[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
A CULTURE OF MISMANAGEMENT AND WASTEFUL
CONFERENCE SPENDING AT THE DEPARTMENT
OF VETERANS AFFAIRS
=======================================================================
HEARING
before the
COMMITTEE ON OVERSIGHT
AND GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
FIRST SESSION
__________
OCTOBER 30, 2013
__________
Serial No. 113-68
__________
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
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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 TAMMY DUCKWORTH, Illinois
DOC HASTINGS, Washington ROBIN L. KELLY, Illinois
CYNTHIA M. LUMMIS, Wyoming DANNY K. DAVIS, Illinois
ROB WOODALL, Georgia PETER WELCH, Vermont
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 VACANCY
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
C O N T E N T S
----------
Page
Hearing held on October 30, 2013................................. 1
WITNESSES
The Hon. Gina Farrisee, Assistant Secretary for Human Resources
and Administration, U.S. Department of Veterans Affairs,
Accompanied by Edward Murray, Deputy Assistant Secretary for
Finance, U.S. Department of Veterans Affairs
Oral Statement............................................... 8
Written Statement............................................ 11
The Honorable Richard J. Griffin, Deputy Inspector General, U.S.
Department of Veterans Affairs, and Gary Abe, Deputy Assistant
Inspector General for Audits and Evaluations, U.S. Department
of Veterans Affairs
Oral Statement............................................... 24
Written Statement............................................ 25
APPENDIX
Veterans Affairs OIG response to questions....................... 54
Committee on Oversight and Government Reform: Staff Report....... 57
GSA, IRS, and VA estimate IRS Conference Spending................ 154
Dept. of Veterans Affairs Conference Oversight................... 156
A CULTURE OF MISMANAGEMENT AND WASTEFUL CONFERENCE SPENDING AT THE
DEPARTMENT OF VETERANS AFFAIRS
----------
Wednesday, October 30, 2013
House of Representatives,
Committee on Oversight and Government Reform,
Washington, D.C.
The committee met, pursuant to call, at 9:30 a.m., in Room
2154, Rayburn House Office Building, Hon. Darrell E. Issa
[chairman of the committee] presiding.
Present: Representatives Issa, Mica, Duncan, Farenthold,
Walberg, Jordan, Meadows, Bentivolio, Cummings, Maloney,
Norton, Tierney, Lynch, Connolly, Duckworth, Davis, Horsford,
Lujan Grisham.
Staff Present: Alexa Armstrong, Majority Legislative
Assistant; Molly Boyl, Majority Deputy General Counsel and
Parliamentarian; Lawrence J. Brady, Majority Staff Director;
Ashley H. Callen, Majority Deputy Chief Counsel for
Investigations; Sharon Casey, Majority Senior Assistant Clerk;
John Cuaderes, Majority Deputy Staff Director; Jessica L.
Donlon, Majority Senior Counsel; Linda Good, Majority Chief
Clerk; Caroline Ingram, Majority Professional Staff Member;
Mark D. Marin, Majority Deputy Staff Director of Oversight;
Emily Martin, Majority Counsel; Ashok M. Pinto, Majority Chief
Counsel, Majority Chief Counsel, Investigations; Laura L. Rush,
Majority Deputy Chief Clerk; Jonathan J. Skladany, Majority
Deputy General Counsel; Rebecca Watkins, Majority
Communications Director; Beverly Britton Fraser, Minority
Counsel; Aryele Bradford, Minority Press Secretary; Kevin
Corbin, Minority Professional Staff Member; Juan McCullum,
Minority Clerk; Dave Rapallo, Minority Staff Director; Daniel
Roberts, Minority Staff Assistant/Legislative Correspondent;
Valerie Shen, Minority Counsel; Mark Stephenson, Minority
Director of Legislation.
Chairman Issa. The committee will come to order.
The Oversight Committee exists 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, 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 government and
government officials responsible to taxpayers. Because
taxpayers have a right to know what they get from their
government. It is our obligation to work tirelessly in
partnership with citizen watchdogs to deliver the facts to the
American people and bring genuine reform to the Federal
bureaucracy.
Today we meet to discuss the Department of Veterans
Affairs, an organization whose essential duty is second only to
the men and women who they serve and their obligation and their
duty and their service to protect our Country. If in fact we
abandon our veterans, then we abandon our men and women in
harm's way. We cannot and should not ever forget that service
begins by raising one's right hand, but continues for a
lifetime, and the effects of that service often has a lingering
effect on the men and women who, in a voluntary army, go in
harm's way because they respect and love their Country.
Congress in fact exempted the Department of Veterans
Affairs from sequestration. So important is the obligation to
get it right that money has not been a problem. Furthermore,
even as we began opening the government again after the latest
effects, additional dollars were dedicated to a backlog that is
by definition inexcusable for those who have served our
Country.
The Department, which is second only to the Department of
Defense, spent an estimated $6.1 million on what was marked or
considered to be training conferences. Today, we are here at a
time in which many people would say, didn't you already cover
the GSA scandal? Didn't you already cover the IRS scandal of
wasting people's money on conferences? It is true we did. But
these conferences are in fact historical, not current.
There are several reasons we are here today, not just that
these were lavish parties that the Department spent, but that
the IG's own report finds it impossible, due to the hopeless
accounting at Veterans Administration, to find out exactly how
much was spent. A forensic audit only estimates how much was
spent.
This is a lot of walking-around money that has been left
loose at the Veterans Administration that could have and should
have been made available to our veterans and their needs.
Additionally, we can find no purpose for these conferences
that justifies it. I do not often reflect on confidential
conversations I have, but there is one that I have made public
in the past, and I will continue to. General Shinseki, in a
conversation with me at the beginning of the discovery of this
scandal, told me his greatest obligation and his problem was to
change the culture at the VA, a culture he inherited, a culture
that in fact talks about the veterans and then in fact fails to
perform in a number of areas.
The taxpayers in this case got a lousy deal. It isn't just
that there were lavish conferences and once again, videos and
mocking of people's real obligations and seriousness, but in
this case, they had an opportunity and an obligation to train
HR people, to be part of that culture of change that the
Secretary so much said he wanted to get accomplished on his
watch. And they failed to do so. The Office of the Inspector
General, attempting to conduct an audit by recreating the
budget using the few records that were available, the IG found
at least $762,000 of unnecessary and unauthorized wasteful
expense.
How could this happen? That there could be three-quarters
of a million dollars of waste? How could it happen? It could
happen because, in fact, this agency has deep pockets and money
that is designed to have flexibility because we want that
flexibility to be used for our veterans.
The Department's senior leadership effectively gave the
conference planners a blank check, and those planners took
advantage of it. I, in fact, am not pleased with outside
conference planners. But let's understand: $450,000 to market
and hype the conference was a decision that really didn't need
to be made, because the fact is, these are employees. You are
paying for them to come, you can order them to come, you can
encourage them to come or you can, in fact, make it clear that
if they don't come, it could reflect on their continued
training requirement. So why do you need to advertise? These
aren't buyers, these are, in fact, recipients of a training
that they need and perhaps a bit of a perk to get away from the
day-to-day job.
Fifty thousand dollars was spent on a movie or what we
might call a YouTube phenomenon on Patton. Ninety-eight
thousand dollars was spent on promotional products such as
notebooks, water bottles, hand sanitizers, fitness walking kits
and the like. Again, I am not sure what part of the HR training
that reflected.
When planners asked their managers about the budget, the
managers replied, ``Don't worry about it.'' Because the
Veterans Administration, Veterans Affairs is a large agency
with deep pockets. Yes, it is a large agency with deep pockets.
But those pockets were not intended to be picked by either
contractors that were likely unnecessary or, in fact, people
who we held accountable and paid to be accountable to the
taxpayers.
It shouldn't come as a surprise then that the conference
planners spent considerably more time on planning and
entertainment activities for themselves than they did for
planning the training activities. Conference planners visited
Dallas, Nashville and Orlando to scout possible locations for
conferences. In emails they raved about what a great time they
were having on what amounted to be taxpayer-financed vacations.
While they were on these paid vacations, they accepted
improper gifts from hotels competing to host the conference,
including spa packages and room upgrades and show tickets, limo
rides and helicopter rides. To make matters worse, during these
conferences, when they were so busy getting the perks of
representing a large, deep-pocket buyer, they, in fact, asked
for and received overtime pay. That is right, Mrs. Maloney.
Only in this kind of environment of not caring enough about the
taxpayers' money can you have somebody have what I grew up
calling chutzpah to use taxpayers' money, enjoy the perks and
then say, but I need overtime.
The conference planners thought they deserved recognition
for their hard work and their efforts to save ``Department
money,'' and amazingly, they did get recognized. Without doing
any due diligence, the Department awarded over $43,000 in cash
and one-time awards to conference planners for a job well done.
This is a pattern that we see, that bonuses are an
entitlement, they are automatic. But in this case, to see that
bonuses were basically there for providing perks to the very
people granting it is the kind of quid pro quo that we need to
get out of government. And if we can't get it out of government
using techniques such as training and responsibility and real
belief in what you do for the government, then in fact
undoubtedly Congress will again pass additional laws that will
be complained about as restraining management. But in fact, if
liberty is given to management to do the job right and they
abuse it, they can expect nothing else.
Meanwhile, with the Department having over 300,000
employees, a $140 billion budget that was immune to
sequestration, our veterans were abused. And I use that word
carefully. But I use it deliberatively. The number of pending
veterans benefits claims currently stands at 700,000. One of
the great abuses discovered in preparation for this hearing is
that the stated number is 400,000. Why? Because first we have
to delay and not do really anything for the first 120 or 125
days, and then we put them on the list.
So whether you say it is 700,000 waiting or 400,000 that
are clearly being abused by a backlog that no matter how much
money is thrown at it never seems to shrink, the Department
continues to fall short of its goals and as additional money
occurs, they simply have excuses. In fact, the Veterans
Administration missed its own target for processing claims by
approximately 100,000 last year. The number of appealed claims
has continued to rapidly grow to over 255,000. Other committees
have held hearings on the effects of those appeals claims, the
inaccuracy and the likelihood that appeal claims, if occurred
often enough, would be meritorious.
The Department's waste and its problems are primarily the
Committee on Veterans Affairs responsibility. However, with the
good work of the IG and the effects that we see of an IG doing
the right thing and not being able to get to the right answer
or in this case, 26 out of 49 IG recommendations remain
unfulfilled, this Committee has very little choice but to bring
up this issue and make it very clear that we will not take our
eyes off the Veterans Administration for any of their practices
until there is a belief there has been meaningful change in the
culture, as the Secretary has told us, in the culture that he
inherited.
With that, I will put the rest of my opening statement into
the record, and I thank the ranking member for his indulgence
and I yield.
[Prepared statement of Mr. Issa follows:]
Mr. Cummings. Thank you very much, Mr. Chairman.
I want to begin by thanking Mr. Griffin, Deputy Inspector
General at the Department of Veterans Affairs, for work he and
others at his office conducted with respect to conferences
hosted by the VA several years ago in Orlando, Florida. The
report you issued, Inspector, was comprehensive in identifying
problems at the VA. It made concrete recommendations to remedy
those problems.
You did great work and I want to make sure that you take
back our thanks to all those who work in your office and
contributed to this report.
Last November, the House Committee on Veterans Affairs held
a hearing on these issues, and reviewed the Inspector General's
report in detail. The Committee considered the significant
problems associated with the VA's conference review process.
And it examined many reforms that were being implemented to
ensure adequate internal controls and oversight. For example,
the VA has made significant changes in its conference planning
and oversight policies. One change was to clearly define
specific executives accountable for ensuring that conference
planning and spending was in compliance with regulations and
policies. In other words, to integrate the VA budget officers
into conference planning and to build in fiscal controls.
The VA also prohibited conferences that cost more than
$500,000 without a waiver from the Secretary and would require
approval from the Deputy Secretary for conferences that cost
between $100,000 and $500,000. The VA also established a
training support office to provide guidance to VA offices about
the applicable regulations and other requirements, and the VA
mandated additional training on travel and purchase cards.
The VA also held accountable employees who were involved in
the 2011 Orlando conferences. For example, the VA demoted the
Deputy Assistant Secretary for the Office of Human Resources
Management, removing her from the Senior Executive Service and
admonished then-Chief of Staff John Gingrich for his role in
authorizing the conferences. The dean of the Veterans Affairs
Learning University also resigned in response to the IG's
findings and other career employees have administrative actions
still pending.
VA officials also asked John Sepulveda, the Assistant
Secretary for Human Resources and Administration, to resign
when the Inspector General's report found that he abdicated his
responsibilities as the Assistant Secretary when he failed to
provide proper guidance and oversight to senior executives in
the operations of his organization.
The Inspector General's report also found that Mr.
Sepulveda falsely claimed he had no knowledge about a George
Patton parody video shown at the conference, although he later
revised his statement. I would have preferred to hear directly
from Mr. Sepulveda today about his actions, but I understand
that he will assert his constitutional right not to testify and
I will respect his right to do so.
For today's hearing, I believe it is important to hear from
our witnesses about steps that still need to be completed, to
fully implement the Inspector General's recommendations. For
example, I would like to hear about the status of a web portal
the VA plans to use to help collect information about
conference spending, which I understand is running later than
scheduled. I would also like an update on the status of a
handbook on conference planning, execution and oversight which
the Inspector General believes will satisfy many of the
recommendations that remain open.
I would also like to hear about VA's progress in meeting
benchmarks established by the Obama Administration for all
agencies. In November 2011, President Obama issued Executive
Order 13589, which required agencies to reduce their total
expenditures on travel and other items by 20 percent below
their 2010 spending. The next year, the Office of Management
and Budget issued a memorandum directing agencies to reduce
their travel budget even more, this time, by 30 percent, and to
maintain that spending level until 2016.
Finally, I want to thank our witnesses from the Department
for being here today. I know some of you are very new to your
jobs, Ms. Farrisee, I understand you have been serving in the
role of Assistant Secretary for Human Resources and
Administration for only about a month. Although you were not
here when these mistakes were made, the committee will look to
you to complete the implementation of the Inspector General's
recommendations and to prevent the waste that occurred in 2011
from being repeated.
With that, Mr. Chairman, I yield back.
Chairman Issa. I thank the ranking member. I might note
that Mr. Murray has been, as far as we can tell, in his
position since 2005. So perhaps the long-serving and the new
kid on the block will be a good combination for today.
All members will have seven days to submit opening
statements and extraneous information for the record.
I now ask unanimous consent that the Oversight Committee's
staff report entitled U.S. Department of Veterans Affairs 2011
Human Resources Conferences, a Culture of Mismanagement and
Reckless spending, be placed into the record. Without
objection, so noted, and copies will be distributed to all
members so they may use the material.
Mr. Cummings. Mr. Chairman, just one clarification. That is
the Republican report, is that right?
Chairman Issa. It is. If you have a minority report, I
would love to see it.
Mr. Cummings. We had no input in this report.
Chairman Issa. Did they have input? I just want to make it
a staff report for the majority.
Mr. Cummings. All right, thank you.
Chairman Issa. I would like to welcome our panel of
witnesses at this time and introduce the Honorable Gina
Farrisee, the Assistant Secretary of Human Resources and
Administration for the United States Department of Veterans
Affairs. Mr. Ed Murray is the Deputy Assistant Secretary for
Finance at the U.S. Department of Veterans Affairs, as we said,
since 2005.
The Honorable John Sepulveda is the Former Assistant
Secretary for Human Resources and Administration at the U.S.
Department of Veterans Affairs. The Honorable Richard Griffin
is the Deputy Inspector General for the U.S. Department of
Veterans Affairs. And his chief deputy, Mr. Gary Abe, is the
Deputy Assistant Inspector General for Audits and Evaluations
at the U.S. Department of Veterans Affairs, and I understand
the chief person responsible for this work.
Pursuant to the committee's rules, would you please all
rise, raise your right hands to take the oath. Do you solemnly
swear or affirm the testimony you are about to give will be the
truth, the whole truth and nothing but the truth.
[Witnesses respond in the affirmative.]
Chairman Issa. Please be seated.
Let the record indicate that all witnesses answered in the
affirmative.
When we begin, I understand that we will have Ms. Farrisee
and Mr. Griffin who will be doing the opening statements. I
understand, as the ranking member said, Mr. Sepulveda, that you
may not be willing to testify. Is that correct?
Mr. Sepulveda. That is correct [remarks off microphone].
Chairman Issa. Then we will go through the obligatory
questions with you before opening statements, we have no
intention on having anyone remain longer than appropriate.
Mr. Sepulveda, you have not provided us with any written
testimony today. Do you wish to make any opening statement?
Mr. Sepulveda. With all due respect sir, Mr. Chairman, on
the advice of my counsel, I respectfully decline to answer
based on my Fifth Amendment constitutional right.
Chairman Issa. Which is the privilege not to incriminate
yourself by answering, is that correct?
Mr. Sepulveda. It is the privilege to remain silent, sir.
Chairman Issa. Okay. It is our understanding from your
counsel that you may assert that constitutional privilege, and
you have. Mr. Sepulveda, today's hearing will address the
planning and execution of two Department of Veterans Affairs
conferences held in Orlando, Florida in 2011. As the Assistant
Secretary of Human Resources and Administration during the
period in question, you played a lead role in the conference
planning process. You were uniquely qualified to assist the
committee in the investigation into the waste that may have
occurred at this event.
Your name appears more than 80 times in the Inspector
General's report on the conferences. So I must ask you to
consider answering the committee's questions, and I am going to
ask you a few right now, to see if you will answer any
questions.
Mr. Sepulveda, you are no longer an employee of the VA. Is
that correct?
Mr. Sepulveda. On the advice of my counsel, I respectfully
decline to answer based on my Fifth Amendment constitutional
right.
Chairman Issa. Mr. Sepulveda, when did you resign from the
VA?
Mr. Sepulveda. Again, on the advice of my counsel, I
respectfully decline to answer based on my Fifth Amendment
constitutional right.
Chairman Issa. Mr. Sepulveda, are you currently receiving
full retirement benefits?
Mr. Sepulveda. On the advice of my counsel, I respectfully
decline to answer based on my Fifth Amendment constitutional
right.
Chairman Issa. Mr. Sepulveda, there was an article in the
Federal Times on October 1st, 2012, that discussed the
conferences that we are here to talk about today. The article
contained a statement attributed to you. The statement
addressed your resignation from the Veterans Administration.
The statement was ``I resigned because I did not want to be a
distraction to the Administration, Secretary Shinseki and the
VA, especially as they continue to work each day to address the
urgent needs of our Nation's veterans.''
Mr. Sepulveda, why did you resign from the Veterans
Administration?
Mr. Sepulveda. On the advice of my counsel, I respectfully
decline to answer based on my Fifth Amendment constitutional
privilege.
Chairman Issa. Mr. Sepulveda, is that statement attributed
to you in fact your statement?
Mr. Sepulveda. Again, on the advice of my counsel, I
respectfully decline to answer based on my Fifth Amendment
constitutional privilege.
Chairman Issa. Mr. Sepulveda, I am disappointed that you
are not willing to give a statement, but you were willing to
give a statement, apparently, to the Federal Times about your
resignation but you won't do so here today. Additionally, Mr.
Sepulveda, when the OIG investigators asked you whether you had
viewed the Patton video parody before it was shown publicly,
you answered no. Is that correct?
Mr. Sepulveda. On the advice of my counsel, I respectfully
decline to answer based on my Fifth Amendment constitutional
privilege.
Chairman Issa. Mr. Sepulveda, I have many more questions on
this list. But it appears as though you will answer no
additional questions. Is there any question I can ask you today
that is germane to our discovery that you are willing to
answer?
Mr. Sepulveda. On the advice of my counsel, I respectfully
decline to answer based on my Fifth Amendment constitutional
privilege.
Chairman Issa. Okay. In that case, I won't say you are
excused, you are dismissed.
Mr. Sepulveda. Thank you, Mr. Chairman.
Chairman Issa. You are most welcome.
We will take a very short recess just so they can reset and
remove his name plate.
[Recess.]
Chairman Issa. This really does look like a divide now
between the IGs and the Administration, but we will leave it
this way to be expeditious.
We now continue with our hearing, Ms. Farrisee, such time
as you may consume, but if you can, stay at approximately five
minutes.
STATEMENT OF THE HONORABLE GINA FARRISEE
Ms. Farrisee. Good morning, Chairman Issa.
Ranking Member Cummings and distinguished members of the
Committee on Oversight and Government Reform, thank you for the
opportunity to be with you today to discuss the Department of
Veterans Affairs commitment to transparency, oversight and the
training of its employees to deliver the highest quality
service to our Nation's veterans, family members and survivors
while ensuring the accountability of taxpayer funds.
I am joined today by Edward Murray, Deputy Assistant
Secretary for Finance in the Office of Management. Sitting
behind me are Jack Hammer, Senior Advisor and Ford Heard,
Associate Deputy Assistant Secretary for Procurement Policy,
Systems and Oversight, Office of Acquisitions and Logistics.
I know that many of you are interested in talking about the
2011 human resources training conferences held in Orlando, the
issues identified by the VA Inspector General and about what
our Department has done over the last year to ensure that such
issues do not occur again. Having taken this position last
month, I was not with VA last year when the VA began
implementing corrective actions to further strengthen oversight
of training conferences. But I and my accompanying witnesses
look forward to discussing the results of the reforms and
reviews VA has conducted.
While the findings of the report were troubling, we also
recognize the critical importance of VA training. The IG report
states that VA's human resources conferences in Orlando were
held to fulfill valid training needs and that they offered
legitimate, substantive training courses. Making clear they
were focused on legitimately required training is not in
question. Learning of the event's failures only makes more key
the fact that VA's mission, to serve our veterans, must be at
the core of our work all of the time, including when we are
planning attending and managing training conferences.
VA began taking actions immediately after learning of the
IG's report. In September of 2012, VA issued a revised training
conference planning oversight policy. This policy established
new standards to ensure senior executives exercise due
diligence in the planning, execution and management of their
sponsored training conferences. In summary, this policy demands
three things. First, every training conference will have a
point of accountability at the senior executive level. Second,
each training conference will have four phases: concept,
development, execution and reporting, each with its own
objectives, metrics and standards of execution to ensure value
and accountability. And third, a new training support office to
assist VA employees in meeting our new reporting requirements.
This policy ensures greater oversight over each training
conference. If the training conference is estimated to cost
over $20,000, the policy requires the appointment of a second
senior official to ensure that the training conference is
executed in accordance with policy, and that the costs are
approved by the administration or staff office.
These duties carry through the training conference as the
official must certify that the training conference was executed
appropriately after its completion. VA's administration and
staff offices have engaged in a re-examination of the methods
that we use to train. VA is leveraging current capabilities,
such as video-teleconferencing, our online training portal,
known as our talent management system, and the VA national
telecommunications system, to cut costs. In fiscal year 2012,
one organization with VA alone realized $33 million in cost
avoidance as a result of increased usage of those systems, an
increase of 29 percent usage from 2011.
The September 2012 policy strengthened the development of
business cases that must be prepared in advance of a training
conference. The sponsor must show the training conference is a
part of a strategy to develop employee skill sets and then
measure outcomes to help develop more relevant and focused
training in the future.
As a result of surveys conducted after the Orlando training
conference, we learned that 75 percent of supervisors stated
that their employees' job performance had improved after the
training conferences. Continuous workforce training and
development are absolutely critical to delivering the timely
quality VA care and services our veterans have earned and
deserved.
Our Department's mission and sacred obligation are to honor
and best serve our veterans, their family members and
survivors. Incumbent in that mission is the non-negotiable
requirement to manage our resources carefully and ensure that
there is always appropriate oversight and accountability for
our taxpayers' dollars.
Mr. Chairman, the VA panel and I will be glad to answer
questions from you and other members of the committee this
morning. Thank you.
[Prepared statement of Ms. Farrisee follows:]
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Chairman Issa. Thank you.
Mr. Griffin?
STATEMENT OF THE HONORABLE RICHARD J. GRIFFIN
Mr. Griffin. Mr. Chairman, Ranking Member Cummings and
distinguished members of the committee, thank you for the
opportunity to provide testimony today and for your continued
support of the work of the men and women of the VA Office of
Inspector General.
Today marks the 61st time over the past six years that IG
managers have provided Congressional testimony. During these
hearings, we have covered a wide variety of challenging topics,
including mental health program management, military sexual
trauma, IT security and protecting veterans' private
information, physician staffing standards, VBA claims
processing issues and internal controls for VA fee-basis
payments.
In addition to these hearings, featuring the work of our
Audit and Health Care staff, our investigative team in fiscal
year 2013 made 498 arrests, including a former VAMC director,
for wire fraud, bribery and conflict of interest, a fiduciary
who stole $2.35 million from 54 veterans, and a service
disabled veteran-owned small business fraud of $6 million, to
include a kickback of $1.2 million to a VAMC engineer.
In addition, our Office of Investigations achieved $718
million in fines, penalties, restitution and civil judgments.
During fiscal year 2013, our Office of Contract Review reported
monetary benefits of $678 million in potential cost savings and
recoveries. Overall, monetary benefits for fiscal year 2013
were $3.6 billion, representing a return on investment of $36
for every $1 in the IG budget.
Our hot line handled 27,000 contacts generating more than
1,225 open cases. It was actually a contact with our hot line
in April of 2012 that triggered our review of the Orlando
training conferences.
As you know, our report identified eight issue areas as
follows. Number one, VA leadership failed to provide proper
oversight. Number two, VA employees improperly accepted gifts.
Number three, HR&A exceeded chief of staff authorization for
the conferences. Number four, VA inappropriately conducted pre-
planning site visits. Number five, lack of accountability and
control over conference costs. Number six, inadequate
management of inter-agency agreement terms and costs. Number
seven, contract violations and lack of oversight led to
excessive costs and illegal and wasteful expenditures. And
finally, number eight is the inappropriate use of government
purchase cards.
To address these shortcomings, we made 49 recommendations
to the VA secretary, who agreed to take corrective actions. Mr.
Chairman, this concludes my statement. Mr. Abe and I will be
pleased to answer any questions the members may have.
[Prepared statement of Mr. Griffin follows:]
[GRAPHIC] [TIFF OMITTED] 86194.014
[GRAPHIC] [TIFF OMITTED] 86194.015
Chairman Issa. Thank you, and I think we will have a great
many questions.
My opening question, Ms. Farrisee, as I said in my opening
statement, the Secretary told me many years ago that he
inherited a culture that he had to change, a culture that he
had not encountered in the U.S. military and was shocked that
it existed in the premier agency to take care of U.S. military
after they leave active duty.
In your short time, have you observed problems inherent in
the attitudes at Veterans Affairs that are part of activities
such as waste, such as the seemingly impossible task of ever
catching up to the backlog and the backlog's backlog?
Ms. Farrisee. Mr. Chairman, in my short time, I have not
noticed this. What I have noticed is that people seem to
understand very clearly that there have been more processes put
in place, that there is a requirement for accountability in
this Department. And they also understand why that has
happened, recognize it.
Chairman Issa. Let me follow up, then, because you have
only been on board since your confirmation in September. Mr.
Murray has been on board a long time. If I told you you had to
produce a handbook and you agreed to do so, and you spent
millions of dollars every month without that handbook and you
came before Congress and you told us about all these things
that sound like they are right out of a handbook, would you be
surprised that my question to you is, why did your organization
miss an agreed-on deadline to produce a handbook? And how hard
can it be to produce at least a draft handbook so guidance can
be available while millions of dollars are being spent every
month?
Ms. Farrisee. Mr. Chairman, the guidance that came out in
September 2012, the policy that the Secretary rushed to ensure
was put out as soon as he was advised of the IG's
recommendations in August of 2012, is the current policy that
has been----
Chairman Issa. But where is the handbook?
Ms. Farrisee. The handbook is still in development, and it
will----
Chairman Issa. Where is the handbook? Can you make a copy
of the draft of the handbook to us so we can see how much work
product has gone on? We are talking about millions of dollars
being spent every month. We are talking about a kind of a,
maybe almost inappropriate way to reduce travel by saying we
are going to cut it 20 percent, when in fact, the right number
might be 80 percent, and is unlikely to be 20 percent.
The question is, will you make available to this committee
all draft materials related to this handbook that are in place
as of today, so we can understand why it is so hard? You
understand most companies produce a handbook almost immediately
so as to limit litigation. In the HR business, handbooks of
conduct are routine. And yet this seems to be so vexing that
Mr. Griffin ha to say he doesn't, I suspect he will say, he
doesn't understand why it is so hard to get it out.
Do you have a note there?
Ms. Farrisee. I do, Mr. Chairman. It says the handbook was
made a part of our response.
Chairman Issa. Handbook draft?
Ms. Farrisee. Draft.
Chairman Issa. And that is current as of today?
Ms. Farrisee. As of today. And it will not be complete
until, our goal is December.
Chairman Issa. December. That is a lofty goal.
Mr. Griffin, you made, the IG overall, you made 49 or so
requests. Some of the most important ones, 20 some, 26 or so,
are unkept to date. Can you find a valid reason that this could
not have, there could not be greater implementation or at least
partial implementation as of today?
Mr. Griffin. I can't speak to the level of effort that has
been brought to bear against the 49 items. I can say that in
the area of the personnel actions that we thought were in
order, all but two of the people that we felt should have some
personnel action taken have in fact been completed.
Chairman Issa. But personnel action in this case represents
no loss of pay, people either retired or are still being paid,
they simply don't have the jobs they had, is that correct?
Mr. Griffin. That is a decision that is made at the
Department, Mr. Chairman.
Chairman Issa. And I appreciate it, and you are very
important to it. But I just wanted to make sure I explained it
simply. In this case, like in every other case, practically,
nobody gets fired in the sense that the private sector
understands it. Everyone still gets a pay unless they choose to
retire, then they get their retirement pay. So no one lost a
day's pay as a result of their failures to protect millions of
dollars of the taxpayers' money as far as you know, is that
correct?
Mr. Griffin. That is correct.
Chairman Issa. Okay. My time is expiring, but I would like
to have the second video, not the Patton, but the other video
quickly shown, to get it into the record. And then we will
immediately go to the ranking member. I want to note that this
has been edited to make it shorter, but it is all original
material. And I want to thank the IG for their efforts to get
us as much material as they have.
[Video shown.]
Chairman Issa. I repeat again General Shinseki's statement
that there is a problem with the culture. I yield to the
ranking member.
Mr. Cummings. The Inspector General's report stated that
more than a year after the Orlando conferences, VA was unable,
Inspector General, to account for all conference costs. The
VA's original estimate was that the two conferences cost $5.8
million. But when the Inspector General's office reconstructed
the expenses, they found about $300,000 in additional costs. Is
that right?
Mr. Griffin. That is a partially accurate description.
There were actually eight or nine different attempts to come up
with a number by the Department. We came up with the $6.1
million figure as the best we could determine based on the
available records that VA had.
Mr. Cummings. So did the VA know how much the conferences
cost?
Mr. Griffin. No.
Mr. Cummings. And why do you think that was? It seems as if
you are doing conferences, you logically keep some type of
accounting. You look at your bills, you look at your invoices
and whatever. Can you try to explain as best you can, first of
all, the difference between what you found and what they were
saying, and then why it is and what recommendation did you make
to go to that problem?
Mr. Griffin. There were a number of different issues that
led to the eventual lack of oversight and the lack of having an
ability to come up with a precise figure. The original budget
numbers that were presented to the chief of staff that he
approved changed radically. The number of people to be trained
was moved down by 1,200. It was supposed to be 3,000 for $8
million; it became 1,800 were going to be trained. And based on
a service level agreement that was executed a month before the
hearing, the total cost was projected to move up to $9.3
million.
The problem is, no one was in charge. It was an HR
conference. Accountability started with the Assistant
Secretary. There are two SES employees, and between the three
of them, they never had a single meeting to discuss the
conference planning, conference costs, et cetera.
So the budget that the chief of staff signed off on, after
that day, it vanished. There was no spend plan, there was no
cost tracking. There were credit card purchases made above the
authorized contract level of the purchaser. One individual made
10 purchases that had a value of over $100,000 when his
contract didn't allow him to make purchases above $3,000.
Mr. Cummings. Well, did they have a budget?
Mr. Griffin. They had a dollar figure that they put in
front of the chief of staff. But after that, no one paid too
much attention to it.
Mr. Cummings. Well, Mr. Murray, according to the VA's
September 2012 memorandum, VA offices involved in planning a
conference were mandated to fully integrate their budget
officers into conference planning decisions in order to ensure
fiscal discipline. Can you tell us whether this has been
implemented and discuss what difference it makes to the
conference budgeting process? And do they have budgets now?
Mr. Murray. Thank you, Representative, for that question.
Indeed, they do. A conference certifying executive now has
to review the business case, the rationale, the outcomes for
any proposed conference. If it is above $20,000, a second
executive has to serve as the responsible conference executive
and certify and affirm those costs in writing in an after-
action report.
So I feel that the discipline is very strong in the process
now. I might add that my expectation, and I do this every day
with the auditors, because we get an external audit, and we
have 14 clean audit opinions, which may surprise some. But
fiscal officers, accounting professionals, budget officers are
required to keep documentation to support transactions, whether
they are a travel obligation, a travel transaction, a contract
transaction, you name it, purchasing, payroll. But it is in
place now, Representative.
Mr. Cummings. And finally, let me ask you this. The 2012
memo also directed the creation of a web-based portal in order
to ``accomplish the data collection and reporting activities
associated with conference activity by October 1st, 2012.'' Has
that been taken care of?
Mr. Murray. That automated portal is not complete. We are
collecting the data. But the portal that actually collects the
data is not complete.
Mr. Cummings. It is already a year after the deadline. What
is the problem?
Mr. Murray. We are working with the Office of Information
Technology on the portal.
Mr. Cummings. When do you expect it to be done?
Mr. Murray. We will have to get back to you.
Mr. Cummings. Can you give us something in writing with a
date that you expect it to be done? We are already over a year
late. And it just is a bit much. I think we can do better.
Thank you very much, Mr. Chairman.
Mr. Mica. [Presiding] I thank the gentleman and recognize
myself for five minutes.
Ms. Farrisee, you weren't there while this took place,
right?
Ms. Farrisee. No, I was not.
Mr. Mica. Mr. Murray, you were there when this took place?
Mr. Murray. I was, sir.
Mr. Mica. And what is your title? It looks like it is
Deputy Assistant Secretary for Finance?
Mr. Murray. Yes, sir.
Mr. Mica. So you were overseeing Finance for VA during this
period when this took place?
Mr. Murray. Yes, sir, I was Deputy Assistant Secretary for
Finance.
Mr. Mica. This is a list, Ms. Farrisee, of 25 pages, 399
conferences, $86.5 million that was spent. Mr. Murray, are you
aware of this, in 2011, for conferences? Were you aware that
this was taking place?
Mr. Murray. We were aware there were a lot of conferences.
Mr. Mica. Ms. Farrisee, did they need 399 conferences and
spend almost $87 million, VA?
Ms. Farrisee. Congressman, I can't answer if they needed
them. I wasn't there.
Mr. Mica. Well, again, right now, for the first nine months
of 2012, I have the information you spent $7.5 million for nine
months. Would that be a little bit more in line with what you
would recommend?
Ms. Farrisee. Congressman, I think you have to look at the
type of training that was being done at the time.
Mr. Mica. Again, you, so far nine months this year, you
spent $7.5 million and they spent $87 million for this entire
year. Again, outrageous.
I think the American people are sort of fed up with this.
These are the $20,000 drumsticks from GSA that they spent. We
had the guy in the hot tub with the conference in Las Vegas
thumbing his nose. Then we conducted the IRS, we had the
squirting fish that cost thousands of dollars and gifts to
employees. Now we have VA.
I have no problem with a conference in Orlando. I don't
represent the tourist area, but north of there. No problem with
the conference in Las Vegas, where GSA got in trouble. It is
the spending and the amount of spending that goes on.
Now, you testified, Inspector General, that people accepted
gifts, right? And three resigned. I am told also that there
were $43,000 in bonuses to conference planners. Is that
correct? I can't hear you. For the record?
Mr. Griffin. That is correct.
Mr. Mica. And there are still people here, Mr. Murray was
there, and he was somewhat in charge of finances, paying the
bills for this while it went on. Many continue, who were
involved, many continue to receive salary and benefits. Would
you say that is correct, Mr. Griffin?
Mr. Griffin. That is correct.
Mr. Mica. Now, they spent almost $100,000 in gifts. This is
$20,000 outrageous--bring the teddy bear in. Am I correct, was
it over $97,000 in gifts for employees and trinkets and stuff?
Mr. Griffin. That is correct.
Mr. Mica. And were some rewarded with, now I am told that
this is the teddy bear, told that some were rewarded with big
stuffed teddy bears, maybe not this one, but is that correct?
Mr. Griffin. I can't speak to that, sir.
Mr. Mica. The information that we have is this is one of
the prizes that was given. So taxpayers not only paying for
drumsticks, squirting fish and now with VA teddy bears. It is
absolutely outrageous that again, people are sending their
money to Washington asking us to be good stewards. And
particularly offensive for the Veterans Administration, where
we should be spending every penny for our veterans. So I am
offended by this.
And then the Cleanup Act is almost just as offensive. When
you were made aware of this, what did they do, Mr. Murray? They
hired some contractors to look at the spending, is that
correct?
Mr. Murray. There were contractors hired.
Mr. Mica. Two contractors. One got about $188,000 and the
other over $200,000, right?
Mr. Murray. Correct.
Mr. Mica. Four hundred thousand dollars to look at the
spending. Outrageous spending to look at the outrageous
spending. Do you think this is in line? We had the Inspector
General look at this. You offered what, 49 recommendations for
improvement, right?
Mr. Griffin. That is correct.
Mr. Mica. And how many have been implemented? I understand
about half. Is that right, Ms. Farrisee?
Ms. Farrisee. Congressman, yes, the personnel actions were
complete.
Mr. Mica. About half.
Ms. Farrisee. And the directive and the handbook will
complete it.
Mr. Mica. What did you do with the $400,000 worth of
reports that were paid for, contractor reports, to look at the
spending of the spending?
Ms. Farrisee. Those reports were actionable to how we
complete our policy. It was an objective review that was
completed by an outside organization to look at all of VA, and
not just look at HR&A.
Mr. Mica. Now, some people are going to have, isn't there
at least one criminal referral, Mr. Griffin?
Mr. Griffin. There was a criminal referral and it was
declined for prosecution by the Department of Justice.
Mr. Mica. So that person is not going to be prosecuted.
Mr. Griffin. That is correct.
Mr. Mica. And we had one witness here who refused to
testify, of three who were implicated in wrongdoing. I believe
that was accepting gifts also, is that right?
Mr. Griffin. That is correct, on the one that we had the
declination. He accepted a number of gifts.
Mr. Mica. All right. Again, it is sad, I know my members
feel the same way, when you see the waste at GSA, IRS, and now
VA. It is pretty offensive to us, to taxpayers and particularly
today our veterans.
Let me recognize now Ms. Norton. Mr. Lynch, I am sorry. We
will go to Mr. Lynch if you are ready.
Mr. Lynch. Sure, thank you, Mr. Chairman. And I want to
thank the witnesses for coming forward and helping the
committee with its work.
I do realize that this is a 2011 conference and that there
was an extensive investigation previously done by the Committee
on Veterans Affairs. So this is not exactly a timely hearing.
But it does point out some examples of waste, fraud and abuse
that this committee is certainly charged with responsibility to
eradicate.
I have to say, though, that I have three VA facilities in
my district. I have the Brockton VA Hospital, I have the West
Roxbury VA Hospital, and I have the Jamaica Plains VA Hospital.
And I am a frequent flyer to my VA hospitals. I visit them on a
regular basis as well as Walter Reed and Bethesda. The people
that I see there that care for our veterans on a daily basis
are not at all reflected in the investigation that is ongoing
here.
It is sad, I agree with the chairman's statement, it is sad
to see the allegations on the VA in a broad stroke. I would
hate to think that the American people think that my doctors,
my nurses, my staff, my therapists who are working at the VA
hospitals, their services are indicative of what we are hearing
today. It is not.
The doctors, the nurses, the staff, the therapists at the
VA, in the city of Boston, they are staying and working at the
VA, number one, a lot of them are veterans. As I go through the
corridors of those hospitals, a lot of the folks that are
serving our veterans, and especially those coming back from
Iraq and Afghanistan, as well as a lot of World War II veterans
who have never in their life had to rely on the VA, but do now,
Korean War veterans, Vietnam veterans, those docs, those
nurses, those staff, therapists, they are working for less than
what they could earn if they walked across the street and
worked at a private hospital in the Boston area. There are some
hospitals there that are very generous in their benefits and
their pay.
But our VA employees, they do the right thing because they
believe in their service. They are intentionally staying at the
VA so that they can, we all want to spend our lives in a
meaningful cause. I think that a lot of our VA employees do so
because they believe deeply in serving our veterans, and they
do so for all the right reasons.
It pains me greatly to see the administration of the VA
caught up in this crap and diminishing the excellent service of
those employees at the VA. That is what pains me more than
anything.
Now, I know that the VA adopted a lot of the
recommendations of the Office of Inspector General, and I am
happy to see that. And there is a problem here. I am not trying
to sugarcoat this at all, there is a problem here. And we have
to make sure that the way the VA is administered at the top is
reflective of the way those docs and nurses and therapists
serve every single day in the VA hospitals and the VA
facilities around this Country and indeed reflect the honor and
the dignity that is due to our veterans. That is the bottom
line here. That is the bottom line. The job that is being done
at the VA should be reflective of the dignity and the sacrifice
and the noble intent of those who have served.
And this is such a departure. It is disgraceful. It is
disgraceful. So we have to get at this thing. I know some heads
have rolled, and that is good. They deserve to go. There is a
real disconnect between the wonderful, gracious, noble service
of our veterans and what is going on that we are uncovering in
this hearing. I think it is a disgrace.
So I think the administration of VA should take a look at
their VA hospitals, look at the people who are working there,
look at the dignity and the sacrifice and the dedication that
they exert in caring for our veterans. And look at the veterans
who are lying in those hospital beds.
The VA administration ought to go visit, they ought to make
it mandatory, if you walk through maybe once a week, a couple
of times a month, walk through that VA hospital so you know who
you are working for. I think that would change your attitude
100 percent, if you know who you work for. Because those are
America's best, those are America's best who did what they did
for all the right reasons. And the service of the VA should be,
as I say, reflective of that wonderful service.
Mr. Chairman, I yield back.
Mr. Mica. I thank the gentleman. I am going to ask
unanimous consent of myself and the committee here to put these
figures in, which I did. I just want the members to know what
you are doing today and what you have done to date, the
results, the GSA spending went from $37 million in 2010 to $4.9
million on conferences. GSA from $10.9 million to $1.3 million
last year. And then we heard today from nearly $87 million to
$7.5 million so far. So these hearings are having an impact.
Without objection, this will be made part of the record.
Mr. Mica. Let me recognize Mr. Walberg.
Mr. Walberg. I thank the chairman. And it is important work
that we are doing, and I think it is good that you mention
those figures and the changes that are taking place. It is kind
of ugly work, as well that we do, but it is necessary.
Especially in context, and I certainly would identify my
thoughts and emotions with the previous member, Mr. Lynch,
about the concern of what is taking place here.
Ms. Farrisee, I certainly wish you all the best in
attempting to lead to get to the bottom of this and deal with
the recommendations, all 49 of them, plus any more that would
be helpful, that will go on.
The number two concern that is brought to my district
office and my office here in Washington from my citizens back
in my district are VA issues, and the frustration that we
continue to have with the backlog that makes it difficult to
get the information necessary or the records necessary for our
veterans that are expanding with the present war situations
that we are in. And I too have the privilege to visit veterans,
wounded warriors at Walter Reed then back in my district at the
Ann Arbor VA Hospital, and see the care that they are receiving
that is second to none, and the quality upgrades of facilities
that are taking place.
So to think that we are wasting resources, not on necessary
planning and upgrading of skills, but on things like we have
had come across our desks in recent history with departments
that are spending for videos of Dr. Spock, and now we see a
parody of Patton, and an attempt to get the Washington Redskins
cheerleaders for the event. It is just--it shouldn't happen.
I would like to queue up an email that specifically refers
to one of the lead planners of this conference and her
concerns. And especially stated, if that email could be queued
up, if you will notice that she expresses concern, where she
says, obviously the money is not an issue. That is a stark
statement when we talk about $6.1 million spent on this
conference, while the VA is exempted from sequestration because
of our concern that veterans' issue be addressed. When we add a
$1.6 billion increase to deal with the backlog, that right now
is at over 700,000 benefit claims, backlogs, some in my
district, Ms. Farrisee, why were conference planners
unconcerned with budgetary constraints, from what you have
found out in your short period of time already?
Ms. Farrisee. Congressman, I believe there was a lack of
leadership and oversight in any kind of good direction and
purpose given to the planners.
Mr. Walberg. Is this from what you have seen so far, an
overarching attitude toward spending throughout the Department?
Ms. Farrisee. Congressman, no, it is not. I have seen the
policies put into place and the accountability that now exists
at the Department.
Mr. Walberg. A second slide I would like to point out was a
concerned employee who stated, ``Please know that I am willing
to help where I can, but the scope of the kickoff has grown
immensely and the work necessary to ensure that kickoff is a
success is beyond what I can balance with my regular work.''
Why were planners allowed to forego their normal work tasks
for the Department in favor of planning conferences?
Ms. Farrisee. Congressman, I can't answer that question,
because I was not there. But I will go back to, I do not think
there was good leadership, oversight on what was happening. I
do not think that the leadership even knew at these levels
everything that was happening.
Mr. Walberg. Were they ever told? Were employees ever told
that they were to forego work? Have you found that to be the
case?
Ms. Farrisee. I have not found that to be the case. But I
do not know what happened during this time, Congressman.
Mr. Walberg. Again, 717,000 backlogged, benefit claims
backlogged. There is work to be done, and that does not send a
positive message.
Mr. Griffin, I would ask you a question relative to the 49
directives. I would assume the majority of those are considered
high directives. There are 26 as far as the first of this month
that we know of that have not been addressed.
Could you describe the potential cost savings that could
come about by addressing these 26 unmet directives that have
been given for priority improvement?
Mr. Griffin. I think what our work was able to demonstrate
for these two conferences was that there was at least $762,000
that could have been used for better purposes than trinkets and
some of the other excesses that occurred. The application to
other VA conferences, clearly, there is money to be saved. I
think some of the numbers that were mentioned by the chairman
reflect that there has been a huge reduction in conference
spending this year.
Mr. Walberg. Significant, significant reductions.
Mr. Griffin. Frankly, the September 2012 memo from the
chief of staff was very thorough. I thought it was aggressive.
We just need to get to the finish line, get the book published
so everybody has it. There is a certain protocol and process
that it has to go through to put a handbook on the street in
VA. We need to finish that to make sure that all the good plans
get enacted.
I did think that the memo of the end of September, which
was issued a couple of days before the release of our report,
was an aggressive attempt to reign in costs. I think it
addressed one of the principal shortcomings in the HR
conferences, in that nobody was in charge.
Mr. Mica. I thank the gentleman. The gentleman's time is
expired.
Mr. Davis?
Mr. Davis. Thank you very much, Mr. Chairman. Let me first
of all associate myself with the remarks made by Mr. Lynch and
Mr. Walberg relative to the services of VA medical facilities.
I have two in my district, Hines VA in Hines, Illinois, closely
affiliated with Loyola University Medical Center, where they
provide, both combined, some of the best medical care in the
world for any person, certainly the veterans that they serve. I
also have the pleasure of having the Jesse Brown VA Medical
Center, which is named for the former Secretary, who had a very
distinguished career in both the military and as Secretary of
Veterans Affairs in his service to the Country.
So we certainly want to extol the virtues of those
facilities and what they do. I think it is most unfortunate
that this kind of hearing is necessary.
Mr. Griffin, let me ask you, the IG report highlights
inappropriate and unauthorized use of government purchase cards
to spend more than $200,000 on the two 2011 conferences.
Basically, when conference planners wanted to spend money on
the conferences, they just charged it to their government
credit cards, even when they went over their authorized limits
and didn't have approvals. Is that correct?
Mr. Griffin. Yes, sir.
Mr. Davis. And at least seven employees did this?
Mr. Griffin. I am sorry, how many?
Mr. Davis. Seven?
Mr. Griffin. Yes.
Mr. Davis. The report also indicated that the primary event
planner was able to circumvent his $3,000 purchasing limit by
making ten separate purchases totaling more than $100,000. Is
that correct?
Mr. Griffin. That is correct.
Mr. Davis. Can you explain how this employee was able to
circumvent Federal and VA acquisition regulations?
Mr. Griffin. There is supposed to be a review process in
place where someone looks at purchase card activity and makes
sure that, first of all, the purchase is for the purpose of
serving our Nation's veterans and not for something else. That
review process is supposed to happen to every cardholder. But
if you have a card and you have a contract that says you are
not authorized to make a purchase over $3,000, and you do
anyway, the vendor doesn't know that VA put a $3,000 limit on
you, they will just take your card and hit it for $10,000.
The problem is that in actuality, the person you are
talking about, his contract was not even valid because he had
moved from Veterans Health Care over to this new assignment,
and his authority didn't transfer with him. It is one of the
areas that the Department is addressing to tighten down.
Frankly, we are doing some additional work in the area of
purchase cards, to make sure that things are in order.
Mr. Davis. Ms. Farrisee, let me ask you, what has the
Department done, what is the Department doing to correct this?
Ms. Farrisee. Congressman, I am going to turn that over to
Mr. Murray from the Finance Office.
Mr. Murray. Thank you for that question, Representative.
What we did, upon immediately learning that this had occurred,
and let me be clear that there was an approving official that
should have reviewed each of those purchases and signed off of
them, as well as a more senior agency program coordinator that
should have looked at those purchases. So it was quite
dismaying, disappointing. I think we were as shocked as anybody
that it occurred, that that many folks could do the wrong
thing.
But what we did immediately was not just look at the HR
purchase card transactions, we looked at the entire Department
of Veterans Affairs purchase cards transactions. We immediately
got with the Office of Acquisitions, and we said, we need to
know definitively who has the elevated purchasing authorities
and who does not. And for those who do not have those elevated
purchasing authorities, we check every Monday, and if they
don't have it, we reduce those cards to the $3,000 micro-
purchase limit.
So the oversight controls went strong, went quick, went in
fast.
Mr. Davis. Thank you very much.
Let me just ask Mr. Griffin, did you find these steps to be
adequate?
Mr. Griffin. I haven't reviewed the entire response in that
area. I am not sure if our follow-up team has felt like it
meets the requirement of the recommendation or not. But I would
be pleased to give you an answer for the record.
Mr. Davis. Thank you very much. And thank you very much,
Mr. Chairman.
Mr. Mica. I thank the gentleman, and we will be keeping the
record open. We will have an announcement on that later.
Mr. Farenthold?
Mr. Farenthold. Thank you very much, Mr. Chairman.
I have been actively involved in conference over-spending
and have actually sponsored bills with respect to this. But the
VA spending on conferences to me seems more egregious than any
of the others, especially when you look at the backlog of
claims some of our veterans are facing. We are looking at
717,000 backlogged claims, in excess of 125 days in some cases.
So I am going to digress for a second on those backlogged
claims to set the stage for some conference questions.
Secretary Shinseki sought to blame the claims backlog on the
government shutdown when he testified before Congress on
October 9th. And I would like to ask you, Ms. Farrisee, is it
true that the Department only furloughed 4 percent of its
employees during the government shutdown?
Ms. Farrisee. At the time of the shutdown, yes, there would
have been more employees furloughed had the government not come
back.
Mr. Farenthold. Let me ask Mr. Murray, since you are the
finance guy. The VA has been pretty much exempted from cuts and
sequestration, is that correct?
Mr. Murray. It depends on the program. For instance, we did
furlough OIT, information technology employees.
Mr. Farenthold. Isn't it true that Congress has pretty much
met every request from the Department to increase its funding
to process the backlogged claims? I believe the Department
actually received around $300 million in the continuing
resolution that would have ended the shutdown. So it seems the
VA has the money to reduce the backlog of claims. Why haven't
we seen a significant decrease? Where do we see this problem
getting solved? Ms. Farrisee, I will let you take a stab at
that.
Ms. Farrisee. Congressman, the Secretary's goal is 2015 for
the backlog on those records. They have made significant
progress. They have used the use of overtime, they have trained
the employees, training is critical to the mission. Training is
critical to us being able to continue to move forward.
Mr. Farenthold. Let us talk for a second about overtime.
During this process, and during these investigations into the
conference spending, the committee found that Department
employees received overtime pay for days in which they
participated in activities entirely unrelated to the
conferences. I have a problem with overtime to plan the
conferences to begin with, but we are looking at helicopter
rides and spa treatments. Wouldn't that overtime have been
better spent on employees who are actually processing veterans'
claims?
Ms. Farrisee. Congressman, you are absolutely right, that
is extremely disturbing. I would expect my leaders in the
future to have and execute good fiduciary responsibilities.
Mr. Farenthold. Earlier this year the House passed H.R.
313, the Government Spending and Accountability Act of 2013,
which caps non-military spending on conferences and requires a
detailed itemized report on Federal conference spending. That
bill is designed to ensure that conferences are for training
and work purposes, rather than taxpayer-funded vacations. It
also adds transparencies and measures to remove loopholes from
the President's Executive Order 13589 entitled Promoting
Effective Spending.
Earlier this year, I sponsored that bill, and it was
passed. Unfortunately, it appears at least in this case, and
this s before the VA people lost sight of what the purposes of
these conferences were, for training. And we have no itemized
expense report. Mr. Griffin, you have testified you don't think
there is a way to actually find out how much was spent, is that
correct?
Mr. Griffin. We did the best we could to review available
receipts, and that is where we came up with the number. But we
are not confident that that is 100 percent of the expenses.
Mr. Farenthold. Ms. Farrisee and Mr. Murray, don't you
think it is important that we keep detailed information on what
we are spending the taxpayers' money on?
Ms. Farrisee. It is extremely important, and the new
policies that were put into place in 2012 will allow us to keep
this information. When the handbook and directive are out, that
will complete that. But we have been doing that kind of
accountability.
Mr. Farenthold. And I understand you all are working on a
web portal for some of this information. Do we have any idea
what that is costing? We are not going into the healthcare.gov
$600 million range, are we?
Mr. Murray. I do not, but we can take a look at that.
Mr. Farenthold. It seems the government has a bad habit of
spending a little bit too much money on websites. That being
said, is there a process in place to try to move some of this
training that is done at these high dollar conferences to
online? You look at what the general trend is in the training
community now, you look at sites like Lynda.com,
totaltraining.com, you have gotomeeting and Google hangouts,
all sorts of opportunities to do this online. Can you give me a
quick overview of what you all are trying to do to move more of
this stuff online?
Ms. Farrisee. Congressman, yes, you are absolutely right.
We have a talent management system which has numerous courses
online. We do webcasts, we do other virtual blended training.
And we are looking into the future to continue to do more of
that training, because we absolutely agree, training can be
accomplished in other forms.
Mr. Farenthold. I see that my time is expired.
Mr. Mica. I thank the gentleman and recognize the gentleman
from Virginia, Mr. Connolly.
Mr. Connolly. Thank you, Mr. Chairman. By the way, you
looked really good with that teddy bear up there. Very nice.
Mr. Mica. Anything is an improvement. Thank you.
[Laughter.]
Mr. Connolly. Ms. Farrisee, Tammy Duckworth, Congresswoman
Duckworth, wanted me to point out that you are here after a 30-
year career in the United States Army, retiring as a major
general, is that correct?
Ms. Farrisee. Yes it is, Congressman.
Mr. Connolly. On behalf of certainly Congresswoman
Duckworth and myself and I know my colleagues, thank you for
your 30 years of service in the U.S. Army to your Country.
Ms. Farrisee. Thank you. It has been my privilege.
Mr. Connolly. Let me ask a question of, well, first of all,
Mr. Murray, you answered something to Mr. Farenthold on
furloughs. He asked whether only 4 percent of the veterans
workforce was furloughed and which parts were furloughed. And
you answered, OIT people.
Mr. Murray. Right. Actual furlough notices did go out to
our information technology people, not all of them, not the
ones that were actually at the medical centers, but some that
did not meet the necessary implication, the high bar, were
furloughed.
Mr. Connolly. To this committee, particularly, that has a
resonant tone to it, because we are very struck with the fact
that IT, properly deployed and invested in, can really make a
difference in terms of adding capability and capacity,
especially in a resource-thin era.
One of the things that IT capacity for the Veterans
Administration was being deployed for was to eat into the
notorious backlog of applications and claims, is that not
correct?
Mr. Murray. That is one of the programs they support.
Mr. Connolly. So those people were furloughed for 16 days?
Mr. Murray. I do not specifically know the status of those
individuals.
Mr. Connolly. Ms. Farrisee, do you know the status of those
individuals?
Ms. Farrisee. I know that all of the OI&T were not
furloughed. Some were in what we considered an accepted status
to be able to continue to support.
Mr. Connolly. Did it disrupt our eating into the backlog?
Because you have actually made progress in the last year, about
30 percent, eating into that backlog, is that correct?
Ms. Farrisee. We have, and it did make a difference,
because the employees were furloughed also from the VBA.
Mr. Connolly. So we in Congress can't have it both ways, we
can't beat up on you on the fact that you have a backlog and
then we shut down the government, forcing you to make some
tough decisions about who gets furloughed and who doesn't,
hampering an effort that otherwise had actually been showing
significant progress.
Mr. Griffin, do conferences have any management value at
all, from your point of view?
Mr. Griffin. Absolutely. In our report, we indicated that
we determined that the training was valid training, and that
the previous training that had been conducted, which was in
2009, hit a small percentage of the HR staff. So we felt that
the actual training was justified.
Mr. Connolly. And there was a lot of training going on,
even at the conferences where the ``we are family'' video was
just shown.
Mr. Griffin. Yes. We included the training agenda as an
appendix to our report, so people could see what the courses
were, how long they lasted and so on.
Mr. Connolly. And I didn't understand your answer to Mr.
Davis. This happened two years ago, the particular incident we
are talking about. Have you reviewed new procedures, given we
have a lot of new people, including Ms. Farrisee in place, to
clean up what happened? Are you satisfied that there are new
protocols, policies and procedures in place to prevent excess
spending, frivolous spending from occurring from legitimate
training conferences and other parts of conferencing that can
really help in terms of networking and the like?
Mr. Griffin. I think that it is a work in progress. I know
that previously, the memorandum that came out four days before
the issuance of our report laid down a lot of very important
markers that people would have to meet at future conferences.
But we need to finish up about half of the recommendations,
which are still in various stages of completion.
Mr. Connolly. Briefly, Ms. Farrisee, could you address
that? How confident are you that we have developed protocols,
procedures and policies that would satisfy the IG's office and
more importantly, satisfy the American people that the
investments we do make in legitimate training and conferences
is wisely invested?
Ms. Farrisee. I am confident that the policy that was put
out in 2012 was the first large step in doing that. Included in
this policy is a form called the Conference Certification Form,
which prohibits many things that had happened at that
conference, prohibits things like purchasing of entertainment
and many of the waste, fraud and abuse that you all have
discussed here today. So we have already put those into place.
It will be in a directive, it will be in a handbook by
December. But it has evolved over this last year, and we look
forward to our handbook.
Mr. Connolly. And if the chairman would just allow one
final technical question? In answer to Chairman Issa's question
about, would you be willing to provide a draft of that
handbook, you said you have already provided it.
Ms. Farrisee. It was one of the responses we have provided.
Mr. Connolly. When was that provided?
Ms. Farrisee. In the OIG report, October 23rd. It was one
of the responses.
Mr. Connolly. So just about a week ago. Thank you so much,
thank you, Mr. Chairman.
Mr. Mica. I thank the gentleman. And we have had trouble,
we haven't gotten a lot of information, late in July,
unfortunately and then just before the hearing.
Mr. Bentivolio, you are recognized.
Mr. Bentivolio. Thank you very much, Mr. Chairman.
Ms. Farrisee, thank you for your service. I too spent some
time at Fort Knox. I was medivacked out of Iraq in 2007. And I
was at the Warrior Transition Unit in October of 2007. Were you
there at that time?
Ms. Farrisee. I was not, but you would not recognize the
new Warrior Transition Center. They have opened a wonderful new
facility at Fort Knox.
Mr. Bentivolio. Since when, 2007 or before that?
Ms. Farrisee. They didn't open the facility until 2013.
Mr. Bentivolio. Okay. That is good to hear, because when I
got there, everybody was in a hullaballoo, because a soldier
had died in the barracks. So the Warrior Transition Unit for
wounded and injured soldiers from Afghanistan and Iraq, they
said, you don't understand. I said, what don't I understand?
They didn't find his body for four days. The Army said 12
hours, the newspaper said two days, the boots on the ground
said he opened his pizza on a Friday and they found him Monday
night.
My own experience there, I waited six hours for the
pharmacist to tell me they didn't carry the prescription, come
back on Thursday. And when I went back on Thursday, they had
forgotten to requisition that medication, for my neck injury.
When I got out, I went back, you get discharged from active
duty, you go back to your National Guard unit and I was ordered
to go and apply for VA benefits. Ordered. Because being a
Vietnam veteran 30 years ago, with my experience with VA, I
didn't want anything to do with it. Do you understand? You're
familiar with those feelings, Vietnam veterans?
Ms. Farrisee. Yes, I am.
Mr. Bentivolio. And Congressman Connolly mentioned, I am
sorry he is not here, but he said there has been a 30 percent
improvement--thank you, Mr. Connolly--a 30 percent improvement
in that since 1973. That is a 1 percent improvement for the
last 30 years, as far as I am concerned, because I am a veteran
and I have direct experience with the VA. The orders I was
given, I filled out my paperwork and waited 11 months for the
VA to tell me they had lost my medical records. Luckily, being
an old soldier, I had made hard copies. So I took them down to
the Detroit VA and stood behind the gentleman as he photocopied
a stack about 8 inches tall of my medical records. Within 60
days, I had my disability, 50 percent.
As a Congressman, I toured the facilities and got the dog
and pony show. They were very gracious, very professional. I
saw a lot of new improvements to the VA. But when I talked to
some of my constituents that come in, handling their casework,
I see the same story that I saw in 1973.
And the question. You have been a general in the military,
you are familiar with FM101-5?
Ms. Farrisee. Not off the top of my head.
Mr. Bentivolio. Well, it is the officer's bible, it is
called Staff Organizations and Operations.
Ms. Farrisee. Okay, yes, I am familiar with it.
Mr. Bentivolio. Could somebody hand her this, please,
chapter four, page 1 of FM101-5 states, could you read that for
me, please, where I have circled it?
Ms. Farrisee. Yes, I will, Congressman. ``The commander is
responsible for all that his staff does or fails to do. He
cannot delegate this responsibility. The final decision as well
as the final responsibility remains with the commander.''
Mr. Bentivolio. And you carried that Army training with you
to the VA, correct?
Ms. Farrisee. Correct.
Mr. Bentivolio. Can you tell me why commanders are
responsible for the actions and attitudes of those under them?
Ms. Farrisee. Because we are placed in that position of
responsibility and we must incur that responsibility for every
action.
Mr. Bentivolio. So in the military, the actions of service
members under the commander's authority are often directly
attributed to the leadership and culture of the group, correct?
Ms. Farrisee. Correct.
Mr. Bentivolio. The VA is no exception. The disgraceful
attitudes and lack of concern over wasting taxpayers' funds
could only be explained by the fact that the leadership of the
VA is flawed. Until the stagnant attitudes at the very top of
the VA are eliminated, we cannot truly hope to eliminate the
many problems plaguing the VA that in the end are hurting our
veterans the most, correct?
Ms. Farrisee. Correct.
Mr. Bentivolio. So let me ask you this. I am new to
Congress. I was a taxpayer, worked in the service. Served my
Country in two wars. And I see the IRS, EPA, the Energy
Department, and now the VA wasting taxpayers' money. What do
you think I should do? What can I do to stop that from
happening? Because what I think is I would like to fire you all
and start over. That is my feeling. But what is reality?
Reality is I have to work with you. How am I going to get
improvements, 100 percent improvements, more than 100 percent
improvements? Because all I saw is 30 percent improvement over
the last 30 years. That is 1 percent a year. Do I have to wait
until 2083 to get 100 percent from the VA?
Ms. Farrisee. Congressman, I believe that the Department is
working, and we plan to work faster than that.
Mr. Bentivolio. I have heard that for 30 years. Actions
speak louder than words. What are you going to do tomorrow to
eliminate that backlog, to get it done? Because that backlog is
the same backlog we had in 1973, 1974, 1975. If you want
something screwed up, let the government do it. That is the way
I look at it. That is not what my taxpayers are expecting. I
want quality service to our veterans, not tomorrow, well,
tomorrow, next week, not in 2083.
Mr. Mica. I thank the gentleman, and he yields back the
balance of his time. Ms. Norton?
Ms. Norton. Thank you very much, Mr. Chairman.
Just let me say, as I begin this series of questions, the
backlog is not the same backlog. That is one of my concerns
here. Because this agency has been given responsibilities it
did not have in previous administrations. So when I heard
initially that it was a VA hearing, I said, oh, it must be on
the backlog of claims.
Of course, the reason we look so closely now at VA is that
the President, hearing all the complaints from veterans about
post-traumatic syndrome, changed the standard, making it more
possible for veterans to show PTSD. So that is not the same
backlog, there probably always has been a backlog. But that is
the reason this agency, I think, is under very, very real
scrutiny.
Now, we have had hearings here. In fact, in two of my
committees on conferences. The first, and I note that this
conference was held in 2011. So perhaps the VA was not on
``fair notice.'' But in April of 2012, there were hearings
about the GSA conferences. And those hearings resulted in
literally the beheading of the top of the agency, the very top
of the agency, the GSA administrator and the person who headed
the main division of the GSA, the Public Buildings Service.
These occurred in 2011, and there was some evidence that
this kind of conference goings-on has been systematic in
Federal agencies for many years now. What made us take very
special note was, of course, the outlandish GSA conference, but
also the fact that we were in very hard times and we still are.
Now, Mr. Griffin, you have testified that there was, in
most of these instances, failure of the senior officials to
give the proper oversight. Now, one begins to wonder about
conferences in hard times and about conferences with agencies
that have an additional backlog. Not the Vietnam backlog, but
an additional backlog. Now, as far as I asked staff, as far as
I could figure our, Mr. Griffin, they said training did occur,
and we think about 12 percent might be chalked off to
entertainment, even waste, with most of it going to training,
is that correct, of these conferences?
Mr. Griffin. I can't put a percentage on it for you, Ms.
Norton. They did have plenary sessions in the beginning, in the
morning.
Ms. Norton. Were these conferences largely devoted to
training which we understand the VA staff may have needed, we
just spoke about PTSD, or was a disproportionate amount of time
spent on these other activities?
Mr. Griffin. I wouldn't say it was disproportionate. There
were four hours of classroom training, if you will, each day.
Ms. Norton. Four hour each day.
Mr. Griffin. Right. And there was a plenary session in the
morning and there was a plenary session at the end of the day.
Ms. Norton. Was the plenary, do you count that in the four
hours, or is that additional?
Mr. Griffin. No.
Ms. Norton. So it is important to note, this is an agency
that needed training, they are working on a wholly new form of
disability that the VA had not fully recognized before. Now, I
ran a Federal agency, and I am with those who say that of
course, you don't want to wipe out all opportunities to have
some fun, particularly people who are under the kinds of
pressure the VA is under. It is important to note that these
people may have had some steam to let off, and that is the kind
of stuff out of context that never tells me anything. Because
if that happened, for example, in one of this 12 percent of the
time, I am not so sure that would have been so bad.
So it doesn't tell me anything. What tells me much more is
what we did not learn from the GSA conference, and that is that
most of the time there was being spent, as apparently it was
here, on training. And I must say, given PTSD, that needed
training.
Now, of course, if you head a government agency and you are
overburdening your senior official, you designate somebody else
or you hire somebody else. They have designated a conference
certifying official and he has all kinds of duties. Mr.
Griffin, this, we now must have a conference certifying
official, and he is responsible for seeing the after-action
review, for seeing this special training, that is not a new
hire, is it? Ms. Farrisee, that is not a new hire, is it?
Ms. Farrisee. No, Congresswoman, it is not a new hire.
Ms. Norton. So those are duties in addition to duties
that--let me just suggest that as important as the training is,
and I am almost through, Mr. Chairman, I appreciate your
indulgence, it is difficult to understand how somebody who has
your, the agency's mandate now, with this extra backlog, in
addition to whatever backlog you may have had, it is going to
be very difficult to do what is the central function of the
agency and pay a lot of attention, as you now require, given
what has been discovered, to conferences. And I think the
agency is going to have to look very carefully at what I would
normally regard as a very important activity, and see if the
training can be done as training, perhaps in the locations.
Because I just don't see how this conference certifying
official, as important and responsible as that designation is,
is going to be able to do that and do it what Congress is
really looking at you to do, and that is to get rid of this
backlog and deal with our veterans.
Thank you very much.
Mr. Mica. I thank the gentlelady. Mr. Duncan?
Mr. Duncan. Thank you very much, Mr. Chairman. I first want
to commend Mr. Bentivolio for his courage in speaking out in
the way in which he did. Apparently there are some or many,
employees of the VA that think that they are immune from
criticism, because they know that all members of Congress want
to support the veterans. I can tell you that my father was the
State Legion commander in 1954, my Uncle Joe was State Legion
commander in 1963, and those were times, in the 1950s and
1960s, when the American Legions around the Country were huge.
And I am the product of Bowie State and now one of the, I think
it's only about 19 percent of the Congress who are veterans.
I am proud of my service and appreciated the education and
opportunities that I got from the military. On the other hand,
I know that most veterans don't want to see the taxpayers
abused or money wasted, even in the VA. And we have this, I
want to commend Mr. Griffin and Mr. Abe for the work that they
have done.
We have this report that says there was an email in which
one Department employees said, we are a large agency with deep
pockets. And it says this email response was indicative of a
larger problem throughout the conference planning process.
Planners disregarded any budgetary concerns and engaged in out
of control spending. They exercised extremely poor stewardship
of taxpayer dollars. That is a very disturbing report.
General Farrisee, in the time of a massive $17 trillion
debt that is headed up much higher and much faster than ever
before, how does a statement like this, we are a large agency
with deep pockets, how do you think that reflects on the
Department?
Ms. Farrisee. It is a very troubling statement,
Congressman. I do not believe it reflect well. I do not believe
that is the thought process today. I do believe that fiduciary
responsibilities are taken very seriously and the policies that
have been put in place will eliminate those types of thoughts.
Mr. Duncan. Well, another email obtained by the committee,
a Department employee stated, in this place you have to get it
all when you can. We have heard and read that this $6.1 million
on these conferences, that planners, it says planners spent, I
think Mr. Griffin said $762,000 or some figure like that. Was
that the figure, Mr. Griffin, on trinkets?
Mr. Griffin. The total overspend was $762,000 as far as we
could determine.
Mr. Duncan. But it could have been more. And then we hand
in this report that the planners were using these trips, these
various resort locations, as just paid vacations by the
taxpayers. It seems to me that this type of activity needs to
be stopped and it needs to be restricted. If the employees of
the VA are patriotic, dedicated employees, this will stop.
General Farrisee, why do you think conference planners were
able to maximize spending on these promotional products? Did
any supervisor step in to say that these amounts were too high?
Or did they just not control this much at all?
Ms. Farrisee. Congressman, I believe there was a lack of
oversight through this whole conference planning. There was not
enough leadership attention to all the details.
Mr. Duncan. Well, I certainly hope that this stops. All
this money, instead of it being paid vacations for VA
employees, as others have said, could have been spent in many,
many better ways.
Thank you very much, Mr. Chairman.
Mr. Mica. Thank you. I recognize the gentleman from Nevada,
Mr. Horsford.
Mr. Horsford. Thank you, Mr. Chairman.
On October 1st, 2012, the Inspector General's office
publicly released a report issuing 49 recommendations on
conference oversight, internal controls and spending. Mr.
Griffin, how many recommendations did Secretary Shinseki concur
with?
Mr. Griffin. The Secretary concurred with all of the
recommendations.
Mr. Horsford. And in fact, the VA had already issued a
conference oversight memorandum that began implementing many of
those recommendations when the report was released, is that
correct?
Mr. Griffin. We shared our draft report with the Department
in August. They had an opportunity to see what the issues were.
And as I previously testified, they did generate an aggressive
memorandum laying out new guidance to try and address a lot of
the issues.
Mr. Horsford. How many of the 49 recommendations has the
Department finished implementing?
Mr. Griffin. We got a flurry of activity in the past few
days, which is a byproduct of the hearing, so we are grateful
for the hearing. Roughly half is my belief. But we will get you
an answer with the precise number for the record. We track
these recommendations on a quarterly basis. We send a reminder
to the Department that this is still an open recommendation and
how are you progressing and getting to closure on it. So it is
a process that we have had in place. I am told now by my
colleague that 26 of the 49 are open.
Mr. Horsford. So 26?
Mr. Griffin. Twenty-six out of 49 remain open. There has
been some exchange of information back and forth between our
follow-up staff and the Department where indications are that
progress is being made but we have not gotten enough
information to say that they have met the requirements of the
recommendation.
Mr. Horsford. So there are 23 that are still in process?
Mr. Griffin. No, there are 26. Twenty-three are closed, 26
are open.
Mr. Horsford. And of the 26 that are open, where is the
Department in the process and the progress and what is the
follow-up on the implementation until they are completed?
Mr. Griffin. I can't speak to all 26 of them. I have seen
some of the responses and as I have indicated, there is
progress being made. But we are not going to close those
recommendations until we are satisfied that they have nailed
it. And so far, that is not the case in all of them. Three of
them involved personnel actions which I understand the
Department intends to conclude tomorrow.
Mr. Horsford. Is there a date certain when they all have to
be completed by?
Mr. Griffin. We will follow up until they are done.
Mr. Horsford. But there is not a deadline?
Mr. Griffin. There is not a deadline. But as things tend to
get older, we do send a past due list to the Congress every
quarter to bring it to their attention that some of these
things have been out there for a long time. We seek to get any
assistance we can in making sure that the Department
understands the importance and takes care of the problem.
Mr. Horsford. Okay. Ms. Farrisee, as Mr. Griffin just
indicated, the Department now has additional reporting
requirements to Congress regarding these conferences. How often
is the VA required to report on conference spending?
Ms. Farrisee. I will have to pass that question to Mr.
Murray on conference spending.
Mr. Murray. We have to report conference spending quarterly
and annually to the Congress as well as OMB.
Mr. Horsford. And what kind of information is now included
in these reports? And who do they go to?
Mr. Murray. Committees on veterans affairs. Our reports go
to the OIG, reports go to OMB. It is detailed breakdowns on
conference spending costs by categories elaborated in the
statute.
Mr. Horsford. So the oversight is there for the conference
spending on a quarterly and annual basis?
Mr. Murray. I believe it is. And I actually believe there
is a lot of oversight before a conference is ever approved,
which is where I think the key oversight belongs is, are there
alternative methods to do this? Is there another way to
accomplish this training, short of traveling and enlisting a
facility and incurring all those incumbent costs. We make a
very strong, we require the activity to make a strong case
there first. And then we make them, if they make the case and
there are good learning outcomes and they can demonstrate there
are good learning, important outcomes that can be measured,
then we look at their analysis of different venues.
I think that is where the control exists.
Mr. Horsford. Thank you. Thank you, Mr. Chairman.
Mr. Mica. I thank the gentleman. Mr. Meadows, the gentleman
from North Carolina, is recognized.
Mr. Meadows. Thank you, Mr. Chairman. I thank each of you
for coming
I want to start off by saying that there are a tremendous
amount of dedicated workers. I know in Veterans Affairs,
there's a number of very dedicated employees. Our committee
staff here is unbelievably dedicated, they do a great job,
truly, for the American people. So I don't want anything to be
misconstrued or out there that there is not an appreciation for
those who serve our Country and work in government. Because
these hearings can come out that way.
At the same time, we must address a few of these issues.
Because I have other governmental agencies saying, why in the
world do they get to travel and I have people in the Blue Ridge
Parkway who can't go from one end of the Blue Ridge Parkway to
others in their service area without having to come back
because of the unbelievable spending that goes on in other
areas.
With that being said, we have some $762,000 that was spent
according to the IG's report. And Ms. Farrisee, you have said,
and Mr. Murray, you have said as well, that top officials
didn't know about it, there wasn't the proper oversight. Could
you put up an email slide here, queue up the slide for me, this
is an email, a senior official email to conference planners
that says, ``Bottom line, you don't have to worry about a
thing.''
Now, when a top official asserts to conference planners
that they don't have to worry about the funding, does that not
send the wrong message? Mr. Murray?
Mr. Murray. Absolutely. It is totally the wrong message.
Mr. Meadows. When do I get to tell the veterans in North
Carolina, of which you do not have a good track record of
processing claims in North Carolina, many of the veterans that
I talk to have to wait, some as many as 600 days to get their
claims handled. When do I get to tell them, bottom line, you
don't have to worry about a thing? When are we going to get to
that point?
Does this type of spending Ms. Farrisee, when we sent out a
word like this, what does it tell the American people, when we
say, bottom line, does it show that we have an unlimited budget
in the VA?
Ms. Farrisee. Congressman, we absolutely don't have an
unlimited budget. And I think it shows a past history of bad
decisions, bad leadership that controls have been put on.
Mr. Meadows. I agree. So how many people got fired because
of the bad leadership and bad decisions? How many? I think I
know the answer. How many got fired for bad leadership and bad
decisions?
Ms. Farrisee. None fired that I am aware of.
Mr. Meadows. Mr. Murray, how many in your organization got
fired?
Mr. Murray. None in my organization.
Mr. Meadows. Okay. How many of them got disciplined greatly
in your organization, Mr. Murray?
Mr. Murray. There was no discipline in mine.
Mr. Meadows. So no discipline no firings, but yet we have
bad leadership and bad decisions. Let's go on a little bit
further, because I am even more troubled by the next slide.
Here is an email that the Department approved a $450,000
marketing budget for a conference. Now, why do we need such a
large marketing budget to make employees go to a conference
that they're required to go to? Why would we do that? Who makes
that decision? Who would have made the decision to approve
that?
Ms. Farrisee. The leadership of HR&A at the time would have
made that decision.
Mr. Meadows. Okay, and they are still employed, right? This
was a good decision on their part, to market it?
Ms. Farrisee. They are no longer with the VA.
Mr. Meadows. Okay. And you were very kind, Ms. Farrisee, in
the way you responded. I want to thank you for your service and
thank you for the way that you responded.
Mr. Murray, I am a little bit troubled, because as we see
these emails coming out, don't ever play poker. Because they
are rolling your eyes and huffing and having disdain for the IG
as these emails come out. Do you think that your organization
does a great job, Mr. Murray?
Mr. Murray. My organization, whenever we become aware of
these issues, we find weaknesses in internal controls, whether
the IG finds it, General Accountability Office finds it, our
internal or external auditors find them, we immediately take
actions to correct, mitigate, fix these kinds of deficiencies.
We have a good, collaborative relationship with the IG and we
work in a transparent and accountable fashion.
Mr. Meadows. But your demeanor today at this hearing
doesn't show that. I have been watching you. I watch people all
the time. So your demeanor would indicate that you are a little
frustrated by these emails as they roll out, as they are
telling a story. Do you agree with the story that this is
indicative of those who are making decisions, that they didn't
have an accountability for cost?
Mr. Murray. The employees that work for me, the employees I
work with, the leaders I work with have a strong accountability
for the costs, for their actions, exercise good judgment. So I
find this very dismaying, very disappointing, sir. And that is
the expression I would like to convey.
Mr. Meadows. So when does this translate into my veterans
in North Carolina being able to count, the moms and dads, the
children counting on those, being taken care of? When are we
going to get our act together? Not just on conferences.
I yield back.
Mr. Mica. I thank the gentleman. Waiting patiently and last
but not least, and I think a day older after celebrating her
birthday, the gentlelady from New Mexico, Ms. Lujan Grisham,
you are recognized.
Ms. Lujan Grisham. Thank you, Mr. Chairman, and thank you
for recognizing that yes, indeed, I am another year older,
which, given the alternative, I am willing to take. I had a
nice time last night.
I know that being one of, maybe the last person to talk,
that you are clear that I think both sides, my colleagues on
this committee, are clear that in the best of circumstances,
our job and yours, no matter how much resources you have or
don't have, is to use that funding in the most effective and
streamlined way that you can. And that further, I would agree
that where you have the flexibility to move as much of your
administrative funds, including training and conferences, into
the direct services and benefits where you are actually making
a difference for veterans and families directly. Given that I
have 20 plus years in local and State government and worked as
a cabinet secretary, I was clear that my dollars that were
appropriated for me needed to go to seniors and their families.
That was an effective use of my time.
However, I also recognize that when we react strictly and
narrowly, we can also do damage. Because if I want you to
provide those direct services and benefits in a meaningful way,
your staff must be trained and have access to innovative new
resources and tools. And if we do get a new software program
implemented that really helps with the backlog and is more
effective, you are going to need training just at that level.
And that is not really what we are talking about here, but I am
a big fan of having appropriately trained and a productive
public and private workforce that are doing the best possible
job.
So I am certainly not going to be your advocate, I don't
think anybody here is, for spending nearly a million dollars on
a conference that had marketing. We know that that is never
going to happen again, or your jobs now is make that happen. We
also recognize in a public system there are limitations about
how you deal with accountability. I think that is an area that
we ought to do a better job too, in terms of holding folks
accountable.
So thank you for being here. Thank you for owning this
problem and thank you for implementing as many of those
recommendations. But I am going to take a different twist,
which is, I think that the OMB's reaction might cause harm and
not get to the real issue, which is, we expect you to be
effective and smart and professional about how you spend all of
your money, regardless of what it is and what it is intended
for.
So I am going to remind folks that last year, OMB ordered
Federal agencies to reduce travel and conference expenses by 30
percent by 2016, and then my district is home to Sandia
National Laboratories, which is one of the critical players in
the Nation's complex energy, national defense, cybersecurity
and employs some of the Country's best and brightest minds. I
am going to read you an excerpt from a letter that Dr. Paul
Hommert, the Director of Sandia Laboratories, wrote to me about
these restrictions.
He shares my concern that these will harm the ability of
the national labs in their research, their scientists and
engineers to share knowledge and collaborate with their peers
in academia and industry. These interactions are critical to
keeping our researchers at the cutting edge in their field.
He shares my desire to ensure that we are spending our
taxpayer dollars wisely while effectively helping the
government accomplish its missions. Dr. Hommert offers
suggestions for developing standards for evaluating and
managing the risk and cost of conference travel spending. And
then I ask, Mr. Chairman, unanimous consent to place the whole
letter in the record.
Chairman Issa. [Presiding] Without objection, so ordered.
Ms. Lujan Grisham. Thank you, sir. And I have another
letter that is from the Center for Association Leadership, a
watchdog organization, who is also looking at these balances.
Clearly we don't want these mistakes made. But we want to be
careful that we don't minimize opportunities that make us a
more efficient and effective government. And I would ask
unanimous consent to put this letter into the record, Mr.
Chairman.
Chairman Issa. Without objection, so ordered.
Ms. Lujan Grisham. And that is really my statement. I only
have 30 seconds, and I am not sure if there is anything to
respond to except, I hope that what we leave this hearing with
is the kind of issues that we have identified should never come
before this Committee or anyone else again. We are expecting
wise, smart, efficient, effective leadership in all of our
public entities. We want to be sure that the recommendations
that you put in place do effectively prohibit this kind of
waste but don't limit the opportunities to have a well-trained,
well-recognized, productive workforce. My fear is we will go
too far and we won't do health research, scientific research
and we won't find the best way to serve our veterans and their
families.
Thank you very much, and with that, Mr. Chairman, I yield
back.
Chairman Issa. I thank the gentlelady. Does the ranking
member want to close?
Seeing none, Ms. Farrisee, I am informed by staff that
having reviewed what was sent to us as ``the manual,'' entitled
memorandum, without objection be placed in the record.
Chairman Issa. With all due respect, I have had to have
manuals under ISO-9000 that complied. This ain't it. This isn't
even close to it. Is there some other document that we are
unaware of that would reflect a manual? You can confer with
your staff.
Ms. Farrisee. Mr. Chairman, the handbook was included in
the OIG response on October 23rd.
Chairman Issa. We did not receive that response. October
23rd was pretty recent.
Mr. Griffin, do you know something about this?
Mr. Griffin. As I mentioned in your absence, Mr. Chairman,
there has been a flurry of documents being sent to us as a
result of the hearing, for which we are grateful.
Chairman Issa. So in other words, if we keep hauling them
in, we will get what we ask for?
Mr. Griffin. I can't say that I have personal knowledge of
receipt of the manual. I don't question the integrity of the
answer given, but I haven't seen it myself.
Chairman Issa. Well, then, I hope you will pledge to
forward us a copy if you find it in that last minute dump in
anticipation of this hearing.
Mr. Griffin. We will do that, Mr. Chairman.
Chairman Issa. Thank you.
Before I go the ranking member, I do want to thank you for
being here. Ms. Farrisee, I expect that we will see you in the
future. Because it is the intention, I just talked to the
chairman of Veterans Affairs Committee, it is the intention of
both our committees to both continue looking at what is driving
backlog down, if it starts really going down, and a continued
look about the question of the VA's drive to change the
culture.
And Mr. Griffin, I would suggest that you might keep us
informed on whether the culture of timely delivery of your
requests are being met. Because the idea that something arrives
just before but not in time for you to review it for a full
committee hearing again begs the question of whether you and
Mr. Abe are being treated with the respect within your own
department that we expect all IGs to be treated with.
And with that, I recognize the ranking member.
Mr. Cummings. Thank you very much.
I think it would be Ms. Farrisee, you can check with your
staff, will you let us know how long is the handbook? How many
pages is it? Just give me an approximation.
Ms. Farrisee. It is about 40 pages.
Mr. Cummings. Forty pages, I see. First of all, Mr.
Griffin, I want to thank you, Inspector Griffin, I want to
thank you and your staff. I have to tell you, Ms. Farrisee and
Mr. Murray, we can do better. And I think you would agree with
that, don't you, Inspector General? Do you agree?
Mr. Griffin. I do agree.
Mr. Cummings. We can do better. I think that it would be
legislative malpractice if we stood on this side of the dais
and said, okay, everything is okay. It is not okay. We are
hoping that you will take that word back to your agency. We
realize you probably have a lot of balls up in the air. But I
have to tell you, well, first of all, as far as conferences are
concerned, I can see you are not spending as much money. You
seem like you have gotten pretty good control, it seems that
way. But we will see when you submit the documents that you
will be submitting.
But we also are concerned about the backlog. And the
chairman talks about this whole culture, what kind of culture
we have there at Veterans. We want to make sure that culture is
one that believes in efficiency and effectiveness, that
believes in making sure that the taxpayers' dollars are spent
in a prudent way, and makes sure that money is spent to enhance
the lives of our veterans. They have already given their blood,
sweat and tears. We have so many families who have lost a loved
one.
So again, we see this as the urgency of now, I have to tell
you, when we were talking about the handbook, I didn't feel a
sense of urgency, although I know we have gotten a draft. Then
I asked a question about a document that was due October 1st,
2012, and it seemed as if, you know, we will get to it when we
can. Well, that is not good enough.
So again, I am hoping that you will go back, that you will
address these issues with some sense of urgency. With that, Mr.
Chairman, I yield back.
Chairman Issa. I thank the gentleman and I thank all
participants today, particularly out witnesses. With that, we
stand adjourned.
[Whereupon, at 11:40 a.m., the committee was adjourned.]
APPENDIX
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Material Submitted for the Hearing Record
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