agencies, and the payments for those
services are consolidated under OPMs revolving fund. The
revolving fund is similar to many other such funds across the
Federal Government. The aim of the revolving fund is not to
generate a profit, but instead to break even over a reasonable
amount of time, generally defined as three years.
Providing human capital services and training for Federal
employees, conducting background checks and other revolving
fund services are integral to OPMs core mission of recruiting
and retaining a high performing workforce to protect and
advance the interests of American citizens. The revolving fund
includes a diverse range of programs, including human resources
tools and technology, enterprise human resources integration,
the Presidential Management Fellows program, and the human
resources line of business. I would like to briefly discuss the
three most public faces of the revolving fund: Federal
Investigative Services, human resources solutions and USAJOBS.
OPMs background investigation programs performance is
strong. We have no backlogs, are meeting congressional
timeliness mandates for OPM under the Intelligence Reform and
Terrorism Prevention Act and have increased automation. Since
driving down average investigative time on this from 145 days
in 2005 to 40 days today, customer agencies have realized over
$26 billion in cost avoidance and efficiency.
Additionally, the Government Accountability Office had long
listed the government personnel security clearance program in
the Department of Defense on their high-risk list. OPM assumed
responsibility for the background investigation function in
February of 2005, and the program was removed from the high-
risk list in January 2011, as a result of the major efforts of
OPM, the Office of Management and Budget, DOD, and the Office
of the Director of National Intelligence.
Despite a shift towards more costly field work-intensive
investigations, OPM remains resourced to meet the investigative
timeliness and quality standards based on the projected needs
of the executive branch community that we service. HRS provides
human resources products and services through a variety of
methods to meet the needs of the Federal Government. HRS offers
a by government, for government solution to a variety of human
resources needs and is uniquely well-positioned to help Federal
agencies meet their recruitment, testing and training needs.
The HRS team has expert knowledge and experience with
Federal policy and operating environments, and designs and
delivers solutions well-suited for government. In recent years,
HRS has worked with OPMs Office of the Inspector General to
become even more transparent and efficient. HRS offers agencies
the opportunity to access world class consulting experience
from pre-competed private sector companies through our training
and management assistance contracting vehicle. Pre-competition
allows agencies to save valuable time and resources in gaining
access to consulting experts and conformance with OPMs
contracting requirements.
Finally, USAJOBS is another critical program that operates
through the revolving fund. Pursuant to law and OMB guidance,
USAJOBS operates on a fully reimbursable basis, charging fees
to agencies that use USAJOBS to pay the cost of providing
Federal employment information to the public, along with
various services. USAJOBS offers a wide array of products and
services to job seekers, agencies and vendors. These products
include the job board with job opportunity announcements, the
resume builder, the agency recruitment portal, mobile apps and
the USAJOBS help desk.
To increase quality, we have worked to increase agency
participation in USAJOBS by encouraging cross-government
involvement and integrated project teams. These teams have led
to direct system improvements to the USAJOBS resume and user
profile sections, greatly benefitting the user experience for
the thousands of job seekers using the service. We've also
successfully cleared the audit and security reviews by OMB and
the White House cross-agency SWAT team, OPMs Office of the
Inspector General and the Department of Homeland Security.
OPM agrees that it is important to have a strong oversight
in order to ensure the integrity of their revolving fund, and
we look forward to continuing to work with the OIG in this
area. I am proud of the government-wide services that OPM
provides, and I look forward to addressing any questions that
you may have. Thank you.
[The prepared statement of Mr. Grimes follows:]
[GRAPHIC] [TIFF OMITTED] 81524.013
[GRAPHIC] [TIFF OMITTED] 81524.014
[GRAPHIC] [TIFF OMITTED] 81524.015
[GRAPHIC] [TIFF OMITTED] 81524.016
[GRAPHIC] [TIFF OMITTED] 81524.017
[GRAPHIC] [TIFF OMITTED] 81524.018
[GRAPHIC] [TIFF OMITTED] 81524.019
[GRAPHIC] [TIFF OMITTED] 81524.020
[GRAPHIC] [TIFF OMITTED] 81524.021
Mr. Farenthold. Thank you, Mr. Grimes.
We will now go to Ms. Brooks Rix. You are recognized for
five minutes, ma'am.
STATEMENT OF LINDA E. BROOKS RIX
Ms. Rix. Chairman Farenthold, Ranking Member Lynch and
members of the Subcommittee, good morning. My name is Linda
Rix, and I am the Chairman and Co-CEO of Avue Technologies
Corporation. I want to thank you today for the opportunity to
testify on this important topic.
Avue provides a comprehensive human resources management
platform to Federal agencies using a cloud-centered model. If
you combine the content of Westlaw, the rules and engines
capability of TurboTax and the use of self-service ATM
machines, you would have the equivalent technology Avue offers
to its Federal Government clients. Avue has competed with the
Office of Personnel Management's human resource products and
services for more than 10 years.
Before founding Avue, I began my career and spent five
years as an employee of OPM.
The subject of this hearing is whether OPMs revolving fund
is a cycle of government waste and the resounding answer to
that is yes. There are three compelling factors that lead to
this conclusion. First, despite dramatically reduced hiring
government-wide, the cost of Federal HR has escalated
dramatically at a time when the private sector has reduced its
HR staff by 21 percent and its cost per hire by 28 percent, the
Federal sector has increased its HR staff by 41 percent and its
cost per hire is more than 12 times that of industry.
The real breadth of OPMs impact can be seen at the VA,
which uses the OPMs USA Staffing product by mandate for all of
its hiring. In the last five years, the VA has increase its HR
specialist workforce by over 51 percent and has created a
corresponding increase in HR payroll of $100 million per year.
During the same period, the VA awarded contracts for HR
services at a rate of $16 million per year and paid OPM an
average of $216 million per year for the last three years.
After increasing its payroll by $100 million, its
contractor support by $16 million and its fees to OPM by $216
million, the VA hired a net 13,475 fewer people in 2012 than it
did in 2008. If you look across government for the last five
years, agencies using USA Staffing product have increased their
HR payroll, added contracted services and paid OPM extremely
high fees while concurrently reducing the number of new hires.
The second factor that gives rise to this level of
duplication of waste is that OPM is an innovation inhibitor.
OPM has a clear self-interest in promoting inefficiencies that
are better aligned with its own products and services. For
example, OPM mandates that all agencies post positions on
USAJOBS. OPM spent $20 million recoding the existing Monster
USA job system plus another $1 million in emergency fixes to
in-source USAJOBS board from Monster. To date, features and
functionalities would be typical of what we would find in a job
board in the 1990s.
At the same time, private employers have dropped their use
of job boards. Today, private sector only hires one of every
six people from job boards. Progressive employers leverage
innovations, like LinkedIn, search engine marketing social
media sites and employee referrals.
While the VA is one example, Inspector General McFarland
correctly observes that OPMs problems affect the entire
government. OPM offers that its customers choose products
because they are better than private offers and they are by
government for government. But Federal HR is not any more
complicated than you would find in a unionized company and the
theory that OPMs technologies and services are cheaper or even
cost-competitive are not validated.
This brings us to the third factor, OPMs extraordinary
conflict of interest and the lengths to which OPM will go to
expand its revenues. OPM violates the Competition in
Contracting Act, illegally asserting OPM products may be
purchased through the Economy Act and therefore non-
competitively. OPM duplicates GSA's 738X Federal supply
schedule, and adds layers of waste in the form of excessive
fees. Where GSA is capped at a service fee of not to exceed .75
percent, OPM openly states that its fees range from 8 percent
to 12 percent. OPM also abuses its role as portfolio manager
for the HR lines of business. It exerts its role as advisor to
agencies to steer contracts exclusively to Federal shared
service centers.
This illustrates the dual identities of OPM, one as
regulator and the other as a for-profit business. As a for-
profit company, OPM is the systemic reason the Federal
Government HR costs are skyrocketing.
OPM has succumbed to its own monetary interest at the
expense of what is best for the government as a whole, and
every day furthers this extraordinary conflict of interest
while insulating itself from competition with the private
sector. OPMs legitimate role must focus exclusively on its
statutory mission, which desperately needs to be restored. Its
revolving fund business, which draws all resources and
intellectual attention, should be returned to the private
sector, so that the government can enjoy billions in savings
through the elimination of wasteful spending, as illustrated
here.
Thank you for this opportunity to contribute to this
hearing. This concludes my remarks and I look forward to your
questions.
[Prepared statement of Ms. Rix follows:]
[GRAPHIC] [TIFF OMITTED] 81524.022
[GRAPHIC] [TIFF OMITTED] 81524.023
[GRAPHIC] [TIFF OMITTED] 81524.024
[GRAPHIC] [TIFF OMITTED] 81524.025
[GRAPHIC] [TIFF OMITTED] 81524.026
[GRAPHIC] [TIFF OMITTED] 81524.027
[GRAPHIC] [TIFF OMITTED] 81524.028
[GRAPHIC] [TIFF OMITTED] 81524.029
[GRAPHIC] [TIFF OMITTED] 81524.030
[GRAPHIC] [TIFF OMITTED] 81524.031
[GRAPHIC] [TIFF OMITTED] 81524.032
[GRAPHIC] [TIFF OMITTED] 81524.033
[GRAPHIC] [TIFF OMITTED] 81524.034
[GRAPHIC] [TIFF OMITTED] 81524.035
[GRAPHIC] [TIFF OMITTED] 81524.036
[GRAPHIC] [TIFF OMITTED] 81524.037
[GRAPHIC] [TIFF OMITTED] 81524.038
[GRAPHIC] [TIFF OMITTED] 81524.039
[GRAPHIC] [TIFF OMITTED] 81524.040
[GRAPHIC] [TIFF OMITTED] 81524.041
Mr. Farenthold. Thank you very much. I will now recognize
myself for five minutes of questioning.
Mr. Grimes, Ms. Rix really does point out what is a great
concern with me, in that you guys are both the regulator and
the vendor. You set the rules and you say all right, you can go
out to the private sector and do this and comply with all those
rules, oh come on, bring it in here, deal with us. Do you see a
conflict there and how do you answer Ms. Rix's concern about
that?
Mr. Grimes. Thank you, Mr. Chairman. We don't see a
conflict at all. In fact, we provide a vehicle for training and
management and so forth, through our training and management
assistance program that utilizes private sector contractors. In
fact, 80 percent of the work that we do in HRS is through
private sector contractors. So they are certainly not being cut
out of the deal.
The bright line that we have is that our merit systems and
accountability division that evaluates whether agencies are
examining and hiring people in the right way has nothing
whatsoever to do with our human resources and products
division. They don't tell agencies that they need to use them.
The HRS merely provides an opportunity for agencies to get
lower cost contracting help in a quick way for their training,
hiring, assessment needs.
Mr. Farenthold. Thank you.
Mr. McFarland, have you done any, has the IGs office done
any investigative work as to the competitive practices there? I
realize this is something we didn't prepare you for.
Mr. McFarland. No, Mr. Chairman, we have not done any work
in that area.
Mr. Farenthold. Mr. Grimes, do you use appropriated funds
to operate any of the revolving fund or is it fully self-
funding?
Mr. Grimes. The revolving fund is fully self-funding. We
work on a cost recovery principle of whatever we spent we
recover from our customers.
Mr. Farenthold. And you don't use appropriated funds to
promote it or anything like that?
Mr. Grimes. Absolutely not.
Mr. Farenthold. That is certainly good to hear.
Mr. Grimes, the Inspector General recently informed the
committee of an investigation involving an OPM contractor
utilized by the revolving funds investigative service division.
Given the particularly serious nature of the investigation, is
the contractor still conducting background and security
investigations as an OPM contractor and what steps has OPM
taken to address the concern raised by the IG?
Mr. Grimes. Mr. Chairman, the Department of Justice is
looking into that and I just can't comment right now.
Mr. Farenthold. All right. I appreciate that. I would, as
the investigation progresses, I do think it is important that
this committee be kept abreast of what is going on,
particularly with those investigations. It is especially
troubling that this investigation involves background checks
that are critical to not only the trust of the government but
the safety of American people.
Let's talk a little bit about technology. Of the 26 record
checks that OPM currently performs, Mr. Grimes, only 7 return
records in machine readable format. And nine only provide hard
copy records. And there are no common standards for data
structure or formats for FIS providers.
What is hindering the progress and how can we get this
automation going to save money and to speed the process?
Mr. Grimes. Mr. Chairman, I regret that I can't tell you
that, because I am not in the FIS operation. But we can
certainly take it for the record and get you an answer.
Mr. Farenthold. I would appreciate that.
Let me ask Ms. Rix a question. You indicate that the online
system for finding jobs is more antiquated than, I think you
said, a 1990s system. Can you expand a little bit on what
effect you think that is having on the quality of applicants in
the process overall?
Ms. Rix. Sure. As many of you know, the USAJOBS board is a
mandated jobs board. It actually is generated from an older
requirement by statute that OPM ensure that Federal agencies
provide a public notice of job postings, which is completely
different than a centralized controlled job board.
The purpose of the job board is essentially to be able to
let people know that have been RIFed from the Federal
Government to base realignment closure and other principles
what job opportunities might be available to them so they can
be restored to public service. Right now, the OPM jobs board is
very confusing. It leads to a lot of people who are expending
resources, the VA is a very good example here. The VA is part
of the $16 million a year expenses in media buys for
recruitment. And doing those media buys, they've spent about
$100 million in media buys in the last five years.
When you see a local advertisement for jobs at the VA for
critical health care professional positions, you then go to
USAJOBS where the VA has approximately 30 to 40 percent of the
job postings on any given day, which means you are going
through 3,000 to 4,000 individually-posted jobs to find a
position for which you would like to apply.
Mr. Farenthold. This is an ongoing problem. I am down at my
VA office regularly talking to them and talking to veterans who
are saying, we don't have the doctors. So how do we get the
doctors in better? What do we need to do to fix that?
Ms. Rix. What needs to happen is, the VA needs to be able
to do single job postings, for example, for physicians, allow
users to select locations in which the user would like to work,
not have 4,000 job postings where a user has to individually
has to search every job posting, not just to determine where it
is, but also to determine whether they are even eligible to
apply for the posting.
So centralizing that process and running open, continuous
recruitment is the best way to go about that objective. But you
have to have the technology.
Mr. Farenthold. Are there now solutions to do that, cloud-
based solutions to do that, where we don't have to spend a
whole lot of money reinventing the wheel?
Ms. Rix. Absolutely.
Mr. Farenthold. I see my time is greatly expired. I will of
course extend the same courtesy to Mr. Lynch in his
questioning. So we will recognize Mr. Lynch for five minutes
plus a minute 33.
Mr. Lynch. No problem, Mr. Chairman. I appreciate that. Mr.
McFarland, good to see you again. I do want to say that I do
share some of the concerns that you have raised, and that Ms.
Rix has raised, with the lack of pricing transparency. This has
been raised before by GAO.
Mr. Grimes, what have you done to address the concerns that
they have and that I share with the lack of pricing
transparency?
Mr. Grimes. This year, our FIS organization released an
annual report that has extensive price transparency included in
the annual report. For our HRS operation, the prices are
clearly marked, as they say. Agencies know what they are
getting when they buy services from HRS, and the prices are
either set in advance or negotiated with the agency, and they
do know exactly what they are getting and how those prices were
arrived at.
Mr. Lynch. That is part of the problem. Now, Ms. Rix has
pointed out, and it seems that Mr. McFarland agrees, that in
some cases, for the same investigation, that OPM is charging
about $1,500 more per investigation than some of the folks in
the private sector. We are doing an awful lot of these. And
also the amount of money we are spending is staggering here.
The cost to conduct background investigations increased by
almost 79 percent from $602 million in fiscal year 2005 to $1.1
billion in fiscal year 2011. So what are we doing to increase
competition? We have some difficult challenges here fiscally,
across the budget. What are we doing in this regard to bring
these prices down and introduce some real competition?
Mr. Grimes. First of all, with respect to comparisons
between other agencies that conduct background investigations
and our FIS operation, it is important to note that, I think
the example maybe was NSA, they have appropriated funds. So
when they charge for an investigation, they don't recover the
cost of those appropriated funds. Our FIS operation has to
include, has to recover all funds. We get no appropriated
funds.
If we were to get appropriated funds, say, for our
personnel, our cost would go down by 27 percent. So it is not
exactly a fair comparison.
Mr. Lynch. Mr. McFarland, what do you think I should do
here? If we wanted to fix this, give me a couple of bold
strokes that would help us get to a better place with this
whole process?
Mr. McFarland. Show me the money.
Mr. Lynch. Could you elaborate on that?
Mr. McFarland. Yes, I can.
Mr. Lynch. Okay, I bet you can. Why don't you take a minute
and do that?
Mr. McFarland. The question goes right to the heart of our
concern and our frustration. We just have not been able to do
in the revolving fund the work that we need to do, by any
stretch of the imagination. We have devoted as much time and
money as we can from our salary and expense fund to do work in
that revolving fund area, especially on the Federal
Investigative Service cases. Because to us, they demonstrate a
real problem that could occur at any given time and that is
picking the wrong person for a government job, picking the
wrong person that is going to get a particular classification
that shouldn't have it. There are many instances of that taking
place, not just with OPM employees per se, but with the
contractors.
So what we want to do, it is a broad scope, but the only
way I can describe it is we really want to delve into
everything in the revolving fund, because it is $2 billion, it
is out of control from our perspective inasmuch as we can't
tell you hardly anything about it. That is a real shame. We
were talking a minute before, when Mr. Grimes was talking about
transparency, that things are published, when my point is, that
is not really transparency from our perspective. Transparency
is only going to be there if we give an independent review of
it.
Mr. Lynch. Right. Well, I just want to say, maybe this is
editorializing, but I think the Chairman and I are of a like
mind on this, we should be able to come up with something that
would allow you to have that transparency. I think that serves
our economic interests as well as our national security
interests, to make sure that that happens. I would like to work
with you on this and figure out a way that we can make that
happen.
Ms. Rix, do you have some thoughts of your own in terms of
how we can straighten this mess out?
Ms. Rix. I think one thing to really focus on is the
availability of private sector alternatives for highly scalable
technologies that can be instituted quickly. I think you had a
hearing previously related to retirement examinations and
processing. There are plenty of options out there in the
private sector that OPM could adopt that would in effect reduce
both cycle time and cost dramatically.
In addition to that, and I will throw this out there even
though it might be fairly controversial, I do think that OPM
should delegate more of its authorities directly to agencies
where agencies can manage those funds. Despite Mr. Grimes
saying that the fact that there is appropriated funds make the
process cheaper, it is all still taxpayer funds.
Mr. Lynch. That is right.
Ms. Rix. It is just a redistribution of that.
Mr. Lynch. Right, exactly right. There are no appropriated
funds, but you are charging these Federal agencies who are
being funded by taxpayer money. So there is a pass-through
here, so there is a real cost to the taxpayer, even though it
is not through the appropriations process. I get that. Thank
you.
I am just about of time. Thank you, Mr. Chairman, I yield
back.
Mr. Farenthold. Thank you very much, Mr. Lynch.
We will now go to the gentlelady from the District of
Columbia, Ms. Norton.
Ms. Norton. Thank you, Mr. Chairman. I thank you for
holding this hearing.
I generally support revolving funds, normally because they
are cost savings. We see the opposite here.
I really am confused, by the way, Mr. Chairman, I see that
the President has a proposal in his budget to give the
Inspector General precisely the jurisdiction he would allow. I
hope our subcommittee or committee quickly authorizes this,
carries it to the Floor so that we can see this done this year.
It seems to me that hands-down, the case has been made for that
oversight.
I am confused here, though, because as I read your
testimony, Mr. McFarland, he notes that the revolving fund
relies heavily on contract employees. So it does seem to me
that the OPM has partly privatized this anyway. And I don't
understand, if the reliance on contract employees saves you
money then it seems to me you should explain why this is such a
government operation. You are not using Federal employees, and
indeed, I would wonder if you use Federal employees, would
these extraordinary increases be any less? That is directed to
the witness from OPM, Mr. Grimes.
Mr. Grimes. Thank you, Ms. Norton. A couple of things. One,
expenses have gone up because the ratio of more expensive
investigations to less expensive investigations has gone up.
Ms. Norton. So you are doing more expensive investigations
than the private sector is doing. And their costs do not
reflect that.
Mr. Grimes. The investigations that we do with our Federal
Investigative staff, which consists of both Federal employees
and contract----
Ms. Norton. What percentage is Federal employees and what
percentage are outsourced employees?
Mr. Grimes. About half of the FIS budget is spent on
contractors.
Ms. Norton. Why the difference?
Mr. Grimes. We use a balance of contractors and Federal
employees, so that when we get a lot more business, we can
expand quickly through the contracting side of the house.
Ms. Norton. Does it cost any more or less for the Federal
employees and the contract employees?
Mr. Grimes. I cannot give you a number there. I would be
happy to take that for the record. I don't know what those cost
figures are. But it gives us the ability to expand as our need
increases.
Ms. Norton. So as far as a Federal agency is concerned, the
Federal agency is really without recourse when the Federal
agency comes to you, Mr. Grimes, isn't that the case? It needs
the background investigation, it wants the employee. Is there
anyplace else for the Federal agency to go?
Mr. Grimes. Congress told us to do background
investigations. So we do them. We do over 2 million
investigative products a year, deliver more than 2 million
investigative products a year. And we do them under 40 days on
average, in accordance with the recent legislation that was
directed us to do so.
Ms. Norton. How do you control costs? There is no
competition. How do you control costs, Mr. Grimes?
Mr. Grimes. Well, we control costs through our----
Ms. Norton. Because it looks like you don't, frankly. When
we look at these increases, I ask that almost pejoratively, how
do you control costs, does anybody ever sit down and say, wow,
these costs are really going up? Is there any group in the
agency that maybe sits down every once in a while and gives
some attention to these costs?
Mr. Grimes. They work very hard to control costs. In fact,
the law requires us to recover the costs that we do have and in
fairness to our customers, our FIS operation works very hard to
control costs.
Ms. Norton. So one of the things you can do as you get more
business, and can charge whatever you desire, is you can just
go out and get more employees instead of, for example,
considering, can we do this work with fewer employees, as for
example, Federal agencies have to do all the time?
Mr. Grimes. In fact, that is what we do. We do not staff up
our Federal workforce to respond to increased demand.
Ms. Norton. Where are the increases, then? Where have the
increases come, then? They have not come from Federal
employees, have they? Or have they? If the increases haven't
come from Federal employees, I have to assume that this
outsourcing gives you the ability to just go get whoever you
need. You said as much when you said that, when we have extra
work or if we need more employees we need these outsourced
employees.
Mr. Grimes. The number of investigations that require more
extensive field work has gone up. So that raises our costs,
because it is more expensive to gather information in the
field.
Ms. Norton. Have Federal agencies given you more people who
need background checks or are you testifying that deeper
background checks are needed? The Federal workforce I don't
think has been exponentially rising.
Mr. Grimes. The number of products probably is about the
same from year to year. But the ratio of more expensive
products to less expensive products has increased.
Ms. Norton. Mr. Grimes, don't you see the problem? If you
are sitting on a product that keeps going up, didn't you
believe that at some point somebody was going to call the
question on you? I am amazed that you don't have a remedy to
offer the committee for these extraordinary increases. I am
speaking now for the rest of the government, which has to come
to you and has no place else to go. Do you have a remedy that
you would offer for these extraordinary increases?
Mr. Grimes. I guess I would have to disagree that there
have been extraordinary increases. The last time we had a price
increase was in 2010. I think it was about 3 percent, and they
have remained static since.
Ms. Norton. Mr. Chairman, I know I am over my time. I was
looking at a graph.
Mr. Farenthold. Without objection, we will give you another
minute or two.
Ms. Norton. It is this graph, multi-year budget comparison
of revolving fund, OPM and OIG is what it really increases
there. I am trying to account for the 4,000, if I look at 4,012
and 98. I am asking, if the depth of the work that you have to
do is what accounts for the increases, the 79 percent increase,
for example, in pricing that I think has already been indicated
to the agencies.
Mr. Grimes. Our pricing has only gone up once in the last,
I think, five years. That was in 2012.
Ms. Norton. OPMs reported cost to conduct background
investigations increased by almost 79 percent in fiscal year
2005 to $1.1 billion in fiscal year 2011. That is the GAO
report.
Mr. Grimes. Right, and I think that reflects, again, the
depth of the investigations that are required and the types of
investigations that have been asked for.
Ms. Norton. Yes, Mr. Chairman, you can see why we need an
in-depth look at this agency.
Mr. Farenthold. Thank you very much, Ms. Norton. We will
now go to the gentleman from Missouri, Mr. Clay. You are
recognized for five minutes or thereabouts.
Mr. Clay. Thank you, Mr. Chairman. Thank you for conducting
this hearing.
As the stewards of the taxpayer funds, the Federal
Government needs to prevent waste, fraud and abuse. The
concerns raised by GAO and the OPM IG regarding OPMs revolving
fund provide strong support for improving the IG's oversight of
the fund's activities. And I appreciate that OPM has been able
to eliminate the investigations backlog and improve its
timeliness.
When GAO was looking at OPMs background investigation
service, it had recommended that OPM look at process
efficiencies to eliminate costs. Panel members, are there
particular revolving fund processes that you believe can be
streamlined? We will start with you, Ms. Rix.
Ms. Rix. Thank you. I believe that both the investigative
process, retirement claims processing processes, the hiring and
staffing process of the Federal Government, and the general
process by which agencies are able to operationally execute
their HR service should in fact all benefit from innovations in
technology. There is no reason to have conflicting
requirements, to have non-digital methods of getting work done
or not having case files and records that are 100 percent
digital going forward.
These are products and innovations that are readily
available from the private sector. OPM has had a not invented
here, build don't buy process that has effectively ignored the
innovations of the last five to ten years in terms of where
technology is today, supporting very large scale private
companies, for example.
Mr. Clay. Mr. Grimes, how can we streamline? Thank you for
your response, Ms. Rix. Mr. Grimes, any comments on how we can
streamline the processes?
Mr. Grimes. There are steps that could be taken to
streamlining the revolving fund process by, for example,
looking at maybe a five-year rate of return rather than the
three years that we do now. Possibly by annual budgets instead
of annual year budgets. That would help.
With regard to investigations, we are undergoing a
transformation in our FIS operation to bring more automation
into the process. We are looking to increase our timeliness
through changing from batch processing to real-time processing.
We are looking at increasing our quality by providing enhanced
data validations and real-time information and with the field
agents as they conduct their work.
We are improving our data security and so forth. So we are
taking steps to improve and streamline that process.
Mr. Clay. Thank you for your response. Mr. McFarland, any
suggestions on streamlining?
Mr. McFarland. Mr. Clay, this is very difficult, because I
sit here giving you the same answer all the time, based on this
particular subject. I don't know, because we haven't been able
to look into the processes. It is very frustrating for an
inspector general office to have to say that, and I apologize
for having to say that.
But once we are able to, we will delve into everything.
Mr. Clay. Mr. McFarland, given the fact that OPMs revolving
fund operations are operated on a cost recovery basis, does
that in a way serve as a disincentive to streamline business
processes and reduce costs?
Mr. McFarland. One might think so, simply because it is
controlled, and there is really not competition per se. But
once we could evaluate pricing methodology, technology
innovation and everything else, we will have some very
definitive answers.
Mr. Clay. Mr. Grimes, does that serve as a disincentive to
streamline business processes?
Mr. Grimes. I think again, on the surface, yes, I can see
where someone might make that assumption. But that is not the
way we operate. We constantly look for ways to streamline our
operations.
Mr. Clay. What about you, Ms. Rix? What is your opinion?
Ms. Rix. I think the VA example that I read to you is
probably the clearest example of the impact government-wide of
having products and services that are mandated for agency use,
that are inadequate and antiquated technologies producing
considerable cost inefficiencies. The revolving fund does in
fact distort the incentive for OPM, because it is incented to
maintain that revenue level in order to maintain its employment
level.
Mr. Clay. Thank you so much for your responses. I yield
back.
Mr. Farenthold. Thank you very much, Mr. Clay.
We are still under an hour here, and I have a couple more
questions, so we will do a second round of questioning. So if
you have some more, Mr. Clay, or Mr. Lynch, we will get back to
you as well. We will get going here with a second round of
questioning.
Ms. Rix, you are in a company that basically does work
similar to what OPM does in their revolving fund. What
percentage or, can you give me an idea of what you spend on, I
would call it quality control, security investigations, what
have you all been doing in-house? What Mr. McFarland wants to
do is an IG with respect to the revolving fund. Obviously you
have a higher level of transparency in government than the
private sector. But management would dictate that you have some
sort of quality control similar to what an IG would do.
How do you all do it? What do you all spend there?
Percentages are good.
Ms. Rix. We probably spend about 50 percent of our total
revenues on maintaining the security level of protocols of our
data centers and access to our systems, which is a requirement
by the Federal Information Security Management Act. In addition
to that, the quality control function, as well as ensuring that
our expense rate is maintained at a low level.
I will give you a couple of examples of recent innovations
that have allowed for dramatic cost savings for our company.
Mr. Farenthold. Let me limit that to about 45 seconds,
because I have some more questions.
Ms. Rix. One thing that we have been able to do is reduce
our cost from about $1.4 million in a year in data center
operations to approximately $14,000 a year by adopting cloud-
based solutions from Amazon that are government-approved.
Another is we have been able to reduce our fees to our
customers by the Avue budget protection plan in concert with
the reductions to their budget, so that we can be in line with
reductions that our clients are experiencing.
So those are things we pay attention to and monitor
constantly as well as price.
Mr. Farenthold. Let's go back to Mr. McFarland now. I think
we are going to get some bipartisan agreement that we need to
get you guys looking into the revolving fund. What do you want
in the legislation? How much money, how many people? Give us an
idea how you want us to craft the legislation and how you would
suggest that we pay for it in this tight budgetary environment.
Mr. McFarland. What we have asked for in our planning was
.33 percent of the total budget. In this particular case, that
would bring us to $6.6 million. Our anticipation is the first
year probably, but not for sure at all, that we would spend
possibly $1.5 million to get things moving.
There has to be a plan in place which we have already
started working on. And we have to move aggressively to get
people trained.
Mr. Farenthold. I have to get to funding. I do have a
limited amount of time. The FIS and the revolving fund is cost
specific. We could pull some money out of that without
appropriating some more money and give you some money there to
investigate it and do some of the management structures without
really directly costing the taxpayers some money. Is that
accurate?
Mr. McFarland. Are you saying such as a memorandum of
understanding, that type of thing?
Mr. Farenthold. We just say, all right, for the for-profit
or non-traditional activities, X percent goes to the IG to
investigate that.
Mr. McFarland. That is what we are seeking in the
legislation.
Mr. Farenthold. That is what you are after?
Mr. McFarland. Yes.
Mr. Farenthold. No direct appropriations.
Mr. McFarland. That is right.
Mr. Farenthold. Obviously Mr. Grimes might argue, well, we
are going to raise the price to our customers to pay for that.
Or do you have some sort of flexibility in profit, where a
small percentage wouldn't hurt you?
Mr. McFarland. Let's say tomorrow we get it and the next
day we use all $6.6 million. That is very easy to explain away
as far as what the cost would be. OPM would have to raise the
cost to the customer, per $1,000, $3.35. We are not anywhere
close to taking that kind of money, $6.6 million. We want to
probably start about $1.5 million.
Mr. Farenthold. Mr. Grimes, do you think you would have to
significantly raise the prices to your customers to fund the IG
looking at what you were doing?
Mr. Grimes. No. We would not have to raise them
significantly.
Mr. Farenthold. Would you have any objection to that sort
of legislation?
Mr. Grimes. In fact, we support that legislation.
Mr. Farenthold. All right, great. I appreciate that. Just
one quick last question. One of the things you said in your
testimony that kind of tweaked my interest was, you stated that
the OPM has created specific training offerings for Federal
employees that align with the Administration's management
priorities. What are the Administration's management priorities
and what are you doing with respect to that? Are there any
specific courses or directives there?
Mr. Grimes. I can't list off any specific courses, but they
are leadership and training courses and management and so forth
that we offer, that agencies can avail themselves of.
Mr. Farenthold. All right, thank you very much.
Mr. Lynch, do you have some more questions? You have five
minutes.
Mr. Lynch. Thank you, Mr. Chairman.
I just want to go back, Mr. McFarland, the Administration
has proposed a way to increase the IG's budget, you are
familiar with that?
Mr. McFarland. Yes, sir.
Mr. Lynch. And I know in your testimony you indicated that
you might be able to achieve a return of $7 for every $1 you
spend.
Mr. McFarland. That was reflective of what we do now with
the retirement and the heath care. That is what we bring back
now. And that changes year to year, of course.
Mr. Lynch. Right. The President does have a proposal, as
the chairman pointed out, that would give you about $6.6
million, something like that. Any problems or any refinements
that you might have to the President's proposal?
Mr. McFarland. No. That would be just fine the way it is.
Mr. Lynch. Mr. Grimes, you seem to be okay with that as
well?
Mr. Grimes. Yes, we are.
Mr. Lynch. Okay, I don't have any more questions. Thank
you. I yield back.
Mr. Farenthold. It is good when we have consensus.
Mr. Clay?
Mr. Clay. Thank you, Mr. Chairman. I understand that
Congress created OPMs revolving fund back in 1952, and that it
was originally used to allow OPMs predecessor to recover the
cost of conducting background checks for other Federal
agencies.
Over the years, the revolving fund was expanded to permit
OPM to recover the cost of providing training and other HR
related services to Federal agencies. I firmly believe that
these activities are necessary for an effective government.
Mr. Grimes, both Mr. McFarland and Ms. Rix have testified
about the tremendous growth in the revolving fund. Can you
explain to us what you believe are the reasons for the
substantial growth?
Mr. Grimes. Thank you, Mr. Clay. I can. In 2005, we
inherited the workload from the Department of Defense
investigation program. It came with an enormous backlog. And as
I mentioned in my testimony, that did increase the cost of the
revolving fund. But in six years, we were able to get that
backlog eliminated and get our timeliness to processing down to
40 days.
Mr. Clay. And then with that, do you do background checks
for the DOD?
Mr. Grimes. Yes, we do.
Mr. Clay. Okay. Mr. Grimes, I understand that at the end of
fiscal year 2012 the amount of surplus in the revolving fund
was $379 million. Now, Mr. Grimes, does the statute authorizing
OPMs revolving fund allow for the carryover of surplus funds
from one year to another?
Mr. Grimes. The statute allows us to maintain a corpus that
would allow us to, for example, shut down a program without
having to rely on appropriated funds. So for example, if the
HRS program were shut down, there needs to be enough money
there to shut the program down. And that is kind of the
standard that we use.
The amount of the revolving fund, I believe FIS had an
independent contract calculate what they ought to have. And
that number was between $180 million and $270 million. So they
are probably around $210 million right now, I believe, and the
balance is probably in our HRS. I can get you more specific
figures if you are interested.
Mr. Clay. Yes, would you do that? And do you ever turn any
money back in to the Treasury?
Mr. Grimes. We would if we had excessive returns. But so
far, we have not.
Mr. Clay. Well, okay. Do you have plans for the use of the
current revolving fund surplus?
Mr. Grimes. That fund exists for capital investment and
also the ability to shut the program down, should we have to do
that. So to the extent that we get, we make more money in a
year than we calculate what that fund ought to be, then we
would have to do something like that, yes.
Mr. Clay. Is there any of the money used for conferences?
Mr. Grimes. We don't spend much on conferences any more.
Mr. Clay. Very good. Mr. Chairman, I yield back.
Mr. Farenthold. On that note, we would like to thank our
witnesses and of course, my fellow members for participating.
This was a great hearing, one that shows more bipartisan
consensus than I think I have seen in my two years in Congress.
I think you can count on some positive results as a result of
this hearing. And again, thank you for being here, and we are
adjourned.
[Whereupon, at 10:38 a.m., the subcommittee was adjourned.]
[GRAPHIC] [TIFF OMITTED] 81524.042